Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 173616 June 25, 2014

AIR TRANSPORTATION OFFICE (ATO), Petitioner,

vs.
HON. COURT OF APPEALS (NINETEENTH DIVISION) and BERNIE G. MIAQUE, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

This petition for certiorari and prohibition of the Air Transportation Office (ATO) seeks the nullification
of the Court of Appeals' Resolution1 dated March 29, 2006 and Resolution2 dated May 30, 2006 in
CA-G.R. CEB-SP No. 01603. The Resolution dated March 29, 2006 granted the application for
temporary restraining order (TRO) of Bernie G. Miaque, while the Resolution dated May 30, 2006
issued a writ of preliminary injunction enjoining the implementation of the writ of execution issued by
the Regional Trial Court (RTC) of Iloilo despite Miaque's alleged continued failure and refusal to
make current the supersedeas bond and to pay to the A TO the rental and concession privilege fees.

The proceedings on the main case of ejectment

MTCC of Iloilo City: Civil Case No. 01 (38)

In May 2001, the ATO filed a complaint for unlawful detainer against Miaque in the Municipal Trial
Court in Cities (MTCC) of Iloilo City, Branch 3. It was docketed as Civil Case No. 01 (38). The ATO
sought the following, among others:

(1) That Miaque be ordered to permanently vacate and peacefully return to the ATO
possession of:

(a) the 800-square meter Refreshment Parlor fronting the New Terminal Building-
Iloilo Airport;

(b) the 310-square meter Restaurant/Gift Shop inside the Iloilo Airport Terminal; and

(c) all areas occupied or otherwise utilized by Miaque incident to his operation of the
Porterage Service within the Iloilo Airport; and

(2) That Miaque be ordered to immediately pay the ATO the amount of not less than
₱1,296,103.10, representing unpaid space rental and concessionaire privilege fees as of
October 15, 2000 plus interest and additional rental and fees which may be proven during
the trial.3

The MTCC subsequently rendered a Decision4 dated May 27, 2002 the dispositive part of which
reads:
WHEREFORE, judgment is rendered finding [Miaque] to be unlawfully detaining the following
premises and orders [him], his men and privies to:

a. vacate the 800[-]square meter Refreshment Parlor fronting the New Terminal Building-
Iloilo Airport. [Miaque] is further ordered to pay [the ATO] the rental and concessionaire
privilege fee[s] accruing from November 1986 to October 2000, totaling ₱460,060.70, plus
differential billings from January 1990 to July 1993 for ₱4,652.60 and interest charges from
January 2000 to October 2000 for ₱2,678.38 or a total amount of ₱467,397.68 as of October
2000, less the payments made by [Miaque] under Official Receipt No. 4317842 dated
December 1998, and the monthly current lease/concession privilege fee from November
2000 until [Miaque] shall have vacated the premises;

(b) vacate the 310[-]square meter Restaurant/Gift Shop inside the Iloilo Terminal Building
which was reduced to a total of 183 square meters in 1998 (51.56 square meters inside the
pre-departure area and 126.72 square meters outside the pre-departure area). [Miaque] is
also ordered to pay [the ATO] rentals/concessionaire’s privilege fee[s] from January 16, 1992
to October 15, 2000 in the total amount of ₱719,708.43 and from October 16, 2000, to pay
the current monthly lease/concessionaire privilege fees until [Miaque] shall have vacated the
premises; and

(c) vacate the area occupied or used by [Miaque] incident to his operation of the Porterage
Service within the Iloilo Airport. [Miaque] is further ordered to pay Tender Offer Fee due from
March 1992 to October 2000 in the total amount of ₱108,997.07. [Miaque] is further ordered
to pay the current monthly concession privilege fee from October 2000 until such time that
[Miaque] shall have vacated the premises.

Costs against [Miaque].5

RTC of Iloilo City: Civil Case No. 02-27292

Miaque appealed the MTCC Decision to the RTC of Iloilo City, Branch 24. It was docketed as Civil
Case No. 02-27292. The RTC, in its Decision6 dated June 7, 2003, affirmed the MTCC Decision in its
entirety. Miaque’s motion for reconsideration was denied.7 Court of Appeals: CA-G.R. SP No. 79439
Miaque questioned the RTC Decision in the Court of Appeals by filing a petition for review, docketed
as CA-G.R. SP No. 79439, on September 25, 2003. In a Decision8 dated April 29, 2005, the Court of
Appeals dismissed the petition and affirmed the RTC Decision. Miaque moved for reconsideration
but it was denied in a Resolution dated January 5, 2006.9

Supreme Court: G.R. No. 171099

Miaque brought the case to this Court in a petition for review, docketed as G.R. No. 171099. In a
Resolution10 dated February 22, 2006, the petition was denied as no reversible error in the Court of
Appeals Decision was sufficiently shown. The motion for reconsideration of Miaque was denied with
finality.11

The proceedings on execution

As an incident of CA-G.R. SP No. 79439, the Court of Appeals issued on February 27, 2004 a
temporary restraining order (TRO) effective for a period of 60 days and required Miaque to post a
bond in the amount of ₱100,000.00.12After the lapse of the TRO, the ATO filed an urgent motion for
the execution of the RTC Decision pursuant to Section 21, Rule 70 of the Rules of Court. This was
opposed by Miaque.13
In an Order14 dated August 2, 2004, the RTC granted the ATO’s motion:

Wherefore, in view of the above consideration, the court finds merit [i]n the reasons given in the
motion of [the ATO] and hereby Grants the issuance of a Writ of Execution.

Pursuant to Section 21, Rule 70 of the 1997 Rules of Civil Procedure, which mandates that the
judgment of this Court being immediately executory in cases of this nature, let a writ of execution
shall issue, ordering the sheriff of this Court to effect its Decision dated June 7, 2003, affirming the
Decision of the MTCC, Branch 3, Iloilo City.

Furnish copies of this order to the Asst. Solicitor Almira Tomampos of the Office of the Solicitor
General and Atty. Rex Rico, counsel for [Miaque].15

Miaque sought reconsideration of the above Order but the RTC denied the motion in an
Order16 dated August 13, 2004. Thereafter, the RTC issued a Writ of Execution dated August 16,
2004.17

However, the Court of Appeals issued a Resolution18 dated August 18, 2004 ordering the issuance of
a writ of preliminary injunction and enjoining the ATO and all persons acting in its behalf from
enforcing the respective Decisions of the MTCC and the RTC while CA-G.R. SP No. 79439 is
pending. Thus, after the dismissal of Miaque’s petition for review in CA-G.R. SP No. 79439, the ATO
filed another urgent motion for execution of the RTC Decision. In its motion, the ATO pointed out that
the supersedeas bond filed by Miaque had lapsed and was not renewed and that the rental and
concessionaire privilege fees have not been paid at all in violation of Section 8, Rule 70 of the Rules
of Court.19 Miaque again opposed the ATO’s urgent motion for execution,20 while the ATO filed a
supplemental urgent motion for execution stating that Miaque’s appeal in the Court of Appeals had
been dismissed.21

In an Order22 dated June 1, 2005, the RTC granted the ATO’s urgent motion for execution and issued
a Writ of Execution23 dated June 2, 2005. On the basis of the said writ, a notice to vacate was given
to Miaque.24 On June 3, 2005, Miaque filed a motion for reconsideration of the Order dated June 1,
2005, with prayer to set aside the writ of execution and notice to vacate.25 At the same time, he filed
a motion in CA-G.R. SP No. 79439 praying that the Court of Appeals order the RTC judge and the
concerned sheriffs to desist from implementing the writ of execution.26 Thereafter, the Court of
Appeals issued a Resolution27 dated June 14, 2005 ordering the sheriffs to desist from executing the
Decisions of the MTCC and the RTC while CA-G.R. SP No. 79439 is still pending. However, on June
15, 2005, before the concerned sheriffs received a copy of the Resolution dated June 14, 2005, the
said sheriffs implemented the writ of execution and delivered the possession of the following
premises to the ATO:

(a) the Restaurant/Gift Shop inside the Iloilo Terminal Building in the reduced area of 183
square meters; and

(b) the area which Miaque occupied or used incident to his operation of the Porterage
Service within the Iloilo Airport.

The sheriffs who implemented the writ then filed a return of service28 and issued reports of partial
delivery of possession.29 However, Miaque subsequently regained possession of the said premises
on the strength of the Court of Appeals’ Resolution dated June 14, 2005.30

On February 9, 2006, after the Court of Appeals issued its Resolution dated January 5, 2006
denying Miaque’s motion for reconsideration of the Decision dated April 29, 2005 in CA-G.R. SP No.
79439, the ATO filed with the RTC a motion for the revival of the writs of execution dated August 16,
2004 and June 2, 2005.31 This was opposed by Miaque.32 After the RTC heard the parties, it issued
an Order33 dated March 20, 2006 granting the ATO’s motion and revived the writs of execution dated
August 16, 2004 and June 2, 2005. Miaque filed a motion for reconsideration but the RTC denied it.34

A new case in the Court of Appeals: CA-G.R. CEB-SP No. 01603

On March 28, 2006, Miaque filed a petition35 for certiorari (with prayer for issuance of TRO and/or writ
of preliminary injunction) in the Court of Appeals, docketed as CA-G.R. CEB-SP No. 01603, where
he assailed the RTC’s Order dated March 20, 2006. He prayed, among others, that the
implementation of the writs of execution be enjoined. It is here where the Court of Appeals issued
the Resolutions being challenged in this case, namely, the Resolution dated March 29, 2006 issuing
a TRO effective for 60 days, and Resolution dated May 30, 2006 issuing a writ of preliminary
injunction enjoining the implementation of the writs of execution dated August 16, 2004 and June2,
2005. In particular, the Resolution dated May 30, 2006 reads: Before us for resolution is [Miaque]’s
application for the issuance of a writ of preliminary injunction that would restrain the respondent
judge, Sheriffs Marcial B. Lambuso, Winston T. Eguia, Camilo I. Divinagracia, Jr. and Eric George S.
Luntao and all other persons acting for and in their behalves, from enforcing the orders issued by the
respondent judge on March 20, 2006 and March 24, 2006, including the writ[s] of execution issued
pursuant thereto, while the petition in the case at bench is still pending with us.

After examining judiciously the record in this case, together with the submissions and contentions of
the parties, we have come up with a finding and so hold that there is a sufficient showing by
[Miaque] that the grounds for the issuance of a writ of preliminary injunction enumerated in Section 3
of Rule 58 of the 1997 Revised Rules of Court exist. We find that [Miaque] has a right in esse to be
protected and the acts against which the injunction is sought to be directed are violative of said right.
To our mind, [Miaque] appears to have a clear legal right to hold on to the premises leased by him
from ATO at least until such time when he shall have been duly ejected therefrom by a writ of
execution of judgment caused to be issued by the MTCC in Iloilo City, which is the court of origin of
the decision promulgated by this Court in CA-G.R. SP No. 79439 on April 29, 2005. Under the
attendant circumstances, it appears that the respondent judge orthe RTC in Iloilo City has no
jurisdiction to order the issuance of such writ of execution because we gave due course to the
petition for review filed with us in CA-G.R. SP No. 79439 and, in fact, rendered a decision on the
merit in said case, thereby divesting the RTC in Iloilo City of jurisdiction over the case as provided
for in the third paragraph of Section 8(a) of Rule 42of the 1997 Revised Rules of Court. In City of
Manila vs. Court of Appeals, 204 SCRA 362, as cited in Mocles vs. Maravilla, 239 SCRA 188, the
Supreme Court held as follows:

"The rule is that, if the judgment of the metropolitan trial court is appealed to the RTC and the
decision of the latter itself is elevated to the CA whose decision thereafter became final, the case
should be remanded through the RTC to the metropolitan trial court for execution."

WHEREFORE, in view of the foregoing premises, a WRIT OF PRELIMINARY INJUNCTION is

hereby ordered or caused to be issued by us enjoining the respondent judge, Sheriffs Marcial B.
Lambuso, Winston T. Eguia, Camilo I. Divinagracia, Jr. and Eric George S. Luntao and all other
persons acting for and in their behalves, from enforcing the orders issued by the respondent judge
on March 20, 2006 and March 24, 2006, including the writ[s] of execution issued pursuant thereto,
while the petition in the case at bench is still pending with us.

This is subject to the petitioner’s putting up of a bond in the sum of ONE HUNDRED THOUSAND
PESOS(₱100,000.00) to the effect that he will pay to the respondent ATO all damages which said
office may sustain by reason of the injunctive writ if we should finally decide that [Miaque] is not
entitled thereto.36

The present petition

The ATO claims that the Court of Appeals acted with grave abuse of discretion amounting to lack or
excess of jurisdiction in issuing the TRO and the subsequent writ of preliminary injunction through
the Order dated March 29, 2006 and the Resolution dated May 30,2006, respectively. According to
the ATO, the Court of Appeals ignored the government’s right under the law, Rules of Court,
jurisprudence and equity to the possession as well as to the payment of rental and concession
privilege fees which, at the time of the filing of this petition, already amounted to ₱2 Million. Such
right had already been decided with finality by this Court, which affirmed the Decision dated April 29,
2005 of the Court of Appeals in CA-G.R. SP No. 79439, but the Court of Appeals has repeatedly
thwarted it. The RTC acted properly and pursuant to Section 21, Rule 70 of the Rules of Court when
it issued the writs of execution.37 Moreover, the ATO asserts that a TRO cannot restrain an
accomplished fact, as the RTC’s writ of execution dated June 1, 2005 had already been partially
implemented.38

The ATO also argues that, by his admission that the issues in CAG.R. SP No. 79439 and CA-G.R.
CEB-SP No. 01603 are exactly the same, Miaque has committed forum shopping. In this connection,
the ATO points out that, in his opposition to the ATO’s motion for additional period of time to file its
comment on Miaque’s petition in CA-G.R. CEB-SP No. 01603, Miaque pointed out the similarity of
the core issues in CA-G.R. SP No. 79439 and CA-G.R. CEB-SP No. 01603, to wit:

b) The legal issues raised by the petition [in CA-G.R. CEBSP No. 01603] are very simple and
not complicated. In fact, the threshold issue, i.e., whether or not respondent court (RTC) has
jurisdiction to issue the writ of execution after the appeal over its decision had been
perfected and the petition for review [in CA-G.R. SP No. 79439] given due course, is exactly
the same one earlier raised by [the ATO itself in its] "Motion for Reconsideration" of the
Resolution dated June 14, 2005, in CA G.R. No. 79439, entitled "Bernie G. Miaque vs. Hon.
Danilo P. Galvez and Air Transportation Office (ATO)", (same parties in this proceeding),
then pending before the 20th Division, Court of Appeals, Cebu City.

Hence, all that [the ATO has] to do is simply to reiterate [its] said arguments, the law and
jurisprudence [it has] earlier invoked and, if [it wishes], add some more arguments, laws or
jurisprudence thereto. Such an exercise would definitely not require a sixty (60) day period. A ten
(10) day period is more than sufficient.39

The ATO further contends that the subject premises form part of a public utility infrastructure and,
pursuant to Presidential Decree No. 1818, the issuance of a TRO against a public utility
infrastructure is prohibited.40

The ATO adds that Miaque’s petition for certiorari in CA-G.R. CEBSP No. 01603 introduces a new
matter which is the alleged novation of the MTCC Decision when he deposited the amount of
₱319,900.00 to the Land Bank of the Philippines account of the ATO in February 2006. At any rate,
the ATO asserts that its tenacity in pursuing the execution of the judgment against Miaque belies its
consent to the alleged novation.41

For his part, Miaque argues that this Court has no jurisdiction to dismiss a petition still pending with
the Court of Appeals. Thus, the ATO cannot properly pray that this Court dismiss CA-G.R. CEB-SP
No. 01603. According to Miaque, the jurisdiction of this Court is limited only to the determination of
whether or not the Court of Appeals gravely abused its discretion in issuing a TRO and,
subsequently, a preliminary injunction in CA-G.R. CEB-SP No. 01603. In this connection, Miaque
insists that the Court of Appeals acted well within its jurisdiction in the issuance of both the Order
dated March 29, 2006 granting a TRO and the Resolution dated May 30, 2006 issuing a writ of
preliminary injunction in CA-G.R. CEB-SP No. 01603. As this Court has effectively affirmed the
MTCC Decision, then it is the MTCC and not the RTC which should have directed the execution of
the MTCC Decision. Moreover, the RTC had no jurisdiction to issue the writs of execution dated
August 16, 2004 and June 1, 2005 because the said court already lost its jurisdiction when Miaque
filed an appeal to the Court of Appeals on September 25, 2003, which appeal was given due
course.42

Miaque also asserts that the ATO’s claim that the RTC’s writ of execution had been partially
implemented is not true and that he is in possession of the entire subject premises when the Court of
Appeals issued the TRO and writ of preliminary injunction being challenged in this case.

Finally, Miaque alleges that no writ may be issued to enforce the MTCC Decision as the said
decision had already been novated by his deposit of ₱319,000.00 to the ATO’s account with the
Land Bank of the Philippines in February 2006.43

This Court, in a Resolution44 dated August 14, 2006, issued a TRO enjoining the Court of Appeals,
Miaque, and his agents and representatives from implementing the Resolution dated March 29,
2006 and the Resolution dated May 30, 2006 in CA-G.R. CEB-SP No. 01603.

The Court’s ruling

The petition is meritorious.

Preliminarily, the Court notes that the challenge to the Order dated March 29, 2006 granting a TRO,
effective for 60 days, is moot as its effectivity had already lapsed.

Cutting through the tangled web of issues presented by the contending parties, the basic question in
this petition is whether or not the Court of Appeals committed grave abuse of discretion amounting to
lack or excess of jurisdiction in issuing the Resolution dated May 30, 2006 which granted petitioner’s
application for the issuance of a writ of preliminary injunction in CA-G.R. CEB-SP No. 01603.

Section 21, Rule 70 of the Rules of Court provides the key to that question: Sec. 21. Immediate
execution on appeal to Court of Appeals or Supreme Court. – The judgment of the Regional Trial
Court against the defendant shall be immediately executory, without prejudice to a further appeal
that may be taken therefrom. (Emphasis supplied.)

This reflects Section 21 of the Revised Rule on Summary Procedure:

Sec. 21. Appeal. - The judgment or final order shall be appealable to the appropriate Regional Trial
Court which shall decide the same in accordance with Section 22 of Batas Pambansa Blg. 129. The
decision of the Regional Trial Court in civil cases governed by this Rule, including forcible entry and
unlawful detainer, shall be immediately executory, without prejudice to a further appeal that may be
taken therefrom. Section 10 of Rule 70 shall be deemed repealed. (Emphasis and underscoring
supplied.)

