Payment of filing/ docket fees- Jurisdictional

DIVISION

[ GR No. 199595, Apr 02, 2014 ]

PHILIPPINE WOMAN’S CHRISTIAN TEMPERANCE UNION v. TEODORO R. YANGCO 2ND +

DECISION

REYES, J.:

This is a petition for certiorari and prohibition[1] under Rule 65 of the Rules of Court seeking the issuance of an order commanding
the Register of Deeds of Quezon City and the Court Sheriff of the Regional Trial Court (RTC) of Quezon City, Branch 218, to cease
and desist from implementing the Court Resolutions dated July 21, 2010[2] and September 15, 2010[3] in G.R. No. 190193 denying
with finality Philippine Woman's Christian Temperance Union, Inc.'s (PWCTUI) petition for review of the Court of Appeals (CA)
Decision[4] dated November 6, 2009 in CA-G.R. CV No. 90763 which affirmed the Decision[5] dated January 24, 2008 of the RTC in
LRC Case No. Q-18126(04) disposing as follows:

WHEREFORE, the Register of Deeds of Quezon City is hereby ordered to cancel TCT No. 20970 T-22702 and issue in lieu thereof
a new title in the name of Teodoro R. Yangco 2nd and 3rd Generation Heirs Foundation, Inc. free from all liens and encumbrances.

SO ORDERED.[6]

PWCTUI also prays, as ancillary remedy, for the re-opening of LRC Case No. Q-18126(04) and as provisional remedy, for the
issuance of a temporary restraining order (TRO) and/or a writ of preliminary injunction.

The Antecedents

On May 19, 2004, respondent Teodoro R. Yangco (2nd and 3rd Generation Heirs) Foundation, Inc. (TRY Foundation) filed before
the RTC of Quezon City, acting as a Land Registration Court, a Petition for the
Issuance of New Title in Lieu of Transfer Certificate of Title (TCT) No. 20970 T-22702 of the Office of the Register of Deeds
of Quezon City docketed as LRC Case No. Q-18126(04).[7]

TRY Foundation alleged that it is composed of the 2nd and 3rd generation heirs and successors-in-interest to the first generation
testamentary heirs of the late philanthropist Teodoro R. Yangco (Yangco) who donated on May 19, 1934 a 14,073-square meter
parcel of land (subject property) located at 21 Boni Serrano Avenue, Quezon City in the following manner, [8] viz:

a) the property shall be used as a site for an institution to be known as the Abierrtas House of Friendship the purpose of which shall
be to provide a Home for needy and unfortunate women and girls, including children of both sexes and promote, foster all efforts,
work and activities looking toward their protection from the ravages of all forms of immoralities;

b) Should the property herein be used for any other purpose or purposes not herein specified, the present gift shall become ipso
factonull and void and property given shall automatically revert to the donor, his heirs and assigns, but any improvement or
improvements placed, constructed and/or maintained on said premises by the Donee, shall remain the property of said Donee to be
by it removed there[f]rom (sic) at its expense after reasonable notice from the donor, his heirs and assigns. [9]

The property was registered in the name of PWCTUI by virtue of TCT No. 20970 at the back of which the above-quoted conditions
of the donation were annotated. PWCTUI is a non-stock, non-profit corporation originally registered with the Securities and
Exchange Commission (SEC) in 1929 under SEC Registration No. PW-959.[10]

PWCTUI's corporate term expired in September 1979.[11] Five years thereafter, using the same corporate name, PWCTUI obtained
SEC Registration No. 122088[12] and forthwith applied for the issuance of a new owner's duplicate copy of TCT No. 20970 over the
subject property thru LRC Case No. 22702. The application was granted and PWCTUI was issued a new TCT No. 20970 T-
22702[13] which, however, bore only the first condition imposed on the donation.

Recounting the foregoing episodes, TRY Foundation claimed that the expiration of PWCTUI's corporate term in 1979 effectively
rescinded the donation pursuant to the "unwritten resolutory condition" deemed written by Article 1315 of the Civil
Code[14] prescribing that the Corporation Code, specifically Section 122[15] thereof, be read into the donation. Interestingly the latter
provision mandates dissolved corporation to wind up their affairs and dispose of their assets within three years from the expiration of
their term. Being comprised of the heirs of the donor, TRY Foundation claimed that it is entitled to petition for the issuance of a new
title in their name pursuant to Section 108 of Presidential Decree (P.D.) No. 1529.[16] TRY Foundation prayed for the issuance of a
new title in its name after the cancellation of PWCTUI's TCT No. 20970 T-22702.
PWCTUI opposed the petition arguing that: (1) TRY Foundation has no legal personality to bring the action because the donation
has never been revoked and any right to demand for its revocation already prescribed; (2) although PCWTUI's corporate term
was not extended upon its expiration in 1979, it nonetheless registered anew and continued the operations, affairs and social work
of the corporation; it also continued to possess the property and exercised rights of ownership over it; (3) only the appropriate
government agency and not TRY Foundation or any other private individual can challenge the corporate life and existence of
PCWTUI; (4) TRY Foundation and its counsel are guilty of forum shopping because they have already questioned PWCTUI's
corporate personality in a different forum but failed to obtain a favorable relief; (5) TRY Foundation is guilty of fraud for failing
to include PWCTUI as an indispensable party and to furnish it with a copy of the petition; and (6) the RTC has no jurisdiction over
the petition because PWCTUI is unaware of its publication.[17]

In a Resolution dated April 4, 2005, the RTC denied the Opposition[18] of PWCTUI. According to the trial court, when the corporate
life of PWCTUI expired in 1979, the property ceased to be used for the purpose for which it was intended, hence, it automatically
reverted to Yangco. As such, TRY Foundation, being composed of his heirs, is considered "other person in interest" under Section
108 of P.D. No. 1529 with a right to file a petition for the issuance of title over the property.

Hearings were thereafter held for the reception of evidence of TRY Foundation. On January 24, 2008, the RTC rendered its
Decision[19]sustaining TRY Foundation's petition.

The RTC ruled that PWCTUI, with SEC Registration No. PW-959 in whose name the property was registered is separate and
distinct from oppositor PWCTUI with SEC Registration No. 122088. The legal personality of PWCTUI (PW-959) ipso facto ended
when its registration expired in September 1979. The new PWCTUI (122088) has its own personality separate and distinct from
PWCTUI (PW-959) hence the latter is not the donee and thus has no claim to the property. As such, the reversion clause in the
donation came about and the property must revert to the donor or his heirs, thus:

It is clear that Don Teodoro R. Yangco is the primary reversion owner of the property. He is succeeded as reversion owner by the
first generation heirs or those testamentary heirs named in his Last Will and Testament which will was admitted to probate by the
Supreme Court in the abovecited case. The second generation heirs are the nieces and nephews of Don Teodoro R. Yangco and
the sons/daughters of the "strangers" named in the will. The second generation heirs succeeded the first generation/testamentary
heirs in their own right. x x x.[20] (Citations omitted)

The RTC granted TRY Foundation's petition by ordering the cancellation of PWCTUI's TCT No. 20970 T-22702 and the issuance of
a new title in the name of TRY Foundation.[21]

PWCTUI appealed to the CA, arguing, among others, that it must be determined whether the condition imposed in the donation has
already occurred or deemed fulfilled. The appeal was docketed as CA-G.R. CV No. 90763. In its Decision[22] dated November
6, 2009, the CA affirmed the RTC's findings. The CA added that the subsequent re-registration of PWCTUI (122088) did not revive
or continue the corporate existence of PWCTUI (PW-959). Hence, PWCTUI (122088) is not the real donee contemplated in the
donation made by Yangco and as such any issue on revocation of donation is improper. The CA Decision disposed thus:

WHEREFORE, the appeal is DENIED. The assailed Decision is AFFIRMED in toto. Costs against [PWCTUI].

SO ORDERED.[23]

PWCTUI sought recourse with the Court thru a petition for review on certiorari docketed as G.R. No. 190193. In a
Resolution[24] dated July 21, 2010, we denied the petition for failure to sufficiently show any reversible error in the assailed CA
decision. PWCTUI moved for reconsideration but its motion was denied with finality in another Resolution[25] dated September 15,
2010. An entry of judgment was thereafter issued stating that the Court Resolution dated July 21, 2010 became final and executory
on October 20, 2010.[26]

On December 23, 2011, PWCTUI filed the herein petition captioned as one for "Prohibition & Certiorari and to Re-Open the Case
with Prayer for Issuance of Temporary Restraining Order (TRO) &/or Writ of Preliminary Injunction."[27] PWCTUI prayed for the
following reliefs:

a.) a TRO and/or a writ of preliminary injunction be issued preventing and/or enjoining public respondents, Register of Deeds of
Quezon City and the Sheriff of the RTC of Quezon City, Branch 218 from executing the RTC Decision dated January 24, 2008;

b.) to make the injunction permanent by annulling and setting aside all orders, decisions, resolutions and proceedings issued and
taken in relation to LRC Case No. Q-18126(04) before the trial and appellate courts for having been promulgated in excess of
jurisdiction or with grave abuse of discretion; and

c.) LRC Case No. Q-18126(04) be re-opened, re-considered and re-studied in the interest of true and fair justice.
In support of its pleas, PWCTUI submitted the following arguments:

a. based on the deed of donation, the expiration of PWCTUI's corporate term is not stated as a ground for the nullification of the
donation and the operation of the reversion clause;

b. the commercial leasing of portions of the donated land did not violate the condition in the donation because the lease contract
with Jelby Acres was pursued for the generation of funds in order for PWCTUI to carry on the charitable purposes of the Abiertas
House of Friendship;

c. TRY Foundation has no legal standing or cause of action to claim the land because its members are not the true heirs of Yangco
who died single and without descendants. His only relatives are his half-siblings who are the legitimate children of his mother, Doña
Ramona Arguelles Corpus and her first husband Tomas Corpus, hence, no right of inheritance ab intestato can take place between
them pursuant to Article 992 of the Civil Code; and

d. Even assuming that TRY Foundation has a cause of action for the revocation of the donation, the same has already prescribed
because more than 40 years has lapsed from the date the donation was made in May 19, 1934.

The Court's Ruling

On its face, it is immediately apparent that the petition merits outright dismissal in view of the doctrine of immutability attached to the
Court's final and executory Resolutions dated July 21, 2010 and September 15, 2010 in G.R. No. 190193.

The doctrine postulates that a decision that has acquired finality becomes immutable and unalterable, and may no longer be
modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law, and whether it is made
by the court that rendered it or by the Highest Court of the land. Any act which violates this principle must immediately be struck
down.[28]

A long and intent study, however, of the arguments raised in the present recourse vis-à-vis the proceedings taken in LRC Case
No. Q-18126(04) disclose that it is necessary, obligatory even, for the Court to accord affirmative consideration to the supplications
tendered by PWCTUI in the petition at bar.

While firmly ingrained as a basic procedural tenet in Philippine jurisprudence, immutability of final judgments was never meant to be
an inflexible tool to excuse and overlook prejudicial circumstances. The doctrine must yield to practicality, logic, fairness and
substantial justice. Hence, it's application admits the following exceptions: (1) the correction of clerical errors; (2) the so-called nunc
pro tunc entries which cause no prejudice to any party; (3) void judgments; and (4) whenever circumstances transpire after the
finality of the decision rendering its execution unjust and inequitable.[29]

Here, the third exception is attendant. The nullity of the RTC judgment and all subsequent rulings affirming the same, render
inoperative the doctrine of immutability of judgment, and consequently justify the propriety of giving due course to the present
petition.

To expound, the RTC judgment in LRC Case No. Q-18126(04) and all proceedings taken in relation thereto were void because the
RTC did not acquire jurisdiction over the fundamental subject matter of TRY Foundation's petition for the issuance of a title which
was in reality, a complaint for revocation of donation, an ordinary civil action outside the ambit of Section 108 of P.D. No. 1529.

The petition filed by TRY

Foundation was a disguised
complaint for revocation of
donation.

It has been held that the jurisdiction of a court over the subject matter of a particular action is determined by the plaintiff's allegations
in the complaint and the principal relief he seeks in the light of the law that apportions the jurisdiction of courts. [30] Jurisdiction
should be determined by considering not only the status or the relationship of the parties but also the nature of the issues or
questions that is the subject of the controversy.[31]

The petition is premised on allegations that the deed of donation from whence PWCTUI derived its title was automatically revoked
when the latter's original corporate term expired in 1979. Consequently, reversion took effect in favor of the donor and/or his
heirs. As relief, TRY Foundation sought the cancellation of TCT No. 20970 T-22702 and the issuance of a new title in its name, to
wit:

WHEREFORE, in view of all the foregoing, it is respectfully prayed of the Hon. Court that after due hearing, the Hon. Court render
judgment:

Ordering the Register of Deeds of Quezon City to cancel TCT No. 20970 T-22702 and issue in lieu thereof a new title in the name of
TRY Heirs (2nd and 3rd Generation) Heirs Foundation, Inc. free from all liens and encumbrances. [32]
The above contentions and plea betray the caption of the petition. Observably, TRY Foundation is actually seeking to recover the
possession and ownership of the subject property from PWCTUI and not merely the cancellation of PWCTUI's TCT No. 20970 T-
22702. The propriety of pronouncing TRY Foundation as the absolute owner of the subject property rests on the resolution of
whether or not the donation made to PWCTUI has been effectively revoked when its corporate term expired in 1979. Stated
otherwise, no judgment proclaiming TRY Foundation as the absolute owner of the property can be arrived at without declaring the
deed of donation revoked.

