G.R. No. L-286 March 29, 1946 in 120 equal monthly installments; that Jose R.
in 120 equal monthly installments; that Jose R. Victoriano continued making said monthly
FREDESVINDO S. ALVERO, petitioner,
vs.
M.L. DE LA ROSA, Judge of First Instance of Manila, JOSE R. VICTORIANO, and
MARGARITA VILLARICA,respondents.
Revilla and Palma for petitioner.
Francisco Claravall for respondents.
DE JOYA, J.:
This is an original petition for certiorari filed in this court.
The record shows that, on June 25, 1945, respondent Jose R. Victoriano had filed a complaint,
in the Court of First Instance of the City of Manila, against petitioner Fredesvindo S. Alvero and
one Margarita Villarica, alleging two causes of action, to wit, (1) to declare in force the contract
of sale, made on October 1, 1940, between said Jose R. Victoriano and Margarita Villarica, of
two (2) parcels of land in the Manotoc subdivision, Balintawak, in the barrio of Calaanan,
municipality of Caloocan, Province of Rizal, with a combined area of 480 square meters, which
land was subsequently sold by said Villarica, in favor of petitioner Fredesvindo S. Alvero, on
December 31, 1944, for the sum of P100,000 in Japanese military notes; and (2) to declare
said subsequent sale null and void.
On July 7, 1945, Margarita Villarica filed an answer to said complaint, expressly admitting
having sold said land to Fresdesvindo S. Alvero, for P100,000, in December, 1944, due to the
imperative necessity of raising funds with which to provide for herself and family, and that she
did not remember the previous sale; at the same time, offering to repurchase said land from
Fredesvindo S. Alvero in the sum of P5,000, but that the latter refused to accept the offer.
On July 13, 1945, Fredesvindo S. Alvero, in answering said complaint, denied the allegations
made therein, and claimed exclusive ownership of the land in question, and at the same time
set up a counterclaim and crossclaim in his answer, demanding from Jose R. Victoriano a
P200-monthly rent on said property, beginning from February, 1945, plus P2,000 as damages.
On July 21, 1945, Jose R. Victoriano filed an answer to said counterclaim, denying Fredesvindo
S. Alvero's alleged ownership over said land, and the other allegations contained in Alvero's
answer.
After the trial of the case before the Hon. Mariano L. de la Rosa, Judge of the Court of First
Instance of the City of Manila, one of the respondents in this case, on November 16, 1945, said
respondent judge rendered his decision, in which it was declared that the two (2) parcels of
land in question, with a combined area of 480 square meters had been sold by Margarita
Villarica to Jose R. Victoriano, since October 1, 1940, for the sum of P6,000, on the condition
that the purchaser should make a down payment of P1,700, and a monthly payment of P76.86
payments until December, 1941, but that owing to the war-time conditions then existing,
Margarita Villarica agreed verbally to suspend such payments until the restoration of peace;
that immediately after said sale of said land to him, Jose R. Victoriano took possession thereof
and made improvements thereon to the amount of P800, and continued occupying said
property until December, 1944, when he abandoned the same to go to evacuation places, but
returned thereto in February, 1945; that Margarita Villarica, having forgotten the sale of said
land to Jose R. Victoriano, sold the same for P100,000 in Japanese military notes, on
December 31, 1944, to Fredesvindo S. Alvero, but afterwards offered to repurchase said
property from him, for the sum of P8,000 in genuine Philippine currency, after liberation; that
Fredesvindo S. Alvero presented the deed of sale, executed in his favor, to the Register of
Deeds of the City of Manila, on January 3, 1945, and took possession of said property in
December, 1944, but afterwards found Jose R. Victoriano in the premises in February, 1945;
that in the contract of sale executed by Margarita Villarica, in favor of Jose R. Victoriano, it was
agreed that, upon failure of the purchaser to make payments of three (3) successive mothly
installments, the vendor would be free to sell the property again, forfeiting the payments made,
except in the case of force majeure; that there was really a verbal agreement between
Margarita Villarica and Jose Victoriano, made in February, 1942, for the suspension of the
payment of the monthly installments until the restoration of peace; and that although Jose R.
Victoriano had presented the deed of sale, executed in his favor, to the Register of Deeds, in
Pasig, Rizal, like Fredesvindo S. Alvero, he had also failed to secure the transfer of title to his
name. And considering that Jose R. Victoriano's document was older than that of Fredesvindo
S. Alvero, and that he had taken possession of said property, since October 1, 1940, the
respondent judge rendered his decision in favor of Jose R. Victoriano, adjudging to him the title
over the property in question, including all the improvements existing thereon, and dismissed
the counterclaim.
On November 28, 1945, Fredesvindo S. Alvero was notified of said decision; and on December
27, 1945, he filed a petition for reconsideration and new trial, which was denied on January 3,
1946; and of said order he was notified on January 7, 1946.
On January 8, 1946, Fredesvindo S. Alvero filed his notice of appeal and record on appeal
simultaneously in the lower court, without filing the P60-appeal bond.
On January 14, 1946, Jose R. Victoriano filed a petition to dismiss the appeal, and at the same
time, asked for the execution of the judgment.
On January 15, 1946, Fredesvindo S. Alvero filed an opposition to said motion to dismiss,
alleging that on the very same day, January 15, 1946, said appeal bond for P60 had been
actually filed, and allege as an excuse, for not filing the said appeal bond, in due time, the
illness of his lawyer's wife, who died on January 10, 1946, and buried the following day.
On January 17, 1946, the respondent judge, Hon. Mariano L. de la Rosa, ordered the dismissal
of the appeal, declaring that, although the notice of appeal and record on appeal had been filed
in due time, the P60-appeal bond was filed too late.
On January 23, 1946, Fredesvindo S. Alvero filed a petition for the reconsideration of the said
order dated January 17, 1946, dismissing his appeal; and said petition for reconsideration was
denied on January 29, 1946. Hence, this petition for certiorari.
On February 11, 1946, the respondents filed their answer to the petition for certiorari, alleging
(1) that said petition is defective in form as well as in substance; (2) that there has been no
excusable negligence, on the part of the petitioner, or grave abuse of discretion on the part of
the respondent judge, in the instant case.
As already stated, the decision rendered by the respondent judge, Hon. Mariano L. de la Rosa,
was dated November 16, 1945, of which counsel for Fredesvindo S. Alvero was notified on
November 28, 1945; that his motion for reconsideration and new trial was filed on December
27, 1945, and denied on January 3, 1946, and that said counsel for Alvero was notified of said
order on January 7, 1946; and that he filed his notice of appeal and record on appeal the
following day, to wit, January 8, 1946, and that the P60-appeal bond was filed only on January
15, 1946.
According to the computation erroneously made by the court, the last day for filing and
perfecting the appeal, in this case, was January 8, 1946, or which date, Fredesvindo S. Alvero
should have filed his (1) notice of appeal, (2) record on appeal, and (3) appeal bond. But the
P60-appeal bond was filed only on January 15, 1946.
Failure to perfect the appeal, within the time prescribed by the rules of court, will cause the
judgment to become final, and the certification of the record on appeal thereafter, cannot
restore the jurisdiction which has been lost. (Roman Catholic Bishop of
Tuguegarao vs. Director of Lands, 34 Phil., 623; Estate of Cordoba and Zarate vs.Alabado, 34
Phil., 920; and Bermudez vs. Director of Lands, 36 Phil., 774.)
The period within which the record on appeal and appeal bond should be perfected and filed
may, however, be extended by order of the court, upon application made, prior to the expiration
of the original period. (Layda vs.Legaspi, 39 Phil., 83.)
Rules of courts, promulgated by authority of law, have the force and effect of law; and rules of
court prescribing the time within which certain acts must be done, or certain proceedings taken,
are considered absolutely indispensable to the prevention of needless delays and to the orderly
and speedy discharge of judicial business. (Shioji vs. Harvey, 43 Phil., 333.)
Strict compliance with the rules of court has been held mandatory and imperative, so that failure
to pay the docket fee in the Supreme Court, within the period fixed for that purpose, will cause
the dismissal of the appeal. (Salaveria vs. Albindo, 39Phil., 922.) In the same manner, on
failure of the appellant in a civil case to serve his brief, within the time prescribed by said rules,
on motion of the appellee and notice to the appellant, or on its own motion, the court may
dismiss the appeal. (Shioji vs. Harvey, 43 Phil., 333.)
Counsel for the petitioner Fredesvindo Alvero alleges as an excuse, for his failure to perfect
and file his appeal, in due time, the illness of his wife, which ended in her death on January 10,
1946, and by which he was greatly affected.
How little, indeed, does one realize that in life he lives in the midst of death; and that every that
passes in a step nearer towards eternity. Yet, notwithstanding the inexorable laws of human
destiny, every mortal fears death, and such fear is worse than death itself. That is perhaps the
reason why those feeling its approach, in their last moments, want to be surrounded by the
ones dearest to their heart, to hear from them words of tenderness and eternal truth, and thus
receive as balm their love and the cheering influence of the traditional faith, and the consolation
of religious hope.
The virtuous and loving wife is the peculiar gift of heaven, and Mother is the name for God in
the innocent lips and hearts of adoring children. "She looketh well to the ways of her household,
and eateth not the bread of idleness." "And her daughters arise up and call her blessed." And
when she dies in the bosom of God, her children find solace in the contemplation of her eternal
bliss, as mirrored in her tranquil beauty.
It is not, therefore, difficult to understand the state of mind of the attorney, and his intense
devotion and ardent affection towards his dying wife.
Unfortunately, counsel for petitioner has created a difficult situation. In his motion for
reconsideration and new trial, dated December 27, 1945, he did not point out specifically the
findings or conclusions in the judgment, are not supported by the evidence or which are
contrary to law, making express reference to the pertinent evidence or legal provisions, as
expressly required by Rule 37, section 2, paragraph (c) of the Rules of Court. Motions of that
kind have been considered as motions pro forma intended merely to delay the proceeding, and,
as such, they cannot and will not interrupt or suspend the period of time for the perfection of
the appeal. (Valdez vs. Jugo, 74 Phil., 49, and Reyes vs. Court of Appeals and Bautista, 74
Phil., 235.) Hence, the period for perfecting herein petitioner's appeal commenced from
November 28, 1945, when he was notified of the judgment rendered in the case, and expired
on December 28, 1945; and, therefore, his notice of appeal and record on appeal filed on
January 8, 1946, were filed out of time, and much more so his appeal bond, which was only
filed on January 15, 1946.
It is futile to speak of hospitals, doctors and nurses to minister alone to the needs of the sick
and the dying, who are dearest to us, for our reasoning powers are of little avail when sorrow
or despair rages within.
But human laws are inflexible and no personal consideration should stand in the way of
performing a legal duty.
The attorney for petitioner Fredesvindo S. Alvero could have asked for an extension of time,
within which to file and perfect his appeal, in the court below; but he had failed to do so, and
he must bear the consequences of his act. A strict observance of the rules of court, which have
been considered indispensable to the prevention of needless delays and to the orderly and
speedy dispatch of judicial business, is an imperative necessity.