The above provisions are supplemented and reinforced by Section 4, Rule 39 and Section 8(b), Rule
42 of the Rules of Court which respectively provide:
Sec. 4. Judgments not stayed by appeal. – Judgments in actions for injunction, receivership,
accounting and support, and such other judgments as are now or may hereafter be declared to be
immediately executory, shall be enforceable after their rendition and shall not be stayed by an
appeal taken therefrom, unless otherwise ordered by the trial court. On appeal therefrom, the
appellate court in its discretion may make an order suspending, modifying, restoring or granting the
injunction, receivership, accounting, or award of support.

The stay of execution shall be upon such terms as to bond or otherwise as may be considered
proper for the security or protection of the rights of the adverse party.

xxxx

Sec. 8. Perfection of appeal; effect thereof.–

(a) Upon the timely filing of a petition for review and the payment of the corresponding docket and
other lawful fees, the appeal is deemed perfected as to the petitioner.

The Regional Trial Court loses jurisdiction over the case upon the perfection of the appeals filed in
due time and the expiration of the time to appeal of the other parties.

However, before the Court of Appeals gives due course to the petition, the Regional Trial Court may
issue orders for the protection and preservation of the rights of the parties which do not involve any
matter litigated by the appeal, approve compromises, permit appeals of indigent litigants, order
execution pending appeal in accordance with Section 2 of Rule 39, and allow withdrawal of the
appeal.

(b) Except in civil cases decided under the Rules on Summary Procedure, the appeal shall stay the
judgment or final order unless the Court of Appeals, the law, or these Rules shall provide otherwise.
(Emphases supplied.)

The totality of all the provisions above shows the following significant characteristics of the RTC
judgment in an ejectment case appealed to it:

(1) The judgment of the RTC against the defendant-appellant is immediately executory,
without prejudice to a further appeal that may be taken therefrom; and

(2) Such judgment of the RTC is not stayed by an appeal taken therefrom, unless otherwise
ordered by the RTC or, in the appellate court’s discretion, suspended or modified.

The first characteristic -- the judgment of the RTC is immediately executory -- is emphasized by the
fact that no resolutory condition has been imposed that will prevent or stay the execution of the
RTC’s judgment.45 The significance of this may be better appreciated by comparing Section 21 of
Rule 70 with its precursor, Section 10, Rule 70 of the 1964 Rules of Court which provided:

Sec. 10. Stay of execution on appeal to Court of Appeals or Supreme Court. – Where defendant
appeals from a judgment of the Court of First Instance, execution of said judgment, with respect to
the restoration of possession, shall not be stayed unless the appellant deposits the same amounts
and within the periods referred to in section 8 of this rule to be disposed of in the same manner as
therein provided.
Under the old provision, the procedure on appeal from the RTC’s judgment to the Court of Appeals
was, with the exception of the need for a supersedeas bond which was not applicable, virtually the
same as the procedure on appeal of the MTC’s judgment to the RTC. Thus, in the contemplated
recourse to the Court of Appeals, the defendant, after perfecting his appeal, could also prevent the
immediate execution of the judgment by making the periodic deposit of rentals during the pendency
of the appeal and thereby correspondingly prevent restitution of the premises to the plaintiff who had
already twice vindicated his claim to the property in the two lower courts. On the other hand, under
the amendatory procedure introduced by the present Section 21 of Rule 70, the judgment of the
RTC shall be immediately executory and can accordingly be enforced forthwith. It shall not be stayed
by the mere continuing deposit of monthly rentals by the dispossess or during the pendency of the
case in the Court of Appeals or this Court, although such execution of the judgment shall be without
prejudice to that appeal taking its due course. This reiterates Section 21 of the Revised Rule on
Summary Procedure which replaced the appellate procedure in, and repealed, the former Section
10, Rule 70 of the 1964 Rules of Court.46 Teresa T. Gonzales La’O & Co., Inc. v. Sheriff
Hatab47 states:

Unlike Rule 70 of the 1964 Revised Rules of Court where the defendant, after perfecting his appeal,
could prevent the immediate execution of the judgment by taking an appeal and making a periodic
deposit of monthly rentals during the pendency of the appeal thereby preventing the plaintiff from
taking possession of the premises in the meantime, the present wording of Section 21, Rule 70
explicitly provides that the judgment of the regional trial court in ejectment cases appealed to it shall
be immediately executory and can be enforced despite the perfection of an appeal to a higher
court.48 (Emphasis supplied.)

The RTC’s duty to issue a writ of execution under Section 21 of Rule 70 is ministerial and may be
compelled by mandamus.49 Section 21 of Rule 70 presupposes that the defendant in a forcible entry
or unlawful detainer case is unsatisfied with the RTC’s judgment and appeals to a higher court. It
authorizes the RTC to immediately issue a writ of execution without prejudice to the appeal taking its
due course.50 The rationale of immediate execution of judgment in an ejectment case is to avoid
injustice to a lawful possessor.51 Nevertheless, it should be stressed that the appellate court may stay
the writ of execution should circumstances so require.52

The second characteristic -- the judgment of the RTC is not stayed by an appeal taken therefrom –
reinforces the first. The judgment of the RTC in an ejectment case is enforceable upon its rendition
1âw phi 1

and, upon motion, immediately executory notwithstanding an appeal taken therefrom. The execution
of the RTC’s judgment is not discretionary execution under Section 2, Rule 39 of the Rules of Court
which provides:

Section 2. Discretionary execution. –

(a) Execution of a judgment or a final order pending appeal. – On motion of the prevailing party with
notice to the adverse party filed in the trial court while it has jurisdiction over the case and is in
possession of either the original record or the record on appeal, as the case may be, at the time of
the filing of such motion, said court may, in its discretion, order execution of a judgment or final order
even before the expiration of the period to appeal.

After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in the
appellate court.

Discretionary execution may only issue upon good reasons to be stated in a special order after due
hearing.
(b) Execution of several, separate or partial judgments. – A several, separate or partial judgment
may be executed under the same terms and conditions as execution of a judgment or final order
pending appeal.

Discretionary execution is authorized while the trial court, which rendered the judgment sought to be
executed, still has jurisdiction over the case as the period to appeal has not yet lapsed and is in
possession of either the original record or the record on appeal, as the case may be, at the time of
the filing of the motion for execution. It is part of the trial court’s residual powers, or those powers
which it retains after losing jurisdiction over the case as a result of the perfection of the appeal.53 As a
rule, the judgment of the RTC, rendered in the exercise of its appellate jurisdiction, being sought to
be executed in a discretionary execution is stayed by the appeal to the Court of Appeals pursuant to
Section 8(b), Rule 42 of the Rules of Court. On the other hand, execution of the RTC’s judgment
under Section 21, Rule 70 is not discretionary execution but a ministerial duty of the RTC.54 It is not
governed by Section 2, Rule 39 of the Rules of Court but by Section 4, Rule 39 of the Rules of Court
on judgments not stayed by appeal. In this connection, it is not covered by the general rule, that the
judgment of the RTC is stayed by appeal to the Court of Appeals under Section 8(b), Rule 42 of the
Rules of Court, but constitutes an exception to the said rule. In connection with the second
characteristic of the RTC judgment in an ejectment case appealed to it, the consequence of the
above distinctions between discretionary execution and the execution of the RTC’s judgment in an
ejectment case on appeal to the Court of Appeals is that the former may be availed of in the RTC
only before the Court of Appeals gives due course to the appeal while the latter may be availed of in
the RTC at any stage of the appeal to the Court of Appeals. But then again, in the latter case, the
Court of Appeals may stay the writ of execution issued by the RTC should circumstances so
require.55 City of Naga v. Hon. Asuncion56 explains:

This is not to say that the losing defendant in an ejectment case is without recourse to avoid
immediate execution of the RTC decision. The defendant may x x x appeal said judgment to the
Court of Appeals and therein apply for a writ of preliminary injunction. Thus, as held in Benedicto v.
Court of Appeals, even if RTC judgments in unlawful detainer cases are immediately executory,
preliminary injunction may still be granted. (Citation omitted.)

To reiterate, despite the immediately executory nature of the judgment of the RTC in ejectment
cases, which judgment is not stayed by an appeal taken therefrom, the Court of Appeals may issue
a writ of preliminary injunction that will restrain or enjoin the execution of the RTC’s judgment. In the
exercise of such authority, the Court of Appeals should constantly be aware that the grant of a
preliminary injunction in a case rests on the sound discretion of the court with the caveat that it
should be made with great caution.57

A writ of preliminary injunction is an extraordinary event which must be granted only in the face of
actual and existing substantial rights. The duty of the court taking cognizance of a prayer for a writ of
preliminary injunction is to determine whether the requisites necessary for the grant of an injunction
are present in the case before it. In the absence of the same, and where facts are shown to be
wanting in bringing the matter within the conditions for its issuance, the ancillarywrit must be struck
down for having been rendered in grave abuse of discretion.58

In this case, the decisions of the MTCC in Civil Case No. 01 (38), of the RTC in Civil Case No. 02-
27292, and of the Court of Appeals in CAG.R. SP No. 79439 unanimously recognized the right of the
ATO to possession of the property and the corresponding obligation of Miaque to immediately
vacate the subject premises. This means that the MTCC, the RTC, and the Court of Appeals all
ruled that Miaque does not have any right to continue in possession of the said premises. It is
therefore puzzling how the Court of Appeals justified its issuance of the writ of preliminary injunction
with the sweeping statement that Miaque "appears to have a clear legal right to hold on to the
premises leased by him from ATO at least until such time when he shall have been duly ejected
therefrom by a writ of execution of judgment caused to be issued by the MTCC in Iloilo City, which is
the court of origin of the decision promulgated by this Court in CA-G.R. SP No. 79439."
Unfortunately, in its Resolution dated May 30, 2006 granting a writ of preliminary injunction in
Miaque’s favor, the Court of Appeals did not state the source or basis of Miaque’s "clear legal right to
hold on to the [said] premises." This is fatal.

In Nisce v. Equitable PCI Bank, Inc.,59 this Court stated that, in granting or dismissing an application
for a writ of preliminary injunction, the court must state in its order the findings and conclusions
based on the evidence and the law. This is to enable the appellate court to determine whether the
trial court committed grave abuse of its discretion amounting to excess or lack of jurisdiction in
resolving, one way or the other, the plea for injunctive relief. In the absence of proof of a legal right
and the injury sustained by one who seeks an injunctive writ, an order for the issuance of a writ of
preliminary injunction will be nullified. Thus, where the right of one who seeks an in junctive writ is
doubtful or disputed, a preliminary injunction is not proper. The possibility of irreparable damage
without proof of an actual existing right is not a ground for a preliminary injunction.

The sole basis of the Court of Appeals in issuing its Resolution dated May 30, 2006 is its view that
the RTC "has no jurisdiction to order the issuance of [the] writ of execution" because, when it gave
due course to the petition for review in CA-G.R. SP No. 79439, the RTC was already divested of
jurisdiction over the case pursuant to the third paragraph of Section 8(a), Rule 42 of the Rules of
Court. The Court of Appeals is mistaken. It disregards both (1) the immediately executory nature of
the judgment of the RTC in ejectment cases, and (2) the rule that such judgment of the RTC is not
stayed by an appeal taken there from. It ignores the nature of the RTC’s function to issue a writ of
execution of its judgment in an ejectment case as ministerial and not discretionary.

The RTC was validly exercising its jurisdiction pursuant to Section 21, Rule 70 of the Rules of Court
when it issued the writs of execution dated August 16, 2004 and June 2,2005. While the Court of
Appeals in CA-G.R. SP No. 79439 enjoined the execution of the RTC’s judgment during the
pendency of CA-G.R. SP No. 79439, the RTC revived the writs of execution dated August 16, 2004
and June 1, 2005 in its Order dated March 20, 2006, after the Court of Appeals denied Miaque’s
motion for reconsideration of the dismissal of the petition in CA-G.R. SP No. 79439. Indeed, the said
writs of execution need not even be revived because they continue in effect during the period within
which the judgment may be enforced by motion, that is within five years from entry of judgment,
pursuant to Section 14,60 Rule 39 of the Rules of Court in relation to Section 661 of the same Rule.

There is grave abuse of discretion when an act is (1) done contrary to the Constitution, the law or
jurisprudence, or (2) executed whimsically, capriciously or arbitrarily out of malice, ill will or personal
bias.62 In this case, the Court of Appeals issued the Resolution dated May 30, 2006 granting
Miaque’s prayer for a writ of preliminary injunction contrary to Section 21, Rule 70 and other relevant
provisions of the Rules of Court, as well as this Court’s pronouncements in Teresa T. Gonzales La’O
& Co., Inc.63 and Nisce.64 Thus, the Court of Appeals committed grave abuse of discretion when it
issued the Resolution dated May 30, 2006 in CA-G.R. CEB-SP No. 01603.

This Court notes that the controversy between the parties in this case has been unduly protracted,
considering that the decisions of the MTCC, the RTC, the Court of Appeals, and this Court in favor of
the ATO and against Miaque on the ejectment case are already final and executory. The Court of
Appeals should therefore proceed expeditiously in resolving CA-G.R. CEBSP No. 01603.

WHEREFORE, the petition is hereby GRANTED. The Resolution dated May 30, 2006 of the Court of
Appeals in CA-G.R. CEB-SP No. 01603 is ANNULLED for having been rendered with grave abuse
of discretion. The Court of Appeals is directed to conduct its proceedings in CA-G.R. CEB-SP No.
01603 expeditiously and without delay.

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENO

Chief Justice
Chairperson

LUCAS P. BERSAMIN MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice

Footnotes

1
Rollo, pp. 45-46; penned by Associate Justice Isaias P. Dicdican with Associate Justices
Vicente L. Yap and Apolinario D. Bruselas, Jr., concurring.

2
Id. at 47-49; penned by Associate Justice Isaias P. Dicdican with Associate Justices Ramon
M. Sato, Jr. and Apolinario D. Bruselas, Jr., concurring.

3
Id. at 50-62.

4
Id. at 63-78.

5
Id. at 77-78.

6
Id. at 79-89.

7
Id. at 100-103.
8
Id. at 125-133.

9
Id. at 135-136.

10
Id. at 159.

11
Id. at 160. Upon finality, entry of judgment was made on July 10, 2006.

12
Id. at 161-162.

13
Id. at 163-171.

14
Id. at 172-174.

15
Id. at 174.

16
Id. at 175-176.

17
Id. at 177-180.

18
Id. at 181-184.

19
Id. at 186-194.

20
Id. at 195-200.

21
Id. at 201-207.

22
Id. at 210-212.

23
Id. at 213-216.

24
Id. at 208-209.

25
Id. at 249-256.

26
Id. at 257-262.

27
Id. at 263-264.

28
Id. at 217-219.

29
Id. at 243-244.

30
Id. at 272-273.

31
Id. at 265-277.

32
Id. at 278-285.
33
Id. at 302-305.

34
Id. at 306-327.

35
Id. at 329-365.

36
Id. at 47-49.

37
Id. at 21-25.

38
Id. at 28-29.

39
Id. at 26. Underscoring supplied in the ATO’s petition.

40
Id. at 28-29.

41
Id. at 34-36.

42
Id. at 682-687.

43
Id. at 691-695.

44
Id. at 420-421.

45
This is unlike the case of the execution of the judgment of the MTCC under Section 19,
Rule 70 of the Rules of Court. (See City of Naga v. Hon. Asuncion, 579 Phil. 781, 797 [2008].
There, this Court said that "Section 21, Rule 70 of the Rules does not provide for a
procedure to avert immediate execution of an RTC decision.")

46
Regalado, Florenz, Remedial Law Compendium(10th edition), Vol. I, p. 906.

47
386 Phil. 88 (2000).

48
Id. at 92.

49
See Uy v. Hon. Santiago, 391 Phil. 575, 578 (2000).

50
City of Naga v. Hon. Asuncion, supra note 45 at 796-797.

51
Bugarin v. Palisoc, 513 Phil. 59, 65 (2005).

52
City of Naga v. Hon. Asuncion, supra note 45 at 797.

53
See Section 9, Rule 41 and Section 8, Rule 42 of the Rules of Court.

54
See Uy v. Santiago, supra note 49.

55
City of Naga v. Hon. Asuncion, supra note 45 at 798-797.

56
Id. at 798.
 Bangko Sentral ng Pilipinas Monetary Board v. Antonio-Valenzuela, G.R. No. 184778,
57

October 2, 2009, 602 SCRA 698, 722.

Palm Tree Estates, Inc. v. Philippine National Bank, G.R. No. 159370, October 3, 2012,
58

682 SCRA 194, 213.

59
545 Phil. 138, 160-161 (2007).

60
Section 14, Rule 39 of the Rules of Court provides: Sec. 14. Return of writ of execution. –
The writ of execution shall be returnable to the court issuing it immediately after the judgment
has been satisfied in part or in full. If the judgment cannot be satisfied in full within thirty (30)
days after his receipt of the writ, the officer shall report to the court and state the reason
therefor. Such writ shall continue in effect during the period within which the judgment may
be enforced by motion. The officer shall make a report to the court every thirty (30) days on
the proceedings taken thereon until the judgment is satisfied in full, or its effectivity expires.
The returns or periodic reports shall set forth the whole of the proceedings taken, and shall
be filed with the court and copies thereof promptly furnished the parties.

61
Section 6, Rule 39 of the Rules of Court provides: Sec. 6. Execution by motion or by
independent action. – A final and executory judgment or order may be executed on motion
within five (5) years from the date of its entry. After the lapse of such time, and before it is
barred by the statute of limitations, a judgment may be enforced by action. The revived
judgment may also be enforced by motion within five (5) years from the date of its entry and
thereafter by action beforeit is barred by the statute of limitations.

Information Technology Foundation of the Philippines v. Commission on Elections, 464

62

Phil. 173, 190 (2004).

63
Teresa T. Gonzales La’O & Co., Inc. v. Sheriff Hatab, supra note 47.

64
Nisce v. Equitable PCI Bank, Inc., supra note 59.
G.R. No. 192048

DOUGLAS F. ANAMA, Petitioner,

vs.
CITIBANK, N.A. (formerly First National City Bank), Respondent.