The Court made a similar observation in Dolar v. Barangay Lublub (now P.D. Monfort North), Municipality of Dumangas,[33] the facts
of which bear resemblance to the facts at hand. In Dolar, the petitioner filed a complaint for quieting of title and recovery of
possession with damages involving a land he had earlier donated to the respondent. The petitioner claimed that the donation had
ceased to be effective when the respondent failed to comply with the conditions of the donation. As relief, the petitioner prayed that
he be declared the absolute owner of the property. The complaint was dismissed by the trial court on the ground that the
petitioner's cause of action for revocation has already prescribed and as such, its claim for quieting of title is ineffective
notwithstanding that the latter cause of action is imprescriptible. In sustaining such dismissal, the Court remarked:

As aptly observed by the trial court, the petitory portion of petitioner's complaint in Civil Case No. 98-033 seeks for a judgment
declaring him the absolute owner of the donated property, a plea which necessarily includes the revocation of the deed of donation
in question. Verily, a declaration of petitioner's absolute ownership appears legally possible only when the deed of donation is
contextually declared peremptorily revoked.

xxxx

It cannot be overemphasized that respondent barangay traces its claim of ownership over the disputed property to a valid contract of
donation which is yet to be effectively revoked. Such rightful claim does not constitute a cloud on the supposed title of petitioner
over the same property removable by an action to quiet title. Withal, the remedy afforded in Article 476 of the Civil Code is
unavailing until the donation shall have first been revoked in due course under Article 764 or Article 1144 of the Code. [34]

An action which seeks the recovery

of property is outside the ambit of
Section 108 of P.D. No. 1529.

Whether the donation merits revocation and consequently effect reversion of the donated property to the donor and/or his heirs
cannot be settled by filing a mere petition for cancellation of title under Section 108 of P.D. No. 1529 which reads:

Sec. 108. Amendment and alteration of certificates. No erasure, alteration, or amendment shall be made upon the registration book
after the entry of a certificate of title or of a memorandum thereon and the attestation of the same by the Register of Deeds, except
by order of the proper Court of First Instance. A registered owner or other person having interest in the registered property, or, in
proper cases, the Register of Deeds with the approval of the Commissioner of Land Registration, may apply by petition to the court
upon the ground that the registered interest of any description, whether vested, contingent, expectant or inchoate appearing on the
certificate, have terminated and ceased; or that new interest not appearing upon the certificate have arisen or been created; or that
an omission or an error was made in entering a certificate or any memorandum thereon, or on any duplicate certificate: or that the
same or any person in the certificate has been changed or that the registered owner has married, or, if registered as married, that
the marriage has been terminated and no right or interest of heirs or creditors will thereby be affected; or that a corporation which
owned registered land and has been dissolved has not yet convened the same within three years after its dissolution; or upon any
other reasonable ground; and the court may hear and determine the petition after notice to all parties in interest, and may order the
entry or cancellation of a new certificate, the entry or cancellation of a memorandum upon a certificate, or grant any other relief upon
such terms and conditions, requiring security and bond if necessary, as it may consider proper; Provided, however, That this section
shall not be construed to give the court authority to reopen the judgment or decree of registration, and that nothing shall be done or
ordered by the court which shall impair the title or other interest of a purchaser holding a certificate for value and in good faith, or his
heirs and assigns without his or their written consent. Where the owner's duplicate certificate is not presented, a similar petition may
be filed as provided in the preceding section.

All petitions or motions filed under this section as well as any other provision of this decree after original registration shall be filed
and entitled in the original case in which the decree of registration was entered.

A parallel issue was encountered by the Court in Paz v. Republic of the Philippines,[35] which involved a petition for the cancellation
of title brought under the auspices of Section 108 of P.D. No. 1529. The petition sought the cancellation of Original Certificate of
Title No. 684 issued thru LRC Case No. 00-059 in favor of the Republic, Filinvest Development Corporation and Filinvest Alabang,
Inc., and the issuance of a new title in the name of the petitioner therein. The petition was dismissed by the RTC. The dismissal
was affirmed by the CA and eventually by this Court on the following reasons:

We agree with both the CA and the RTC that the petitioner was in reality seeking the reconveyance of the property covered by OCT
No. 684, not the cancellation of a certificate of title as contemplated by Section 108 of P.D. No. 1529. Thus, his petition did not fall
under any of the situations covered by Section 108, and was for that reason rightly dismissed.
Moreover, the filing of the petition would have the effect of reopening the decree of registration, and could thereby impair the rights
of innocent purchasers in good faith and for value. To reopen the decree of registration was no longer permissible, considering that
the one-year period to do so had long ago lapsed, and the properties covered by OCT No. 684 had already been subdivided into
smaller lots whose ownership had passed to third persons. x x x.

xxxx

Nor is it subject to dispute that the petition was not a mere continuation of a previous registration proceeding. Shorn of the thin
disguise the petitioner gave to it, the petition was exposed as a distinct and independent action to seek the reconveyance of realty
and to recover damages. Accordingly, he should perform jurisdictional acts, like paying the correct amount of docket fees for the
filing of an initiatory pleading, causing the service of summons on the adverse parties in order to vest personal jurisdiction over them
in the trial court, and attaching a certification against forum shopping (as required for all initiatory pleadings). He ought to know that
his taking such required acts for granted was immediately fatal to his petition, warranting the granting of the respondents' motion to
dismiss.[36]

By analogy, the above pronouncements may be applied to the controversy at bar considering that TRY Foundation's exposed action
for revocation of the donation necessarily includes a claim for the recovery of the subject property.

The circumstances upon which the ruling in Paz was premised are attendant in the present case. The petition of TRY Foundation
had the effect of reopening the decree of registration in the earlier LRC Case No. 20970 which granted PWCTUI's application for the
issuance of a new owner's duplicate copy of TCT No. 20970. As such, it breached the caveat in Section 108 that "this section shall
not be construed to give the court authority to reopen the judgment or decree of registration." The petition of TRY Foundation also
violated that portion in Section 108 stating that "all petitions or motions filed under this section as well as any other provision of this
decree after original registration shall be filed and entitled in the original case in which the decree of registration was entered." The
petition of TRY Foundation in LRC Case No. Q-18126(04) was clearly not a mere continuation of LRC Case No. 20970.

Further, the petition filed by TRY Foundation is not within the province of Section 108 because the relief thereunder can only be
granted if there is unanimity among the parties, or that there is no adverse claim or serious objection on the part of any party in
interest.[37] Records show that in its opposition to the petition, PWCTUI maintained that it "remains and continues to be the true and
sole owner in fee simple of the property" and that TRY Foundation "has no iota of right" thereto.[38]

More so, the enumerated instances for amendment or alteration of a certificate of title under Section 108 are non-controversial in
nature. They are limited to issues so patently insubstantial as not to be genuine issues. The proceedings thereunder are summary
in nature, contemplating insertions of mistakes which are only clerical, but certainly not controversial issues. [39] Undoubtedly,
revocation of donation entails litigious and controversial matters especially in this case where the condition supposedly violated by
PWCTUI is not expressly stated in the deed of donation. Thus, it is imperative to conduct an exhaustive examination of the factual
and legal bases of the parties' respective positions for a complete determination of the donor's desires. Certainly, such objective
cannot be accomplished by the court through the abbreviated proceedings of Section 108.

In fact, even if it were specifically imposed as a ground for the revocation of the donation that will set off the automatic reversion of
the donated property to the donor and/or his heirs, court intervention is still indispensable.

As ruled in Vda. de Delgado v. CA,[40] "[a]lthough automatic reversion immediately happens upon a violation of the condition and
therefore no judicial action is necessary for such purpose, still judicial intervention must be sought by the aggrieved party if only for
the purpose of determining the propriety of the rescission made."[41] In addition, where the donee denies the rescission of the
donation or challenges the propriety thereof, only the final award of the court can conclusively settle whether the resolution is proper
or not.[42] Here, PWCTUI unmistakably refuted the allegation that the expiration of its corporate term in 1979 rescinded the donation.

Lastly, the issues embroiled in revocation of donation are litigable in an ordinary civil proceeding which demands stricter
jurisdictional requirements than that imposed in a land registration case.

Foremost of which is the requirement on the service of summons for the court to acquire jurisdiction over the persons of the
defendants. Without a valid service of summons, the court cannot acquire jurisdiction over the defendant, unless the defendant
voluntarily submits to it. Service of summons is a guarantee of one's right to due process in that he is properly apprised of a
pending action against him and assured of the opportunity to present his defenses to the suit.[43]

In contrast, jurisdiction in a land registration cases being a proceeding in rem, is acquired by constructive seizure of the land through
publication, mailing and posting of the notice of hearing.[44] Persons named in the application are not summoned but merely notified
of the date of initial hearing on the petition.[45]

The payment of docket fees is another jurisdictional requirement for an action for revocation which was absent in the suit filed by
TRY Foundation. On the other hand, Section 111 of P.D. No. 1529 merely requires the payment of filing fees and not docket fees.

Filing fees are intended to take care of court expenses in the handling of cases in terms of cost of supplies, use of equipment,
salaries and fringe benefits of personnel, etc., computed as to man hours used in handling of each case. Docket fees, on the other
hand, vest the trial court jurisdiction over the subject matter or nature of action. [46]

The absence of the above jurisdictional requirements for ordinary civil actions thus prevented the RTC, acting as a land registration
court, from acquiring the power to hear and decide the underlying issue of revocation of donation in LRC Case No. Q-
18126(04). Any determination made involving such issue had no force and effect; it cannot also bind PWCTUI over whom the RTC
acquired no jurisdiction for lack of service of summons.

"Jurisdiction is the power with which courts are invested for administering justice; that is, for hearing and deciding cases. In order
for the court to have authority to dispose of the case on the merits, it must acquire jurisdiction over the subject matter and the
parties."[47]

Conclusion

All told, the RTC, acting as a land registration court, had no jurisdiction over the actual subject matter contained in TRY Foundation's
petition for issuance of a new title. TRY Foundation cannot use the summary proceedings in Section 108 of P.D. No. 1529 to
rescind a contract of donation as such action should be threshed out in ordinary civil proceedings. In the same vein, the RTC had
no jurisdiction to declare the donation annulled and as a result thereof, order the register of deeds to cancel PWCTUI's TCT No.
20970 T-22702 and issue a new one in favor of TRY Foundation.

The RTC, acting as a land registration court, should have dismissed the land registration case or re-docketed the same as an
ordinary civil action and thereafter ordered compliance with stricter jurisdictional requirements.
Since the RTC had no jurisdiction over the action for revocation of donation disguised as a land registration case, the
judgment in LRC Case No. Q-18126(04) is null and void. Being void, it cannot be the source of any right or the creator of any
obligation. It can never become final and any writ of execution based on it is likewise void.[48] It may even be considered as a
lawless thing which can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head. [49]

Resultantly, the appellate proceedings relative to LRC Case No. Q-18126(04) and all issuances made in connection with such
review are likewise of no force and effect. A void judgment cannot perpetuate even if affirmed on appeal by the highest court of the
land. All acts pursuant to it and all claims emanating from it have no legal effect.[50]

The Court Resolutions dated July

21, 2010 and September 15, 2010
do not bar the present ruling.

It is worth emphasizing that despite PWCTUI's incessant averment of the RTC's lack of jurisdiction over TRY Foundation's petition,
the trial court shelved the issue, took cognizance of matters beyond those enveloped under Section 108 and sorted out, in abridged
proceedings, complex factual issues otherwise determinable in a full-blown trial appropriate for an ordinary civil action.

PWCTUI no longer raised the jurisdiction issue before the CA and limited its appeal to the factual findings and legal conclusions of
the RTC on its corporate existence and capacity as the subject property's uninterrupted
owner. The matter reached the Court thru a petition for review under Rule 45, but with the question of jurisdiction absent in
the appellate pleadings, the Court was constrained to review only mistakes of judgment.

While PWCTUI could have still challenged the RTC's jurisdiction even on appeal, its failure to do so cannot work to its
disadvantage. The issue of jurisdiction is not lost by waiver or by estoppel; no laches will even attach to a judgment rendered
without jurisdiction.[51]

Hence, since the Court Resolutions dated July 21, 2010 and September 15, 2010 in G.R. No. 190193 disposed the case only
insofar as the factual and legal questions brought before the CA were concerned, they cannot operate as a procedural impediment
to the present ruling which deals with mistake of jurisdiction.

This is not to say, however, that a certiorari before the Court is a remedy against its own final and executory judgment. As made
known in certain cases, the Court is invested with the power to suspend the application of the rules of procedure as a necessary
complement of its power to promulgate the same.[52] Barnes v. Hon. Quijano Padilla[53] discussed the rationale for this tenet, viz:

Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial
justice, must always be eschewed. Even the Rules of Court reflect this principle. The power to suspend or even disregard rules can
be so pervasive and compelling as to alter even that which this Court itself has already declared to be final, x x x.