It may not be amiss to state in this connection that no irreparable damage has been caused to
the petitioner Fredesvindo S. Alvero, as Margarita Villarica, the vendor to the two, of the land
in question, has shown readiness to repair the damage done.

No showing having been made that there had been merely excusable negligece, on the part of
the attorney for petitioner Fredesvindo S. Alvero, and that there had been gave abuse of sound
judicial discretion, on the part of the respondent judge, the petition for certiorari filed in this
case, is, therefore, hereby dismissed, without costs. So ordered.
G.R. No. L-6120 June 30, 1953
CIPRIANO P. PRIMICIAS, petitioner,
vs.
FELICISIMO OCAMPO, as Judge-at-large presiding over Branch C of the Court of First
Instance of Manila and EUGENIO ANGELES, as City Fiscal of Manila, representing the
PEOPLE OF THE PHILIPPINES,respondents.
Claro M. Recto for petitioner.
City Fiscal Eugenio Angeles for respondents.
BAUTISTA ANGELO, J.:
This is a petition which seeks to prohibit respondent Judge from proceeding with the trial of two
criminal cases which were then pending against petitioner without the assistance of assessors
in accordance with the provisions of section 49 of Republic Act No. 409 in relation to section
154 of Act No. 190, and as an auxiliary remedy, to have a writ of preliminary injunction issued
so that the trial may be held pending until further orders of this court.
This petition was originally filed with the Court of Appeals, but was later certified to this court
on the ground that the main basis of the petition is section 49 of Republic Act No. 409, otherwise
known as Revised Charter of the City of Manila, approved on June 18, 1949, and respondents
assail the constitutionality of said section in that it contravenes the constitutional provision that
the rules of court "shall be uniform for all courts of the same grade . . . .(Section 13, Article VIII
of the Constitution.).
Petitioner was charged before the Court of First Instance of Manila with two statutory offenses,
namely, (1) with a violation of Commonwealth Act No. 606, which was docketed as criminal
case No. 18374, in that he knowingly chartered a vessel of Philippine registry to an alien without
the approval of the President of the Philippines and (2) with a violation of section 129 in relation
to section 2713 of the Revised Administrative Code, which was docketed as Criminal Case No.
18375, in that he failed to submit to the Collector of Customs the manifests and certain
authenticated documents for the vessel "Antarctic" and failed to obtain the necessary clearance
from the Bureau of Customs prior to the departure of said vessel for a foreign port.
On April 23, 1952, before the trial of said criminal cases, petitioner filed a motion praying that
assessors be appointed to assist the court in considering the questions of fact involved in said
cases as authorized by section 49 of Republic Act No. 409, otherwise known as Revised
Charter of the City of Manila, which provides that "the aid of assessors in the trial of any civil or
criminal action in the Municipal Court, or the Court of First Instance, within the City, may be
invoked in the manner provided in the Code of Civil Procedure." This motion was opposed by
the City Fiscal who appeared for the People of the Philippines.
On April 28, 1952, the court issued an order denying the motion holding in effect that with the
promulgation of the Rules of Court by the Supreme Court, which became effective on July 1,
1940, all rules concerning pleading, practice and procedure in all courts of the Philippines
previously existing were not only superseded but expressly repealed, that the Supreme Court,
having been vested with the rule-making power, expressly omitted the portions of the Code of
Civil Procedure regarding assessors in said Rules of Court, and that the reference to said
statute by section 49 of Republic Act No. 409 on the provisions regarding assessors should be
deemed as a mere surplusage. Believing that this order is erroneous, petitioner now comes to
this court imputing abuse of discretion to the respondent Judge.
The issues now posed by petitioner are:.
I. The right of the petitioner to a trial with the aid of assessors is an absolute substantive right,
and the duty of the court to provide assessors is mandatory.
II. The right to trial with the aid of assessors, being a substantive right, cannot be impaired by
this court in the exercise of its rule-making power.
III. Section 154 of the Code of Civil Procedure and Section 2477 of the Old Charter of Manila,
creating the right to trial with the aid of assessors, are substantive law and were not repealed
by Rules of Court.
IV. Granting without admitting that the provisions on assessors of the Code of Civil Procedure
and the old Charter of Manila were impliedly repealed, nevertheless, the same provisions were
later reenacted by reference in section 49 of the Revised Charter of Manila, which is now the
source of the right to trial with the aid of assessors and which refers to the Code of Civil
Procedure merely to indicate the procedure for appointing assessors.
V. Section 49 of the Revised Charter of Manila is not invalid class legislation and does not
violate the constitutional provision that the rules of pleading, practice and procedure 'shall be
uniform for all the courts of the same grade.
A brief summary of the historical background of the legislation regarding trial with the aid of
assessors in the Philippines may be of help in the determination of the issues posed by
petitioner. The first provision which allowed trial with the aid of assessors in civil cases in inferior
courts and Courts of First Instance is contained in Act No. 190 of the Philippine Commission,
otherwise known as the Code of Civil Procedure, which took effect on October 1, 1901
(Sections 58-62; 154-161). Almost simultaneously, or on October 17, 1901, the trial with the
aid of assessors both in civil and criminal cases was allowed in the Manila courts upon the
enactment of Act No. 267, amending Act No. 183, the original Charter of Manila. In 1914, the
trial by assessors was allowed in criminal cases in the courts of first instance in the provinces
with the enactment of Act No. 2369. And in 1915, Act No. 2520 was passed extending the same
trial by assessors to the courts of first instance and justice of the peace courts in the Department
of Mindanao and Sulu.
In connection with the use of assessors in Manila, section 44 of Act No. 183, the original Charter
of Manila, as amended by section 13 of Act No. 267, was reenacted as section 2449 of the
Administrative Code 1916, Act No. 2657. Section 2449 of the Administrative Code of 1916
became section 2477 of Act No. 2711, otherwise known as the Revised Administrative Code
of 1917. And section 2477 in turn became section 49 of the Republic Act No. 409, which is the
present Charter of the City of Manila. This section 49 is the law now invoked by petitioner in
support of his claim to a trial with the aid of assessors in the two criminal cases now pending
against him. Its pertinent provisions are quoted hereunder for ready reference:.
SEC. 49. Assessors in the courts in the city. — The aid of assessors in the trial of any
civil or criminal action in the municipal court, or the Court of First Instance, within the
city, may be invoked in the manner provided in the Code of Civil Procedure. It shall be
the duty of the Municipal Board to prepare one list of the names of twenty-five residents
of the City best fitted by education, natural ability and reputation for probity to sit as
assessors in the trial of actions in the municipal court and a like list of persons to sit as
assessors in the trial of the action in the Court of First Instance. The Board may at any
time strike any name from the list so prepared, by reason of the death, permanent
disability, or unfitness of the person named; and in case names are so stricken out,
other names shall be added in their place, to be selected as in this section provided.
Parties desiring to avail themselves of the use of assessors in the municipal or Court
of First Instance shall proceed as provided for by law or rules of court; and the method
of summoning assessors, enforcing their attendance, excusing them from attendance,
their compensation, oath duties and effect of dissent from the opinion of the judges
shall be as provided in those laws or rules.
A careful analysis of the above provisions is interesting. Their most salient features are: The
aid of assessors in the trial of any civil or criminal action in the Municipal Court or the Court of
First Instance may be invoked in the manner provided in the Code of Civil Procedure. The
parties desiring to avail themselves of the use of assessors "shall proceed as provided for by
law or rules of court", and "the method of summoning assessors, enforcing their attendance,
excusing them from attendance, their compensation, oath, duties, and effect of the dissent from
the opinion of the judge shall be as provided in those laws or rules." If we are to be guided
merely by these provisions, the right to trial with the aid of assessor would seem to be beyond
dispute. These provisions are simple and clear and appear to be mandatory. But where the
difficulty arises is in their relation or bearing on the directive of the Constitution which provides
that "the existing laws on pleading, practice, and procedure are hereby repealed as statutes,
and are declared rules of courts subject to the power of the Supreme Court to alter and modify
the same." Pursuant to this rule-making power, the Supreme Court promulgated the present
Rules of Court, which became effective on July 1, 1940, but because it failed to incorporate
therein the provisions of the Code of Civil Procedure on assessors, respondents now contend
that the right to trial with the aid of assessors, with all its concomitant provisions, cannot now
be invoked because, being procedural in nature, the same must be deemed to have been
impliedly eliminated.
This claim would be correct if we were to hold that the right to trial with the aid of assessors is