DECISION

JARDELEZA, J.:

This is a petition for review on certiorari1 under Rule 45 of the Revised Rules of Court seeking to
reverse and set aside the Decision2 dated November 19, 2009 (assailed Decision) and the
Resolution3 dated April 20, 2010 (assailed Resolution) of the Court of Appeals (CA) in CA-G.R. SP
No. 1077 48, denying petitioner's action for revival of judgment.

In consideration for a loan obtained from respondent First National City Bank of New York (now
Citibank, N.A.) (Citibank), on November 10, 1972, petitioner Douglas F. Anama (Anama) executed a
promissory note in the amount of ₱418,000.00 in favor of Citibank.4 To secure payment of the
obligation, Anama also executed in favor of Citibank a chattel mortgage over various industrial
machineries and equipment located on his property at No. 1302, E. de los Santos Avenue, Quezon
City.5 For Anama's failure to pay the monthly installments due on the promissory note starting
January 1974, Citibank filed a complaint for sum of money and replevin6 dated November 13, 1974
(docketed as Civil Case No. 95991) with the Court of First Instance of Manila (now Regional Trial
Court), Branch 11. Anama filed his answer with counterclaim7 and his amended answer with
counterclaim,8 alleging, among others, that his failure to pay the monthly installments was due to the
fault of Citibank as it refused to receive the checks he issued, and that the chattel mortgage was
defective and void.9

On December 2, 1974, the Regional Trial Court (RTC), upon proof of default of Anama in the
payment of his loan, issued an Order of Replevin over the machineries and equipment covered by
the chattel mortgage.10

On January 29, 1977, Citibank, alleging that the properties subject of the Order of Replevin which
were taken by the Sheriff under his custody were not delivered to it, filed a motion for [issuance of]
alias writ of seizure.11 Citibank prayed that an alias writ of seizure be issued directing the Sheriff to
seize the properties and to dispose them in accordance with Section 6, Rule 60 of the Revised Rules
of Court. The RTC granted the motion through its Resolution12 dated February 28, 1977. The Ex-
Officio Sheriff of Quezon City issued three receipts for the seized properties on March 1 7, 18, and
19, 1977.13 Anama filed a motion for reconsideration but this was denied by the RTC in a
Resolution14 dated March 18, 1977.

Anama then filed a petition for certiorari and prohibition with writ of preliminary injunction with the CA
on March 21, 1977 (docketed as CAG. R. SP No. 06499) on the ground that the above resolutions of
the trial court were issued in excess of jurisdiction and with grave abuse of discretion because of the
lack of evidence proving Citibank's right to possession over the properties subject of the chattel
mortgage.15

On July 30, 1982, the CA rendered a Decision16 (July 30, 1982 Decision) granting Anama's petition
for certiorari and prohibition and nullifying the RTC's orders of seizure, to wit:
WHEREFORE, the petition is granted. The questioned resolutions issued by the respondent judge in
Civil Case No. 95991, dated February 28, 1977, and March 18, 1977, together with the writs and
processes emanating or deriving therefrom, are hereby declared null and void ab initio.

The respondent ex-of[f]icio sheriff of Quezon City and the respondent First National City Bank are
hereby ordered to return all the machineries and equipments with their accessories seized,
dismantled and hauled, to their original and respective places and positions in the shop flooring of
the petitioner's premises where these articles were, before they were dismantled, seized and hauled
at their own expense. The said respondents are further ordered to cause the repair of the concrete
foundations destroyed by them including the repair of the electrical wiring and facilities affected
during the seizure, dismantling and hauling.

The writ of preliminary injunction heretofore in effect is hereby made permanent. Costs against the
private respondents.

SO ORDERED.17

On August 25, 1982, Citibank filed its petition for review on certiorari with this Court (docketed as
G.R. No. 61508) assailing the July 30, 1982 Decision of the CA.18 On March 17, 1999, we
promulgated a Decision19 dismissing Citibank's petition for lack of merit and affirming the July 30,
1982 Decision of the CA. An Entry of Judgment20 was subsequently issued on April 12, 1999.

Meanwhile, on November 19, 1981, during the pendency of CA-G.R. SP No. 06499 in the CA, the
fourth floor of the Manila City Hall, where Branch 11 of the R TC of Manila and its records, including
the records of Civil Case No. 95991 were located, was destroyed by fire.21

On February 10, 1982, Anama filed a petition for reconstruction of record22 in the RTC, which the
latter granted in an Order23 dated May 3, 1982. On December 2, 1982, considering that G.R. No.
61508 was already pending before this Court, the R TC issued an Order24 directing that all pending
incidents in Civil Case No. 95991 be suspended until G.R. No. 61508 has been resolved.

On March 12, 2009, Anama filed a petition for revival of judgment with the CA (docketed as CA-G.R.
SP No. 107748).25 Anama sought to revive the CA's July 30, 1982 Decision in CA-G.R. SP No.
06499 and argued that Citibank's failure to file an action for the reconstitution of the records in the
RTC in Civil Case No. 95991 constituted abandonment of its cause of action and complaint against
Anama.26 In addition to the revival of the CA's July 30, 1982 Decision in CA-G.R. SP No. 06499,
Anama sought to remand the case to the RTC for further proceedings in Civil Case No. 95991,
particularly his counterclaims against Citibank.27

In its comment, Citibank argued that the petition should be dismissed as an action for revival of
judgment is within the exclusive original jurisdiction of the RTC. It also argued that laches has set in
against Anama for having slept on his rights for almost 10 years. Lastly, Citibank claimed that it did
not abandon its money claim against Anama when it did not initiate the reconstitution proceedings in
the RTC.28

On November 19, 2009, the CA denied the petition for lack of jurisdiction. Pertinent portions of the
assailed Decision reads:

[W]e find that respondent bank correctly question (sic) this Court's jurisdiction to entertain the instant
petition to revive the July 30, 1982 decision in CA-G.R. SP No. 06499. While concededly filed within
10 years from the April 12, 1999 entry of the decision rendered in G.R. No. 61508, the petition
should have been filed with the appropriate Regional Trial Court which has exclusive original
jurisdiction over all civil actions in which the subject of the litigation is incapable of pecuniary
estimation and/or all cases not within the exclusive jurisdiction of any court, tribunal, person or body
exercising judicial or quasijudicial functions. x x x29

Anama filed his motion for reconsideration which the CA denied through its assailed Resolution30
dated April 20, 2010.

On June 10, 2010, Anama filed this petition31 and argued that his petition for revival of judgment
should be filed in the court that issued the judgment sought to be revived, the CA in this case.32

In its comment,33 Citibank agrees with the CA that jurisdiction over actions for revival of judgments is
with the R TC.34 Citibank also argues that Anama's petition to revive judgment is already barred by
laches and that it did not waive or abandon its claim against Anama in Civil Case No. 95991.35

On December 30, 2010, Anama filed his reply.36

On August 25, 2016, Anama filed a manifestation37 reiterating the arguments on his petition. On
February 17, 2017, Citibank filed its comment38 stressing that the CA did not err in dismissing the
petition to revive judgment on the ground of lack of jurisdiction. On March 16, 2017, Anama filed his
reply.39

We deny the petition.

An action to revive a judgment is an action whose exclusive purpose is to enforce a judgment which
could no longer be enforced by mere motion.40 Section 6, Rule 39 of the Revised Rules of Court
provides:

Sec. 6. Execution by motion or by independent action. - A final and executory judgment or order may
be executed on motion within five (5) years from the date of its entry. After the lapse of such time,
and before it is barred by the statute of limitations, a judgment may be enforced by action. The
revived judgment may also be enforced by motion within five (5) years from the date of its entry and
thereafter by action before it is barred by the statute of limitations.

Section 6 is clear. Once a judgment becomes final and executory, the prevailing party can have it
executed as a matter of right by mere motion within five years from the date of entry of judgment. If
the prevailing party fails to have the decision enforced by a motion after the lapse of five years, the
said judgment is reduced to a right of action which must be enforced by the institution of a complaint
in a regular court within 10 years from the time the judgment becomes final.41

Further, a revival suit is a new action, having for its cause of action the judgment sought to be
revived.42 It is different and distinct from the original judgment sought to be revived or enforced.43 It is
a new and independent action, wherein the cause of action is the decision itself and not the merits of
the action upon which the judgment sought to be enforced is rendered. Revival of judgment is
premised on the assumption that the decision to be revived, either by motion or by independent
action, is already final and executory.44

As an action for revival of judgment is a new action with a new cause of action, the rules on
instituting and commencing actions apply, including the rules on jurisdiction. Its jurisdictional
requirements are not dependent on the previous action and the petition does not necessarily have to
be filed in the same court which rendered judgment.45
Jurisdiction is defined as the power and authority of the courts to hear, try and decide cases. What
determines the jurisdiction of the court is the nature of the action pleaded as appearing from the
allegations in the complaint. The averments and the character of the relief sought are the ones to be
consulted.46

The principle is that jurisdiction over the subject matter of a case is conferred by law and determined
by the allegations in the complaint which comprise a concise statement of the ultimate facts
constituting the plaintiffs cause of action. The nature of an action, as well as which court or body has
jurisdiction over it, is determined based on the allegations contained in the complaint of the plaintiff,
irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims
asserted.47 Jurisdiction being a matter of substantive law, the established rule is that the statute in
force at the time of the commencement of the action determines the jurisdiction of the court.48

Batas Pambansa Bilang 129 (BP 129), otherwise known as the Judiciary Reorganization Act of 1980
and its amendments, is the law which confers jurisdiction to the courts. Section 19 of BP 129, as
amended by Republic Act No. 7691,49 provides:

Sec. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original
jurisdiction:

(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;

In determining the jurisdiction of an action whose subject is incapable of pecuniary estimation, the
nature of the principal action or remedy sought must first be ascertained. If it is primarily for the
recovery of a sum of money, the claim is considered capable of pecuniary estimation and the
jurisdiction of the court depends on the amount of the claim. But, where the primary issue is
something other than the right to recover a sum of money, where the money claim is purely
incidental to, or a consequence of, the principal relief sought, such are actions whose subjects are
incapable of pecuniary estimation, hence cognizable by the RTCs.50

As an action to revive judgment raises issues of whether the petitioner has a right to have the final
and executory judgment revived and to have that judgment enforced and does not involve recovery
of a sum of money, we rule that jurisdiction over a petition to revive judgment is properly with the R
TCs. Thus, the CA is correct in holding that it does not have jurisdiction to hear and decide Anama's
action for revival of judgment.

A reading of the CA's jurisdiction also highlights the conclusion that an action for revival of judgment
is outside the scope of jurisdiction of the CA. Section 9 of BP 129 provides:

Sec. 9. Jurisdiction. -The Court of Appeals shall exercise:

1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo
warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;

2. Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts;
and

3. Exclusive appellate jurisdiction over all final judgments, resolutions, orders or awards of Regional
Trial Courts and quasi-judicial agencies, instrumentalities, boards or commission, including the
Securities and Exchange Commission, the Social Security Commission, the Employees
Compensation Commission and the Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of
the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph 4 of the fourth paragraph of Section 17 of
the Judiciary Act of 1948.

The CA also has concurrent original jurisdiction over petitions for issuance of writ of amparo,51 writ
of habeas data,52and writ of kalikasan. 53

Not being one of the enumerated cases above, it is clear that the CA is without jurisdiction to hear
and decide an action for revival of judgment.

Anama's reliance on Aldeguer v. Gemelo54 to justify his filing with the CA is misplaced. The issue
1avvphi1

in Aldeguer is not jurisdiction but venue. The issue was which between the RTC of Iloilo and RTC of
Negros Occidental was the proper court to hear the action.

However, venue and jurisdiction are entirely distinct matters. Jurisdiction may not be conferred by
consent or waiver upon a court which otherwise would have no jurisdiction over the subject matter of
an action; but the venue of an action as fixed by statute may be changed by the consent of the
parties and an objection that the plaintiff brought his suit in the wrong county may be waived by the
failure of the defendant to make a timely objection. In either case, the court may render a valid
judgment. Rules as to jurisdiction can never be left to the consent or agreement of the parties,
whether or not a prohibition exists against their alteration.55 Venue is procedural, not jurisdictional,
and hence may be waived.56

As we have already ruled on jurisdiction, there is no more reason to discuss whether laches has set
in against Anama.

Considering, however, that the proceedings in Civil Case No. 95991 have been suspended and
remains pending since 1982, we deem it necessary to lift the order of suspension and instruct the
trial court to hear and try the case with deliberate dispatch.

WHEREFORE, the petition is DENIED. The Decision dated November 19, 2009 and Resolution
dated April 20, 2010 of the Court of Appeals in CA-G.R. SP No. 107748 are AFFIRMED.

We direct the trial court to proceed with the hearing and disposition in Civil Case No. 95991 with all
deliberate dispatch.

SO ORDERED.

FRANCIS H. JARDELEZA
Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice
Chairperson

TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO

Associate Justice Associate Justice
 NOEL GIMENEZ TIJAM
Associate Justice

CERTIFICATION

Pursuant to the Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Court’s Division.

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes

1
Rollo, pp. 11-139.

2
Id. at 141-151. Penned by Associate Justice Rebecca De Guia-Salvador and concurred in
by Associate Justices Apolinario D. Bruselas, Jr. and Mario V. Lopez.

3
Id. at 153-154.

4
Id at 142, 155,208-09.

5
Id.at142,157 & 209.

6
Id. at 155-160.

7
Id. at 161-166.

8
Id. at 168-174.

9
Id. at 171-173.

10
Id. at 212.

11
Id. at 179-180.

12
Id. at 185-184.

13
Id. at 187-189.

14
Id. at 185-186.

15
Id. at 27, 143-144 & 215.

16
Id. at 198-207.
17
Id. at 207.

18
Id. at 28.

19
Id. at 208-232.

20
Id. at 233.

21
Id. at 32, 144 & 234.

22
Id. at 234-236.

23
Id. at 237-238.

24
Id. at 256.

25
Id. at 144-145.

26
Id. at 33-34 & 145.

27
Id. at 145.

28
Id.

29
Id. at 147.

30
Id. at 153-154.

31
Id. at l 1-13 9.

32
Id. at 122.

33
Id. at 280-3 l 0.

34
Id. at 295-296.

35
Id. at 299-302.

36
Id.at313-382.

37
Id. at 397-432.

38
Id. at 443-461.

39
Id. at 462-525.

40
Caiña v. Court of Appeals, G.R. No. 114393, December 15, 1994, 239 SCRA 252, 261.

41
Rubio v. Alabata, G.R. No. 203947, February 26, 2014, 717 SCRA 554, 559-560.
 Philippine National Bank v. Nuevas, G.R. No. L-21255, November 29, 1965, 15 SCRA 434,
42

436-437, citing Philippine National Bank v. Bondoc, G.R. No. L-20236, July 30, 1965, 14
SCRA 770.

Heirs of Numeriano Miranda, Sr. v. Miranda, G.R. No. 179638, July 8, 2013, 700 SCRA
43

746, 756, citing Juco v. Heirs of Tomas Siy Chung Fu, G.R. No. 150233, February 16, 2005,
45 l SCRA 464, 473-474

44
Saligumba v. Palanog, GK No. 143365, December 4, 2008, 573 SCRA 8, 15-16.

45
Riano, Civil Procedure (The Bar lectures Series), Vol. 1, 2011, p. 655.

46
Padlan v. Dinglasan, G.R. No. 180321, March 20, 2013, 694 SCRA 91, 99.

City of Dumaguete v. Philippine Ports Authority, G.R. No. 168973, August 24, 2011, 656
47

SCRA 102,119.

Bank of the Philippine Islands v. Hong, G.R. No. 161771, February 15, 2012, 666 SCRA
48

71, 77, citing Llamas v. Court of Appeals, G.R. No. 149588, September 29, 2009, 601 SCRA
228, 233.

An Act Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts,
49

and Municipal Circuit Trial Courts, Amending for the Purpose Batas Pambansa Blg. 129,
Otherwise Known >as the "Judiciary Reorganization Act of 1980" (1994).

50
Villena v. Payoyo, G.R. No. 163021, April 27, 2007, 522 SCRA 592, 596-597.

51
THE RULE ON THE WRIT OF AMPARO, A.M. No. 07-9-12-SC, September 25, 2007, Sec.
3.

THE RULE ON THE WRIT OF HABEAS DATA, A.M. No. 08-1-16-SC, January 22, 2008,
52

Sec. 3.

RULES OF PROCEDURE FOR ENVIRONMENTAL CASES, A.M. No. 09-6-8-SC, April 13,
53

2010, Rule 7, Sec. 3.

54
68 Phil. 421 (1939).

Heirs of Pedro Lopez v. De Castro, G.R. No. 112905, February 3, 2000, 324 SCRA 591,
55

609, citing Santos III Northwest Orient Airlines, G.R. No. 101538, June 23, 1992, 210 SCRA
256, 265-266.

56
Id.
G.R. No. 176898 December 3, 2012

GEORGE S. H. SY, doing business under the name and style of OPM INTERNATIONAL
CORPORATION,Petitioner,
vs.
AUTOBUS TRANSPORT SYSTEMS INC., Respondent.

DECISION

DEL CASTILLO, J.:

A writ of preliminary mandatory injunction will not be set aside unless it was issued with grave
abused of discretion.

This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assails the Decision2 dated
September 21, 2006 and the Resolution3 dated March 6, 2007 of the Court of Appeals (CA) in CA-
G.R. SP No. 90926.