The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities. Time and again, this Court has consistently held that rules
must not be applied rigidly so as not to override substantial justice. [54] (Citation omitted and italics supplied)

Here, the grave error in jurisdiction permeating the proceedings taken in LRC Case No. Q-18126(04) deprived PWCTUI of its
property without the very foundation of judicial proceedings due process. Certainly, the Court cannot let this mistake pass
without de rigueurrectification by suspending the rules of procedure and permitting the present recourse to access auxiliary review.

If the Court, as the head and guardian of the judicial branch, must continuously merit the force of public trust and confidence which
ultimately is the real source of its sovereign power and if it must decisively discharge its sacred duty as the last sanctuary of the
oppressed and the weak, it must, in appropriate cases, pro-actively provide weary litigants with immediate legal and equitable relief,
free from the delays and legalistic contortions that oftentimes result from applying purely formal and procedural approaches to
judicial dispensations.[55]

WHEREFORE, all things studiedly viewed in the correct perspective, the petition is hereby GRANTED. All proceedings taken,
decisions, resolutions, orders and other issuances made in LRC Case No. Q-18126(04), CA-G.R. CV No. 90763 and G.R. No.
190193 are hereby ANNULLED and SET ASIDE.

The Register of Deeds of Quezon City is hereby ORDERED to CANCEL any Transfer Certificate of Title issued in the name of
Teodoro R. Yangco 2nd and 3rd Generation Heirs Foundation, Inc. as a consequence of the execution of the disposition in LRC
Case No. Q-18126(04), and to REINSTATE Transfer Certificate of Title No. 20970 T-22702 in the name of Philippine Woman's
Christian Temperance Union, Inc.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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.

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.

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.

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.

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.

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 AN EXCEPTION TO THE HEARSAY RULE UNDER SECTION 45 (SIC), RULE 130, OF THE
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.

G.R. Nos. 79937-38 February 13, 1989

SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City and MANUEL CHUA UY
PO TIONG, respondents.

Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco, Oreta, Tanjuatco, Berenguer &
Sanvicente Law Offices for private respondent.

GANCAYCO, J.:

Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case when the correct and proper
docket fee has not been paid.

On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the Regional Trial Court of
Makati, Metro Manila for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of
its nullity against private respondent Manuel Uy Po Tiong. Private respondent as declared in default for failure to file the required
answer within the reglementary period.

On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial Court of Quezon City for the refund
of premiums and the issuance of a writ of preliminary attachment which was docketed as Civil Case No. Q-41177, initially against
petitioner SIOL, and thereafter including E.B. Philipps and D.J. Warby as additional defendants. The complaint sought, among
others, the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and
costs of the suit. Although the prayer in the complaint did not quantify the amount of damages sought said amount may be inferred
from the body of the complaint to be about Fifty Million Pesos (P50,000,000.00).

Only the amount of P210.00 was paid by private respondent as docket fee which prompted petitioners' counsel to raise his
objection. Said objection was disregarded by respondent Judge Jose P. Castro who was then presiding over said case. Upon the
order of this Court, the records of said case together with twenty-two other cases assigned to different branches of the Regional
Trial Court of Quezon City which were under investigation for under-assessment of docket fees were transmitted to this Court. The
Court thereafter returned the said records to the trial court with the directive that they be re-raffled to the other judges in Quezon
City, to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant.

On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-RTC directing the judges in
said cases to reassess the docket fees and that in case of deficiency, to order its payment. The Resolution also requires all clerks of
court to issue certificates of re-assessment of docket fees. All litigants were likewise required to specify in their pleadings the
amount sought to be recovered in their complaints.

On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily assigned, issuedan order
to the Clerk of Court instructing him to issue a certificate of assessment of the docket fee paid by private respondent and, in case of
deficiency, to include the same in said certificate.

On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August 30,1984, an amended complaint
was filed by private respondent including the two additional defendants aforestated.

Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his assumption into office on January
16, 1986, issued a Supplemental Order requiring the parties in the case to comment on the Clerk of Court's letter-report signifying
her difficulty in complying with the Resolution of this Court of October 15, 1985 since the pleadings filed by private respondent did
not indicate the exact amount sought to be recovered. On January 23, 1986, private respondent filed a "Compliance" and a "Re-
Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory damages" in the prayer. In
the body of the said second amended complaint however, private respondent alleges actual and compensatory damages and
attorney's fees in the total amount of about P44,601,623.70.

On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and stating therein that the
same constituted proper compliance with the Resolution of this Court and that a copy thereof should be furnished the Clerk of Court
for the reassessment of the docket fees. The reassessment by the Clerk of Court based on private respondent's claim of "not less
than P10,000,000.00 as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently paid by
private respondent.
Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie Asuncion dated January
24, 1986.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 as d.qmages so
the total claim amounts to about P64,601,623.70. On October 16, 1986, or some seven months after filing the supplemental
complaint, the private respondent paid the additional docket fee of P80,396.00. 1

On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:

WHEREFORE, judgment is hereby rendered:

1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks annulment of the order

(a) denying petitioners' motion to dismiss the complaint, as amended, and

(b) granting the writ of preliminary attachment, but giving due course to the portion thereof questioning the
reassessment of the docketing fee, and requiring the Honorable respondent Court to reassess the docketing fee
to be paid by private respondent on the basis of the amount of P25,401,707.00. 2

Hence, the instant petition.

During the pendency of this petition and in conformity with the said judgment of respondent court, private respondent paid the
additional docket fee of P62,432.90 on April 28, 1988. 3

The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not acquire jurisdiction over
Civil Case No. Q-41177 on the ground of nonpayment of the correct and proper docket fee. Petitioners allege that while it may be
true that private respondent had paid the amount of P182,824.90 as docket fee as herein-above related, and considering that the
total amount sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that should be
paid by private respondent is P257,810.49, more or less. Not having paid the same, petitioners contend that the complaint should be
dismissed and all incidents arising therefrom should be annulled. In support of their theory, petitioners cite the latest ruling of the
Court in Manchester Development Corporation vs. CA, 4 as follows:

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 in so far as it is inconsistent with this pronouncement is overturned and reversed.

On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to Civil Case No. Q41177 for
at the time said civil case was filed in court there was no such Manchester ruling as yet. Further, private respondent avers that what
is applicable is the ruling of this Court in Magaspi v. Ramolete, 5 wherein this Court held that the trial court acquired jurisdiction over
the case even if the docket fee paid was insufficient.

The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating the procedure of the courts
will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retrospective
in that sense and to that extent. 6

In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the docket fee is an indispensable step
for the perfection of an appeal. In a forcible entry and detainer case before the justice of the peace court of Manaoag, Pangasinan,
after notice of a judgment dismissing the case, the plaintiff filed a notice of appeal with said court but he deposited only P8.00 for the
docket fee, instead of P16.00 as required, within the reglementary period of appeal of five (5) days after receiving notice of
judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee only fourteen (14) days later. On the
basis of these facts, this court held that the Court of First Instance did notacquire jurisdiction to hear and determine the appeal as
the appeal was not thereby perfected.

In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino citizen by sending it through
registered mail to the Office of the Solicitor General in 1953 but the required filing fee was paid only in 1956, barely 5V2 months
prior to the filing of the petition for citizenship. This Court ruled that the declaration was not filed in accordance with the legal
requirement that such declaration should be filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this
Court concluded that the filing of petitioner's declaration of intention on October 23, 1953 produced no legal effect until the required
filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an original petition for quo
warranto contesting the right to office of proclaimed candidates which was mailed, addressed to the clerk of the Court of First
Instance, within the one-week period after the proclamation as provided therefor by law.10However, the required docket fees were
paid only after the expiration of said period. Consequently, this Court held that the date of such payment must be deemed to be the
real date of filing of aforesaid petition and not the date when it was mailed.

Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before a court will act on a petition or
complaint. However, we also held that said rule is not applicable when petitioner seeks the probate of several wills of the same
decedent as he is not required to file a separate action for each will but instead he may have other wills probated in the same
special proceeding then pending before the same court.

Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only upon payment of the docket
fee regardless of the actual date of its filing in court. Said case involved a complaint for recovery of ownership and possession of a
parcel of land with damages filed in the Court of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00
for the sheriffs fee, the complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer
Certificate of Title issued in the name of the defendant be declared as null and void. It was also prayed that plaintiff be declared as
owner thereof to whom the proper title should be issued, and that defendant be made to pay monthly rentals of P3,500.00 from June
2, 1948 up to the time the property is delivered to plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of
P250,000.00, the costs of the action and exemplary damages in the amount of P500,000.00.

The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to which an opposition was filed
by the plaintiff alleging that the action was for the recovery of a parcel of land so the docket fee must be based on its assessed
value and that the amount of P60.00 was the correct docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.

The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant. In the prayer of the
amended complaint the exemplary damages earlier sought was eliminated. The amended prayer merely sought moral damages as
the court may determine, attorney's fees of P100,000.00 and the costs of the action. The defendant filed an opposition to the
amended complaint. The opposition notwithstanding, the amended complaint was admitted by the trial court. The trial court
reiterated its order for the payment of the additional docket fee which plaintiff assailed and then challenged before this Court.
Plaintiff alleged that he paid the total docket fee in the amount of P60.00 and that if he has to pay the additional fee it must be based
on the amended complaint.

The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case even if the docketing fee
paid was not sufficient. In Magaspi, We reiterated the rule that the case was deemed filed only upon the payment of the correct
amount for the docket fee regardless of the actual date of the filing of the complaint; that there was an honest difference of opinion
as to the correct amount to be paid as docket fee in that as the action appears to be one for the recovery of property the docket fee
of P60.00 was correct; and that as the action is also one, for damages, We upheld the assessment of the additional docket fee
based on the damages alleged in the amended complaint as against the assessment of the trial court which was based on the
damages alleged in the original complaint.

However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for torts and damages and
specific performance with a prayer for the issuance of a temporary restraining order, etc. The prayer in said case 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, the attachment of such property of defendants that may be
sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order requiring defendants to execute
a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff. It was also
prayed that the defendants be made to pay the plaintiff jointly and severally, actual, compensatory and exemplary damages as well
as 25% of said amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the trial court to declare the
tender of payment of the purchase price of plaintiff valid and sufficient for purposes 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 Millon allegedly suffered by plaintiff.

Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on the nature of the action for
specific performance where the amount involved is not capable of pecuniary estimation. However, it was obvious from the
allegations of the complaint as well as its designation that the action was one for damages and specific performance. Thus, this
court held the plaintiff must be assessed the correct docket fee computed against the amount of damages of about P78 Million,
although the same was not spelled out in the prayer of the complaint.

Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on September 12, 1985 by the
inclusion of another co-plaintiff and eliminating any mention of the amount of damages in the body of the complaint. The prayer in
the original complaint was maintained.

On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other cases that were
investigated. On November 12, 1985, the trial court directed the plaintiff to rectify the amended complaint by stating the amounts
which they were asking for. This plaintiff did as instructed. In the body of the complaint the amount of damages alleged was reduced
to P10,000,000.00 but still no amount of damages was specified in the prayer. Said amended complaint was admitted.

Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee regardless of the actual date of
filing in court," this Court held that the trial court did not acquire jurisdiction over the case by payment of only P410.00 for the docket
fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was no such
original complaint duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent
proceedings and actions taken by the trial court were declared null and void. 13

The present case, as above discussed, is among the several cases of under-assessment of docket fee which were investigated by
this Court together with Manchester. The facts and circumstances of this case are similar to Manchester. In the body of the original
complaint, the total amount of damages sought amounted to about P50 Million. In the prayer, the amount of damages asked for was
not stated. The action was for the refund of the premium and the issuance of the writ of preliminary attachment with damages. The
amount of only P210.00 was paid for the docket fee. On January 23, 1986, private respondent filed an amended complaint wherein
in the prayer it is asked that he be awarded no less than P10,000,000.00 as actual and exemplary damages but in the body of the
complaint the amount of his pecuniary claim is approximately P44,601,623.70. Said amended complaint was admitted and the
private respondent was reassessed the additional docket fee of P39,786.00 based on his prayer of not less than P10,000,000.00 in
damages, which he paid.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 in damages so
that his total claim is approximately P64,601,620.70. On October 16, 1986, private respondent paid an additional docket fee of
P80,396.00. After the promulgation of the decision of the respondent court on August 31, 1987 wherein private respondent was
ordered to be reassessed for additional docket fee, and during the pendency of this petition, and after the promulgation
of Manchester, on April 28, 1988, private respondent paid an additional docket fee of P62,132.92. Although private respondent
appears to have paid a total amount of P182,824.90 for the docket fee considering the total amount of his claim in the amended and
supplemental complaint amounting to about P64,601,620.70, petitioner insists that private respondent must pay a docket fee of
P257,810.49.

The principle in Manchester could very well be applied in the present case. The pattern and the intent to defraud the government of
the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the second amended complaint.

However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by this Court on May 7, 1987.
Thus, in Manchester, due to the fraud committed on the government, this Court held that the court a quo did not acquire jurisdiction
over the case and that the amended complaint could not have been admitted inasmuch as the original complaint was null and void.