not substantive but procedural or adjective in nature. If it were merely procedural, not having
been incorporated in the Rules of Court, the logical conclusion is that the rule- making power
has deemed wise to eliminate it. But no such presumption, nor conclusion, can be drawn for
the reason that the right to a trial by assessors is substantive in the sense that it must created
and defined by express enactment as opposed to a mere remedy devised to enforce such right
or obtain redress therefor. "Rules of procedure should be distinguished from substantive law.
A substantive law creates, defines or regulates rights concerning life, liberty or property, or the
powers of agencies or instrumentalities for the administration of public affairs, whereas rules of
procedure are provisions prescribing the method by which substantive rights may be enforced
in courts of justice." (Moran, Comments on the Rules of Court, Vol. I, 1952 ed., p.4.)
In Bustos vs. Lucero,* (46 Off. Gaz., January Supp., pp. 445, 448), this Court cited with
approval the following definitions of substantive law:
Substantive law creates substantive rights and the two terms in this respect may be
said to be synonymous. Substantive rights in a term which includes those rights which
one enjoys under the legal system prior to the disturbance of normal relations. (60 C.J.
980.)
Substantive law is that part of the law which creates, defines and regulates rights, or
which regulates the right and duties which give rise to a cause of action; that part of
the law which courts are established to administer; as opposed to adjective or remedial
law, which prescribes the method of enforcing rights or obtain redress for their
invasions (36 C.J. 27; 52 C.J.S. 1026).
The trial with the aid of assessors as granted by section 154 of the Code of Civil Procedure
and section 2477 of the old Charter of Manila are parts of substantive law and as such are not
embraced by the rule-making power of the Supreme Court. This is so because in said section
154 this matter is referred to as a right given by law to a party litigant. Section 2477 of the
Administrative Code of 1917 is couched is such a manner that a similar right is implied when
invoked by a party litigant. It says that the aid may be invoked in the manner provided in the
Code of Civil Procedure. And this right has been declared absolute and substantial by this
Court in several cases where the aid of assessors had been invoked (Berbari vs. Concepcion,
et al., 40 Phil., 320; Colegio de San Jose vs. Sison, 54 Phil., 344.) Thus, it was there said that
these provisions "necessarily lead to the conclusion that the intervention of the assessors is
not an empty formality which may be disregarded without violating either the letter or the spirit
of the law. It is another security given by the law to the litigants, and as such, it is a substantial
right of which they cannot be deprived without vitiating all the proceedings. Were we to agree
that for one reason or another the trial by assessors may be done away with, the same line of
reasoning would force us to admit that the parties litigant may be deprived of their right to be
represented by counsel, to appear and be present at the hearings, and so on, to the extent of
omitting the trial in a civil case, and thus set at naught the essential rights granted by the law
to the parties, with consequent nullity of the proceedings." (Colegio de San Jose vs. Sison, 54
Phil., 344, 349.)
Being substantive in nature, it is not difficult to see why the provisions concerning trial by
assessors embodied in the Code of Civil Procedure have not been incorporated by the
Supreme Court in the present Rules of Court. To have done so, it would have been a travesty
of its rule-making power which, by direct mandate of the Constitution, is limited to matters
referring to pleading, practice and procedure. The application that the respondents draw from
the failure to incorporate these provisions in the present Rules of Court to the effect that the
intention was to eliminate them or repeal them all together cannot, therefore, stand in the light
of the observations and authorities we have above adverted to.
There is a point in the claim that the provisions concerning trial by assessors embodied in the
Code of Civil Procedure are not wholly substantive but portions thereof are remedial such as
those which refer to the method of summoning assessors, enforcing their attendance, excusing
them from attendance, their compensation, oath, duties and effect of dissent from the opinion
of the judge, as to which no cogent reason is seen for their non-incorporation if the intent is not
to eliminate them from the Rules of Court. This is true; but it is likewise true that because said
remedial provisions are inextricably interwoven with the substantive part, it must have been
deemed wise and proper to leave them as they were for reasons of coordination and
expediency, it being a truism that the one cannot be detached from the other. Ubi jus ibi
remedium. Remedial measures are but implementary in character and they must be appended
to the portion of the law to which they belong. Mention should be made here that not all of the
provisions appearing in the Code of Civil Procedure are remedial in nature, such as those
pertaining to prescription, the requisites for making a will, and the succession of the estate of
an adopted child, which are admittedly substantive in character and for that reason were not
incorporated in the Rules of Court. To this group belong the provisions under consideration.
Granting arguendo that the provisions on assessors of the Code of Civil Procedure and even
in the old Charter of Manila are purely remedial in nature and because of the failure to
incorporate them in the Rules of Court they are deemed to have been impliedly repealed as
claimed by respondents, we are of the opinion that they can still be invoked by a litigant upon
the theory that they had been reaffirmed and reenacted by Republic Act No. 409, which was
approved in 1949, or nine years after the Rules of Court became effective. As already stated,
section 49 of said Act states that the aid of assessors may be invoked in the manner provided
in the Code of Civil Procedure. It likewise states that the parties desiring to avail themselves
for the use of assessors shall proceed as provided for by law. The mention made of the Code
of Civil Procedure in said section indicates in itself a re-enactment or incorporation by reference
of the provisions concerning assessors contained in said law. Congress, whose members were
mostly lawyers, must be presumed to know that at the time said Act was approved the Rules
of Court had already been promulgated without incorporating therein the provisions concerning
the aid to assessors, and fully cognizant of this situation, and not desiring to omit this right
granted to a litigant, they must have deemed it wise and proper to re-enact them by reference
in said section 49. This Congress can do, for, while our Constitution has given the power to
adopt rules of procedure to the Supreme Court, such grant did not preclude Congress from
enacting any procedural law or altering, amending, or supplementing any of the rules that may
be promulgated by the Supreme Court (Section 13, Article VIII, Philippine Constitution).
The practice of making such reference has long been sanctioned. Our Congress did this not
only in connection with courts in the City of Manila. It also did it in connection with courts in
Quezon City (Republic Act No. 537). Statutes which refer to other statutes and make them
applicable to the subject for legislation are called "reference statutes". These statutes are
frequently used "to avoid encumbering the statute books by unnecessary repetition, and they
have frequently been recognized as an approval method of legislation, in the absence of
constitutional restrictions." [50 Am. Jur. 57; Gruen vs. Tax Commission, 211 P. (2d) (1949) 651,
666.].
Again, it has been held that "The adoption of an earlier statute by reference makes it as much
as a part of the latter act as though it had been incorporated at full length. This is true of a
legislative act which refers to another act for the procedure to be taken." (50 Am. Jur. 58.) The
reference in Republic Act No. 409 to the provisions on assessors must be deemed, therefore,
to have incorporated therein the pertinent provisions on the matter contained in the Code of
Civil Procedure in much the same manner as if the whole provisions had been reproduced.
Consistent with this theory, we cannot but hold that the observations made by respondents to
the effect that the reference made to said provisions is section 49 is a mere surplusage, or was
due to a mere oversight, has no legal basis, as such innuendo would be tantamount to imputing
lack of foresight, if not brazen negligence, to our legislative body.
It is finally contended that section 49 of Republic Act No. 409 is unconstitutional because it
violates the constitutional provisions that procedural rules "shall be uniform for all courts of the
same grade" and, therefore, it is a class legislation. This contention cannot be entertained:
firstly, because it is raised for the first time in this instance, a procedural defect which would
bar any further discussion on the matter following well-known precedents1 and, secondly,
because it is not correct that at present only in Manila trial with the aid of assessors may be
invoked if we will sustain the theory that the promulgation of the Rules of Court did not have
the effect of repealing the provisions on assessors embodied in the Code of Civil Procedure.
The contention of respondents — we reckon — is predicated on the assumption that the
provisions on assessors of the Code of Civil Procedure had been impliedly repealed. Such is
not the case. We have already pointed out that the basic provisions on the matter partake of
the nature of substantive law and as such they were left intact by the Supreme Court. The
corollary to this conclusion is that this remedy may be invoked out only in Manila but in all other