Factual Antecedents

Petitioner George S.H. Sy is doing business under the name and style of OPM International
Corporation (OPM), which is engaged in the sale and installation of bus air conditioning units.4

Sometime in July 1996, petitioner entered into a verbal agreement with respondent Autobus
Transport Systems, Inc.,5 a public utility bus company plying the northern Luzon routes from
Manila.6 Under their agreement, respondent would purchase Konvecta air conditioning units from
petitioner and petitioner would finance respondent’s acquisition of twenty-two (22) units of bus
engine and chassis from Commercial Motors Corporation (CMC) and twenty-two (22) bus deluxe
bodies to be built by Almazora Motors Corporation (AMC).7 The parties agreed that respondent would
amortize the payments for the Konvecta air conditioning units and the bus units separately;8 that
petitioner would settle respondent’s account with CMC starting on the fourteenth (14th) month from
the time of the first delivery of the bus engines and chassis; and that respondent would pay
petitioner the acquisition cost of the 22 units of bus engines and chassis in 36 monthly installments,
starting on the fifteenth (15th) month from the time of the first delivery of the bus engines and
chassis.9 As security, respondent would execute Chattel Mortgages over the buses in favor of
CMC.10 Once petitioner has fully paid the amortizations to CMC, respondent would execute new
Chattel Mortgages over the buses, this time, in favor of petitioner.11 In the meantime, respondent
would deliver to petitioner titles to five properties in Caloocan City registered under the name of
Gregorio Araneta III, the chairman of respondent, as security for petitioner’s advances to CMC.12

The 22 bus units were delivered to respondent by CMC in three batches: 10 in November 1996, five
in March 1997 and seven in October 1997.13 After the delivery of the first batch, respondent delivered
to petitioner Transfer Certificates of Title (TCT) Nos. 292199, 292200, 292201, 292202, and
292203.14

Petitioner, however, defaulted in paying the amortizations to CMC, forcing the latter to demand
payment from respondent.15 Consequently, respondent was compelled to pay some of the obligations
directly to CMC.16

On November 26, 1998, respondent, through counsel, issued a letter to petitioner demanding that he
settle the obligations with CMC or return the five titles to respondent.17
On December 5, 1998, petitioner, in a letter, apologized for the delay and requested for an extension
until January 31, 1999 to settle respondent’s obligations with CMC.18

On January 28, 1999, respondent, through counsel, again sent a letter to petitioner reminding him of
his promise to settle the obligations by January 31, 1999.19

On the same date, petitioner, thru a letter, asked respondent for another extension of 10 days or
until February 10, 1999.20

On March 12, 1999, due to the failure of petitioner to settle the obligations with CMC, respondent
filed a complaint for Specific Performance21 against petitioner.22 The case was docketed as Civil Case
No. 99-93127 and raffled to Branch 45 of the Regional Trial Court (RTC) of Manila. Respondent
prayed that a decision be rendered:

1. Ordering [petitioner] to perform all his obligations under the verbal agreement by way of
paying the balance of [respondent’s] loan to CMC;

2. Ordering [petitioner] to return to [respondent] the mortgaged five (5) Transfer Certificates
of Title Nos. 292199, 292200, 292201, 292202 and 292203;

3. Ordering [petitioner] to pay [respondent] attorney’s fees amounting to P50,000.00 plus

P2,000.00 per hearing attended and pleadings submitted in Court.23

In his Answer,24 petitioner interposed the defense of lack of cause of action, contending that
respondent has no right to institute the present action because the controversy is between petitioner
and CMC.25 Petitioner also alleged that he failed to settle respondent’s obligations with CMC because
respondent stopped paying its amortizations.26 Thus, petitioner prayed that respondent be ordered to
pay the amount of P56,000,000.00, representing respondent’s alleged unpaid balance for the entire
transaction.27

On the scheduled pre-trial, petitioner and his counsel failed to appear, prompting the RTC to declare
petitioner in default.28 Upon petitioner’s motion,29 the RTC reconsidered the order of default.30

On the next scheduled pre-trial, petitioner and his counsel again failed to appear.31 Thus, petitioner
was declared in default and respondent was allowed to present its evidence ex-parte.32

On May 16, 2000, the RTC rendered a Decision33 in favor of respondent, to wit:

WHEREFORE, and as prayed for by [respondent], judgment is hereby rendered for the [respondent],
as follows:

1) ordering the [petitioner] to perform all his obligations under the verbal agreement by way
of paying the balance of [respondent’s] loan to CMC;

2) ordering [petitioner] to return to [respondent] the five (5) Transfer Certificates of Title Nos.
292199, 292200, 292201, 292202, and 29203;

3) ordering [petitioner] to pay [respondent] reasonable attorney’s fees in the reduced amount
of P20,000.00, plus the costs of suit.

The counterclaim of the [petitioner] is dismissed for lack of bases and merit.
SO ORDERED.34

Feeling aggrieved, petitioner filed a Petition for Relief from Judgment35 citing the death of his counsel
as excusable negligence.36 Finding the petition meritorious, the RTC set aside its Decision and set
the case for trial.37

On September 16, 2004, respondent filed a Motion to Order [Petitioner] to Return the Five (5)
Transfer Certificates of Title to [Respondent].38 The RTC denied the motion in an Order39 dated
December 9, 2004.

On January 11, 2005, respondent filed a Motion for the Issuance of a Writ of Preliminary Mandatory
Injunction,40praying for the issuance of a Writ of Preliminary Mandatory Injunction commanding
petitioner to return to respondent the five titles.41

Ruling of the Regional Trial Court

On April 11, 2005, the RTC issued an Order42 granting respondent’s Motion. The RTC ordered
petitioner to return the five titles to respondent since he failed to comply with the agreement he made
with respondent, i.e. to finance respondent’s obligations with CMC.43 In granting the Motion, the RTC
took into consideration respondent’s fear that petitioner might use these titles to obtain a loan from
Metrobank given that petitioner already admitted that he turned over the possession of the five titles
to the said bank.44 Thus:

Wherefore, premises considered, and upon the posting by [respondent] of a bond in the amount of
TWO MILLION (P2,000,000.00) PESOS to be approved by this Court, to answer all the damages
and costs which the [petitioner] may suffer by reason of the injunction, if the Court will finally decide
that the [respondent] was not entitled thereto, let a writ of preliminary mandatory injunction be issued
commanding the [petitioner] to return to the [respondent] the five (5) Transfer Certificates of Title
Nos. 292199, 292200, 292201, 292202 and 292203.

SO ORDERED.45

Petitioner filed a Motion for Reconsideration with Motion to Post Counter bond46 but the RTC denied
the same in its Order 47 dated July 26, 2005.

This prompted petitioner to elevate the case to the CA via a Petition for Certiorari,48 imputing grave
abuse of discretion on the part of the RTC in issuing the Writ of Preliminary Mandatory Injunction.

Ruling of the Court of Appeals

The CA, however, found no grave abuse of discretion on the part of the RTC.49 The CA agreed with
the RTC that respondent delivered the five titles to petitioner as security for petitioner’s advances to
CMC.50 Hence, the dispositive portion of the Decision51 dated September 21, 2006 reads:

WHEREFORE, the petition is DENIED, the two (2) assailed Orders of the Regional Trial Court,
Branch 45, dated 11 April 2005 and 26 July 2005, are hereby AFFIRMED.

SO ORDERED.52

Petitioner moved for reconsideration53 but the CA denied his motion in a Resolution54 dated March 6,
2007.
 Issues

Hence, this petition raising the following issues:

I.

WHETHER XXX THE HONORABLE [CA] COMMITTED A GRAVE AND SERIOUS ERROR
WHEN IT FOUND THE ISSUANCE OF THE WRIT OF PRELIMINARY MANDATORY
INJUNCTION TO BE IN ORDER, AND, CONSEQUENTLY, DECLARING THAT OPM NO
LONGER HAD ANY REASON TO HOLD ON TO THE FIVE (5) TITLES.

II.

WHETHER XXX THE HONORABLE [CA] COMMITTED A GRAVE AND SERIOUS ERROR
WHEN IT DID NOT FIND JUSTIFIABLE GROUNDS TO WARRANT THE WRIT’S
DISSOLUTION BY OPM’S OFFER TO POST A COUNTER BOND UNDER SECTION 6,
RULE 58 OF THE 1997 RULES OF COURT.

III.

WHETHER THE FINDINGS OF FACT OF THE [CA] COMMITTED WITH GRAVE ABUSE
OF DISCRETION MAY BE REVIEWED BY THE SUPREME COURT ON APPEAL BY
CERTIORARI.55

Summed up, the issues boil down to whether the RTC committed grave abuse of discretion
amounting to lack or in excess of jurisdiction in issuing a writ of preliminary mandatory injunction
commanding petitioner to return to respondent TCT Nos. 292199, 292200, 292201, 292202, and
292203, and in denying petitioner’s offer to post a counter bond.

Petitioner’s Arguments

Petitioner claims that respondent is not entitled to a writ of preliminary mandatory injunction because
it failed to show that it has a clear legal right56 and that it would suffer grave and irreparable damage if
a writ were not issued.57Petitioner alleges that respondent delivered the titles to him as security for
respondent’s entire obligation to OPM in the total amount of more than P81 million, inclusive of
interest.58 He insists that respondent still owes OPM the amount of P30 million, inclusive of
interest.59 Considering that respondent’s obligation to OPM is not yet fully paid, respondent is not
entitled to a writ of preliminary mandatory injunction.60 Petitioner likewise claims that the P2 million
bond posted by respondent is insufficient to protect the interest of OPM in the event that judgment is
rendered in its favor.61 Lastly, petitioner imputes grave abuse of discretion on the part of the CA in not
allowing OPM to post a counter bond.62

Respondent’s Arguments

Respondent, on the other hand, maintains that the RTC validly issued the writ of preliminary
mandatory injunction.63Respondent insists that it has a legal right to recover the five titles since
petitioner defaulted in his obligation, exposing respondent to damages and financial burden.64 It
claims that it had to pay interest and penalty charges to CMC because of petitioner’s delay in paying
the amortizations.65 Respondent also contends that it was able to show the possibility of an
"irreparable injury."66 Since the titles are in the possession of Metrobank, there is a possibility that
petitioner would use these titles to obtain a loan with Metrobank.67 As to the bond and counter bond,
respondent emphasizes that the fixing of the amount of bond and the granting of a motion for filing a
counter bond are discretionary upon the trial court.68

Our Ruling

Section 3, Rule 58 of the Rules of Court reads:

SEC. 3. Grounds for issuance of preliminary injunction. – A preliminary injunction may be granted
when it is established:

(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief
consists in restraining the commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited period or perpetually;

(b) That the commission, continuance or non-performance of the act or acts complained of
during the litigation would probably work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding, and tending to render the
judgment ineffectual.

A preliminary injunction may be issued at any time before judgment or final order.69 It may be a
prohibitory injunction, which requires a party to refrain from doing a particular act, or a mandatory
injunction, which commands a party to perform a positive act to correct a wrong in the past.70 A writ of
preliminary mandatory injunction, however, is more cautiously regarded because it commands the
performance of an act.71 Accordingly, it must be issued only upon a clear showing that the following
requisites are established: (1) the applicant has a clear and unmistakable right that must be
protected; (2) there is a material and substantial invasion of such right; and (3) there is an urgent
need for the writ to prevent irreparable injury to the applicant.72

In this case, the RTC, in granting respondent’s Motion for the Issuance of a Writ of Preliminary
Mandatory Injunction, explained that:

From the verified complaint filed in this case as well as the [respondent’s] verified Motion for the
Issuance of a Writ of Preliminary Mandatory Injunction, it is clear that the five (5) land titles
registered in the name of Gregorio Araneta III were delivered by the [respondent] to the [petitioner]
to secure the latter’s advances to CMC for the financing of the twenty two (22) bus chassis which
[respondent] purchased from CMC. However, [petitioner] defaulted in his obligations to CMC which
compelled the [respondent] to directly pay CMC some of the obligations of the [petitioner]. Since the
condition for the delivery of the land titles which is the payment by the [petitioner] of the
obligations of the [respondent] to CMC has not been complied with by the [petitioner], there
is no further justification for the [petitioner] to hold on to the possession of the land titles.

In this connection, extant in the records of this case are the two (2) letters of the [petitioner] to the
lawyers of the [respondent] wherein he expressly admitted his failure to comply with his obligations
to CMC on behalf of the [respondent] x x x. These letters were not denied by the [petitioner]; in fact,
it was admitted by him in his Answer x x x.

It must be noted that the land titles are in the name of Gregorio Araneta III who is not a party to the
transaction between the [respondent] and the [petitioner] and that there is no document between the
parties concerning the terms and conditions behind the possession of the said titles by the
[petitioner]. There is no Deed of Mortgage over the properties covered by the said titles. The only
document on record is the acknowledgement receipt dated March 18, 1997 signed by the [petitioner]
x x x but other than the acknowledgment of the receipt of the titles, there is nothing else to show the
terms and conditions under which [petitioner] is to possess the same. At best, therefore, the
[petitioner] is merely a depository of the said titles. He cannot foreclose, dispose of, assign or
otherwise deal with the same. Thus, the damages that he may suffer if the land titles are
returned to the [respondent] is practically inexistent compared to the damages which
[respondent] and the owners of the land titles have suffered due to the continuous
possession of the [petitioner] of the said titles, as they cannot exercise their proprietary
rights to the properties covered by the titles.[73 (Emphasis supplied)

The CA affirmed the Order74 since it found no grave abuse of discretion amounting to lack or in
excess of jurisdiction on the part of the RTC. It said:

x x x we find the issuance of the writ to be in order. FIRST, there is no denying that the titles to the
subject five (5) properties belonged to and were in fact registered under the name of Mr. Gregorio
Ma. Araneta III of AUTOBUS. NEXT, as stated in AUTOBUS’ complaint and admitted in OPM’s
answer, the purpose in handing over the five (5) titles to OPM was to secure the advances to be
made by the latter to CMC. Hence, when OPM failed to meet its obligations with CMC, AUTOBUS’
rights over the twenty-two (22) buses were materially and substantially compromised by a
threatened foreclosure of the chattel mortgage. Again, this cannot be denied for a chattel mortgage
was executed by AUTOBUS over the buses in favor of CMC which shall be transferred to OPM once
CMC is paid by OPM, although claimed by OPM as additional collateral. AUTOBUS in its Comment
and Memorandum asserts that it has paid all its obligations to CMC which is not denied by OPM.
Consequently, OPM no longer had any reason to hold on to the five (5) titles for its failure to pay
CMC. THIRDLY, the urgency of the situation necessitating the issuance of the mandatory writ was
sufficiently established by AUTOBUS before the trial court, thus:

[Respondent] has expressed fear that the [petitioner] (OPM) has turned over the possession of the
said titles to Metrobank in order to obtain a loan from the bank or to secure an existing loan from the
said bank. [Petitioner] has admitted that Metrobank has possession of the titles, but according to
him, it is only for safekeeping. Considering this admission, this Court gives credence to the
[respondent’s] fear.

We x x x agree with the trial court for it is very unlikely that the purpose for handing over the titles to
the bank was merely for safekeeping when the bank itself conducted inspections and appraisals on
the subject five (5) properties of Mr. Araneta.

As regards OPM’s offer to post a counter bond, the same on its own does not however warrant the
[writ’s] dissolution.75

Based on the foregoing disquisition, we find that the RTC had sufficient bases to issue the writ of
preliminary mandatory injunction as all the requisites for the issuance of such writ were established.
We agree with the RTC that respondent has a right to recover the five titles because petitioner failed
to comply with his obligation to respondent. It bears stressing that respondent was compelled to
directly pay CMC to avoid the foreclosure of the chattel mortgages, which respondent executed in
favor of CMC. Considering that respondent has paid most, if not all, of its obligations to CMC, there
is no reason for petitioner to hold on to the titles.
Petitioner’s allegation that respondent delivered the five titles to him as security, not only for the
refinancing of the 22 bus chassis from CMC, but for the entire obligation deserves scant
consideration.

In respondent’s demand letter76 dated November 26, 1998, respondent’s counsel reminded petitioner
that "the sole purpose of the mortgage on the properties was to secure the refinancing of
[respondent’s] buses with CMC."77 Thus, respondent’s counsel demanded petitioner to settle his
obligations with CMC or return the titles to respondent. In his letter-reply78 dated December 5, 1998,
petitioner did not deny that respondent delivered the titles to him solely as security for the
refinancing of the buses. Instead, he admitted his failure to settle his obligations with CMC and
asked that he be given additional time to settle the same.79 In respondent’s demand letter80 dated
January 28, 1999, respondent’s counsel again reminded petitioner to settle the obligations with CMC
or return the titles, which serves "as security for [petitioner’s] refinancing of buses."81 Again, in his
letter82 dated January 28, 1999, petitioner did not refute the statement of respondent’s counsel. Once
more, he admitted his failure and asked for a final extension.83The communication between the
parties clearly proves that the respondent delivered the five titles to petitioner solely as security for
the refinancing of the buses purchased by respondent from CMC. 1âwphi 1

In addition, we need not belabor that the issuance of a writ of preliminary injunction is discretionary
upon the trial court because "the assessment and evaluation of evidence towards that end involve
findings of facts left to the said court for its conclusive determination."84 For this reason, the grant or
the denial of a writ of preliminary injunction shall not be disturbed unless it was issued with grave
abuse of discretion amounting to lack or in excess of jurisdiction.85 Grave abuse of discretion is
defined as "capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction, or
where the power is exercised in an arbitrary or despotic manner by reason of passion, prejudice or
personal aversion amounting to an evasion of positive duty or to a virtual refusal to perform the duty
enjoined, or to act at all in contemplation of law."86 No grave abuse of discretion exists in this case.

The contentions of petitioner regarding the fixing of the bond and the denial of his offer to post a
counter bond likewise have no merit. As we have said, all these depend on the sound discretion of
the trial court, which shall not be disturbed in the absence of grave abuse of discretion on the part of
the trial court.

Finally, as to whether respondent still owes OPM the amount of ₱30 million, we believe that this is a
factual issue best left to the determination of the RTC where the main case is pending.

WHEREFORE, the petition is hereby DENIED. The assailed Decision dated September 21, 2006
and the Resolution dated March 6, 2007 of the Court of Appeals in CA-G.R. SP. No. 90926 are
hereby AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson
 ARTURO D. BRION DIOSDADO M. PERALTA*
Associate Justice Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson

CERTIFICATION

I certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes

* Per raffle dated November 26, 2012

1
Rollo. pp. 9-46

2
Id. at 48-56: penned by Associate Justice Rosmari D. Carandang and concurred in by
Associate Justices Renato C. Dacudao and Estela M. Perlas-Bernabe (now a member of this
Court)

3
Id. at 58

4
Id. at 43

5
Id. at 60.

6
Id. at 13.

7
Id. at 49.

8
Id.

9
Id.
10
Id.

11
Id.

12
Id. at 50 and 60.

13
Id. at 49.

14
Id. at 50.

15
Id.

16
Id.

17
Id. at 64-65.

18
Id. at 66.

19
Id. at 67.

20
Id. at 68.

21
Id. at 59-63.

22
Id. at 51

23
Id. at 61.

24
Id. at 69-74.

25
Id. at 72.

26
Id.

27
Id. at 73.

28
Records, p. 52.

29
Id. at 58-59.

30
Id. at 77.

31
Id. at 93.

32
Id.

33
Id. at 167-169; penned by Judge Marcelino L. Sayo, Jr.

34
Id. at 169.
35
Id. at 187-200.

36
Id. at 190-191.

37
Id. at 258.

38
Rollo, pp. 78-81.

39
Id. at 96-97.

40
Id. at 98-103.

41
Id. at 101.

42
Id. at 117-120.

43
Id. at 118.

44
Id. at 119.

45
Id. at 120.

46
Id. at 121-130.

47
Id. at 149.

48
Id. at 150-180.

49
Id. at 55.

50
Id. at 53-54.

51
Id. at 48-56.

52
Id. at 55.

53
Id. at 294-305.

54
Id. at 58.

55
Id. at 363.

56
Id. at 372-376.

57
Id. at 369-371.

58
Id. at 365-367.

59
Id. at 367-369.
60
Id. at 369.

61
Id. at 376-377.

62
Id. at 378-381.

63
Id. at 390.

64
Id. at 390-393.

65
Id. at 392.

66
Id. at 393.

67
Id. at 393-394.

68
Id. at 394-395.

City Government of Butuan v. Consolidated Broadcasting System, (CBS), Inc., G.R. No.
69

157315, December 1, 2010, 636 SCRA 320, 336.