In the present case, a more liberal interpretation of the rules is called for considering that, unlike Manchester, private respondent
demonstrated his willingness to abide by the rules by paying the additional docket fees as required. The promulgation of the
decision in Manchester must have had that sobering influence on private respondent who thus paid the additional docket fee as
ordered by the respondent court. It triggered his change of stance by manifesting his willingness to pay such additional docket fee
as may be ordered.

Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total amount of the claim. This
is a matter which the clerk of court of the lower court and/or his duly authorized docket clerk or clerk in-charge should determine
and, thereafter, if any amount is found due, he must require the private respondent to pay the same.

Thus, the Court rules as follows:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that
vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond
the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall not be considered filed
until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but
also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing
fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for
determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the
Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is hereby instructed to reassess
and determine the additional filing fee that should be paid by private respondent considering the total amount of the claim sought in
the original complaint and the supplemental complaint as may be gleaned from the allegations and the prayer thereof and to require
private respondent to pay the deficiency, if any, without pronouncement as to costs.

SO ORDERED.

SECOND DIVISION

[G.R. NO. 165147 : July 9, 2008]

PHILIPPINE FIRST INSURANCE CO., INC. and PARAMOUNT GENERAL INSURANCE

CORPORATION, Petitioners, v. PYRAMID LOGISTICS AND TRUCKING CORPORATION (formerly PANACOR INTEGRATED
WAREHOUSING AND TRUCKING CORPORATION), Respondent.

DECISION

CARPIO MORALES, J.:

The issue, in the main, in the present case is whether respondent, Pyramid Logistics and Trucking Corporation (Pyramid), which
filed on November 7, 2001 a complaint,1 denominated as one for specific performance and damages, against petitioners Philippine
First Insurance Company, Inc. (Philippine First) and Paramount General Insurance Corporation (Paramount) before the Regional
Trial Court (RTC) of Makati, docketed as Civil Case No. 01-1609, paid the correct docket fee; if in the negative, whether the
complaint should be dismissed or Pyramid can still be ordered to pay the fee.

Pyramid sought to recover the proceeds of two insurance policies issued to it, Policy No. IN-002904 issued by petitioner Paramount,
and Policy No. MN-MCL-HO-00-0000007-00 issued by petitioner Philippine First. Despite demands, petitioners allegedly failed to
settle them, hence, it filed the complaint subject of the present petition.

In its complaint, Pyramid alleged that on November 8, 2000, its delivery van bearing license plate number PHL-545 which was
loaded with goods belonging to California Manufacturing Corporation (CMC) valued at PESOS NINE HUNDRED SEVEN
THOUSAND ONE HUNDRED FORTY NINE AND SEVEN/100 (P907,149.07) left the CMC Bicutan Warehouse but the van,
together with the goods, failed to reach its destination and its driver and helper were nowhere to be found, to its damage and
prejudice; that it filed a criminal complaint against the driver and the helper for qualified theft, and a claim with herein petitioners as
co-insurers of the lost goods but, in violation of petitioners' undertaking under the insurance policies, they refused without just and
valid reasons to compensate it for the loss; and that as a direct consequence of petitioners' failure, despite repeated demands, to
comply with their respective undertakings under the Insurance Policies by compensating for the value of the lost goods, it suffered
damages and was constrained to engage the services of counsel to enforce and protect its right to recover compensation under said
policies, for which services it obligated itself to pay the sum equivalent to twenty-five (25%) of any amount recovered as and for
attorney's fees and legal expenses.2

Pyramid thus prayed

. . . that after due proceedings, judgment be rendered, ordering [herein petitioners] to comply with their obligation under their
respective Insurance Policies by paying to [it] jointly and severally,the claims arising from the subject losses.

THAT, [herein petitioners] be adjudged jointly and severally to pay to [it], in addition to the foregoing, the following:

1. The sum of PHP 50,000.00 plus PHP 1,500.00 for each Court session attended by counsel until the instant [case] is finally
terminated, as and for attorney's fees;

2. The costs of suit[;]3 (Underscoring supplied)cralawlibrary

and for other reliefs just and equitable in the premises.4

Pyramid was assessed P610 docket fee, apparently on the basis of the amount of P50,000 specified in the prayer representing
attorney's fees, which it duly paid.5

Pyramid later filed a 1st Amended Complaint6 containing minor changes in its body7 but bearing the same prayer.8 Branch 148 of
the Makati RTC to which the complaint was raffled admitted the Amended Complaint. 9
Petitioners filed a Motion to Dismiss on the ground of, inter alia, lack of jurisdiction, Pyramid not having paid the docket fees in full,
arguing thus:

xxx

In the body of the Amended Complaint, plaintiff alleged that the goods belonging to California Manufacturing Co., Inc. (CMC) is [sic]
"valued at Php907,149.07" and consequently, "plaintiff incurred expenses, suffered damages and was constrained to engage the
services of counsel to enforce and protect its right to recover compensation under the said policies and for which services, it
obligated itself to pay the sum equivalent to twenty-five (25%) of any recovery in the instant action, as and for attorney's fees and
legal expenses".

On the other hand, in the prayer in the Complaint, plaintiff deliberately omitted to specify what these damages are. x x x

xxx

Verily, this deliberate omission by the plaintiff is clearly intended for no other purposes than to evade the payment of the correct
filing fee if not to mislead the docket clerk, in the assessment of the filing fee. In fact, the docket clerk in the instant case charged the
plaintiff a total of Php610.00 only as a filing fee, which she must have based on the amount of Php50,000.00 [attorney's fees]
only.10 (Emphasis in the original; italics and underscoring supplied)

Petitioners cited11 Manchester Development Corporation v. Court of Appeals12 which held:

x x x [A]ll 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 be accepted or admitted, or shall otherwise be expunged
from the record.13 (Emphasis and underscoring supplied)cralawlibrary

They cited too Sun Insurance Office, Ltd. v. Asuncion14 which held that "[i]t is not simply the filing of the complaint or appropriate
pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of
the action."15

Petitioners thus concluded:

With the above cases as a backdrop, the Supreme Court, in revising the rules of pleading and practice in the 1997 Rules of Civil
Procedure, added a tenth ground to a Motion to Dismiss - to wit, "[t]hat a condition precedent for filing claim [sic] has not been
complied with.["]

On the contrary, if plaintiff would insist that its claim against the defendants is only Php50,000.00 plus Php 1,500.00 as appearance
fee per court hearing, then it follows that it is the Metropolitan Trial Court which has jurisdiction over this case, not this Honorable
Court. Such amount is way below the minimum jurisdictional amount prescribed by the rules in order to confer jurisdiction to the
Regional Trial Court.16 (Underscoring supplied)cralawlibrary

To the Motion to Dismiss Pyramid filed its Opposition,17 alleging that if there was a mistake in the assessment of the docket fees, the
trial court was not precluded from acquiring jurisdiction over the complaint as "it has the authority to direct the mistaken party to
complete the docket fees in the course of the proceedings . . ."18The Opposition merited a Reply19 from petitioners.

By Order of June 3, 2002, the trial court20 denied the Motion to Dismiss in this wise:

xxx

Indeed, a perusal of the Complaint reveals that while plaintiff made mention of the value of the goods, which were lost, the prayer of
plaintiff did not indicate its exact claim from the defendants. The Complaint merely prayed defendants "to comply with their
obligation under their respective insurance policies by paying to plaintiff jointly and severally, the claims arising from the subject
losses" and did not mention the amount of PHP907,149.07, which is the value of the goods and which is also the subject of
insurance. This resulted to the assessment and payment of docket fees in the amount of P610 only. The Court, even without the
Motion to Dismiss filed by defendant, actually noted such omission which is actually becoming a practice for some lawyers. For
whatever purpose it may be, the Court will not dwell into it. In this instant case, this being for specific performance, it is not
dismissible on that ground but unless proper docket fees are paid, the Court can only grant what was prayed for in the Complaint.

x x x x21 (Emphasis and underscoring supplied)cralawlibrary

Petitioners' Motion for Reconsideration22 of the denial of their Motion to Dismiss having been denied23 by Order of August 1, 2002,
they filed their Answer with Compulsory Counterclaim ad Cautelam,24alleging that they intended to file a Petition for Certiorari with
the Court of Appeals.25

Petitioners did indeed eventually file before the Court of Appeals a Petition for Certiorari (With Preliminary Injunction and Urgent
Prayer for Restraining Order)26 posing the following two of three queries, viz:

First. Does [Pyramid's] deliberate omission to pay the required correct docket and filing fee vest the trial court [with] jurisdiction to
entertain the subject matter of the instant case?cralawred

Second. [Is] the instant case an action for specific performance or simply one for damages or recovery of a sum of money?

x x x x27

By Decision of June 3, 2004,28 the Court of Appeals partially granted petitioners' petition for certiorari by setting aside the trial
judge's assailed orders and ordering Pyramid to file the correct docket fees within a reasonable time, it holding that while the
complaint was denominated as one for specific performance, it sought to recover from petitioners Pyramid's "claims arising from the
subject losses." The appellate court ratiocinated:

xxx

Indeed, it has been held that "it is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee that vests a trial court with jurisdiction over the subject matter or nature of the action." To determine the
docket fees, it is necessary to determine the true nature of the action by examining the allegations of the complaint. x x x

xxx

While the captions of the complaint and 1st amended complaint denominated the case as one for "Specific Performance and
Damages", the allegations and prayer therein show that the specific performance sought by private respondent was for petitioners to
"comply with their obligation under their respective Insurance Policies by paying to plaintiff jointly and severally, the claims arising
from the subject losses" as well as the attorney's fees and costs of suit. Obviously, what constitutes specific performance is the
payment itself by petitioners of private respondent's claims arising from the losses it allegedly incurred. x x x29

xxx

Public respondent should have ordered private respondent to pay the correct docket fees on the basis of the allegations of the
complaint. x x x

xxx

While it has been held in Manchester Development Corporation v. Court of Appeals x x x that "any pleading that fails to comply with
this requirement of specifying the amount of damages not only in the body of the pleading but also in the prayer shall not be
accepted nor admitted, or shall otherwise be expunged from the record," this rule was relaxed in subsequent cases, wherein
payment of the correct docket fees was allowed within a reasonable time. . .

x x x x30 (Emphasis and underscoring supplied)cralawlibrary

Thus the appellate court disposed:

WHEREFORE, the petition is partially granted. The Orders dated June 3, 2002 and August 1, 2002 of public respondent are partially
set aside insofar as they dispensed with the payment of the correct docket fees. Consequently, [Pyramid] is hereby directed to pay
the correct docket fees on the basis of the losses alleged in the body of the complaint, plus the attorney's fees mentioned in the
prayer, within a reasonable time which should not go beyond the applicable prescriptive or reglementary period. In all other
respects, the said Orders are affirmed.31 (Underscoring supplied)cralawlibrary

Petitioners filed a Motion for Reconsideration32 of the appellate court's decision. Pyramid filed its Comment and Opposition to the
Motion for Reconsideration,33 arguing thus:

xxx
In the present case, [Pyramid] thru its Complaint simply sought from petitioners compliance with their contractual undertaking as
insurers of the goods insured which were lost in [its] custody. Private respondent did not specify the extent of petitioners' obligation
as it left the matter entirely in the judgment of the trial court to consider. Thus, the Complaint was labeled "Specific Performance"
which [Pyramid] submitted to the Clerk of Court for assessment of the docket fee, after which, it paid the same based on the said
assessment. There was no indication whatsoever that [Pyramid] had refused to pay; rather, it merely argued against petitioners'
submissions as it maintained the correctness of the assessment made.34 (Underscoring supplied)cralawlibrary

By Resolution of August 23, 2004, the Court of Appeals denied petitioners' Motion for Reconsideration;35 hence, the present Petition
for Review on Certiorari,36 raising the issues of whether the appellate court erred:

. . . WHEN IT APPLIED IN THE INSTANT CASE THE LIBERAL RULE ENUNCIATED IN SUN INSURANCE OFFICE, LTD. (SIOL)
v. ASUNCION, 170 SCRA 274 AND NATIONAL STEEL CORPORATION v. COURT OF APPEALS, 302 SCRA 523 (1999) IN
RESPECT TO THE PAYMENT OF THE PRESCRIBED FILING AND DOCKET FEES DESPITE CLEAR SHOWING OF
RESPONDENT'S INTENTION TO EVADE THE PAYMENT OF THE CORRECT DOCKET FEE WHICH WARRANTS THE
APPLICATION OF THE DOCTRINE LAID DOWN IN MANCHESTER DEVELOPMENT CORPORATION VS. COURT OF
APPEALS, 149 SCRA 562.