places where it existed prior to the promulgation of the Rules of Court. This is true in civil cases.
With regard to criminal cases, we have already said that the same remedy may be invoked in
the cities of Cebu, Iloilo and Quezon, with the particularity that their charters make express
reference, either directly or indirectly, to the provisions of the code of Civil Procedure. With this
historical background, the claim that under the theory we have entertained the trial with the aid
of assessors can only be invoked in the City of Manila is certainly without merit.
In view of the foregoing, we hold that the provisions on assessors embodied in the Code of
Civil Procedure are still in force and that the same may still be invoked in the light of the
provisions of section 49 of the Republic Act No. 409. It is therefore our opinion that the
respondent Judge acted with abuse of discretion in denying petitioner his right to the aid of
assessors in the trial of the two criminal cases now pending in the Court of First Instance of
Manila.
Wherefore, petition is hereby granted, without pronouncement as to costs.
G.R. No. 180291 July 27, 2010
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) and WINSTON F. GARCIA, in his
capacity as PRESIDENT and GENERAL MANAGER of the GSIS, Petitioners,
vs.
DINNAH VILLAVIZA, ELIZABETH DUQUE, ADRONICO A. ECHAVEZ, RODEL RUBIO,
ROWENA THERESE B. GRACIA, PILAR LAYCO, and ANTONIO JOSE
LEGARDA, Respondents.
DECISION
MENDOZA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to reverse
and set aside the August 31, 2007 Decision1 of the Court of Appeals (CA), in CA-G.R. SP No.
98952, dismissing the petition for certiorari of Government Service Insurance System (GSIS)
assailing the Civil Service Commission's Resolution No. 062177.
THE FACTS:
Petitioner Winston Garcia (PGM Garcia), as President and General Manager of the GSIS, filed
separate formal charges against respondents Dinnah Villaviza, Elizabeth Duque, Adronico A.
Echavez, Rodel Rubio, Rowena Therese B. Gracia, Pilar Layco, and Antonio Jose Legarda
for Grave Misconduct and/or Conduct Prejudicial to the Best Interest of the Service pursuant
to the Rules of Procedure in Administrative Investigation (RPAI) of GSIS Employees and
Officials, III, D, (1, c, f) in relation to Section 52A (3), (20), Rule IV, of the Uniform Rules on
Administrative Cases in the Civil Service (URACCS), in accordance with Book V of the
Administrative Code of 1987, committed as follows:
That on 27 May 2005, respondent, wearing red shirt together with some employees, marched
to or appeared simultaneously at or just outside the office of the Investigation Unit in a mass
demonstration/rally of protest and support for Messrs. Mario Molina and Albert Velasco, the
latter having surreptitiously entered the GSIS premises;
xxx xxx xxx
That some of these employees badmouthed the security guards and the GSIS management
and defiantly raised clenched fists led by Atty. Velasco who was barred by Hearing Officer
Marvin R. Gatpayat in an Order dated 24 May 2005 from appearing as counsel for Atty. Molina
pursuant to Section 7 (b) (2) of R.A. 6713 otherwise known as the Code of Conduct and Ethical
Standards for Public Officials and Employees;
That respondent, together with other employees in utter contempt of CSC Resolution No.
021316, dated 11 October 2002, otherwise known as Omnibus Rules on Prohibited Concerted
Mass Actions in the Public Sector caused alarm and heightened some employees and
disrupted the work at the Investigation Unit during office hours.2
This episode was earlier reported to PGM Garcia, through an office memorandum dated May
31, 2005, by the Manager of the GSIS Security Department (GSIS-SD), Dennis Nagtalon. On
the same day, the Manager of the GSIS Investigation Unit (GSIS-IU), Atty. Lutgardo Barbo,
issued a memorandum to each of the seven (7) respondents requiring them to explain in writing
and under oath within three (3) days why they should not be administratively dealt with. 3
Respondents Duque, Echavez, Rubio, Gracia, Layco, and Legarda, together with two others,
submitted a letter-explanation to Atty. Barbo dated June 6, 2005. Denying that there was a
planned mass action, the respondents explained that their act of going to the office of the GSIS-
IU was a spontaneous reaction after learning that their former union president was there. Aside
from some of them wanting to show their support, they were interested in that hearing as it
might also affect them. For her part, respondent Villaviza submitted a separate letter explaining
that she had a scheduled pre-hearing at the GSIS-IU that day and that she had informed her
immediate supervisor about it, attaching a copy of the order of pre-hearing. These letters were
not under oath.4
PGM Garcia then filed the above-mentioned formal charges for Grave Misconduct and/or
Conduct Prejudicial to the Best Interest of the Service against each of the respondents, all
dated June 4, 2005. Respondents were again directed to submit their written answers under
oath within three (3) days from receipt thereof.5 None was filed.
On June 29, 2005, PGM Garcia issued separate but similarly worded decisions finding all seven
(7) respondents guilty of the charges and meting out the penalty of one (1) year suspension
plus the accessory penalties appurtenant thereto.
On appeal, the Civil Service Commission (CSC) found the respondents guilty of the lesser
offense of Violation of Reasonable Office Rules and Regulations and reduced the penalty to
reprimand. The CSC ruled that respondents were not denied their right to due process but there
was no substantial evidence to hold them guilty of Conduct Prejudicial to the Best Interest of
the Service. Instead,
x x x. The actuation of the appellants in going to the IU, wearing red shirts, to witness a public
hearing cannot be considered as constitutive of such offense. Appellants' (respondents herein)
assembly at the said office to express support to Velasco, their Union President, who pledged
to defend them against any oppression by the GSIS management, can be considered as an
exercise of their freedom of expression, a constitutionally guaranteed right. 6x x x
PGM Garcia sought reconsideration but was denied. Thus, PGM Garcia went to the Court of
Appeals via a Petition for Review under Rule 43 of the Rules on Civil Procedure. 7 The CA
upheld the CSC in this wise:
The Civil Service Commission is correct when it found that the act sought to be punished hardly
falls within the definition of a prohibited concerted activity or mass action. The petitioners failed
to prove that the supposed concerted activity of the respondents resulted in work stoppage and
caused prejudice to the public service. Only about twenty (20) out of more than a hundred
employees at the main office, joined the activity sought to be punished. These employees, now
respondents in this case, were assigned at different offices of the petitioner GSIS. Hence,
despite the belated claim of the petitioners that the act complained of had created substantial
disturbance inside the petitioner GSIS' premises during office hours, there is nothing in the
record that could support the claim that the operational capacity of petitioner GSIS was affected
or reduced to substantial percentage when respondents gathered at the Investigation Unit.
Despite the hazy claim of the petitioners that the gathering was intended to force the
Investigation Unit and petitioner GSIS to be lenient in the handling of Atty. Molina's case and
allow Atty. Velasco to represent Atty. Molina in his administrative case before petitioner GSIS,
there is likewise no concrete and convincing evidence to prove that the gathering was made to
demand or force concessions, economic or otherwise from the GSIS management or from the
government. In fact, in the separate formal charges filed against the respondents, petitioners
clearly alleged that respondents "marched to or appeared simultaneously at or just outside the
office of the Investigation Unit in a mass demonstration/rally of protest and support for Mssrs.
Mario Molina and Albert Velasco, the latter surreptitiously entered the GSIS premises." Thus,
petitioners are aware at the outset that the only apparent intention of the respondents in going
to the IU was to show support to Atty. Mario Molina and Albert Velasco, their union officers.
The belated assertion that the intention of the respondents in going to the IU was to disrupt the
operation and pressure the GSIS administration to be lenient with Atty. Mario Molina and Albert
Velasco, is only an afterthought.8
Not in conformity, PGM Garcia is now before us via this Petition for Review presenting the
following:
STATEMENT OF THE ISSUES
I
WHETHER AN ADMINISTRATIVE TRIBUNAL MAY APPLY SUPPLETORILY THE
PROVISIONS OF THE RULES OF COURT ON THE EFFECT OF FAILURE TO DENY THE
ALLEGATIONS IN THE COMPLAINT AND FAILURE TO FILE ANSWER, WHERE THE
RESPONDENTS IN THE ADMINISTRATIVE PROCEEDINGS DID NOT FILE ANY
RESPONSIVE PLEADING TO THE FORMAL CHARGES AGAINST THEM.
II
WHETHER THE RULE THAT ADMINISTRATIVE DUE PROCESS CANNOT BE EQUATED
WITH DUE PROCESS IN JUDICIAL SENSE AUTHORIZES AN ADMINISTRATIVE
TRIBUNAL TO CONSIDER IN EVIDENCE AND GIVE FULL PROBATIVE VALUE TO
UNNOTARIZED LETTERS THAT DID NOT FORM PART OF THE CASE RECORD.
III
WHETHER A DECISION THAT MAKES CONCLUSIONS OF FACTS BASED ON EVIDENCE
ON RECORD BUT MAKES A CONCLUSION OF LAW BASED ON THE ALLEGATIONS OF A
DOCUMENT THAT NEVER FORMED PART OF THE CASE RECORDS IS VALID.
IV
WHETHER FURTHER PROOF OF SUSBTANTIAL REDUCTION OF THE OPERATIONAL
CAPACITY OF AN AGENCY, DUE TO UNRULY MASS GATHERING OF GOVERNMENT
EMPLOYEES INSIDE OFFICE PREMISES AND WITHIN OFFICE HOURS, IS REQUIRED TO
HOLD THE SAID EMPLOYEES LIABLE FOR CONDUCT PREJUDICIAL TO THE BEST
INTEREST OF THE SERVICE PURSUANT TO CSC RESOLUTION NO. 021316.
V
WHETHER AN UNRULY MASS GATHERING OF TWENTY EMPLOYEES, LASTING FOR
MORE THAN AN HOUR DURING OFFICE HOURS, INSIDE OFFICE PREMISES AND
WITHIN A UNIT TASKED TO HEAR AN ADMINISTRATIVE CASE, TO PROTEST THE
PROHIBITION AGAINST THE APPEARANCE OF THEIR LEADER AS COUNSEL IN THE