70
Id.

71
Dela Rosa v. Heirs of Juan Valdez, G.R. No. 159101, July 27, 2011, 654 SCRA 467, 479.

72
Pacsports Phils., Inc. v. Niccolo Sports, Inc., 421 Phil. 1019, 1030-1031 (2001).

73
Rollo, pp. 118-119.

74
Id. at 117-120.

75
Id. at 53-55.

76
Id. at 64-65.

77
Id. at 65.

78
Id. at 66.

79
Id.

80
Id. at 67.

81
Id.

82
Id. at 68.

83
Id.
EVELYN S. CABUNGCAL, G.R. No. 160367
ELVIRA J. CANLAS,
MARIANITA A. BULANAN,
REMEDIOS S. DE JESUS, and
NUNILON J. MABINI,
Petitioners,

- versus -

SONIA R. LORENZO, in her capacity Present:

as Municipal Mayor of San Isidro,
Nueva Ecija, CECILIO DE GUZMAN,
Vice Mayor, CESARIO LOPEZ, JR., CARPIO, J., Chairperson,
EMILIO PACSON, BONIFACIO LEONARDO-DE CASTRO,
CACERES, JR., NAPOLEON BRION,
OCAMPO, MARIO CRUZ, DEL CASTILLO, and
PRISCILA REYES, ROLANDO ABAD, JJ.
ESQUIVEL, and CRISENCIANO
CABLAO in their capacity as members of
the Sangguniang Bayan of San Isidro,
Nueva Ecija, and EDUARDO N.
JOSON IV, Vice Governor, BELLA
AURORA A. DULAY, BENJAMIN V.
MORALES, CHRISTOPHER L.
VILLAREAL, JOSE T. DEL
MUNDO, SOLITA C. SANTOS,
RENATO C. TOMAS, JOSE
BERNARDO V. YANGO, IRENEO S.
DE LEON, NATHANIEL B. BOTE,
RUDY J. DE LEON, RODOLFO M. Promulgated:
LOPEZ, MA. LOURDES C. LAHOM, December 18, 2009
and JOSE FRANCIS STEVEN M. DIZON,
in their capacity as members of the
Sangguniang Panlalawigan of the Province
of Nueva Ecija,
Respondents.
x-------------------------------------------------------------------x

DECISION
DEL CASTILLO, J.:

As a rule, judicial intervention is allowed only after exhaustion of administrative

remedies. This principle goes hand-in-hand with the doctrine of primary jurisdiction,
which precludes courts from resolving, in the first instance, controversies falling under
the jurisdiction of administrative agencies. Courts recognize that administrative agencies
are better equipped to settle factual issues within their specific field of expertise because
of their special skills and technical knowledge. For this reason, a premature invocation of
the courts judicial power is often struck down, unless it can be shown that the case falls
under any of the applicable exceptions.

Assailed in this Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court
are the March 20, 2003 Decision[2] of the Court of Appeals (CA) dismissing petitioners
petition for lack of merit and its October 6, 2003 Resolution[3] denying the motion for
reconsideration.

Factual Antecedents

On July 9, 2001, the Sangguniang Bayan of San Isidro, Nueva Ecija, issued
Resolution No. 27 s. 2001[4] declaring the reorganization of all offices of the municipal
government. On July 23, 2001, the Resolution was approved by the Sangguniang
Panlalawigan via Resolution No. 154 s. 2001.[5]

Thereafter, on November 12, 2001, the Sangguniang Bayan passed Resolution

No. 80 s. 2001,[6] approving and adopting the proposed new staffing pattern of the
municipal government. On November 26, 2001,
the Sangguniang Panlalawigan approved the same through Resolution No. 299 s.
2001.[7]

On December 21, 2001, the Municipal Mayor of San Isidro, Nueva Ecija, herein
respondent Sonia R. Lorenzo, issued a memorandum[8] informing all employees of the
municipal government that, pursuant to the reorganization, all positions were deemed
vacant and that all employees must file their respective applications for the newly created
positions listed in the approved staffing pattern on or before January 10, 2002.Otherwise,
they would not be considered for any of the newly created positions.

Proceedings before the Court of Appeals

Instead of submitting their respective applications, petitioners, on January 17,

2002, filed with the CA a Petition for Prohibition and Mandamus with application for
issuance of Writ of Preliminary Injunction and Restraining Order.[9] They alleged that
they were permanent employees of the Rural Health Unit of the Municipality of San
Isidro, Nueva Ecija, with the corresponding salary grade and date of employment:[10]

Position Salary
Name Date of employment
Grade
Evelyn S. Cabungcal Dentist II 16 April 4, 1983
Elvira J. Canlas Nurse III 16 December 19, 1978
Marianita A. Bulanan Midwife III 11 May 21, 1981
Remedios S. De Jesus Dental Aide 4 June 6, 1989
Nunilon J. Mabini Sanitation 6 January 2, 1990
Inspector I

Respondents Sonia R. Lorenzo, Cecilio De Guzman, Cesario Lopez, Jr., Emilio

Pacson, Bonifacio Caceres, Jr., Napoleon Ocampo, Mario Cruz, Priscila Reyes, Rolando
Esquivel, and Crisenciano Cablao were sued in their capacity as Mayor, as Vice Mayor,
and as members of the Sangguniang Bayan respectively, of San Isidro, Nueva Ecija. On
the other hand, respondents Eduardo N. Joson IV, Bella Aurora A. Dulay, Benjamin V.
Morales, Christopher L. Villareal, Jose T. Del Mundo, Solita C. Santos, Renato C.
Tomas, Jose Bernardo V. Yango, Ireneo S. De Leon, Nathaniel B. Bote, Rudy J. De
Leon, Rodolfo M. Lopez, Ma. Lourdes C. Lahom, and Jose Francis Steven M. Dizon
were sued in their capacity as Vice Governor and as members of the Sangguniang
Panlalawigan, respectively.

Petitioners sought to prohibit respondents from implementing the reorganization

of the municipal government of San Isidro, Nueva Ecija, under Resolution Nos. 27 and
80 s. 2001 of the Sangguniang Bayan.They likewise prayed for the nullification of said
Resolutions.
 While the case was pending, respondent Mayor Sonia R. Lorenzo issued a letter
terminating the services of those who did not re-apply as well as those who were not
selected for the new positions effective April 21, 2002.[11]

On March 20, 2003, the CA rendered a Decision dismissing the petition for lack of
merit. It ruled:

Going through the arguments of the parties, we find respondents contentions to

be more in line with existing laws and jurisprudence. It cannot be denied that indeed,
petitioners severance from employment is a sad tale to tell; however, petitioners
allegation of grave abuse of discretion on the part of public respondents particularly
Mayor Lorenzo, can hardly be justified. The assailed acts of respondents are clearly
authorized under Section 76 of the Local Government Code of 1991 as quoted above.

xxxx

Culled from the records of the case, the reorganization of the municipal
government of San Isidro yielded an organization structure suitable for a 4th class
municipality, which created savings in an estimated amount of more or less Four Million
pesos (P4,000,000.00), which can be used for implementation of other local projects for
delivery of basic services and additional benefits for its employees. As shown by the
respondents, the original plantilla x x x of one hundred and thirty one (131) [positions]
has been trimmed down to eighty-eight (88) [positions] under the new staffing
pattern. Thus, We find plausible the [claim] of respondents about budgetary [savings],
comparing the old with new staffing pattern, in that:

Prior to the reorganization, this LGU had a budget appropriation

of P18,322,933.00 for personal services [including enterprise workers] leaving a
measly sum of [sic] P4,127,703.00 as revolving fund for the whole year. With
the advent of the new staffing pattern, more tha[n] P7,000,000.00 can be
channeled by this LGU for its plans and programs. Under Section 325 of the
Local Government Code, LGUs are limited by law to appropriate only forty five
percent [45%] in case of first to third class LGUs or fifty five percent [55%] in
case of fourth to fifth class municipalities of their annual income for personal
services. The LGU of San Isidro being a fourth class municipality has certainly
exceeded the 55% appropriation limit under the Local Government Code
because for the year 2000 alone, [P16,787,961.00, or roughly 78% of its annual
income of P22,450,636.00, have already been allocated to personal
services. That certainly is] way above the ceiling allowed by Section 325 of the
Local Government Code.

xxxx

Verily, there was no bad faith on the part of respondents when they chose to
follow the recommendations of the management committee, [to create] a new staffing
 pattern [thereby generating savings] to provide more basic services [and] livelihood
projects x x x.

xxxx

Valid reasons had been shown by respondents which support the reorganization
of the municipal government of San Isidro. No personal or political motives having been
shown to be involved in this strongly assailed reorganization of the Municipality of San
Isidro, petitioners, therefore, had miserably failed to show and prove to this Court that
respondents violated R.A. No. 7305 (Magna Carta of Health Workers).

We must point out that good faith is presumed. It is incumbent upon the
petitioners to prove that the reorganization being implemented in the Municipality of San
Isidro is tainted with bad faith. Absent any showing that respondents acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in the passage and
implementation of Resolution Nos. 27 and 80, this petition must fail.

Finally, respondents were correct when they stated that the extraordinary writ of
mandamus is not applicable in this case because the act being sought by petitioners to be
done is discretionary and not a ministerial duty. In other words, mandamus lies only to
compel the performance, x x x of a ministerial duty, but not to compel the performance of
a discretionary duty. Since grave abuse of discretion is not evident in this case, the
exceptional remedy of mandamus is unavailable. x x x

WHEREFORE, in view of all the foregoing and finding that the assailed
Resolution No. 27 dated July 9, 2001 and Resolution No. 80 dated November 12, 2001
were not issued by respondents with grave abuse of discretion amounting to lack or
excess of jurisdiction, the instant appeal [sic] is DENIED DUE COURSE and,
accordingly, DISMISSED for lack of merit. The validity of the assailed
resolutions, being in accordance with law and jurisprudence, is UPHELD.
SO ORDERED.[12]

Petitioners moved for a reconsideration[13] which was denied by the CA in

its October 6, 2003 Resolution.

Hence, petitioners availed of this recourse.

Petitioners Arguments

Petitioners contend that the March 20, 2003 Decision and October 6, 2003
Resolution of the CA were not in accordance with Republic Act (RA) No. 6656,
otherwise known as An Act to Protect the Security of Tenure of Civil Service Officers
and Employees in the Implementation of Government Reorganization, specifically
Section 2[14] thereof and RA 7305, otherwise known as the Magna Carta of Health
Workers.

Respondents Argument

Respondents, for their part, argue that petitioners separation from service was a
result of a valid reorganization done in accordance with law and in good faith.

Both parties filed their memoranda.[15] Thereafter, in a Resolution[16] dated August

6, 2008, we required the parties to submit supplemental memoranda discussing therein
their respective positions on the issue of jurisdiction.

Issues

1) Whether petitioners automatic resort to the Court of Appeals is proper.

2) Whether the case falls under the exceptions to the rule on exhaustion of
administrative remedies.

Our Ruling

Petitioners recourse should have been

with the Civil Service Commission and
not with the Court of Appeals

Section 2 (1) and Section 3, Article IX-B of the Constitution provide that:

Section 2. (1) The civil service embraces all branches, subdivisions,

instrumentalities and agencies of the Government, including government-owned or
controlled corporations with original charters.

Section 3. The Civil Service Commission, as the central personnel agency of the
Government, shall establish a career service and adopt measures to promote morale,
efficiency, integrity, responsiveness, progressiveness, and courtesy in the civil service. It
shall strengthen the merit and rewards system, integrate all human resources
development programs for all levels and ranks, and institutionalize a management climate
conducive to public accountability. It shall submit to the President and the Congress an
annual report on its personnel programs.
 Corollary thereto, Section 4 of CSC Memorandum Circular No. 19-99, states that:

Section 4. Jurisdiction of the Civil Service Commission. The Civil Service

Commission shall hear and decide administrative cases instituted by, or brought before it,
directly or on appeal, including contested appointments, and shall review decisions and
actions of its offices and of the agencies attached to it.

Except as otherwise provided by the Constitution or by law, the Civil Service

Commission shall have the final authority to pass upon the removal, separation and
suspension of all officers and employees in the civil serviceand upon all matters
relating to the conduct, discipline and efficiency of such officers and
employees. (Emphasis supplied)

Pursuant to the foregoing provisions, the CSC, as the central personnel agency of
the Government, has jurisdiction over disputes involving the removal and separation of
all employees of government branches, subdivisions, instrumentalities and agencies,
including government-owned or controlled corporations with original charters. Simply
put, it is the sole arbiter of controversies relating to the civil service.[17]

In this case, petitioners are former local government employees whose services
were terminated due to the reorganization of the municipal government under Resolution
Nos. 27 and 80 of the Sangguniang Bayan of San Isidro, Nueva Ecija. Considering that
they belong to the civil service, the CSC has jurisdiction over their separation from office.

Even the laws upon which petitioners anchor their claim vest jurisdiction upon the
CSC. Under RA 6656 and RA 7305, which were cited by the petitioners in their petition,
it is the CSC which determines whether an employees dismissal or separation from office
was carried out in violation of the law or without due process. Accordingly, it is also the
CSC which has the power to reinstate or reappoint an unlawfully dismissed or terminated
employee. Quoted hereunder are Section 9 of RA 6656 and Section 8 of RA 7305:
SECTION 9. All officers and employees who are found by the Civil Service
Commission to have been separated in violation of the provisions of this Act, shall
be ordered reinstated or reappointed as the case may be without loss of seniority
and shall be entitled to full pay for the period of separation. Unless also separated for
cause, all officers and employees, who have been separated pursuant to reorganization
shall, if entitled thereto, be paid the appropriate separation pay and retirement and other
benefits under existing laws within ninety (90) days from the date of the effectivity of
their separation or from the date of the receipt of the resolution of their appeals as the case
may be: Provided, That application for clearance has been filed and no action thereon has
 been made by the corresponding department or agency. Those who are not entitled to
said benefits shall be paid a separation gratuity in the amount equivalent to one (1) month
salary for every year of service. Such separation pay and retirement benefits shall have
priority of payment out of the savings of the department or agency concerned. (Emphasis
supplied)

xxxx

SECTION 8. Security of Tenure. In case of regular employment of public health

workers, their services shall not be terminated except for cause provided by law and after
due process: Provided, That if a public health worker is found by the Civil Service
Commission to be unjustly dismissed from work, he/she shall be entitled to
reinstatement without loss of seniority rights and to his/her back wages with twelve
percent (12%) interest computed from the time his/her compensation was withheld from
him/her up to the time of reinstatement. (Emphasis supplied)

All told, we hold that it is the CSC which has jurisdiction over appeals from
personnel actions taken by respondents against petitioners as a result of
reorganization. Consequently, petitioners resort to the CA was premature. The
jurisdiction lies with the CSC and not with the appellate court.

The case does not fall under any of the

exceptions to the rule on exhaustion of
administrative remedies

The rule on exhaustion of administrative remedies provides that a party must

exhaust all administrative remedies to give the administrative agency an opportunity to
decide the matter and to prevent unnecessary and premature resort to the courts.[18] This,
however, is not an ironclad rule as it admits of exceptions,[19] viz:
1. when there is a violation of due process;

2. when the issue involved is purely a legal question;

3. when the administrative action is patently illegal amounting to lack or excess of

jurisdiction;

4. when there is estoppel on the part of the administrative agency concerned;

5. when there is irreparable injury;

 6. when the respondent is a department secretary whose acts as an alter ego of the
President bears the implied and assumed approval of the latter;

7. when to require exhaustion of administrative remedies would be unreasonable;

8. when it would amount to a nullification of a claim;

9. when the subject matter is a private land in land case proceedings;

10. when the rule does not provide a plain, speedy and adequate remedy; and

11. when there are circumstances indicating the urgency of judicial intervention.

The instant case does not fall under any of the exceptions. Petitioners filing of a
petition for mandamus and prohibition with the CA was premature. It bears stressing that
the remedies of mandamus and prohibition may be availed of only when there is no
appeal or any other plain, speedy and adequate remedy in the ordinary course of
law.[20] Moreover, being extraordinary remedies, resort may be had only in cases of
extreme necessity where the ordinary forms of procedure are powerless to afford relief.[21]

Thus, instead of immediately filing a petition with the CA, petitioners should have
first brought the matter to the CSC which has primary jurisdiction over the case.[22] Thus,
we find that the CA correctly dismissed the petition but not the grounds cited in support
thereof. The CA should have dismissed the petition for non-exhaustion of administrative
remedies.[23]

Considering our above findings, we find no cogent reason to resolve the other
issues raised by the petitioners in their petition.

WHEREFORE, the instant petition is DENIED. The March 20, 2003 Decision
of the Court of Appeals dismissing the petition and its October 6, 2003 Resolution
denying the motion for reconsideration are AFFIRMED but on the ground that
petitioners failed to exhaust the administrative remedies available to them.

SO ORDERED.
 MARIANO C. DEL CASTILLO
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

TERESITA J. LEONARDO-DE ARTURO D. BRION

CASTROAssociate Justice Associate Justice

ROBERTO A. ABAD
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
 CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
attestation, it is hereby certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the
Courts Division.

REYNATO S. PUNO
Chief Justice


Per Special Order No. 775 dated November 3, 2009.