. . . WHEN IT DID NOT APPLY THE RULING OF THIS HONORABLE TRIBUNAL IN MARCOPPER MINING CORPORATION v.
GARCIA, 143 SCRA 178, TAN v. DIRECTOR OF FORESTRY, 125 SCRA 302, AND CHINA ROAD AND BRIDGE CORPORATION
v. COURT OF APPEALS, 348 SCRA 401.37 (Underscoring supplied)cralawlibrary

Petitioners invoke the doctrine in Manchester Development Corporation v. Court of Appeals38 that a pleading which does not specify
in the prayer the amount sought shall not be admitted or shall otherwise be expunged, and that the court acquires jurisdiction only
upon the payment of the prescribed docket fee.39

Pyramid, on the other hand, insists, in its Comment on the Petition,40 on the application of Sun Insurance Office, Ltd. (SIOL) v.
Asuncion41 and subsequent rulings relaxing the Manchester ruling by allowing payment of the docket fee within a reasonable time,
in no case beyond the applicable prescriptive or reglementary period, where the filing of the initiatory pleading is not accompanied
by the payment of the prescribed docket fee.42

In Tacay v. Regional Trial Court of Tagum, Davao del Norte,43 the Court clarified the effect of the Sun Insurance ruling on the
Manchester ruling as follows:

As will be noted, the requirement in Circular No. 7 [of this Court which was issued based on the Manchester ruling 44] that
complaints, petitions, answers, and similar pleadings should specify the amount of damages being prayed for not only in the body of
the pleading but also in the prayer, has not been altered. What has been revised is the rule that subsequent "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
amount sought in the amended pleading," the trial court now being authorized to allow payment of the fee within a reasonable time
but in no case beyond the applicable prescriptive period or reglementary period. Moreover, a new rule has been added, governing
the awards of claims not specified in the pleading - i.e., damages arising after the filing of the complaint or similar pleading - as to
which the additional filing fee therefore shall constitute a lien on the judgment.

Now, under the Rules of Court, docket or filing fees are assessed on the basis of the "sum claimed," on the one hand, or the "value
of the property in litigation or the value of the estate," on the other. . .

Where the action is purely for the recovery of money or damages, the docket fees are assessed on the basis of the aggregate
amount claimed, exclusive only of interests and costs. In this case, the complaint or similar pleading should, according to Circular
No. 7 of this Court, "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 filing fees in any case."

Two situations may arise. One is where the complaint or similar pleading sets out a claim purely for money and damages and there
is no statement of the amounts being claimed. In this event the rule is that the pleading will "not be accepted nor admitted, or shall
otherwise be expunged from the record." In other words, the complaint or pleading may be dismissed, or the claims as to which
amounts are unspecified may be expunged, although as aforestated the Court may, on motion, permit amendment of the complaint
and payment of the fees provided the claim has not in the meantime become time-barred. The other is where the pleading does
specify the amount of every claim, but the fees paid are insufficient; and here again, the rule now is that the court may allow a
reasonable time for the payment of the prescribed fees, or the balance thereof, and upon such payment, the defect is cured and the
court may properly take cognizance of the action, unless in the meantime prescription has set in and consequently barred the right
of action.45(Emphasis and underscoring supplied)cralawlibrary

Indeed, Pyramid captioned its complaint as one for "specific performance and damages" even if it was, as the allegations in its body
showed, seeking in the main the collection of its claims-sums of money representing losses the amount of which it, by its own
admission, "knew."46 And, indeed, it failed to specify in its prayer in the complaint the amount of its claims/damages.
When Pyramid amended its complaint, it still did not specify, in its prayer, the amount of claims/damages it was seeking. In fact it
has the audacity to inform this Court, in its Comment on the present Petition, that

x x x In the natural order of things, when a litigant is given the opportunity to spend less for a docket fee after submitting his pleading
for assessment by the Office of the Clerk of Court, he would not decline it inasmuch as to request for a higher assessment under the
circumstances [for such] is against his interest and would be senseless. Placed under the same situation, petitioner[s] would
certainly do likewise. To say otherwise would certainly be dishonest,47

which comment drew petitioners to conclude as follows:

[This] only shows respondent's dishonesty and lack of regard of the rules. Following this line of reasoning, respondent would do
everything if only for it to spend less for the filing fee, even to the extent of circumventing and defying the rule on the payment of the
filing fee.

In spite of the fact that the respondent was already caught in the quagmire of its own cobweb of deception, it further justified its
unethical act by ratiocinating that "placed under the same situation, petitioner would certainly do likewise, to say otherwise would
certainly be dishonest". This attitude of the respondent is very alarming! Having been caught red-handed, the honorable thing that
respondent should have done is admit its own violation rather than justify an act which it knows is a clear contravention of the rules
and jurisprudence.48 (Italics and emphasis in the original)

Pyramid's following justification for omitting to specify in the prayer of its complaint the amount of its claims/damages, viz:

xxx

x x x While respondent knew its losses and alleged them in the body of the Complaint, it was not aware of the extent of
petitioners' respective liability under the two insurance policies. The allegation of respondent's losses, albeit, without repeating
them in its prayer for relief was not motivated by an intention to mislead, cheat or defraud the Court. It just left the matter of liability
arising from two separate and distinct Insurance Policies covering the same insurable risk for the trial court's determination, hence,
respondent came up with an action for "specific performance[,]" 49 (Emphasis and underscoring supplied)cralawlibrary

fails to impress.

As the salient allegations of Pyramid's complaint show and as priorly stated, they constitute, in the main, an action for collection of
its claims it admittedly "knew."

Assuming arguendo that Pyramid has other claims the amounts of which are yet to be determined by the trial court, the rule
established in Manchester which was embodied in this Court's Circular No. 7-88 issued on March 24, 1988, as modified by the Sun
Insurance ruling, still applies. Consider this Court's pronouncement bearing on the matter in Ayala Corporation v.
Madayag:50 ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

xxx

Apparently, the trial court misinterpreted paragraph 3 of the [Sun Insurance] ruling of this Court wherein it stated that "where the
judgment awards a claim not specified in the pleading, or if specified, the same has been left for the determination of the court, the
additional filing fee therefor shall constitute a lien on the judgment" by considering it to mean that where in the body and prayer of
the complaint there is a prayer xxx the amount of which is left to the discretion of the Court, there is no need to specify the amount
being sought, and that any award thereafter shall constitute a lien on the judgment.

x x x While it is true that the determination of certain damages x x x is left to the sound discretion of the court, it is the duty of the
parties claiming such damages to specify the amount sought on the basis of which the court may make a proper determination,
and for the proper assessment of the appropriate docket fees. The exception contemplated as to claims not specified or to claims
although specified are left for determination of the court is limited only to any damages that may arise after the filing of the complaint
or similar pleading for then it will not be possible for the claimant to specify nor speculate as to the amount thereof. (Emphasis and
underscoring supplied)cralawlibrary

If respondent Pyramid's counsel had only been forthright in drafting the complaint and taking the cudgels for his client and the trial
judge assiduous in applying Circular No. 7 vis a vis prevailing jurisprudence, the precious time of this Court, as well as of that of the
appellate court, would not have been unnecessarily sapped.

The Court at this juncture thus reminds Pyramid's counsel to observe Canon 12 of the Code of Professional Ethics which enjoins a
lawyer to "exert every effort and consider it his duty to assist in the speedy and efficient administration of justice," and Rule 12.04 of
the same Canon which enjoins a lawyer "not [to] unduly delay a case, impede the execution of a judgment or misuse court
processes." And the Court reminds too the trial judge to bear in mind that the nature of an action is determined by the allegations of
the pleadings51 and to keep abreast of all laws and prevailing jurisprudence, consistent with the standard that magistrates must be
the embodiments of competence, integrity and independence.52

WHEREFORE, in light of the foregoing discussions, the petition is DENIED.

SO ORDERED.

G.R. No. 192649 March 9, 2011

HOME GUARANTY CORPORATION, Petitioner,

vs.
R-II BUILDERS INC., and NATIONAL HOUSING AUTHORITY, Respondents.

DECISION

PEREZ, J.:

Primarily assailed in this petition for review filed pursuant to Rule 45 of the 1997 Rules of Civil Procedure, is the Decision dated 21
January 2010 rendered by the Former Fifteenth Division of the Court of Appeals (CA) in CA-G.R. SP No. 111153,1 the dispositive
portion of which states as follows:

WHEREFORE, the petition for certiorari and prohibition is hereby DENIED.

The assailed Orders, dated March 3, 2009 and September 29, 2009, of the Regional Trial Court of Manila, Branch 22 are hereby
AFFIRMED.

Consequently, the injunction earlier issued on December 4, 2009, restraining the proceedings in Civil Case No. 05-113407, is
hereby DISSOLVED.2

The Facts

On 19 March 1993, a Joint Venture Agreement (JVA) was entered into between respondents National Housing Authority (NHA) and
R-II Builders, Inc. (R-II Builders) for the implementation of the Smokey Mountain Development and Reclamation Project (SMDRP).
Amended and restated on 21 February 19943 and 11 August 1994,4 the JVA was aimed at implementing a two-phase conversion of
the Smokey Mountain Dumpsite "into a habitable housing project inclusive of the reclamation of the area across Radial Road 10 (R-
10)".5 By the terms of the JVA, R-II Builders, as developer, was entitled to own 79 hectares of reclaimed land and the 2.3 hectare
commercial area at the Smokey Mountain. As landowner/implementing agency, NHA, on the other hand, was entitled to own the
2,992 temporary housing units agreed to be built in the premises, the cleared and fenced incinerator site consisting of 5 hectares,
3,520 units of permanent housing to be awarded to qualified on site residents, the industrial area consisting of 3.2 hectares and the
open spaces, roads and facilities within the Smokey Mountain Area.6

On 26 September 1994, NHA and R-II Builders, alongside petitioner Housing Guaranty Corporation (HGC) as guarantor and the
Philippine National Bank (PNB) as trustee, entered into an Asset Pool Formation Trust Agreement which provided the mechanics for
the implementation of the project.7 To back the project, an Asset Pool was created composed of the following assets: (a) the 21.2
hectare Smokey Mountain Site in Tondo, Manila; (b) the 79-hectare Manila Bay foreshore property in the name of the NHA; (c) the
Smokey Mountain Project Participation Certificates (SMPPCs) to be issued, or their money proceeds; (d) disposable assets due to
R-II Builders and/or its proceeds as defined in the JVA; (e) the resulting values inputted by R-II Builders for pre-implementation
activities and some start-up works amounting to ₱300,000,000.00; (f) the 2,992 temporary housing facilities/units to be constructed
by R-II Builders; and, (g) all pertinent documents and records of the project.8

On the same date, the parties likewise executed a Contract of Guaranty whereby HGC, upon the call made by PNB and conditions
therein specified, undertook to redeem the regular SMPPCs upon maturity and to pay the simple interest thereon to the extent of
8.5% per annum.9 The foregoing agreements led to the securitization of the project through the issuance of 5,216 SMPPCs upon the
Asset Pool, with a par value of 1 Million each, classified and to be redeemed by the trustee or, in case of call on its guaranty, by
HGC, in the following order of priority:

a) Regular SMPPCs worth ₱2.519 Billion, issued for value to the general public at specified interests and maturity dates.
These were to be redeemed by the PNB which was obliged to exhaust all liquid assets of the Asset Pool before calling on
the HGC guarantee;
 b) Special SMPPCs worth ₱1.403 Billion, issued exclusively to the NHA for conveyance of the Smokey Mountain Site and
Manila Bay foreshore property to the Asset Pool, redeemable upon turnover of the developed project; and

c) Subordinated SMPPCs worth ₱1.294 Billion, issued exclusively to R-II Builders for its rights and interests in the JVA,
redeemable with the turnover of all residual values, assets and properties remaining in the Asset Pool after both the
Regular and Special SMPPCs are redeemed and all the obligations of the Asset Pool are settled. 10

Subsequent to R-II Builders' infusion of ₱300 Million into the project, the issuance of the SMPPCs and the termination of PNB’s
services on 29 January 2001, NHA, R-II Builders and HGC agreed on the institution of Planters Development Bank (PDB) as trustee
on 29 January 2001.11 By 24 October 2002, however, all the Regular SMPPCs issued had reached maturity and, unredeemed,
already amounted to an aggregate face value of ₱2.513 Billion. The lack of liquid assets with which to effect redemption of the
regular SMPPCs prompted PDB to make a call on HGC’s guaranty and to execute in the latter’s favor a Deed of Assignment and
Conveyance (DAC) of the entire Asset Pool, consisting of: (a) 105 parcels of land comprising the Smokey Mountain Site and the
Reclamation Area, with a total area of 539,471.47 square meters, and all the buildings and improvements thereon; (b) shares of
stock of Harbour Centre Port Terminal, Inc. (HCPTI); and, (c) other documents. 12

On 1 September 2005, R-II Builders filed the complaint against HGC and NHA which was docketed as Civil Case No. 05-113407
before Branch 24 of the Manila Regional Trial Court, a Special Commercial Court (SCC). Contending that HGC’s failure to redeem
the outstanding regular SMPPCs despite obtaining possession of the Asset Pool ballooned the stipulated interests and materially
prejudiced its stake on the residual values of the Asset Pool, R-II Builders alleged, among other matters, that the DAC should be
rescinded since PDB exceeded its authority in executing the same prior to HGC’s redemption and payment of the guaranteed
SMPPCs; that while the estimated value of Asset Pool amounted to ₱5,919,716,618.62 as of 30 June 2005, its total liabilities was
estimated at ₱2,796,019,890.41; and, that with the cessation of PDB’s functions as a trustee and HGC’s intention to use the Asset
Pool to settle its obligations to the Social Security System (SSS), it was best qualified to be appointed as new trustee in the event of
the resolution of the DAC. Assessed docket fees corresponding to an action incapable of pecuniary estimation, the complaint sought
the grant of the following reliefs: (a) a temporary restraining order/preliminary and permanent injunction, enjoining disposition/s of
the properties in the Asset Pool; (b) the resolution or, in the alternative, the nullification of the DAC; (c) R-II Builders' appointment as
trustee pursuant to Rule 98 of the Rules of Court; (d) HGC’s rendition of an accounting of the assets and the conveyance thereof in
favor of R-II Builders; and, (e) ₱500,000.00 in attorney’s fees.13