SAID ADMINISTRATIVE CASE, FALLS WITHIN THE PURVIEW OF THE CONSTITUTIONAL
GUARANTEE TO FREEDOM OF EXPRESSION AND PEACEFUL ASSEMBLY.
VI
WHETHER THE CONCERTED ABANDONMENT OF EMPLOYEES OF THEIR POSTS FOR
MORE THAN AN HOUR TO HOLD AN UNRULY PROTEST INSIDE OFFICE PREMISES
ONLY CONSTITUTES THE ADMINISTRATIVE OFFENSE OF VIOLATION OF
REASONABLE OFFICE RULES AND REGULATIONS.9
The Court finds no merit in the petition.
Petitioners primarily question the probative value accorded to respondents' letters of
explanation in response to the memorandum of the GSIS-IU Manager. The respondents never
filed their answers to the formal charges. The petitioners argue that there being no answers,
the allegations in the formal charges that they filed should have been deemed admitted
pursuant to Section 11, Rule 8 of the Rules of Court which provides:
SECTION 11. Allegations not specifically denied deemed admitted.- Material averment in the
complaint, other than those as to the amount of liquidated damages, shall be deemed admitted
when not specifically denied. Allegations of usury in a complaint to recover usurious interest
are deemed admitted if not denied specifically and under oath.
According to the petitioners, this rule is applicable to the case at bench pursuant to Rule 1,
Section 4 of the Rules of Court which reads:
SECTION 4. In what cases not applicable. - These Rules shall not apply to election cases, land
registration, cadastral, naturalization and insolvency proceedings, and other cases not herein
provided for, except by analogy or in a suppletory character and whenever practicable and
convenient. (underscoring supplied)
The Court does not subscribe to the argument of the petitioners. Petitioners' own rules, Rule
XI, Section 4 of the GSIS' Amended Policy and Procedural Guidelines No. 178-04, specifically
provides:
If the respondent fails to file his Answer within five (5) working days from receipt of the Formal
Charge for the supporting evidence, when requested, he shall be considered to have waived
his right to file an answer and the PGM or the Board of Trustees, in proper cases, shall render
judgment, as may be warranted by the facts and evidence submitted by the prosecution.
A perusal of said section readily discloses that the failure of a respondent to file an answer
merely translates to a waiver of "his right to file an answer." There is nothing in the rule that
says that the charges are deemed admitted. It has not done away with the burden of the
complainant to prove the charges with clear and convincing evidence.
It is true that Section 4 of the Rules of Court provides that the rules can be applied in
a "suppletory character."Suppletory is defined as "supplying deficiencies."10 It means that the
provisions in the Rules of Court will be made to apply only where there is an insufficiency in
the applicable rule. There is, however, no such deficiency as the rules of the GSIS are explicit
in case of failure to file the required answer. What is clearly stated there is that GSIS may
"render judgment as may be warranted by the facts and evidence submitted by the
prosecution."
Even granting that Rule 8, Section 11 of the Rules of Court finds application in this case,
petitioners must remember that there remain averments that are not deemed admitted by the
failure to deny the same. Among them are immaterial allegations and incorrect conclusions
drawn from facts set out in the complaint.11 Thus, even if respondents failed to file their answer,
it does not mean that all averments found in the complaint will be considered as true and correct
in their entirety, and that the forthcoming decision will be rendered in favor of the petitioners.
We must not forget that even in administrative proceedings, it is still the complainant, or in this
case the petitioners, who have the burden of proving, with substantial evidence, the allegations
in the complaint or in the formal charges.12
A perusal of the decisions of the CA and of the CSC will reveal that the case was resolved
against petitioners based, not on the absence of respondents' evidence, but on the weakness
of that of the petitioners. Thus, the CA wrote:
Petitioners correctly submitted the administrative cases for resolution without the respondents'
respective answer to the separate formal charges in accordance with Section 4, Rule XI of the
RPAI. Being in full control of the administrative proceeding and having effectively prevented
respondents from further submitting their responsive answer and evidence for the defense,
petitioners were in the most advantageous position to prove the merit of their allegations in the
formal charges. When petitioner Winston Garcia issued those similarly worded decisions in the
administrative cases against the respondents, it is presumed that all evidence in their favor
were duly submitted and justly considered independent of the weakness of respondent's
evidence in view of the principle that ''the burden of proof belongs to the one who alleges and
not the one who denies."13
On the merits, what needs to be resolved in the case at bench is the question of whether or not
there was a violation of Section 5 of CSC Resolution No. 02-1316. Stated differently, whether
or not respondents' actions on May 27, 2005 amounted to a "prohibited concerted activity or
mass action." Pertinently, the said provision states:
Section 5. As used in this Omnibus Rules, the phrase ''prohibited concerted activity or mass
action'' shall be understood to refer to any collective activity undertaken by government
employees, by themselves or through their employees organizations, with intent of effecting
work stoppage or service disruption in order to realize their demands of force concession,
economic or otherwise, from their respective agencies or the government. It shall include mass
leaves, walkouts, pickets and acts of similar nature. (underscoring supplied)
In this case, CSC found that the acts of respondents in going to the GSIS-IU office wearing red
shirts to witness a public hearing do not amount to a concerted activity or mass action
proscribed above. CSC even added that their actuations can be deemed an exercise of their
constitutional right to freedom of expression. The CA found no cogent reason to deviate
therefrom.
As defined in Section 5 of CSC Resolution No. 02-1316 which serves to regulate the political
rights of those in the government service, the concerted activity or mass action proscribed must
be coupled with the "intent of effecting work stoppage or service disruption in order to realize
their demands of force concession." Wearing similarly colored shirts, attending a public hearing
at the GSIS-IU office, bringing with them recording gadgets, clenching their fists, some even
badmouthing the guards and PGM Garcia, are acts not constitutive of an (i) intent to effect work
stoppage or service disruption and (ii) for the purpose of realizing their demands of force
concession.
Precisely, the limitations or qualifications found in Section 5 of CSC Resolution No. 02-1316
are there to temper and focus the application of such prohibition. Not all collective activity or
mass undertaking of government employees is prohibited. Otherwise, we would be totally
depriving our brothers and sisters in the government service of their constitutional right to
freedom of expression.
Government workers, whatever their ranks, have as much right as any person in the land to
voice out their protests against what they believe to be a violation of their rights and interests.
Civil Service does not deprive them of their freedom of expression. It would be unfair to hold
that by joining the government service, the members thereof have renounced or waived this
basic liberty. This freedom can be reasonably regulated only but can never be taken away.
A review of PGM Garcia's formal charges against the respondents reveals that he himself was
not even certain whether the respondents and the rest of the twenty or so GSIS employees
who were at the GSIS-IU office that fateful day marched there or just simply appeared there
simultaneously.14 Thus, the petitioners were not even sure if the spontaneous act of each of
the twenty or so GSIS employees on May 27, 2005 was a concerted one. The report of Manager
Nagtalon of the GSIS-SD which was the basis for PGM Garcia's formal charges reflected such
uncertainty. Thus,
Of these red shirt protesters, only Mr. Molina has official business at the Investigation Unit
during this time. The rest abandoned their post and duties for the duration of this incident which
lasted until 10:55 A.M. It was also observed that the protesters, some of whom raised their
clenched left fists, carefully planned this illegal action as evident in their behavior of arrogance,
defiance and provocation, the presence of various recording gadgets such as VCRs, voice
recorders and digital cameras, the bad mouthing of the security guards and the PGM, the
uniformity in their attire and the collusion regarding the anomalous entry of Mr. Albert Velasco
to the premises as reported earlier.15
In another case, Communication Workers of America v. Ector County Hospital District, 18 it was
held that,
A county hospital employee's wearing of a "Union Yes" lapel pin during a union organization
drive constituted speech on a matter of public concern, and the county's proffered interest in
enforcing the anti-adornment provision of its dress code was outweighed by the employee's
interest in exercising his First Amendment speech and associational rights by wearing a pro-
union lapel button.19
Thus, respondents' freedom of speech and of expression remains intact, and CSC's Resolution
No. 02-1316 defining what a prohibited concerted activity or mass action has only tempered or
regulated these rights. Measured against that definition, respondents' actuations did not
amount to a prohibited concerted activity or mass action. The CSC and the CA were both
correct in arriving at said conclusion.
WHEREFORE, the assailed August 31, 2007 Decision of the Court of Appeals as well as its
October 16, 2007 Resolution in CA G.R. SP No. 98952 are hereby AFFIRMED.
SO ORDERED.