Additional member per Special Order No. 776 dated November 3, 2009.
[1]
Rollo, pp. 320.
[2]
Id. at 2136; penned by Associate Justice Sergio L. Pestao and concurred in by Acting Presiding Justice Cancio C. Garcia and
Associate Justice Eloy R. Bello, Jr.
[3]
Id. at 4243.
[4]
CA rollo, p. 44.
[5]
Id. at 2829.
[6]
Rollo, pp. 4548.
[7]
CA rollo, pp. 34 35.
[8]
Id. at 3637.
[9]
Id. at 226.
[10]
Rollo, p. 6.
[11]
Id. at 79.
[12]
Id. at 2936.
[13]
Id. at 3741.
[14]
SECTION 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and
hearing. A valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been abolished or
rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service,
or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may
be considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to a claim for
reinstatement or reappointment by an aggrieved party:
(a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency
concerned;
(b) Where an office is abolished and another performing substantially the same functions is created;
(c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit;
(d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform
substantially the same function as the original offices;
(e) Where the removal violates the order of separation provided in Section 3 hereof.
[15]
Rollo, pp. 92110 and 116139.
[16]
Id. at 214216.
[17]
Pangasinan State University v. Court of Appeals, G.R. No. 162321, June 29, 2007, 526 SCRA 92, 98.
[18]
Republic of the Phils. v. Express Telecommunication Co., Inc., 424 Phil. 372, 399 (2002).
 EN BANC

G.R. No. L-12581 March 13, 1917

JOSE LINO LUNA, Petitioner, vs. EULOGIO

RODRIGUEZ, Respondent.

Ramon Diokno & Agapito Ygnacio for petitioner.

Sumulong & Estrada for respondent.

MORELAND, J.:

This is an action based upon the alleged usurpation of a public

office, that of governor of the Province of Rizal, in which a demurrer
was filed to the complaint. The question before us arises on the
issues framed by the demurrer. chanroblesvi rtua lawlib rary c hanro bles vi rt ual l aw libra ry

After setting out the election of the defendant, the complaint alleges
that: "The plaintiff duly began a contest in the Court of First
Instance of Rizal against the said election, and, while the said
contest was pending decision, the defendant took possession of the
office to which he was elected on the 16th of October, 1916, by
virtud of a certificate of election issued to him by the board of
provincial canvassers, which certificate of election was the subject
of controversy in the election contest." chanrobles vi rtual law lib rary

The complaint further alleges that: "The protest was decided by the
Court of First Instance on the 14th day of January, 1917, and the
plaintiff was declared to have received 4018 votes while the
defendant was found to have received only 3,317 votes, that is to
say, that the plaintiff was the one who received a plurality of the
legal votes cast at the said election; and the court ordered, in
consequence, that the provincial board, as the provincial board of
canvassers, correct its canvass in accordance with the decision of
the court."chanrobles v irt ual law l ibra ry

The complaint avers that: "In view of the decision referred to, the
plaintiff notified the defendant that he was ready to qualify and to
assume possession of the office and demanded that he quit the
office and deliver it to the plaintiff; but that the defendant refused
to do so."chanrobles vi rtual law lib rary

Upon these facts plaintiff asserts in his complaint that: "The

defendant is retaining and usurping the office in question to the
great injury of the plaintiff and to the detriment of the public
interest;" and maintains that: "the plaintiff has the right, by virtue
of the decision of the Court of First Instance above mentioned, to
take possession of and exercise the duties of the office, and the
defendant, by virtue of said decisions, has lost his right to occupy it,
and is at the present time in possession thereof without right." chanroble s virtual law lib rary

A demurrer was filed to the complaint on the ground that: "The

allegations of the complaint fail to show that the plaintiff is entitled
to occupy the office and discharge the duties of the office now held
by the defendant;" and that: "The facts set out in the complaint are
not sufficient to constitute a cause of action as they do not show
that the defendant is usurping or illegally retaining possession of the
office in question." chanrob les vi rtual law lib rary

We are of the opinion that the demurrer must be sustained. The

complaint does not show that the plaintiff was entitled to the office
or that the defendant is illegally in possession thereof. Section 197
of the Code of Civil Procedure provides that: "A civil action may be
brought in the name of the Government of the Philippine Islands:
(1) Against a person who usurps, intrudes into, or unlawfully holds
or exercises a public civil office;" and that such action may be
commenced by any "person claiming to be entitled to a public office,
unlawfully held and exercised by another." Section 202 declared
that: "When the action is against a person for usurping an office,
the complaint shall set forth the name of the person who claims to
be entitled thereto, with an averment of his right to the same; and
that the defendant is unlawfully in possession of the same; and
judgment may be rendered upon the right of the defendant, and
also upon the right of the person so averred to be entitled, or only
upon the right of the defendant, as justice requires." chanrobles v irt ual law l ibra ry

Section 207 determines the form and nature of the judgment to be

rendered in this class of action. It provides that: "When the
defendant is found guilty of usurping, intruding into, or unlawfully
holding or exercising an office, . . . judgment shall be rendered that
such defendant be ousted and altogether excluded therefrom, and
that the relator or plaintiff, as the case may be, recover his costs."
libra ry
chanroble s virtual law

This court has held on several occasions, in applying that portion of

the Election Law referring to the election of provincial governors,
that a person is not entitled to occupy the office of provincial
governor until his election has been duly proclaimed by the
provincial board of canvassers and a certificate of election has been
issued to him in pursuance of that proclamation (Manalo vs. Sevilla,
24 Phil. Rep., 609). The certificate of election is the credential which
proves his right to exercise the functions of the office and admits
him into possession thereof. chanroble svirtualawl ibra ry chan roble s vi rtual law lib rary

Section 1999 of the Administrative Code provides in effect that a

person holding a public office shall continue to possess and exercise
the functions of the same until his successor is elected and qualifies.
By virtue of this statute on who occupies a public office is required
to maintain possession thereof until his successor is elected and
qualifies. If he turns the office over to a person who was not duly
elected and who has not qualified he is acting in violation of law and
will be responsible for the loss of money or property occasioned by
such transfer. While section 209 of the Code of Civil Procedure
provides that a plaintiff in an action of quo warranto may be
declared entitled to the office in question before he has taken the
oath of office or executed the official bond required by law, that fact
is not in conflict with our opinion that the plaintiff in the present
action must go so far as to allege in his complaint and prove on the
trial that he was duly elected to the office in dispute. chanro blesvi rt ualawlib ra rychan roble s virtual law lib rary

The complaint rests the plaintiff's right to the office exclusively upon
the decision of the Court of First Instance in the election contest.
That right is not based on a proclamation of the provincial board of
canvassers or on a certificate of election issued in pursuance
thereof. There is no allegation in the complaint that the provincial
board of canvassers corrected its canvass in accordance with the
decision of the Court of First Instance, or that, after such correction,
that body duly proclaimed the plaintiff elected to the office in
question. Neither is there an allegation that a certificate of election
was duly issued to the plaintiff in pursuance of such proclamation.
Plaintiff's right to the office, according to his own allegations, rests
exclusively on the judgment of the Court of First Instance referred
to.
chanroblesvi rtualaw lib rary cha nrob les vi rtua l law lib rary

This court has held on several occasions (Topacio vs. Paredes, 23

Phil. Rep., 238; Hontiveros vs. Altavas, 24 Phil. Rep., 632) that a
Court of First Instance in an election contest has no authority to
declare any one elected to the office to which the contest relates.
Its sole duty is to order the provincial board of canvassers to correct
its return. Its judgment, therefore, is not proof of plaintiff's election.
Moreover, it is subject to appeal. In fact, the judgment of the court
in this case was appealed and that appeal is now pending in this
court. chanroble svirtualawl ibra ry chan roble s virtual law lib rary

It is our opinion, therefore, that the complaint does not show either
that the plaintiff is entitled to the office or that the defendant is
usurping the same. chanro blesvi rt ualawlib ra ry chan robles v irt ual law li bra ry

Although it is not mentioned as ground of demurrer and has not

been presented or discussed, it is a grave question, even conceding
that this action is maintainable under any theory, whether the
complaint is not demurrable on the ground that there is another
action pending between the same parties for the same cause. An
election contest determines finally the right of the contestant as well
as of each of the respondents to the office contested. While the
contest does not determine the eligibility of the candidate for office,
it determines who was elected to the office contested. It will be
observed that the complaint in this action is not based on the
ineligibility of the defendant but seeks to determine who was
elected to the office of provincial governor of the Province of Rizal in
the last election. That question will be finally and conclusively
determined in the election contest; and an action of quo warranto to
determine the same question would seem to be unnecessary and
burdensome. chanroblesvi rt ualawlib ra ry chanrobles vi rt ual law li bra ry

It is clear to us that, although the question has not been raised or

discussed, this action is not maintainable under any theory. Section
27 of Act 1582 provides a method for the determination of election
contests which is exclusive of every other remedy; and to the
extent that it is applicable has modified the Code of Civil procedure
dealing with actions founded upon the usurpation of public office.
The case of Navarro vs. Gimenez (10 Phil. Rep., 226) is similar to
the case before us. There the election was contested under section
27 of Act No. 1582. Immediately after the decision of the court had
been rendered in that contest an action of usurpation was begun
under the provisions of the Code of Civil Procedure to which we
have referred. The Supreme Court in that case decided the very
question to which we have adverted. It said:

It is very evident that the Legislature intended to provide a

summary and exclusive way for determining the facts in relation to
certain elections held under the law. It is expressly provided by
section 27 that the decision of the Court of First Instance shall be
final and conclusive. No appeal is allowed from that decision. In the
present case there was such a proceeding. The present plaintiff was
a party thereto. He had an opportunity to try and have decided the
very questions which he now asks to have decided by this court in
this proceeding. Those questions were, in fact, tried and decided in
the court below and if this action can be maintained it would
amount to an allowance of an appeal from the judgment of the
court below in the election proceeding, the very thing which section
27 prohibits.
chanro blesvi rt ualawlib ra ry chanrobles vi rt ual law li bra ry

It cannot be believed that the Legislature, after providing a special

and exclusive manner for determining the facts in an election case,
and after declaring that determination should be final, intended that
the defeated party should have a right to try the same questions
over again by virtue of the provisions of section 201, above quoted.
That the provisions of section 201 have been modified to some
extent by the Election Law is very clear. Whether or not it still
remains in force and may be availed of by a defeated candidate,
who claims that the possessor of an office is not entitled thereto for
some reason not connected with the method of casting and counting
the votes, we do not decide. We do decide, however, that it has
been so far modified that no person claiming a right to a public
office can now maintain an action by virtue of this section when the
grounds alleged by him in his complaint relate to the facts which the
Court of First Instance in proceedings under said section 27 had
acquired a right to and did determine.

This decision would seem to be conclusive of right to maintain the

present action. chanroblesvi rtua lawlib rary chan roble s virt ual law lib rary

In closing we call attention to the fact that unless the special

remedies mentioned in Chapter IX of the Code of Civil Procedure are
directed against the court of Firs Instance itself, the Supreme Court
will usually require the proceeding to be brought in the Court of
First Instance instead of the Supreme Court. The Court of First
Instance is better adapted to the trial of these special remedies than
is the Supreme Court; and we regard it as the better practice to
begin the proceedings to obtain such remedies in the trial court in
the first instance. This is especially true where the determination of
the questions presented would require the taking of evidence. chanroble svirtualawl ibra ry chan roble s virtual law lib rary

The demurrer is sustained and unless the complaint is amended

within five days the action will be finally dismissed with costs. So
ordered.chanroble svi rtualaw lib rary chan rob les vi rtual law lib rary

Torres and Araullo, JJ., concur.

Trent, J., concurs in the result.

Separate Opinions chanrobles virtual law library

CARSON, J., concurring: chanrobles v irt ual law li bra ry

I concur, under the doctrine announced in Navarro vs. Gimenez (10

Phil. Rep., 226).
COMMISSIONER OF CUSTOMS and G.R. No. 179579
the DISTRICT COLLECTOR OF THE
PORT OF SUBIC,
Present:
Petitioners,

CARPIO, J., Chairperson,

BRION,

PEREZ,
- versus -
SERENO, and

REYES, JJ.

Promulgated:
HYPERMIX FEEDS CORPORATION,

Respondent.
February 1, 2012

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
SERENO, J.:
Before us is a Petition for Review under Rule 45,[1] assailing the
Decision[2] and the Resolution[3] of the Court of Appeals (CA), which nullified the
Customs Memorandum Order (CMO) No. 27-2003[4] on the tariff classification of
wheat issued by petitioner Commissioner of Customs.
The antecedent facts are as follows:
On 7 November 2003, petitioner Commissioner of Customs issued CMO 27-
2003. Under the Memorandum, for tariff purposes, wheat was classified
according to the following: (1) importer or consignee; (2) country of origin; and (3)
port of discharge.[5] The regulation provided an exclusive list of corporations,
ports of discharge, commodity descriptions and countries of origin. Depending on
these factors, wheat would be classified either as food grade or feed grade. The
corresponding tariff for food grade wheat was 3%, for feed grade, 7%.
CMO 27-2003 further provided for the proper procedure for protest or
Valuation and Classification Review Committee (VCRC) cases. Under this
procedure, the release of the articles that were the subject of protest required
the importer to post a cash bond to cover the tariff differential.[6]
A month after the issuance of CMO 27-2003, on 19 December 2003,
respondent filed a Petition for Declaratory Relief[7] with the Regional Trial Court
(RTC) of Las Pias City. It anticipated the implementation of the regulation on its
imported and perishable Chinese milling wheat in transit from
China.[8] Respondent contended that CMO 27-2003 was issued without following
the mandate of the Revised Administrative Code on public participation, prior
notice, and publication or registration with the University of the Philippines Law
Center.
Respondent also alleged that the regulation summarily adjudged it to be a
feed grade supplier without the benefit of prior assessment and examination;
thus, despite having imported food grade wheat, it would be subjected to the 7%
tariff upon the arrival of the shipment, forcing them to pay 133% more than was
proper.
Furthermore, respondent claimed that the equal protection clause of the
Constitution was violated when the regulation treated non-flour millers
differently from flour millers for no reason at all.
Lastly, respondent asserted that the retroactive application of the
regulation was confiscatory in nature.
On 19 January 2004, the RTC issued a Temporary Restraining Order (TRO)
effective for twenty (20) days from notice.[9]
Petitioners thereafter filed a Motion to Dismiss.[10] They alleged that: (1)
the RTC did not have jurisdiction over the subject matter of the case, because
respondent was asking for a judicial determination of the classification of wheat;
(2) an action for declaratory relief was improper; (3) CMO 27-2003 was an
internal administrative rule and not legislative in nature; and (4) the claims of
respondent were speculative and premature, because the Bureau of Customs
(BOC) had yet to examine respondents products. They likewise opposed the
application for a writ of preliminary injunction on the ground that they had not
inflicted any injury through the issuance of the regulation; and that the action
would be contrary to the rule that administrative issuances are assumed valid
until declared otherwise.
On 28 February 2005, the parties agreed that the matters raised in the
application for preliminary injunction and the Motion to Dismiss would just be
resolved together in the main case. Thus, on 10 March 2005, the RTC rendered its
Decision[11] without having to resolve the application for preliminary injunction
and the Motion to Dismiss.
The trial court ruled in favor of respondent, to wit:
WHEREFORE, in view of the foregoing, the Petition is GRANTED and the subject
Customs Memorandum Order 27-2003 is declared INVALID and OF NO FORCE AND
EFFECT. Respondents Commissioner of Customs, the District Collector of Subic or
anyone acting in their behalf are to immediately cease and desist from enforcing the
said Customs Memorandum Order 27-2003.

SO ORDERED.[12]

The RTC held that it had jurisdiction over the subject matter, given that the
issue raised by respondent concerned the quasi-legislative powers of petitioners.
It likewise stated that a petition for declaratory relief was the proper remedy, and
that respondent was the proper party to file it. The court considered that
respondent was a regular importer, and that the latter would be subjected to the
application of the regulation in future transactions.
With regard to the validity of the regulation, the trial court found that
petitioners had not followed the basic requirements of hearing and publication in
the issuance of CMO 27-2003. It likewise held that petitioners had substituted the
quasi-judicial determination of the commodity by a quasi-legislative
predetermination.[13] The lower court pointed out that a classification based on
importers and ports of discharge were violative of the due process rights of
respondent.
 Dissatisfied with the Decision of the lower court, petitioners appealed to
the CA, raising the same allegations in defense of CMO 27-2003.[14] The appellate
court, however, dismissed the appeal. It held that, since the regulation affected
substantial rights of petitioners and other importers, petitioners should have
observed the requirements of notice, hearing and publication.
Hence, this Petition.
Petitioners raise the following issues for the consideration of this Court:
I. THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE WHICH IS NOT IN
ACCORD WITH THE LAW AND PREVAILING JURISPRUDENCE.

II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT THE TRIAL COURT HAS
JURISDICTION OVER THE CASE.

The Petition has no merit.

We shall first discuss the propriety of an action for declaratory relief.
Rule 63, Section 1 provides:
Who may file petition. Any person interested under a deed, will, contract or
other written instrument, or whose rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental regulation may, before breach or
violation thereof, bring an action in the appropriate Regional Trial Court to determine
any question of construction or validity arising, and for a declaration of his rights or
duties, thereunder.

The requirements of an action for declaratory relief are as follows: (1) there
must be a justiciable controversy; (2) the controversy must be between persons
whose interests are adverse; (3) the party seeking declaratory relief must have a
legal interest in the controversy; and (4) the issue involved must be ripe for
judicial determination.[15] We find that the Petition filed by respondent before the
lower court meets these requirements.
First, the subject of the controversy is the constitutionality of CMO 27-2003
issued by petitioner Commissioner of Customs. In Smart Communications v.
NTC,[16] we held:
 The determination of whether a specific rule or set of rules issued by an
administrative agency contravenes the law or the constitution is within the jurisdiction
of the regular courts. Indeed, the Constitution vests the power of judicial review or
the power to declare a law, treaty, international or executive agreement, presidential
decree, order, instruction, ordinance, or regulation in the courts, including the
regional trial courts. This is within the scope of judicial power, which includes the
authority of the courts to determine in an appropriate action the validity of the acts of
the political departments. Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government. (Emphasis supplied)

Meanwhile, in Misamis Oriental Association of Coco Traders, Inc. v.