On 26 October 2005, Branch 24 of the Manila RTC issued the writ of preliminary injunction sought by R-II Builders which, upon the
challenge thereto interposed by HGC, was later affirmed by the CA in the 17 December 2007 decision rendered in CA-G.R. SP No.
98953.14 Having filed its answer to the complaint, in the meantime, HGC went on to move for the conduct of a preliminary hearing on
its affirmative defenses which included such grounds as lack of jurisdiction, improper venue and the then pendency before this Court
of G.R. No. 164537, entitled Francisco Chavez vs. National Housing Authority, et al., a case which challenged, among other
matters, the validity of the JVA and its subsequent amendments.15 On 2 August 2007, R-II Builders, in turn, filed a motion to
admit16 its Amended and Supplemental Complaint which deleted the prayer for resolution of the DAC initially prayed for in its original
complaint. In lieu thereof, said pleading introduced causes of action for conveyance of title to and/or possession of the entire Asset
Pool, for NHA to pay the Asset Pool the sum of ₱1,803,729,757.88 representing the cost of the changes and additional works on the
project and for an increased indemnity for attorney’s fees in the sum of ₱2,000,000.00. 17

Consistent with its joint order dated 2 January 2008 which held that R-II Builders’ complaint was an ordinary civil action and not an
intra-corporate controversy,18 Branch 24 of the Manila RTC issued a clarificatory order dated 1 February 2008 to the effect, among
other matters, that it did not have the authority to hear the case.19 As a consequence, the case was re-raffled to respondent Branch
22 of the Manila RTC (respondent RTC) which subsequently issued the 19 May 2008 order which, having determined that the case
is a real action, admitted the aforesaid Amended and Supplemental Complaint, subject to R-II Builders’ payment of the "correct and
appropriate" docket fees.20 On 15 August 2008, however, R-II Builders filed a motion to admit it Second Amended Complaint, on the
ground that its previous Amended and Supplemental Complaint had not yet been admitted in view of the non-payment of the correct
docket fees therefor.21 Said Second Amended Complaint notably resurrected R-II Builders’ cause of action for resolution of the DAC,
deleted its causes of action for accounting and conveyance of title to and/or possession of the entire Asset Pool, reduced the claim
for attorney’s fees to ₱500,000.00, sought its appointment as Receiver pursuant to Rule 59 of the Rules of Court and, after an
inventory in said capacity, prayed for approval of the liquidation and distribution of the Asset Pool in accordance with the parties’
agreements.22

On 2 September 2008, HGC filed its opposition to the admission of R-II Builders’ Second Amended Complaint on the ground that
respondent RTC had no jurisdiction to act on the case until payment of the correct docket fees and that said pleading was intended
for delay and introduced a new theory inconsistent with the original complaint and the Amended and Supplemental Complaint.
Claiming that R-II Builders had defied respondent court’s 19 May 2008 order by refusing to pay the correct docket fees, HGC
additionally moved for the dismissal of the case pursuant to Section 3, Rule 17 of the 1997 Rules of Civil Procedure. 23 On 24
November 2008, R-II Builders also filed an Urgent Ex-Parte Motion for Annotation of Lis Pendens on the titles of the properties in
the Asset Pool, on the ground that HGC had sold and/or was intending to dispose of portions thereof, in violation of the writ of
preliminary injunction issued in the premises.24 Finding that jurisdiction over the case was already acquired upon payment of the
docket fees for the original complaint and that the Second Amended Complaint was neither intended for delay nor inconsistent with
R-II Builders’ previous pleadings, respondent RTC issued its first assailed order dated 3 March 2009 which: (a) denied HGC’s
motion to dismiss; (b) granted R-II Builders’ motion to admit its Second Amended Complaint; and, (c) noted R-II Builders’ Urgent Ex-
Parte Motion for Annotation of Lis Pendens, to which the attention of the Manila Register of Deeds was additionally called. 25
Undaunted, HGC filed its 22 March 2009 motion for reconsideration of the foregoing order, arguing that: (a) the case is real action
and the docket fees paid by R-II Builders were grossly insufficient because the estimated value of properties in the Asset Pool
exceeds ₱5,000,000,000.00; (b) a complaint cannot be amended to confer jurisdiction when the court had none; (c) the RTC should
have simply denied the Urgent Ex-Parte Motion for Annotation of Lis Pendens instead of rendering an advisory opinion thereon. In
addition, HGC faulted R-II Builders with forum shopping, in view of its 10 September 2008 filing of the complaint docketed as Civil
Case No. 08-63416 before Branch 91 of the Quezon City RTC, involving a claim for receivables from the NHA.26 In turn, R-II
Builders opposed the foregoing motion27 and, on the theory that the Asset Pool was still in danger of dissipation, filed an urgent
motion to resolve its application for the appointment of a receiver and submitted its nominees for said position. 28

On 29 September 2009, respondent RTC issued its second assailed order which (a) denied HGC’s motion for reconsideration; (b)
granted R-II Builders’ application for appointment of receiver and, for said purpose: [i] appointed Atty. Danilo Concepcion as
Receiver and, [ii] directed R-II Builders to post a bond in the sum of ₱10,000,000.00.29Imputing grave abuse of discretion against the
RTC for not dismissing the case and for granting R-II Builders’ application for receivership, HGC filed the Rule 65 petition for
certiorari and prohibition docketed as CA-G.R. SP No. 111153 before the CA30 which, thru its Former Special Fifteenth Division,
rendered the herein assailed 21 January 2010 decision,31 upon the following findings and conclusions:

a) Irrespective of whether it is real or one incapable of pecuniary estimation, the action commenced by R-II Builders
indubitably falls squarely within the jurisdiction of respondent RTC;

b) From the allegations of R-II Builders’ original complaint and amended complaint the character of the relief primarily
sought, i.e., the declaration of nullity of the DAC, the action before respondent RTC is one where the subject matter is
incapable of pecuniary estimation;

c) R-II Builders need not pay any deficiency in the docket fees considering its withdrawal of its Amended and
Supplemental Complaint;

d) A receiver may be appointed without formal hearing, particularly when it is within the interest of both parties and does
not result in the delay of any government infrastructure projects or economic development efforts;

e) Respondent RTC’s act of calling the attention of the Manila Registrar of Deeds to R-II Builders’ Urgent Ex-Parte Motion
for Annotation of Lis Pendens is well-within its residual power to act on matters before it; and

f) The withdrawal of R-II Builders’ Amended and Supplemental Complaint discounted the forum shopping imputed against
it by HGC.32

HGC’s motion for reconsideration of the foregoing decision33 was denied for lack of merit in the CA’s resolution dated 21 June 2010,
hence, this petition.

The Issues

HGC urges the affirmative of the following issues in urging the grant of its petition, to wit:

"Did the Honorable Court of

Appeals Seriously Err When It
Failed to Rule That:

I. The Regional Trial Court a quo had no jurisdiction to proceed with the case considering that:

(1) the original court was without authority to hear the case and;

(2) despite an unequivocal order from the trial court a quo, Private Respondent (R-II Builders) failed and refused to pay
the correct and proper docket fees, whether it be for a real or personal action, based on the values of the properties or
claims subject of the complaints.

II. Since the Honorable Court of Appeals had characterized the case as a personal action, the action before the Regional Trial Court
a quo should have been dismissed for improper venue.

III. The order appointing a receiver was made with grave abuse of discretion as amounting to lack of jurisdiction for having been
issued under the following circumstances:

(1) It was made without a hearing and without any evidence of its necessity;
 (2) It was unduly harsh and totally unnecessary in view of other available remedies, especially considering that Petitioner
HGC is conclusively presumed to be solvent;

(3) It effectively prevented the performance of HGC’s functions in recovering upon its guaranty exposure and was in
contravention of Presidential Decree Nos. 385 and 1818, Republic Act No. 8927 and Supreme Court Circular Nos. 2-91,
13-93, 68-94 and Administrative Circular No. 11-00."34

Acting on HGC’s motion for resolution of its application for a temporary restraining order and/or preliminary injunction,35 the Court
issued the resolution dated 23 August 2010, enjoining the enforcement of respondent RTC’s assailed orders. 36

The Court’s Ruling

We find the petition impressed with merit.

Jurisdiction is defined as the authority to hear and determine a cause or the right to act in a case.37 In addition to being conferred by
the Constitution and the law,38 the rule is settled that a court’s jurisdiction over the subject matter is determined by the relevant
allegations in the complaint,39 the law in effect when the action is filed,40 and the character of the relief sought irrespective of
whether the plaintiff is entitled to all or some of the claims asserted. 41Consistent with Section 1, Rule 141 of the Revised Rules of
Court which provides that the prescribed fees shall be paid in full "upon the filing of the pleading or other application which initiates
an action or proceeding", the well-entrenched rule is to the effect that a court acquires jurisdiction over a case only upon the
payment of the prescribed filing and docket fees.42

The record shows that R-II Builders’ original complaint dated 23 August 2005 was initially docketed as Civil Case No. 05-113407
before Branch 24 of the Manila, a designated Special Commercial Court.43 With HGC’s filing of a motion for a preliminary hearing on
the affirmative defenses asserted in its answer44 and R-II Builders’ filing of its Amended and Supplemental Complaint dated 31 July
2007,45 said court issued an order dated 2 January 2008 ordering the re-raffle of the case upon the finding that the same is not an
intra-corporate dispute.46 In a clarificatory order dated 1 February 2008,47 the same court significantly took cognizance of its lack of
jurisdiction over the case in the following wise:

At the outset, it must be stated that this Court is a designated Special Commercial Court tasked to try and hear, among others, intra-
corporate controversies to the exclusion of ordinary civil cases.

When the case was initially assigned to this Court, it was classified as an intra-corporate case. However, in the ensuing proceedings
relative to the affirmative defences raised by defendants, even the plaintiff conceded that the case is not an intra-corporate
controversy or even if it is, this Court is without authority to hear the same as the parties are all housed in Quezon City.

Thus, the more prudent course to take was for this Court to declare that it does not have the authority to hear the complaint it being
an ordinary civil action. As to whether it is personal or civil, this Court would rather leave the resolution of the same to Branch 22 of
this Court. (Italics supplied).

We find that, having squarely raised the matter in its Rule 65 petition for certiorari and prohibition docketed as CA-G.R. SP No.
111153,48 HGC correctly faults the CA for not finding that Branch 24 of the Manila RTC had no authority to order the transfer of the
case to respondent RTC.49 Being outside the jurisdiction of Special Commercial Courts, the rule is settled that cases which are civil
in nature, like the one commenced by R-II Builders, should be threshed out in a regular court.50 With its acknowledged lack of
jurisdiction over the case, Branch 24 of the Manila RTC should have ordered the dismissal of the complaint, since a court without
subject matter jurisdiction cannot transfer the case to another court. 51 Instead, it should have simply ordered the dismissal of the
complaint, considering that the affirmative defenses for which HGC sought hearing included its lack of jurisdiction over the case.

Calleja v. Panday,52 while on facts the other way around, i.e., a branch of the RTC exercising jurisdiction over a subject matter within
the Special Commercial Court’s authority, dealt squarely with the issue:

Whether a branch of the Regional Trial Court which has no jurisdiction to try and decide a case has authority to remand the same to
another co-equal Court in order to cure the defects on venue and jurisdiction.

Calleja ruled on the issue, thus:

Such being the case, RTC Br. 58 did not have the requisite authority or power to order the transfer of the case to another branch of
the Regional Trial Court. The only action that RTC-Br. 58 could take on the matter was to dismiss the petition for lack of jurisdiction.

Certainly, the pronouncement of Br. 24, the Special Commercial Court, in its Joint Order of 2 January 2008 that the case is not an
intracorporate controversy, amplified in its Order of 1 February 2008 that it "does not have the authority to hear the complaint it
being an ordinary civil action" is incompatible with the directive for the re-raffle of the case and to "leave the resolution of the same
to Branch 22 of this Court." Such a directive is an exercise of authority over the case, which authority it had in the same breath
declared it did not have. What compounds the jurisdictional error is the fact that at the time of its surrender of jurisdiction, Br. 24 had
already acted on the case and had in fact, on 26 October 2005, issued the writ of preliminary injunction sought by herein respondent
R-II Builders. At that point, there was absolutely no reason which could justify a re-raffle of the case considering that the order that
was supposed to have caused the re-raffle was not an inhibition of the judge but a declaration of absence of jurisdiction. So faulty
was the order of re-raffle that it left the impression that its previously issued preliminary injunction remained effective since the case
from which it issued was not dismissed but merely transferred to another court. A re-raffle which causes a transfer of the case
involves courts with the same subject matterjurisdiction; it cannot involve courts which have different jurisdictions exclusive of the
other. More apt in this case, a re-raffle of a case cannot cure a jurisdictional defect.