The said report of Nagtalon contained only bare facts. It did not show respondents' unified
intent to effect disruption or stoppage in their work. It also failed to show that their purpose was
to demand a force concession.

In the recent case of GSIS v. Kapisanan ng mga Manggagawa sa GSIS, 16 the Court upheld
the position of petitioner GSIS because its employees, numbering between 300 and 800 each
day, staged a walkout and participated in a mass protest or demonstration outside the GSIS
for four straight days. We cannot say the same for the 20 or so employees in this case. To
equate their wearing of red shirts and going to the GSIS-IU office for just over an hour with that
four-day mass action in Kapisanan ng mga Manggagawa sa GSIS case and to punish them in
the same manner would most certainly be unfair and unjust.

Recent analogous decisions in the United States, while recognizing the government's right as
an employer to lay down certain standards of conduct, tend to lean towards a broad definition
of "public concern speech" which is protected by their First Amendment. One such case is that
of Scott v. Meters.17 In said case, the New York Transit Authority (NYTA), responsible for
operation of New York City's mass transit service, issued a rule prohibiting employees from
wearing badges or buttons on their uniforms. A number of union members wore union buttons
promoting their opposition to a collective bargaining agreement. Consequently, the NYTA tried
to enforce its rule and threatened to subject these union members to discipline. The court,
though recognizing the government's right to impose reasonable restrictions, held that the
NYTA's rule was "unconstitutionally overboard."
G.R. No. 75919 May 7, 1987
MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,
vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS,
ANDREW LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.
Tanjuatco, Oreta and Tanjuatco for petitioners.
Pecabar Law Offices for private respondents.
RESOLUTION
GANCAYCO, J.:
Acting on the motion for reconsideration of the resolution of the Second Division of January
28,1987 and another motion to refer the case to and to be heard in oral argument by the
Court En Banc filed by petitioners, the motion to refer the case to the Court en banc is granted
but the motion to set the case for oral argument is denied.
Petitioners in support of their contention that the filing fee must be assessed on the basis of
the amended complaint cite the case of Magaspi vs. Ramolete. 1 They contend that the Court
of Appeals erred in that the filing fee should be levied by considering the amount of damages
sought in the original complaint.
The environmental facts of said case differ from the present in that —
1. The Magaspi case was an action for recovery of ownership and possession of a parcel of
land with damages.2While the present case is an action for torts and damages and specific
performance with prayer for temporary restraining order, etc. 3
2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the
defendant to the property, the declaration of ownership and delivery of possession thereof to
plaintiffs but also asks for the payment of actual moral, exemplary damages and attorney's fees
arising therefrom in the amounts specified therein. 4However, in the present case, the prayer
is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the
action against the defendants' announced forfeiture of the sum of P3 Million paid by the
plaintiffs for the property in question, to attach such property of defendants that maybe sufficient
to satisfy any judgment that maybe rendered, and after hearing, to order defendants to execute
a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture
of the money of plaintiff, ordering defendants jointly and severally to pay plaintiff actual,
compensatory and exemplary damages as well as 25% of said amounts as maybe proved
during the trial as attorney's fees and declaring the tender of payment of the purchase price of
plaintiff valid and producing the effect of payment and to make the injunction permanent. The
amount of damages sought is not specified in the prayer although the body of the complaint
alleges the total amount of over P78 Million as damages suffered by plaintiff. 5
3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of
the action in the Magaspi case. The complaint was considered as primarily an action for
recovery of ownership and possession of a parcel of land. The damages stated were treated
as merely to the main cause of action. Thus, the docket fee of only P60.00 and P10.00 for the
sheriff's fee were paid. 6
In the present case there can be no such honest difference of opinion. As maybe gleaned from
the allegations of the complaint as well as the designation thereof, it is both an action for
damages and specific performance. The docket fee paid upon filing of complaint in the amount
only of P410.00 by considering the action to be merely one for specific performance where the
amount involved is not capable of pecuniary estimation is obviously erroneous. Although the
total amount of damages sought is not stated in the prayer of the complaint yet it is spelled out
in the body of the complaint totalling in the amount of P78,750,000.00 which should be the
basis of assessment of the filing fee.
4. When this under-re assessment of the filing fee in this case was brought to the attention of
this Court together with similar other cases an investigation was immediately ordered by the
Court. Meanwhile plaintiff through another counsel with leave of court filed an amended
complaint on September 12, 1985 for the inclusion of Philips Wire and Cable Corporation as
co-plaintiff and by emanating any mention of the amount of damages in the body of the
complaint. The prayer in the original complaint was maintained. After this Court issued an order
on October 15, 1985 ordering the re- assessment of the docket fee in the present case and
other cases that were investigated, on November 12, 1985 the trial court directed plaintiffs to
rectify the amended complaint by stating the amounts which they are asking for. It was only
then that plaintiffs specified the amount of damages in the body of the complaint in the reduced
amount of P10,000,000.00. 7 Still no amount of damages were specified in the prayer. Said
amended complaint was admitted.
On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount
of P3,104.00 as filing fee covering the damages alleged in the original complaint as it did not
consider the damages to be merely an or incidental to the action for recovery of ownership and
possession of real property. 8 An amended complaint was filed by plaintiff with leave of court
to include the government of the Republic as defendant and reducing the amount of damages,
and attorney's fees prayed for to P100,000.00. Said amended complaint was also admitted. 9
In the Magaspi case, the action was considered not only one for recovery of ownership but also
for damages, so that the filing fee for the damages should be the basis of assessment. Although
the payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was
held that since the payment was the result of an "honest difference of opinion as to the correct
amount to be paid as docket fee" the court "had acquired jurisdiction over the case and the
proceedings thereafter had were proper and regular." 10 Hence, as the amended complaint
superseded the original complaint, the allegations of damages in the amended complaint
should be the basis of the computation of the filing fee. 11
In the present case no such honest difference of opinion was possible as the allegations of the
complaint, the designation and the prayer show clearly that it is an action for damages and
specific performance. The docketing fee should be assessed by considering the amount of
damages as alleged in the original complaint.
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket
fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the
Court, much less the payment of the docket fee based on the amounts sought in the amended
pleading. The ruling in the Magaspi case 14 in so far as it is inconsistent with this
pronouncement is overturned and reversed.
WHEREFORE, the motion for reconsideration is denied for lack of merit.
SO ORDERED.

As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon
payment of the docket fee regardless of the actual date of filing in court . 12 Thus, in the present
case the trial court did not acquire jurisdiction over the case by the payment of only P410.00
as docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the
Court. 13 For an legal purposes there is no such original complaint that was duly filed which
could be amended. Consequently, the order admitting the amended complaint and all
subsequent proceedings and actions taken by the trial court are null and void.