Department of Finance Secretary,[17] we said:
xxx [A] legislative rule is in the nature of subordinate legislation, designed to
implement a primary legislation by providing the details thereof. xxx

In addition such rule must be published. On the other hand, interpretative rules
are designed to provide guidelines to the law which the administrative agency is
in charge of enforcing.
Accordingly, in considering a legislative rule a court is free to make three
inquiries: (i) whether the rule is within the delegated authority of the administrative
agency; (ii) whether it is reasonable; and (iii) whether it was issued pursuant to proper
procedure. But the court is not free to substitute its judgment as to the desirability or
wisdom of the rule for the legislative body, by its delegation of administrative judgment,
has committed those questions to administrative judgments and not to judicial
judgments. In the case of an interpretative rule, the inquiry is not into the validity but
into the correctness or propriety of the rule. As a matter of power a court, when
confronted with an interpretative rule, is free to (i) give the force of law to the
rule; (ii) go to the opposite extreme and substitute its judgment; or (iii) give some
intermediate degree of authoritative weight to the interpretative rule. (Emphasis
supplied)

Second, the controversy is between two parties that have adverse

interests. Petitioners are summarily imposing a tariff rate that respondent is
refusing to pay.
 Third, it is clear that respondent has a legal and substantive interest in the
implementation of CMO 27-2003. Respondent has adequately shown that, as a
regular importer of wheat, on 14 August 2003, it has actually made shipments of
wheat from China to Subic. The shipment was set to arrive in December 2003.
Upon its arrival, it would be subjected to the conditions of CMO 27-2003. The
regulation calls for the imposition of different tariff rates, depending on the
factors enumerated therein. Thus, respondent alleged that it would be made to
pay the 7% tariff applied to feed grade wheat, instead of the 3% tariff on food
grade wheat. In addition, respondent would have to go through the procedure
under CMO 27-2003, which would undoubtedly toll its time and resources. The
lower court correctly pointed out as follows:
xxx As noted above, the fact that petitioner is precisely into the business of
importing wheat, each and every importation will be subjected to constant disputes
which will result into (sic) delays in the delivery, setting aside of funds as cash bond
required in the CMO as well as the resulting expenses thereof. It is easy to see that
business uncertainty will be a constant occurrence for petitioner. That the sums
involved are not minimal is shown by the discussions during the hearings conducted as
well as in the pleadings filed. It may be that the petitioner can later on get a refund but
such has been foreclosed because the Collector of Customs and the Commissioner of
Customs are bound by their own CMO. Petitioner cannot get its refund with the said
agency. We believe and so find that Petitioner has presented such a stake in the
outcome of this controversy as to vest it with standing to file this petition.[18] (Emphasis
supplied)

Finally, the issue raised by respondent is ripe for judicial determination,

because litigation is inevitable[19] for the simple and uncontroverted reason that
respondent is not included in the enumeration of flour millers classified as food
grade wheat importers. Thus, as the trial court stated, it would have to file a
protest case each time it imports food grade wheat and be subjected to the 7%
tariff.
It is therefore clear that a petition for declaratory relief is the right remedy
given the circumstances of the case.
Considering that the questioned regulation would affect the substantive
rights of respondent as explained above, it therefore follows that petitioners
should have applied the pertinent provisions of Book VII, Chapter 2 of the Revised
Administrative Code, to wit:
 Section 3. Filing. (1) Every agency shall file with the University of the Philippines
Law Center three (3) certified copies of every rule adopted by it. Rules in force on the
date of effectivity of this Code which are not filed within three (3) months from that
date shall not thereafter be the bases of any sanction against any party of persons.

xxx xxx xxx

Section 9. Public Participation. - (1) If not otherwise required by

law, an agency shall, as far as practicable, publish or circulate notices of
proposed rules and afford interested parties the opportunity to submit
their views prior to the adoption of any rule.
(2) In the fixing of rates, no rule or final order shall be valid
unless the proposed rates shall have been published in a newspaper of
general circulation at least two (2) weeks before the first hearing thereon.
(3) In case of opposition, the rules on contested cases shall be
observed.

When an administrative rule is merely interpretative in nature, its

applicability needs nothing further than its bare issuance, for it gives no real
consequence more than what the law itself has already prescribed. When, on the
other hand, the administrative rule goes beyond merely providing for the means
that can facilitate or render least cumbersome the implementation of the law but
substantially increases the burden of those governed, it behooves the agency to
accord at least to those directly affected a chance to be heard, and thereafter to
be duly informed, before that new issuance is given the force and effect of law.[20]
Likewise, in Taada v. Tuvera,[21] we held:
The clear object of the above-quoted provision is to give the general public
adequate notice of the various laws which are to regulate their actions and conduct as
citizens. Without such notice and publication, there would be no basis for the
application of the maxim ignorantia legis non excusat. It would be the height of
injustice to punish or otherwise burden a citizen for the transgression of a law of
which he had no notice whatsoever, not even a constructive one.

Perhaps at no time since the establishment of the Philippine Republic has the
publication of laws taken so vital significance that at this time when the people have
bestowed upon the President a power heretofore enjoyed solely by the legislature.
While the people are kept abreast by the mass media of the debates and deliberations
in the Batasan Pambansa and for the diligent ones, ready access to the legislative
 records no such publicity accompanies the law-making process of the President. Thus,
without publication, the people have no means of knowing what presidential decrees
have actually been promulgated, much less a definite way of informing themselves of
the specific contents and texts of such decrees. (Emphasis supplied)

Because petitioners failed to follow the requirements enumerated by the

Revised Administrative Code, the assailed regulation must be struck down.
Going now to the content of CMO 27-3003, we likewise hold that it is
unconstitutional for being violative of the equal protection clause of the
Constitution.
The equal protection clause means that no person or class of persons shall
be deprived of the same protection of laws enjoyed by other persons or other
classes in the same place in like circumstances. Thus, the guarantee of the equal
protection of laws is not violated if there is a reasonable classification. For a
classification to be reasonable, it must be shown that (1) it rests on substantial
distinctions; (2) it is germane to the purpose of the law; (3) it is not limited to
existing conditions only; and (4) it applies equally to all members of the same
class.[22]
Unfortunately, CMO 27-2003 does not meet these requirements. We do
not see how the quality of wheat is affected by who imports it, where it is
discharged, or which country it came from.
Thus, on the one hand, even if other millers excluded from CMO 27-2003
have imported food grade wheat, the product would still be declared as feed
grade wheat, a classification subjecting them to 7% tariff. On the other hand,
even if the importers listed under CMO 27-2003 have imported feed grade wheat,
they would only be made to pay 3% tariff, thus depriving the state of the taxes
due. The regulation, therefore, does not become disadvantageous to respondent
only, but even to the state.
It is also not clear how the regulation intends to monitor more closely
wheat importations and thus prevent their misclassification. A careful study of
CMO 27-2003 shows that it not only fails to achieve this end, but results in the
opposite. The application of the regulation forecloses the possibility that other
corporations that are excluded from the list import food grade wheat; at the
same time, it creates an assumption that those who meet the criteria do not
import feed grade wheat. In the first case, importers are unnecessarily burdened
to prove the classification of their wheat imports; while in the second, the state
carries that burden.
Petitioner Commissioner of Customs also went beyond his powers when
the regulation limited the customs officers duties mandated by Section 1403 of
the Tariff and Customs Law, as amended. The law provides:
Section 1403. Duties of Customs Officer Tasked to Examine, Classify, and
Appraise Imported Articles. The customs officer tasked to examine, classify, and appraise
imported articles shall determine whether the packages designated for examination
and their contents are in accordance with the declaration in the entry, invoice and
other pertinent documents and shall make return in such a manner as to indicate
whether the articles have been truly and correctly declared in the entry as regard their
quantity, measurement, weight, and tariff classification and not imported contrary to
law. He shall submit samples to the laboratory for analysis when feasible to do so and
when such analysis is necessary for the proper classification, appraisal, and/or
admission into the Philippines of imported articles.

Likewise, the customs officer shall determine the unit of quantity in which
they are usually bought and sold, and appraise the imported articles in accordance
with Section 201 of this Code.

Failure on the part of the customs officer to comply with his duties shall subject
him to the penalties prescribed under Section 3604 of this Code.

The provision mandates that the customs officer must first assess and determine
the classification of the imported article before tariff may be imposed.
Unfortunately, CMO 23-2007 has already classified the article even before the
customs officer had the chance to examine it. In effect, petitioner Commissioner
of Customs diminished the powers granted by the Tariff and Customs Code with
regard to wheat importation when it no longer required the customs
officers prior examination and assessment of the proper classification of the
wheat.
It is well-settled that rules and regulations, which are the product of a
delegated power to create new and additional legal provisions that have the
effect of law, should be within the scope of the statutory authority granted by the
legislature to the administrative agency. It is required that the regulation be
germane to the objects and purposes of the law; and that it be not in
contradiction to, but in conformity with, the standards prescribed by law.[23]
 In summary, petitioners violated respondents right to due process in the
issuance of CMO 27-2003 when they failed to observe the requirements under
the Revised Administrative Code. Petitioners likewise violated respondents right
to equal protection of laws when they provided for an unreasonable classification
in the application of the regulation. Finally, petitioner Commissioner of Customs
went beyond his powers of delegated authority when the regulation limited the
powers of the customs officer to examine and assess imported articles.
WHEREFORE, in view of the foregoing, the Petition is DENIED.
SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice

Chairperson

ARTURO D. BRION JOSE PORTUGAL PEREZ

Associate Justice Associate Justice
 BIENVENIDO L. REYES

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

RENATO C. CORONA

Chief Justice

[1]
Rollo, pp. 124-142.
[2]
Id. at 33-46.
[3]
Id. at 47.
[4]
Records, pp. 16-18.
[5]
SUBJECT: Tariff Classification of Wheat
In order to monitor more closely wheat importations and thus prevent their misclassification, the following
are hereby prescribed:
1. For tariff purposes, wheat shall be classified as follows:
1.1 Under HS 1001.9090 (Food Grade) when all the following elements are present:
1.1.1 the importer/consignee of the imported wheat is a flour miller as per attached list (Annex
A), which shall form as integral part of this Order
1.1.2 the wheat importation consists of any of those listed in Annex A according to the
country of origin indicated therein
1.1.3 the wheat importation is entered/unloaded in the Port of Discharge indicated opposite the
name of the flour miller, as per Annex A
1.2 Under HS 1001.9010 (Feed Grade)
1.2.1 When any or all of the elements prescribed under 1.1 above is not present.
1.2.2 All other wheat importations by non-flour millers, i.e., importers/consignees NOT listed
in Annex A
[6]
SUBJECT: Tariff Classification of Wheat
xxx xxx xxx
2. Any issue arising from this Order shall be resolved in an appropriate protest or VCRC case.
3. In case of a VCRC case, the following applies:
3.1 The shipment may qualify for Tentative Release upon payment of the taxes and duties as per
declaration and the posting of cash bond to cover the tariff differential.
3.2 The Tentative Release granted by the VCRC shall, prior to the release of the shipment from
Customs custody, be subject to representative. For this purpose, the District/Port Collector
concerned shall forward to the Office of the Commissioner the Tentative Release papers, together
 with all pertinent shipping and supporting documents, including, but not limited to, contract of
sale, phytosanitary certificate and certificate of quality.
In the case of Outports, the required documents shall be faxed to the Office of the Commissioner
of Customs to any of these numbers: 527-1953/527-4573.
3.3 In resolving the classification issue, the VCRC shall consider the import/consignee, type/source of
wheat and port of discharge of the wheat importation, as indicated in Annex A, and require the
proofs/evidences (sic), including, but not limited to, proofs of sale or consumption of said wheat
importation, certificate of quality issued by manufacturing country and contract of sale.
3.4 Any VCRC decision adverse to the government shall be subject to automatic review by the
Commissioner of Customs.
[7]
Rollo pp. 158-168.
[8]
Records, p. 12.
[9]
Rollo, pp. 58-59.
[10]
Id. at 60-78.
[11]
Id. at 108-114; penned by Judge Romeo C. De Leon.
[12]
Id. at 114.
[13]
Id. at 112.
[14]
Id. at 117-122.
[15]
Tolentino v. Board of Accountancy, 90 Phil. 83 (1951).
[16]
456 Phil. 145 (2003).
[17]
G.R. No. 108524, 10 November 1994, 238 SCRA 63, 69-70.
[18]
Rollo, p. 112.
[19]
Office of the Ombudsman v. Ibay, 416 Phil. 659 (2001).
[20]
CIR v. Michel J. Lhuiller Pawnshop Inc., 453 Phil. 1043 (2003).
[21]
220 Phil. 422 (1985).
[22]
Philippine Rural Electric Cooperatives Association, Inc. v. DILG, 451 Phil. 683 (2003).
[23]
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles v. Home Development Mutual Fund, 389 Phil. 296
(2000).
G.R. No. 200670 July 6, 2015

CLARK INVESTORS AND LOCATORS ASSOCIATION INC., Petitioner,

vs.
SECRETARY OF FINANCE AND COMMISSIONER OF INTERNAL REVENUE, Respondents.

DECISION

VILLARAMA, JR., J.:

This is a petition for certiorari with a prayer for the issuance of a temporary restraining order and/or
writ of preliminary injunction to annul and set aside Revenue Regulations No. 2-2012 (RR 2-2012)
issued by the Department of Finance (DOF) on February 17, 2012 upon recommendation of the
Bureau of Internal Revenue (BIR). Petitioner Clark Investors and Locators Association, Inc. claims
that RR 2-2012, which imposes Value Added Tax (VAT) and excise tax on the importation of
petroleum and petroleum products from abroad into the Freeport or Economic Zones, is void and
contrary to Republic Act (RA) No. 7227, otherwise known as the Bases Conversion and
Development Act of 1992, as amended by RA No. 9400.

The salient facts follow.

On March 13, 1992, Congress enacted RA No. 7227 which mandated the accelerated conversion of
the Clark and Subic military reservations into special economic zones. Section 12 thereof provides
for the creation of the Subic Special Economic Zone:

SEC. 12. Subic Special Economic Zone. - Subject to the concurrence by resolution of the
sangguniang panlungsod of the City of Olongapo 'and the sangguniang bayan of the Municipalities
of Subic, Morong and Hermosa, there is hereby created a Special Economic and Free-port Zone
consisting of the City of Olongapo and the Municipality of Subic, Province of Zambales, the lands
occupied by the Subic Naval Base and its contiguous extensions as embraced, covered, and defined
by the 1947 Military Bases Agreement between the Philippines and the United states of America as
amended, and within the territorial jurisdiction of the Municipalities of Morong and Hermosa,
Province of Bataan, hereinafter referred to as the Subic Special Economic Zone whose metes and
bounds shall be delineated in a proclamation to be issued by the President of the Philippines. Within
thirty (30) days after the approval of this Act, each local government unit shall submit its resolution of
concurrence to join the Subic Special Economic Zone to the Office of the President. Thereafter, the
President of the Philippines shall issue a proclamation defining the metes and bounds of the zone as
provided herein.

The abovementioned zone shall be subject to the following policies:

(a) Within the framework and subject to the mandate and limitations of the
Constitution and the pertinent provisions of the Local Government Code, the Subic
Special Economic Zone shall be developed into a self-sustaining, industrial,
commercial, financial and investment center to generate employment opportunities in
and around the zone and to attract and promote productive foreign investments;

(b) The Subic Special Economic Zone shall be operated and managed as a
separate customs territory ensuring free flow or movement of goods and
capital within, into and exported out of the Subic Special Economic Zone, as
well as provide incentives such as tax and duty-free importations of raw
materials, capital and equipment. However, exportation or removal of goods
from the territory of the Subic Special Economic Zone to the other parts of the
Philippine territory shall be subject to customs duties and taxes under the
Customs and Tariff Code and other relevant tax laws of the Philippines;

(c) The provision of existing laws, rules and regulations to the contrary
notwithstanding, no taxes, local and national, shall be imposed within the
Subic Special Economic Zone. In lieu of paying taxes, three percent (3%) of the
gross income earned by all businesses and enterprises within the Subic
Special Economic Zone to be remitted to the National Government, one
percent (1%) each to the local government units affected by the declaration of
the zone in proportion to their population area, and other factors. In addition,
there is hereby established a development fund of one percent (1 %) of the
gross income earned by all businesses and enterprises within the Subic
Special Economic Zone to be utilized for the development of municipalities
outside the City of Olongapo and the Municipality of Subic and other
municipalities contiguous to the base areas.

In case of conflict between national and local laws with respect to tax
exemption privileges in the Subic Special Economic Zone, the same shall be
resolved in favor of the latter;

(d) No exchange control policy shall be applied and free markets for foreign
exchange, gold, securities and futures shall be allowed and maintained in the Subic
Special Economic Zone;

(e) The Central Bank, through the Monetary Board, shall supervise and regulate the
operation of banks and other financial institutions within the Subic Special Economic
Zone;

(f) Banking and finance shall be liberalized with the establishment of foreign currency
depository units of local commercial banks and offshore banking units of foreign
banks with minimum Central Bank regulation;

(g) Any investor within the Subic Special Economic Zone whose continuing
investment shall not be less than Two hundred fifty thousand dollars ($250,000),
his/her spouse and dependent children under twenty one (21) years of age, shall be
granted permanent resident status within theSubic Special Economic Zone. They
shall have freedom of ingress and egress to and from the Subic Special Economic
Zone without any need of special authorization from the Bureau of Immigration and
Deportation. The Subic Bay Metropolitan Authority referred to in Section 13 of this
Act may also issue working visas renewable every two (2) years to foreign
executives and other aliens possessing highly-technical skills which no Filipino within
the Subic Special Economic Zone possesses, as certified by the Department of
Labor and Employment. The names of aliens granted permanent residence status
and working visas by the Subic Bay Metropolitan Authority shall be reported to the
Bureau of Immigration and Deportation within thirty (30) days after issuance thereof;

(h) The defense of the zone and the security of its perimeters shall be the
responsibility of the National Government in coordination with the Subic Bay
Metropolitan Authority. The Subic Bay Metropolitan Authority shall provide and
establish its own internal security and fire-fighting forces; and
 (i) Except as herein provided, the local government units comprising the Subic
Special Economic Zone shall retain their basic autonomy and identity. The cities
1âw phi1

shall be governed by their respective charters and the municipalities shall operate
and function in accordance with Republic Act No. 7160, otherwise known as the
Local Government Code of 1991. (Emphasis supplied)

Based on Section 12 (c) above, in lieu of national and local taxes, all businesses and enterprises
operating within the Subic Special Economic Zone shall pay a preferential gross income tax rate of
five percent (5%). In addition, Section 12 (b) also provides that such businesses and enterprises
shall be exempt from the payment of all taxes and duties on the importation of raw materials, capital,
and equipment into the Subic Special Economic Zone.