Prescinding from the foregoing considerations, and to show that the proceedings below was error upon error, we find that the CA
also gravely erred in not ruling that respondent RTC’s (Branch 22, the regular court) jurisdiction over the case was curtailed by R-II
Builders’ failure to pay the correct docket fees. In other words, the jurisdictionally flawed transfer of the case from Branch 24, the
SCC to Branch 22, the regular court, is topped by another jurisdictional defect which is the non-payment of the correct docket fees.
In its order dated 19 May 2008 which admitted R-II Builders’ Amended and Supplemental Complaint, respondent RTC distinctly
ruled that the case was a real action and ordered the re-computation and payment of the correct docket fees.53 In patent
circumvention of said order, however, R-II Builders filed its 14 August 2008 motion to admit its Second Amended Complaint which
effectively deleted its causes of action for accounting and conveyance of title to and/or possession of the entire Asset Pool and, in
addition to reducing the claim for attorney’s fees and seeking its appointment as a receiver, reinstated its cause of action for
resolution of the DAC.54 Acting on said motion as well as the opposition and motion to dismiss interposed by HGC, 55 respondent
RTC ruled as follows in its assailed 3 March 2009 order,56 to wit:

1. The docket fees of the original complaint has been paid, thus, the Court already acquired jurisdiction over the instant
case. The admission of the Amended and Supplemental Complaint, is subject to the payment of docket fees pursuant to
the Order of this Court dated May 18, 2008. The non-payment of the docket fees stated in the Order dated May 18, 2008
will result only in the non-admission of the Amended and Supplemental Complaint, which means that the Original
Complaint remains. However, since the Amended and Supplemental Complaint is being withdrawn and in lieu thereof a
new Amended Complaint is sought to be admitted, there is no more need to pay the docket fees as provided for in the
said Order.

2. It is settled that once jurisdiction is acquired and vested in a Court, said Court maintains its jurisdiction until judgment is
had (Aruego, Jr., et al. vs. CA). Such acquired jurisdiction is not lost by the amendment of a pleading that raises
additional/new cause(s) of action. The jurisdiction of a Court is not even lost even if the additional docket fees are required
by reason of the amendment.

Indeed, the Supreme Court held in PNOC vs. Court of Appeals (G.R. No. 107518, October 8, 1998) that:

"Its failure to pay the docket fee corresponding to its increased claim for damages under the amended complaint should not be
considered as having curtailed the lower court’s jurisdiction. Pursuant to the ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion,
the unpaid docket fees should be considered as a lien on the judgment even though private respondent specified the amount of
₱600,000.00 as its claim for damages in its amended complaint.

Thus, even on the assumption that additional docket fees are required as a consequence of any amended complaint, its non-
payment will not result in the court’s loss of jurisdiction over the case.57

Distinctly, the principal reference remained to be the "original complaint," in which R-II Builders itself submitted that the case "is a
real action as it affects title and possession of real property or interest therein." It was precisely this submission which was the basis
of the conclusion of the SCC court, Br. 24 that the case is not an intra-corporate controversy and therefore is outside its authority.

We see from the assailed Order that the regular court accepted the case on the reason that "the docket fees of the original
complaint has been paid," so that, furthermore, the Amended and Supplemental Complaint may be admitted "subject to the payment
of docket fees." When the required fees were not paid, the court considered it as resulting in the non-admission of the Amended and
Supplemental Complaint such that "the original complaint remains." That remaining original complaint can then be amended by "a
new Amended Complaint" which is no longer subject to the conditions attached to the unadmitted Amended and Supplemental
Complaint.

The Order of 3 March 2009, with its logic and reason, is wholly unacceptable.

In upholding the foregoing order as well as its affirmance in respondent RTC’s 29 September 2009 order,58 the CA ruled that the
case – being one primarily instituted for the resolution/nullification of the DAC – involved an action incapable of pecuniary
estimation. While it is true, however, that R-II Builder's continuing stake in the Asset Pool is "with respect only to its residual value
after payment of all the regular SMPPCs holders and the Asset Pool creditors", 59 the CA failed to take into account the fact that R-II
Builders’ original complaint and Amended and Supplemental Complaint both interposed causes of action for conveyance and/or
recovery of possession of the entire Asset Pool. Indeed, in connection with its second cause of action for appointment as trustee in
its original complaint,60 R-II Builders distinctly sought the conveyance of the entire Asset Pool61 which it consistently estimated to be
valued at ₱5,919,716,618.62 as of 30 June 2005.62 In its opposition to HGC’s motion to dismiss, R-II Builders even admitted that the
case is a real action as it affects title to or possession of real property or an interest therein.63With R-II Builders' incorporation of a
cause of action for conveyance of title to and/or possession of the entire Asset Pool in its Amended and Supplemental
Complaint,64 on the other hand, no less than respondent RTC, in its 19 May 2008 order, directed the assessment and payment of
docket fees corresponding to a real action.

Admittedly, this Court has repeatedly laid down the test in ascertaining whether the subject matter of an action is incapable of
pecuniary estimation by determining the nature of the principal action or remedy sought. While a claim is, on the one hand,
considered capable of pecuniary estimation if the action is primarily for recovery of a sum of money, the action is considered
incapable of pecuniary estimation where the basic issue is something other than the right to recover a sum of money, the money
claim being only incidental to or merely a consequence of, the principal relief sought. 65 To our mind, the application of foregoing test
does not, however, preclude the further classification of actions into personal actions and real action, for which appropriate docket
fees are prescribed. In contrast to personal actions where the plaintiff seeks the recovery of personal property, the enforcement of a
contract, or the recovery of damages, real actions are those which affect title to or possession of real property, or interest
therein.66While personal actions should be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where
the defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be found, at the
election of the plaintiff,67 the venue for real actions is the court of the place where the real property is located. 68

Although an action for resolution and/or the nullification of a contract, like an action for specific performance, fall squarely into the
category of actions where the subject matter is considered incapable of pecuniary estimation,69 we find that the causes of action for
resolution and/or nullification of the DAC was erroneously isolated by the CA from the other causes of action alleged in R-II Builders'
original complaint and Amended and Supplemental Complaint which prayed for the conveyance and/or transfer of possession of the
Asset Pool. In Gochan v. Gochan,70 this Court held that an action for specific performance would still be considered a real action
where it seeks the conveyance or transfer of real property, or ultimately, the execution of deeds of conveyance of real property.
More to the point is the case of Ruby Shelter Builders and Realty Development Corporation v. Hon. Pablo C. Formaran III 71 where,
despite the annulment of contracts sought in the complaint, this Court upheld the directive to pay additional docket fees
corresponding to a real action in the following wise, to wit:

x x x [I]n Siapno v. Manalo, the Court disregarded the title/denomination of therein plaintiff Manalo's amended petition as one
for Mandamus with Revocation of Title and Damages; and adjudged the same to be a real action, the filing fees for which should
have been computed based on the assessed value of the subject property or, if there was none, the estimated value thereof. The
Court expounded in Siapno that:

In his amended petition, respondent Manalo prayed that NTA's sale of the property in dispute to Standford East Realty Corporation
and the title issued to the latter on the basis thereof, be declared null and void. In a very real sense, albeit the amended petition is
styled as one for "Mandamus with Revocation of Title and Damages", it is, at bottom, a suit to recover from Standford the realty in
question and to vest in respondent the ownership and possession thereof. In short, the amended petition is in reality an action
in res or a real action. Our pronouncement in Fortune Motors (Phils.), Inc. vs. Court of Appeals is instructive. There, we said:

A prayer for annulment or rescission of contract does not operate to efface the true objectives and nature of the action which is to
recover real property. (Inton, et al., v. Quintan, 81 Phil. 97, 1948)

An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a private sale of real
property. (Muñoz v. Llamas, 87 Phil. 737, 1950).

While it is true that petitioner does not directly seek the recovery of title or possession of the property in question, his action for
annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which, under the law,
is considered immovable property, the recovery of which is petitioner's primary objective. The prevalent doctrine is that an action for
the annulment or rescission of a sale of real property does not operate to efface the fundamental and prime objective and nature of
the case, which is to recover said real property. It is a real action. 72

Granted that R-II Builders is not claiming ownership of the Asset Pool because its continuing stake is, in the first place, limited only
to the residual value thereof, the conveyance and/or transfer of possession of the same properties sought in the original complaint
and Amended and Supplemental Complaint both presuppose a real action for which appropriate docket fees computed on the basis
of the assessed or estimated value of said properties should have been assessed and paid. In support of its original complaint’s
second cause of action for appointment as trustee and conveyance of the properties in the Asset Pool, R-II Builders distinctly
alleged as follows:

5.12. As the Court-appointed Trustee, R-II Builders shall have and exercise the same powers, rights and duties as if [it]
had been originally appointed, having the principal duty of redeeming and buying back the Regular SMPPC’s and
thereafter liquidating the Asset Pool, which are also the end goals of the Agreement.

5.12.1. R-II Builders, as the Trustee, shall have the power and right to invest, transfer, convey or assign any of the assets
of the Asset Pool, whether funds, receivables, real or personal property, in exchange for shares of stocks, bonds,
 securities, real or personal properties of any kind, class or nature, provided that any such investment, transfer,
conveyance or assignment shall not impair the value of the Asset Pool.

5.12.2. R-II Builders, as the Trustee, shall have the power and right to sell, change, assign or otherwise dispose of any
stocks, bonds, securities, real or personal properties or other assets constituting the Asset Pool.

5.12. 3. R-II Builders, as the Trustee, shall have the power and right to enter into lease agreements as lessor or any other
related contract for the benefit of the Asset Pool; and

5.12.4. It is understood that the aforecited powers and rights of R-II Builders as the court-appointed Trustee, are non-
exclusive; and is deemed to include all the rights and powers necessary and incidental to achieve the goals and
objectives of the Agreement.73

From the foregoing allegations in its original complaint, it cannot be gainsaid that R-II Builders was unquestionably seeking
possession and control of the properties in the Asset Pool which predominantly consisted of real properties. Having admitted that
"the case is a real action as it affects title to or possession of real property or (an) interest therein",74 R-II Builders emphasized the
real nature of its action by seeking the grant of the following main reliefs in the Amended and Supplemental Complaint it
subsequently filed, to wit:

5. After trial on the merits, render judgment:

(i) Declaring the annulment of the Deed of Assignment and conveyance executed by PDB in favor of HGC; or in the
alternative, declaring the nullity of the said instrument;

(ii) Appointing R-II Builders as the Trustee of the Asset Pool Properties, with powers and responsibilities including but not
limited to those stated in 5.12.1, 5.12.2, 5.12.3 and 5.12.4 herein and those spelled out in the Re-Stated Smokey
Mountain Asset Pool Formation Trust Agreement;

(iii) Ordering HGC to render an accounting of all properties of the Asset Pool transferred thereto under the Deed of
Assignment and Conveyance and thereafter convey title to and/or possession of the entire Asset Pool to R-II Builders as
the Trustee thereof which assets consist of, but is not limited to the following:

(a) 105 parcels of land comprising the Smokey Mountain Site, and, the Reclamation Area, consisting of the
539,471.47 square meters, and all the buildings and improvements thereon, with their corresponding certificates
of title;

(b) shares of stock of Harbour Center Port Terminal, Inc. which are presently registered in the books of the said
company in the name of PDB for the account of the Smokey Mountain Asset Pool; and

(c) other documents as listed in Annex E of the Contract of Guaranty.

(iv) Ordering NHA to pay the Asset Pool the amount of Php1,803,729,757.88 including the direct and indirect cost thereon
as may be found by this Honorable Court to be due thereon;

(v) Making the injunction permanent;

(vi) Ordering HGC and the NHA to pay Attorney’s fees in the amount of ₱2,000,000 and the costs of suit.75

For failure of R-II Builders to pay the correct docket fees for its original complaint or, for that matter, its Amended and Supplemental
Complaint as directed in respondent RTC's 19 May 2008 order, it stands to reason that jurisdiction over the case had yet to properly
attach. Applying the rule that "a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in
court" in the landmark case of Manchester Development Corporation v. Court of Appeals, 76 this Court ruled that jurisdiction over any
case is acquired only upon the payment of the prescribed docket fee which is both mandatory and jurisdictional. To temper said
ruling, the Court subsequently issued the following guidelines in Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion, 77viz.:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee,
that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory
pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable
time but in no case beyond the applicable prescriptive or reglementary period.
 2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be
considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee
within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the
prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same
has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall
be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the
additional fee.

True to the foregoing guidelines, respondent RTC admitted R-II Builder’s Amended and Supplemental Complaint and directed the
assessment and payment of the appropriate docket fees in the order dated 19 May 2008. Rather than complying with said directive,
however, R-II Builders manifested its intent to evade payment of the correct docket fees by withdrawing its Amended and
Supplemental Complaint and, in lieu thereof, filed its Second Amended Complaint which deleted its cause of action for accounting
and conveyance of title to and/or possession of the entire Asset Pool, reduced its claim for attorney’s fees, sought its appointment
as Receiver and prayed for the liquidation and distribution of the Asset Pool. 78 In upholding the admission of said Second Amended
Complaint in respondent RTC’s assailed 3 March 2009 Order, however, the CA clearly lost sight of the fact that a real action was
ensconced in R-II Builders’ original complaint and that the proper docket fees had yet to be paid in the premises. Despite the latter’s
withdrawal of its Amended and Supplemental Complaint, it cannot, therefore, be gainsaid that respondent RTC had yet to acquire
jurisdiction over the case for non-payment of the correct docket fees.