The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of
the docket fee should be the amount of damages sought in the original complaint and not in
the amended complaint.

The Court cannot close this case without making the observation that it frowns at the practice
of counsel who filed the original complaint in this case of omitting any specification of the
amount of damages in the prayer although the amount of over P78 million is alleged in the body
of the complaint. This is clearly intended for no other purpose than to evade the payment of the
correct filing fees if not to mislead the docket clerk in the assessment of the filing fee. This
fraudulent practice was compounded when, even as this Court had taken cognizance of the
anomaly and ordered an investigation, petitioner through another counsel filed an amended
complaint, deleting all mention of the amount of damages being asked for in the body of the
complaint. It was only when in obedience to the order of this Court of October 18, 1985, the
trial court directed that the amount of damages be specified in the amended complaint, that
petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00
in the body of the complaint but not in the prayer thereof. The design to avoid payment of the
required docket fee is obvious.

The Court serves warning that it will take drastic action upon a repetition of this unethical
practice.

To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar
pleadings should specify the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be considered in the assessment of
the filing fees in any case. Any pleading that fails to comply with this requirement shall not bib
accepted nor admitted, or shall otherwise be expunged from the record.
G.R. No. 150780 May 5, 2006
NESTLE PHILIPPINES, INC., Petitioner,
vs.
FY SONS, INCORPORATED, Respondent.
DECISION
CORONA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the
decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 57299 dated January 11, 2001 which
in turn affirmed with modification the decision of Branch 57 of the Regional Trial Court (RTC)
of Makati City in Civil Case No. 90-3169,2 as well as the CA’s resolution3 dated November 14,
2001 which denied petitioner’s motion for reconsideration.
The antecedent facts follow.
Petitioner is a corporation engaged in the manufacture and distribution of all Nestle products
nationwide. Respondent, on the other hand, is a corporation engaged in trading, marketing,
selling and distributing food items to restaurants and food service outlets. On December 23,
1998, petitioner and respondent entered into a distributorship agreement (agreement) whereby
petitioner would supply its products for respondent to distribute to its food service outlets. A
deed of assignment was also executed by respondent in favor of petitioner on December 13,
1988, assigning the time deposit of a certain Calixto Laureano in the amount of P500,000 to
secure respondent’s credit purchases from petitioner. A special power of attorney was likewise
executed by Laureano authorizing the respondent to use the time deposit as collateral.
The areas covered by the agreement were Baguio, Dagupan, Angeles, Bulacan, Pampanga,
Urdaneta, La Union, Tarlac and Olongapo. At the end of 1989, the agreement expired and the
parties executed a renewal agreement on January 22, 1990. A supplemental agreement was
executed on June 27, 1990, to take effect on July 1, 1990.
On July 2, 1990, petitioner fined respondent P20,000 for allegedly selling 50 cases of Krem-
Top liquid coffee creamer to Lu Hing Market, a retail outlet in Tarlac. This was purportedly
proscribed by the agreement. Respondent paid the fine. In September 1990, Krem-Top liquid
coffee creamer was sold to Augustus Bakery and Grocery, an act again allegedly in violation
of the agreement. Petitioner imposed a P40,000 fine which respondent refused to pay.
On October 19, 1990, respondent, through counsel, wrote petitioner to complain about the
latter’s breaches of their agreement and the various acts of bad faith committed by petitioner
against respondent. Respondent demanded the payment of damages. In turn, on November 5,
1990, petitioner sent respondent a demand letter and notice of termination, alleging that the
latter had outstanding accounts of P995,319.81. When the alleged accounts were not settled,
petitioner applied the P500,000 time deposit as partial payment.
Respondent filed a complaint for damages against petitioner, alleging bad faith.4 According to
respondent:
… [petitioner] made representations and promises of rendering support, including marketing
support, assignment of representatives by way of assistance in its development efforts, and
assurances of income in a marketing area not previously developed. Thus, [respondent] was
lured into executing a distributorship agreement with the [petitioner]…. [Respondent] thereby
invested huge sums of money, time and efforts to abide by such distributorship agreement, and
to develop market areas for [petitioner’s] products. Thereafter, the [petitioner] breached the
distributorship agreement by committing various acts of bad faith such as: failing to provide
promotional support; deliberately failing to promptly supply the [respondent] with the stocks for
its orders; intentionally diminishing the [respondent’s] sales by supporting a non-distributor; and
concocting falsified charges to cause the termination of the distributorship agreement without
just cause. By such termination, [petitioner] would be able to obtain the market gains made by
[respondent] at the latter’s own efforts and expenses. When [respondent] complained to
[petitioner] about the latter’s acts of bad faith, the latter terminated the agreement on the
allegation that [respondent] did not pay its accounts. [Petitioner] also seized [respondent’s] time
deposit collateral without basis; penalized [respondent] with monetary penalty for the concocted
charge; and unilaterally suspended the supply of stocks to [respondent]. 5
Respondent sought actual damages of P1,000,000, moral damages of P200,000, exemplary
damages of P100,000, attorney’s fees of P100,000, plus the return of the P500,000 time
deposit and costs of suit. In its answer, petitioner interposed a counterclaim for P495,319.81
representing the balance of respondent’s overdue accounts, with interest of 2% per month from
the date of default until fully paid, moral damages of P100,000, exemplary damages
of P200,000, attorney’s fees of P120,000 and costs of suit.
In a decision dated November 10, 1997, the Makati City RTC ruled in favor of the respondent:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and
against the defendant ordering the defendant to pay plaintiff the following:
1. The amount of P1,000,000.00 as actual damages sustained by the plaintiff by
reason of the unwarranted and illegal acts of the defendant in terminating the
distributorship agreement;
2. The amount of P100,000.00 as exemplary damages;
3. The amount of P100,000.00 as attorney’s fees;
The plaintiff however, is hereby ordered to pay the defendant the amount of P53,214,26 (sic)
which amount has been established as the amount the defendant is entitled from the plaintiff.
Three-fourths costs against the defendant.
. AN EXCEPTION TO THE HEARSAY RULE UNDER SECTION 45 (SIC), RULE 130, OF THE
SO ORDERED.6
Petitioner appealed the decision to the CA. On January 11, 2001, the CA rendered a decision
affirming the RTC’s decision with modification:
WHEREFORE, the judgment appealed from is AFFIRMED with the following
MODIFICATIONS: (1) the actual damages is INCREASED from P1,000,000.00
to P1,500,000.00;7 and (2) the amount of P53,214.26 payable by the appellee to the appellant
is DELETED.
SO ORDERED.8
Both the CA and the RTC found, among others, that petitioner indeed failed to provide support
to respondent, its distributor; that petitioner unjustifiably refused to deliver stocks to respondent;
that the imposition of the P20,000 fine was void for having no basis; that petitioner failed to
prove respondent’s alleged outstanding obligation; that petitioner terminated the agreement
without sufficient basis in law or equity and in bad faith; and that petitioner should be held liable
for damages.
Hence this petition raising the following grounds:
(1)
THE [CA] COMMITTED A GRAVE ERROR IN LAW WHEN IT RULED THAT: "THE
RATIOCINATIONS OF THE APPELLANT AS TO THE APPELLEE’S ALLEGED VIOLATION
OF THE CONTRACT ARE THUS WEAK AND UNCONVINCING" AND "THE APPELLEE’S
ALLEGED NON-PAYMENT AND OUTSTANDING BALANCE OF P995,319.81 WAS NOT
SUFFICIENTLY PROVEN" DESPITE THE FACT THAT FLORENTINO YUE, JR., THE
MANAGER OF THE RESPONDENT ADMITTED IN OPEN COURT IN ANSWER TO THE
QUESTION OF THEN PRESIDING JUDGE PHINNY C. ARAQUIL THAT THE
DISTRIBUTORSHIP AGREEMENT WAS TERMINATED BY YOUR PETITIONER BECAUSE
OF THE UNPAID BALANCE OF THE RESPONDENT OF AROUND P900,000.00.
(2)
THE [CA] COMMITTED A GRAVE ERROR IN LAW IN DISREGARDING THE TESTIMONY
OF THE WITNESS FOR THE PETITIONER, CRISTINA RAYOS WHO PREPARED THE
STATEMENT OF ACCOUNT (EXHIBIT 11) ON THE GROUNDS THAT SHE WAS NOT
INVOLVED IN THE DELIVERY AS SHE WAS ONLY IN CHARGE OF THE RECORDS AND
DOCUMENTS OF ALL ACCOUNTS RECEIVABLES AS PART OF HER DUTIES AS CREDIT
AND COLLECTION MANAGER CONSIDERING THAT THE EVIDENCE PRESENTED WAS
REVISED RULES ON EVIDENCE.
(3)
THE [CA] COMMITTED A GRAVE ERROR IN LAW IN AWARDING TO THE RESPONDENT
ACTUAL DAMAGES IN THE AMOUNT OF P1,000,000.00 AND ORDERING THE REFUND
OF THE AMOUNT OF P500,000.00 REPRESENTING THE TIME DEPOSIT OF THE
RESPONDENT WHICH WAS ASSIGNED AS SECURITY FOR THE RESPONDENT’S
CREDIT LINE BECAUSE THE PETITIONER HAD THE RIGHT TO TERMINATE THE