Meanwhile, on March 20, 2007, Congress enacted RA No. 9400 which extended the aforementioned
tax and fiscal incentives under RA No. 7227 to the Clark Freeport Zone. By way of amendment,
Section 2 thereof provides:

SEC. 2. Section 15 of Republic Act No. 7227, as amended, is hereby amended to read as follows:

"SEC. 15. Clark Special Economic Zone (CSEZ) and Clark Freeport Zone (CFZ). - Subject to the
concurrence by resolution of the local government units directly affected, the President is hereby
authorized to create by executive proclamation a Special Economic Zone covering the lands
occupied by the Clark military reservations and its contiguous extensions as embraced, covered and
defined by the 194 7 Military Bases Agreement between the Philippines and the United States of
America, as amended, located within the territorial jurisdiction of Angeles City, municipalities of
Mabalacat and Porac, Province of Pampanga, and the municipalities of Capas and Bamban,
Province of Tarlac, in accordance with the provision as herein provided insofar as applied to the
Clark military reservations. The Clark Air Base proper with an area of not more than four thousand
four hundred hectares (4,400 has.), with the exception of the twenty-two-hectare commercial area
situated near the main gate and the Bayanihan Park consisting of seven and a half hectares (7.5
has.) located outside the main gate of the Clark Special Economic Zone, is hereby declared a
freeport zone.

"The CFZ shall be operated and managed as a separate customs territory ensuring free flow
or movement of goods and capital equipment within, into and exported out of the CFZ, as
well as provide incentives such as tax and duty-free importation of raw materials and capital
equipment. However, exportation or removal of goods from the territory of the CFZ to the
other parts of the Philippine territory shall be subject to customs duties and taxes under the
Tariff and Customs Code of the Philippines, as amended, the National Internal Revenue Code
of 1997, as amended, and other relevant tax laws of the Philippines.

"The provisions of existing laws, rules and regulations to the contrary notwithstanding, no national
and local taxes shall be imposed on registered business enterprises within the CFZ. In lieu of said
taxes, a five percent (5%) tax on gross income earned shall be paid by all registered business
enterprises within the CFZ and shall be directly remitted as follows: three percent (3%) to the
National Government, and two percent (2%) to the treasurer's office of the municipality or city where
they are located.

"The governing body of the Clark Special Economic Zone shall likewise be established by executive
proclamation with such powers and functions exercised by the Export Processing Zone Authority
pursuant to Presidential Decree No. 66, as amended: Provided, That it shall have no regulatory
authority over public utilities, which authority pertains to the regulatory agencies created by law for
the purpose, such as the Energy Regulatory Commission created under Republic Act No. 9136 and
the National Telecommunications Commission created under Republic Act No. 7925.

"x x x

"Subject to the concurrence by resolution of the local government units directly affected and upon
recommendation of the Philippine Economic Zone Authority (PEZA), the President is hereby
authorized to create by executive proclamation Special Economic Zones covering the City of
Balanga and the municipalities of Limay, Mariveles, Morong, Hermosa, and Dinalupihan, Province of
Bataan.

"Subject to the concurrence by resolution of the local government units directly affected and upon
recommendation of the PEZA, the President is hereby authorized to create by executive
proclamation Special Economic Zones covering the municipalities of Castillejos, San Marcelino, and
San Antonio, Province of Zambales.

"Duly registered business enterprises that will operate in the Special Economic Zones to be created
shall be entitled to the same tax and duty incentives as provided for under Republic Act No. 7916, as
amended: Provided that for the purpose of administering these incentives, the PEZA shall register,
regulate, and supervise all registered enterprises within the Special Economic Zones."

Thus, the businesses and enterprises within the Clark Freeport Zone are similarly exempt from the
payment of all taxes and duties on the importation of raw materials, capital and equipment.

On February 17, 2012, the DOF, upon recommendation of the BIR, issued RR 2-2012 which
imposed VAT and excise tax on the importation of petroleum and petroleum products from abroad
and into the Freeport or Economic Zones. Section 3 thereof partly provides:

SECTION 3. TAX TREATMENT OF ALL PETROLEUM AND PETROLEUM PRODUCTS

IMPORTED AND ITS SUBSEQUENT EXPORTATION OR SALES TO FREEPORT AND
ECONOMIC ZONE LOCATORS OR OTHER PERSONS/ENTITIES; REFUND OF TAXES PAID;
AUTHORITY TO RELEASE IMPORTED GOODS (ATRIG) AND OTHER ADMINISTRATIVE
REQUIREMENTS. - The Value-Added and Excise taxes which are due on all petroleum and
petroleum products that are imported and/or brought directly from abroad to the Philippines,
including Freeport and Economic zones, shall be paid by the importer thereof to the Bureau of
Customs (BOC).

The subsequent exportation or sale/delivery of these petroleum or petroleum products to registered

enterprises enjoying tax privileges within the Freeport and Economic zones, as well as the sale of
said goods to persons engaged in international shipping or international air transport operations,
shall be subject to 0% VAT. With respect to the VAT paid on petroleum or petroleum products by the
importer on account of aforesaid 0% VAT transactions/entities and the Excise taxes paid on account
of sales to international carriers of Philippine or Foreign Registry for use or consumption outside the
Philippines or exempt entities or agencies covered by tax treaties, conventions and international
agreements for their use or consumption (covered by Certification in such entity's favor), as well as
entities which are by law exempt from indirect taxes, the importer may file a claim for credit or refund
with the BOC, which shall process the claim for refund, subject to the favorable endorsement of the
BIR, in accordance with existing rules and procedures: Provided, that no claim for refund shall be
granted unless it is properly shown to the satisfaction of the BIR that said petroleum or petroleum
products have been sold to a duly registered locator and have been utilized in the registered
activity/operation of the locator, or that such have been sold and have been used for international
shipping or air transport operations, or that the entities to which the said goods were sold are
statutorily zero-rated for VAT, and/or exempt from Excise taxes.

xxxx

On March 8, 2012, petitioner, which represents the businesses and enterprises within the Clark
Freeport Zone, filed the instant petition alleging that respondents acted with grave abuse of
discretion in issuing RR 2-2012. It argues that by imposing the VAT and excise tax on the
importation of petroleum and petroleum products from abroad and into the Freeport or Economic
Zones, RR 2-2012 unilaterally revoked the tax exemption granted by RA No. 7227 and RA No. 9400
to the businesses and enterprises operating within the Subic Special Economic Zone and Clark
Freeport Zone.

Respondents, through the Office of the Solicitor General (OSG), contend that the petition must be
denied outright because the special civil action for certiorari cannot be used to assail RR 2-2012
which was issued by the respondents in the exercise of their quasi-legislative or rule-making powers.
According to the OSG, certiorari can only be used against a public officer exercising judicial or quasi-
judicial powers. In addition, the OSG invokes the doctrine of hierarchy of courts and claims that a
petition for certiorari cannot be filed directly to this Court absent highly exceptional reasons which
the petitioner failed to adduce. Finally, the OSG opposes the argument of petitioner that RR 2-2012
unilaterally revoked the tax exemption granted by RA No. 7227 and RA No. 9400 to the businesses
and enterprises operating within the Subic Special Economic Zone and Clark Freeport Zone by
referring to the tax refund under Section 3 of RR 2-2012. It points out that Section 3 allows the
businesses and enterprises operating within the Subic Special Economic Zone and Clark Freeport
Zone to claim for a tax refund upon submission of competent proof that they used the imported fuel
exclusively within the Subic Special Economic Zone and Clark Freeport Zone. Thus, the OSG
claimed that RR 2-2012 is consistent with RA No. 7227 and RA No. 9400.

We deny the petition for being an improper remedy.

Firstly, respondents did not act in any judicial or quasi-judicial capacity. A petition for certiorari under
Rule 65 of the 1997 Rules of Civil Procedure, as amended, is a special civil action that may be
invoked only against a tribunal, board, or officer exercising judicial or quasi-judicial functions.

Section 1, Rule 65 of the 1997 Rules of Civil Procedure, as amended, provides:

SECTION 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy,
and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that judgment be rendered
annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental
reliefs as law and justice may require.

xxxx

For a special civil action for certiorari to prosper, the following requisites must concur: ( 1) it must be
directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the
tribunal, board, or officer must have acted without or in excess of jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy,
and adequate remedy in the ordinary course of law.1
A respondent is said to be exercising judicial function where he has the power to determine what the
law is and what the legal rights of the parties are, and then undertakes to determine these questions
and adjudicate upon the rights of the parties.2 Quasi-judicial function, on the other hand, is "a term
which applies to the action, discretion, etc., of public administrative officers or bodies x x x required
to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from
them, as a basis for their official action and to exercise discretion of a judicial nature."3 before a
tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a
law that gives rise to some specific rights of persons or property under which adverse claims to such
rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer
clothed with power and authority to determine the law and adjudicate the respective rights of the
contending parties.4

Respondents do not fall within the ambit of a tribunal, board, or officer exercising judicial or quasi-
judicial functions. They issued RR 2-2012 in the exercise of their quasi-legislative or rule-making
powers, and not judicial or quasi-judicial functions. Verily, respondents did not adjudicate or
determine the rights of the parties.

In order to determine whether a Revenue Regulation is quasilegislative in nature, we must examine

the legal basis of the Secretary of Finance in the issuance thereof. In BPI Leasing Corporation v.
Court of Appeals.5 we ruled that Revenue Regulation 19-86 was quasi-legislative in nature because
it was issued by the Secretary of Finance in the exercise of his rule-making powers under Section
244 of the National Internal Revenue Code (NIRC):

The Court finds the questioned revenue regulation to be legislative in nature. Section 1 of Revenue
Regulation 19-86 plainly states that it was promulgated pursuant to Section 277 of the NIRC. Section
277 (now Section 244) is an express grant of authority to the Secretary of Finance to promulgate all
needful rules and regulations for the effective enforcement of the provisions of the NIRC. In Paper
Industries Corporation of the Philippines v. Court of Appeals, the Court recognized that the
application of Section 277 calls for none other than the exercise of quasi-legislative or rule-making
authority. Verily, it cannot be disputed that Revenue Regulation 19-86 was issued pursuant to the
rule-making power of the Secretary of Finance, thus making it legislative and not interpretative as
alleged by BLC. 6

Similarly, in the case at bar, RR 2-2012 was also issued by the Secretary of Finance based on
Section 244 of the NIRC. Section 1 of RR 2-2012 provides:

SECTION 1. SCOPE - Pursuant to Section 244, in relation to Section 245, of the National Internal
Revenue Code (NIRC) of 1997, as amended, these Regulations are hereby promulgated in order to
prescribe:

1) the tax administration treatment of all petroleum and petroleum products imported into the
Philippines, including those coming in through Freeport zones or Economic Zones; and 2) the refund
of Value-Added Tax (VAT) and Excise taxes paid for transactions statutorily zero-rated or exempt
therefrom; and to provide administrative guidelines on the operation and maintenance of storage
tanks, facilities, depots or terminals where commodities for commercial use can be stored.

Relevantly, Section 244 of the NIRC provides:

SEC. 244. Authority of Secretary of Finance to Promulgate Rules and Regulations. -The Secretary of
Finance, upon recommendation of the Commissioner, shall promulgate all needful rules and
regulations for the effective enforcement of the provisions of this Code.
Conformably with our ruling in BPI Leasing Corporation that the application of Section 244 of the
NIRC is an exercise of quasi-legislative or rule-making powers of the Secretary of Finance, and
since RR 2-2012 was issued by the Secretary of Finance based on Section 244 of the NIRC, such
administrative issuance is therefore quasi-legislative in nature which is outside the scope of a
petition for certiorari. issued by the Secretary of Finance based on Section 244 of the NIRC, such
administrative issuance is therefore quasi-legislative in nature which is outside the scope of a
petition for certiorari.

Secondly, while this case is styled as a petition for certiorari, there is, however, no denying the fact
that, in essence, it seeks the declaration by this Court of the unconstitutionality and illegality of the
questioned rule, thus partaking the nature, in reality, of one for declaratory relief over which this
Court has only appellate, not original, jurisdiction. 7Section 5, Article VIII of the 1987 Philippine
Constitution provides:

Sec. 5. The Supreme Court shall have the following powers:

(1) Exercise original jurisdiction over cases affecting ambassadors, other public
ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo
warranto, and habeas corpus.

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the
Rules of Court may provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in
question.

xxxx

Accordingly, this petition must fail because this Court does not have original jurisdiction over a
petition for declaratory relief even if only questions of law are involved.8 The special civil action of
declaratory relief falls under the exclusive jurisdiction of the Regional Trial Courts. 9 The Rules of
Court is explicit that such action shall be brought before the appropriate Regional Trial Court.
Section 1, Rule 63 of the Rules of Court provides:

SECTION 1. Who may file petition. - Any person interested under a deed, will, contract or other
written instrument, whose rights are affected by a statute, executive order or regulation, ordinance,
or any other governmental regulation may, before breach or violation thereof, bring an action in the
appropriate Regional Trial Court to determine any question of construction or validity arising, and for
a declaration of his rights or duties, thereunder.

Lastly, although this Court, the Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court
forum.10 In Heirs of Bertuldo Hinog v. Hon. Melicor, 11citing People v. Cuaresma, 12 we held:

This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court
with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not,
however, to be taken as according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed. There is after all a
hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a
general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming
regard for that judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court,
and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's
original jurisdiction to issue these writs should be allowed only when there are special and important
reasons therefor, clearly and specifically set out in the petition. This is [an] established policy. It is a
policy necessary to prevent inordinate demands upon the Court's time and attention which are better
devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the
Court's docket.

The rationale for this rule is two-fold: (1) it would be an imposition upon the precious time of this
Court; and (2) it would cause an inevitable and resultant delay, intended or otherwise, in the
adjudication of cases, which in some instances had to be remanded or referred to the lower court as
the proper forum under the rules of procedure, or as better equipped to resolve the issues because
this Court is not a trier of facts. 13

We thus affirm the judicial policy that we shall not entertain a direct resort to this Court unless the
remedy cannot be obtained in the apporiate courts, and exceptional and compelling circumstances,
such as cases of national interest and of serious implications, justify the availment of the
extraordinary remedy of writ of certiorari. 14

In Chamber of Real Estate and Builders Association, Inc (CREBA) v. Secretary of Agrarian
Reform, 15 we provided examples of such exceptional and compelling circumstances, to wit:

Exceptional and compelling circumstances were held present in the following cases (a) Chavez v.
Romulo, on citizens 9 right to bear arms ;(b) Government of [the] United States of America v. Hon.
Purganan, on bail in extradition remedy of writ of certiorari.

In Chamber of Real Estate and Builders Association, Inc.(CREBA) v. Secretary of Agrarian

Reform, 15 we provided examples of such exceptional and compelling circumstances, to wit:

Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v.
Romulo, on citizens' right to bear arms; (b) Government of[the] United States of America v. Hon
Purganan, on bail in extradition proceedings; (c) Commission on Elections v.Judge Quijano- Padilla,
on government contract involving modernization and computerization of voters' registration list;(d)
Buklod ng Kawaning EJIB v. Hon Sec. Zamora, on status and existence of a public office; and (e)
Hon. Fortich v. Hon. Corona, on the so-called "Win-Win Resolution" of the Office of the President
which modified the approval of the conversion to agro-industrial area. 16

In the case at bar, petitioner failed to allege such exceptional and compelling circumstances which
justify a direct resort to this Court.

In view of the serious procedural and technical defects of the petition, we see no need for this Court
to resolve the other issues raised by the petitioner.

WHEREFORE, premises considered, the petition is DISMISSED.

With costs against the petitioner.

SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice

WE CONCUR:

DIOSDADO M.PERALTA*
Associate Justice
Acting Chairperson

LUCAS P. BERSAMIN** JOSE PORTUGAL PEREZ***

Associate Justice Associate Justice

ESTELA M.PERLAS-BERNABE****
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.

DIOSDADO M. PERALTA
Associate Justice
Acting Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the 1987 Constitution and the Division Acting Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes

*
Designated Acting Chairperson per Special Order No. 2071 dated June 23, 2015.

Designated additional Member in lieu of Associate Justice Francis H. Jardeleza, per Raffle
**

dated January 5, 2015.

Designated Acting Member in lieu of Associate Justice Bienvenido L. Reyes, per Special
***

Order No. 2084 dated June 29, 2015.

Designated Acting Member in lieu of Associate Justice Presbitero J. Velasco, Jr., per
***

Special Order No. 2072 dated June 23, 2015.

1
SPOJ Acuzar v. Jorolan, etc. 631 Phil. 514,523 (2010).
2
Metropolitan Bank and Trust Company, Inc. v. National Wages and Productivity
Commission, 543 Phil. 318, 329 (2007).

3
Midland Insurance Corporation v. Intermediate Appellate Court, 227 Phil. 413, 418
(1986).See also Villarosa v. Commission on Elections, 377 Phil. 497, 506-507 (1999); the
United Residents of Dominican Hill, Inc v. Commission on the Settlement of land Problems,
406 Phil. 354, 372 (2001).

4
Santiago, Jr., etc. v. Bautista, et al., 143 Phil. 209, 219 (1970).

5
461Phil.451, 459 (2003).

6
BPI Leasing Corporation v. Court of Appeals, supra.

7
Philnabank Employees Association v. Estanislao, G.R. No. 104209, November 16, 1993,
227 SCRA 804, 811.

8
Liga ng mga Barangay National v. City Mayor of Manila, 465 Phil. 529, 542 (2004).

9
Office of the Ombudsman v. Hon.! Bay, 416 Phil. 659, 665-666 (2001).

10
Mendoza, et al. v. Mayor Villas, et al., 659 Phil. 409, 414 (2011).

11
495 Phil. 422, 432 (2005).

12
254 Phil. 418, 426-427 (1989).

Liga ng mga Barangay National v. City Mayor of Manila, supra note 8, at 543, citing
13

Santiago v. Vasquez, G.R. Nos. 99289-90, January 27, I 993, 2 I 7 SCRA 633, 652.

14
Id., citing Tana v. Hon. Gov. Socrates, 343 Phil. 670, 700 (1997).

15
635 Phil. 283 (2010).

Chamber of Real Estate and Builders Association, Inc. (CREBA) v. Secretary of Agrarian
16

Reform, supra, at 301.