DISTRIBUTORSHIP AGREEMENT UNDER ART. 1191 OF THE CIVIL CODE AND
PARAGRAPHS 5 AND 22 OF THE DISTRIBUTORSHIP AGREEMENT BECAUSE OF THE
FAILURE OF THE RESPONDENT TO SETTLE ITS ACCOUNT IN THE AMOUNT
OF P995,319.81 AND THAT THE EVIDENCE SUBMITTED BY THE RESPONDENT ON THE
ALLEGED ACTUAL DAMAGES IT SUSTAINED AS A RESULT OF THE TERMINATION OF
THE DISTRIBUTORSHIP AGREEMENT (EXHIBIT 5) AND COMPANION EXHIBITS WERE
MERELY SPECULATIVE AND DID NOT HAVE PROBATIVE VALUE.
(4)
THE [CA] COMMITTED A GRAVE ERROR IN LAW FOR NOT AWARDING TO THE
PETITIONER ITS COUNTERCLAIM.9
On the first issue, petitioner asserts that respondent’s witness, Florentino Yue, Jr., a director
and officer of respondent corporation, admitted in open court that the respondent had an unpaid
obligation to petitioner in the amount of "around P900,000."10
Respondent counters that this statement was merely in answer to the question of the presiding
judge on what ground petitioner supposedly terminated the agreement. The witness was not
being asked, nor was he addressing, the truth of such ground. In fact, this witness later testified
that "(petitioner) wrote us back saying that they (had) terminated my contract and that I owe(d)
them something like P900,000."11
Petitioner’s argument is palpably without merit and deserves scant consideration. It quoted Mr.
Yue’s statement in isolation from the rest of his testimony and took it out of context. Obviously,
Yue’s statement cannot be considered a judicial admission that respondent had an unpaid
obligation of P900,000 and that the agreement had been terminated for this reason.
On the second issue, petitioner argues that the CA should not have disregarded the testimony
of petitioner’s witness, Cristina Rayos, who prepared the statement of account on the basis of
the invoices and delivery orders corresponding to the alleged overdue accounts of
respondent.12 The CA ruled that petitioner was not able to prove that respondent indeed had
unpaid accounts, saying, among others, that the testimony of Rayos constituted incompetent
evidence:
xxx the appellee’s alleged non-payment and outstanding balance of P995,319.81 was not
sufficiently proven.
xxx xxx xxx
Anyway, the appellant’s Statement of Account showing such alleged unpaid balance is
undated, and it does not show receipt thereof by the appellee, and when, if such indeed was
received. Moreover, there are no supporting documents to sustain such unpaid accounts. The
witness for the appellant who prepared the Statement, Cristina Rayos, in fact admitted that the
Invoices corresponding to the alleged overdue accounts are not signed. Her explanation was
that there were DO’s or Delivery Orders covering the transactions. However, she did not identify
the signatures appearing on the Delivery Orders marked as Exhibits "13-A", "14-A", "15-A" and
"16-A" as the persons who received the goods for the appellant. In any case, she could not
have identified the same, for she was not involved in the delivery, as she is only in charge of
the records and documents on all accounts receivables as part of her duties as Credit and
Collection Manager.13
Petitioner contends that the testimony of Rayos was an exception to the hearsay rule under
Section 43, Rule 130 of the Rules of Court:14
Entries in the course of business. — Entries made at, or near the time of the transactions to
which they refer, by a person deceased, or unable to testify, who was in a position to know the
facts therein stated, may be received as prima facie evidence, if such person made the entries
in his professional capacity or in the performance of duty and in the ordinary or regular course
of business or duty.1avvphil.net
Petitioner’s contention has no merit.
The provision does not apply to this case because it does not involve entries made in the course
of business. Rayos testified on a statement of account she prepared on the basis of invoices
and delivery orders which she, however, knew nothing about. She had no personal knowledge
of the facts on which the accounts were based since, admittedly, she was not involved in the
delivery of goods and was merely in charge of the records and documents of all accounts
receivable as part of her duties as credit and collection manager. 15 She thus knew nothing of
the truth or falsity of the facts stated in the invoices and delivery orders, i.e., whether such
deliveries were in fact made in the amounts and on the dates stated, or whether they were
actually received by respondent. She was not even the credit and collection manager during
the period the agreement was in effect.16 This can only mean that she merely obtained these
documents from another without any personal knowledge of their contents.
The foregoing shows that Rayos was incompetent to testify on whether or not the invoices and
delivery orders turned over to her correctly reflected the details of the deliveries made. Thus,
the CA correctly disregarded her testimony.
Furthermore, the invoices and delivery orders presented by petitioner were self-serving. Having
generated these documents, petitioner could have easily fabricated them. Petitioner’s failure to
present any competent witness to identify the signatures and other information in those invoices
and delivery orders cast doubt on their veracity.
Petitioner next argues that respondent did not deny during the trial that it received the goods
covered by the invoices and was therefore deemed to have admitted the same. 17 This
argument cannot be taken seriously. From the very beginning, respondent’s position was that
petitioner concocted falsified charges of non-payment to justify the termination of their
agreement.18 In no way could respondent be deemed to have admitted those deliveries.
On the third issue, petitioner questions the award of actual damages in the amount
of P1,000,000 and the refund of the P500,000 time deposit, contending that it validly terminated
the agreement because of respondent’s failure to pay its overdue accounts.
As discussed above, the CA declared that petitioner was not able to prove that respondent had
unpaid accounts, thus debunking the claim of a valid termination. The CA also held petitioner
guilty of various acts which violated the provisions of the agreement. 19 Consequently, for
petitioner’s breach of the agreement, the CA awarded actual damages to respondent in the
amount of P1,000,000. Petitioner, other than claiming that it validly terminated the agreement,
did not challenge the findings of the CA that it committed various violations of the agreement.
Hence, there was legal basis for the grant of actual damages.
Petitioner asserts that the documentary evidence presented by respondent to prove actual
damages in the amount of P4,246,015.60 should not have been considered because
respondent’s complaint only prayed for an award of P1,000,000. It further contends that the
court acquires jurisdiction over the claim only upon payment of the prescribed docket fee. 20
Indeed, a court acquires jurisdiction over the claim of damages upon payment of the correct
docket fees.21 In this case, it is not disputed that respondent paid docket fees based on the
amounts prayed for in its complaint. Respondent adduced evidence to prove its losses. It was
proper for the CA and the RTC to consider this evidence and award the sum of P1,000,000.
Had the courts below awarded a sum more than P1,000,000, which was the amount prayed
for, an additional filing fee would have been assessed and imposed as a lien on the
judgment.22However, the courts limited their award to the amount prayed for.
Both the RTC and CA found that respondent had satisfactorily proven the factual bases for the
damages adjudged against the petitioner. This is a factual matter binding and conclusive upon
this Court.23 It is well-settled that –
. . . findings of fact of the trial court, when affirmed by the Court of Appeals, are binding upon
the Supreme Court. This rule may be disregarded only when the findings of fact of the Court of
Appeals are contrary to the findings and conclusions of the trial court, or are not supported by
the evidence on record. But there is no ground to apply this exception to the instant case. This
Court will not assess all over again the evidence adduced by the parties particularly where as
in this case the findings of both the trial court and the Court of Appeals completely coincide.24

Likewise, the determination of the amount of damages commensurate with the factual findings
upon which it is based is primarily the task of the trial court.25 Considering that the amount
adjudged is not excessive, we affirm its correctness.

Moreover, given that petitioner was not able to prove that respondent had unpaid accounts in
the amount of P995,319.81, the seizure of the P500,000 time deposit was improper. As a
result, the refund of this amount with interest is also called for.

Finally, petitioner’s counterclaims are necessarily without merit. It failed to prove the alleged
outstanding accounts of respondent. Accordingly, it is not entitled to the supposed unpaid
balance of P495,319.81 with interest.

Petitioner, being at fault and in bad faith, and there being no proof that respondent was guilty
of any wrongdoing, cannot claim moral and exemplary damages and attorney’s fees from
respondent.

In fine, we find no error in the assailed decision and resolution of the CA. We therefore affirm
them.

WHEREFORE, the petition is hereby DENIED for lack of merit. The decision of the Court of
Appeals dated January 11, 2001 and resolution dated November 14, 2001 in CA-G.R. CV No.
57299 are hereby AFFIRMED.

Costs against petitioner.

SO ORDERED.