In the 15 February 2011 Resolution issued in the case of David Lu v. Paterno Lu Ym, Sr., 79 this Court, sitting En Banc, had occasion
to rule that an action for declaration of nullity of share issue, receivership and corporate dissolution is one where the value of the
subject matter is incapable of pecuniary estimation. Subsequent to the trial court's rendition of a decision on the merits declared to
be immediately executory and the CA's denial of their application for a writ of preliminary injunction and/or temporary restraining
order to enjoin enforcement of said decision, the defendants questioned the sufficiency of the docket fees paid a quo which
supposedly failed take into consideration the value of the shares as well as the real properties involved for which the plaintiff
additionally caused notices of lis pendens to be annotated. Finding that defendants were already estopped in questioning the
jurisdiction of the trial court on the ground of non-payment of the correct docket fees, the Court discounted intent to defraud the
government on the part of the plaintiff who can, at any rate, be required to pay the deficiency which may be considered a lien on the
judgment that may be rendered, without automatic loss of the jurisdiction already acquired, in the first instance, by the trial
court.1avvphi1

The factual and legal milieus of the case at bench could not, however, be more different. While R-II Builders styled its original
complaint and Amended and Supplemental Complaint as one primarily for the resolution and/or declaration of the DAC, it
simultaneously and unmistakably prayed for the conveyance, possession and control of the Asset Pool. Alongside the fact that HGC
has consistently questioned the sufficiency of the docket fees paid by R-II Builders, estoppel cannot be said to have set in since, the
lapse of more than five years from the commencement of the complaint notwithstanding, it appears that the case has yet to be tried
on the merits. Having admitted that its original complaint partook the nature of a real action and having been directed to pay the
correct docket fees for its Amended and Supplemental Complaint, R-II Builders is, furthermore, clearly chargeable with knowledge
of the insufficiency of the docket fees it paid. Unmistakably manifesting its intent to evade payment of the correct docket fees,
moreover, R-II Builders withdrew its Amended and Supplemental Complaint after its admission and, in lieu thereof, filed its’ Second
Amended Complaint on the ground that said earlier pleading cannot be considered admitted in view of its non-payment of the docket
and other fees it was directed to pay. In so doing, however, R-II Builders conveniently overlooked the fact that the very same
argument could very well apply to its original complaint for which – given its admitted nature as a real action - the correct docket
fees have also yet to be paid.

The importance of filing fees cannot be over-emphasized for they are intended to take care of court expenses in the handling of
cases in terms of costs of supplies, use of equipment, salaries and fringe benefits of personnel, and others, computed as to man-
hours used in the handling of each case. The payment of said fees, therefore, cannot be made dependent on the result of the action
taken without entailing tremendous losses to the government and to the judiciary in particular. 80 For non-payment of the correct
docket fees which, for real actions, should be computed on the basis of the assessed value of the property, or if there is none, the
estimated value thereof as alleged by the claimant,81 respondent RTC should have denied admission of R-II Builders’ Second
Amended Complaint and ordered the dismissal of the case. Although a catena of decisions rendered by this Court eschewed the
application of the doctrine laid down in the Manchester case, 82 said decisions had been consistently premised on the willingness of
the party to pay the correct docket fees and/or absence of intention to evade payment of the correct docket fees. This cannot be
said of R-II Builders which not only failed to pay the correct docket fees for its original complaint and Amended and Supplemental
Complaint but also clearly evaded payment of the same by filing its Second Amended Complaint.

By itself, the propriety of admitting R-II Builders’ Second Amended Complaint is also cast in dubious light when viewed through the
prism of the general prohibition against amendments intended to confer jurisdiction where none has been acquired yet. Although the
policy in this jurisdiction is to the effect that amendments to pleadings are favored and liberally allowed in the interest of justice,
amendment is not allowed where the court has no jurisdiction over the original complaint and the purpose of the amendment is to
confer jurisdiction upon the court.83 Hence, with jurisdiction over the case yet to properly attach, HGC correctly fault the CA for
upholding respondent RTC’s admission of R-II Builders’ Second Amended Complaint despite non-payment of the docket fees for its
original complaint and Amended and Supplemental Complaint as well as the clear intent to evade payment thereof.
With the determination of the jurisdictional necessity of the dismissal of the complaint of R-II Builders docketed as Civil Case No. 05-
113407, first before Br. 24 and later before Br. 22 both of the RTC of Manila, we no longer find any reason to go into a discussion of
the remaining issues HGC proffers for resolution. In view, particularly, of its non-acquisition of jurisdiction over the case, respondent
RTC clearly had no authority to grant the receivership sought by R-II Builders. It needs pointing out though that the prayer for
receivership clearly indicates that the R-II Builders sought the transfer of possession of property consisting of the assets of the JVA
from HGC to the former’s named Receiver. As already noted, said transfer of possession was sought by respondent R-II Builders
since the very start, overtly at the first two attempts, covertly in the last, the successive amendments betraying the deft
maneuverings to evade payment of the correct docket fees.

WHEREFORE, premises considered, the assailed Decision dated 21 January 2010 is REVERSED and SET ASIDE. In lieu thereof,
another is entered NULLIFYING the regular court’s, RTC Branch 22’s Orders dated 3 March 2009 and 29 September 2009 as well
as the SCC’s, RTC Branch 24’s Order dated 26 October 2005 which was rendered void by the SCC’s subsequent declaration of
absence of authority over the case. The complaint of R-II Builders docketed as Civil Case No. 05-113407 first before Br. 24 and
thereafter before Br. 22 both of the RTC of Manila is hereby DISMISSED.

SO ORDERED.

G.R. Nos. 175277 & 175285 September 11, 2013

UNICAPITAL, INC., UNICAPITAL REALTY, INC., and JAIME J. MARTINEZ, Petitioners,

vs.
RAFAEL JOSE CONSING, JR., and THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF PASIG CITY, BRANCH
168, Respondents.

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

G.R. No. 192073

RAFAEL JOSE CONSING, JR., Petitioner,

vs.
HON. MARISSA MACARAIG-GUILLEN, in her capacity as the Presiding Judge of the Regional Trial Court of Makati City,
Branch 60 and UNICAPITAL, INC., Respondents.

DECISION

PERLAS-BERNABE, J.:

Before the Court are consolidated petitions for review on certiorari1 assailing separate issuances of the Court of Appeals (CA) as
follows:

(a) The petitions in G.R. Nos. 175277 and 175285 filed by Unicapital, Inc., (Unicapital), Unicapital Realty, Inc. (URI), and
Unicapital Director and Treasurer Jaime J. Martirez (Martirez)assail the CA’s Joint Decision 2 dated October 20, 2005 and
Resolution3 dated October 25, 2006 in CA-G.R. SP Nos. 64019and 64451 which affirmed the Resolution4 dated
September 14,1999 and Order5 dated February 15, 2001 of the Regional Trial Court (RTC) of Pasig City, Branch 68
(RTC-Pasig City) in SCA No. 1759, upholding the denial of their motion to dismiss; and

(b) The petition in G.R. No. 192073 filed by Rafael Jose Consing, Jr. (Consing, Jr.) assails the CA’s Decision 6dated
September 30, 2009 and Resolution7 dated April 28, 2010 inCA-G.R. SP No. 101355 which affirmed the Orders dated
July16, 20078 and September 4, 20079 of the RTC of Makati City, Branch 60 (RTC-Makati City) in Civil Case No. 99-
1418,upholding the denial of his motion for consolidation.

The Facts

In 1997, Consing, Jr., an investment banker, and his mother, Cecilia Dela Cruz (Dela Cruz), obtained an ₱18,000,000.00 loan from
Unicapital,₱12,000,000.00 of which was acquired on July 24, 1997 and the remaining₱6,000,000.00 on August 1, 1997. The said
loan was secured by Promissory Notes10 and a Real Estate Mortgage11 over a 42,443 square meter-parcel of land located at Imus,
Cavite, registered in the name of Dela Cruz as per Transfer Certificate of Title (TCT) No. T-687599 (subject property).12 Prior to
these transactions, Plus Builders, Inc. (PBI), a real estate company, was already interested to develop the subject property into a
residential subdivision.13 In this regard, PBI entered into a joint venture agreement with Unicapital, through its real estate
development arm, URI. In view of the foregoing, the loan and mortgage over the subject property was later on modified into an
Option to Buy Real Property14 and, after further negotiations, Dela Cruz decided to sell the same to Unicapital and PBI. For this
purpose, Dela Cruz appointed Consing, Jr. as her attorney-in-fact.15
Eventually, Unicapital, through URI, purchased one-half of the subject property for a consideration of ₱21,221,500.00 (against which
Dela Cruz’s outstanding loan obligations were first offset), while PBI bought the remaining half for the price of ₱21,047,000.00.16 In
this relation, Dela Cruz caused TCT No. T-687599 to be divided into three separate titles as follows: (a) TCT No. T-851861 for
URI;17 (b) TCT No. T-851862 for PBI;18 and (c)TCT No. T-51863 which was designated as a road lot.19 However, even before URI
and PBI were able to have the titles transferred to their names, Juanito Tan Teng (Teng) and Po Willie Yu (Yu) informed Unicapital
that they are the lawful owners of the subject property as evidenced by TCT No.T-114708;20 that they did not sell the subject
property; and that Dela Cruz’s title, i.e., TCT No. T-687599, thereto was a mere forgery.21 Prompted by Teng and Yu’s assertions,
PBI conducted further investigations on the subject property which later revealed that Dela Cruz's title was actually of dubious origin.
Based on this finding, PBI and Unicapital sent separate demand letters22 to Dela Cruz and Consing, Jr., seeking the return of the
purchase price they had paid for the subject property.

From the above-stated incidents stemmed the present controversies as detailed hereunder.

The Proceedings Antecedent to G.R. Nos. 175277 & 175285

On May 3, 1999, Consing, Jr. filed a complaint, denominated as a Complex Action for Declaratory Relief 23 and later amended to
Complex Action for Injunctive Relief24 (Consing, Jr.’s complaint) before the RTC-Pasig City against Unicapital, URI, PBI, Martirez,
PBI General Manager Mariano Martinez (Martinez), Dela Cruz and Does 1-20, docketed as SCA No. 1759. In his complaint,
Consing, Jr. claimed that the incessant demands/recovery efforts made upon him by Unicapital and PBI to return to them the
purchase price they had paid for the subject property constituted harassment and oppression which severely affected his personal
and professional life.25 He also averred that he was coerced to commit a violation of Batas Pambansa Blg. 22 26 as Unicapital and
PBI, over threats of filing acase against him, kept on forcing him to issue a post-dated check in the amount sought to be recovered,
notwithstanding their knowledge that he had no funds for the same. 27 He further alleged that Unicapital and URI required him to sign
blank deeds of sale and transfers without cancelling the old one sin violation of the laws on land registration and real estate
development.28 Likewise, Consing, Jr. added that Unicapital and PBI’s representatives were" speaking of him in a manner that was
inappropriate and libelous,"29 and that some John Does "deliberately engaged in a fraudulent scheme to compromise Consing, Jr.’s
honor, integrity and fortune x x x consisting of falsifying or causing to be falsified, or attempting to present as falsified certain
transfers of Land Titles and Deeds for profit,"30 classifying the foregoing as ultra vires acts which should warrant sanctions under the
corporation law, Revised Securities Act and related laws.31 Accordingly, Consing, Jr. prayed that: (a) he be declared as a mere
agent of Dela Cruz, and as such, devoid of any obligation to Unicapital, URI, and PBI for the transactions entered into concerning
the subject property; (b) Unicapital, URI, and PBI be enjoined from harassing or coercing him, and from speaking about him in a
derogatory fashion; and (c) Unicapital, URI, and PBI pay him actual and consequential damages in the amount of ₱2,000,000.00,
moral damages of at least ₱1,000,000.00, exemplary damages of ₱1,000,000.00, all per month, reckoned from May 1, 1999 and
until the controversy is resolved, and attorney's fees and costs of suit.32

For their part, Unicapital, URI, and Martirez (Unicapital, et al.) filed separate Motions to Dismiss 33 Consing, Jr.’s complaint
(Unicapital, et al.’s motion to dismiss) on the ground of failure to state a cause of action, considering that: (a) no document was
attached against which Consing, Jr. supposedly derived his right and against which his rights may be as certained; (b) the demands
to pay against Consing, Jr. and for him to tender post-dated checks to cover the amount due were well within the rights of Unicapital
as an unpaid creditor, as Consing, Jr. had already admitted his dealings with them; (c) the utterances purportedly constituting libel
were not set out in the complaint; and (d) the laws supposedly violated were not properly identified. Moreover, Unicapital, et al.
posited that the RTC-PasigCity did not acquire jurisdiction over the case given that Consing, Jr. failed to pay the proper amount of
docket fees. In the same vein, they maintained that the RTC-Pasig City had no jurisdiction over their supposed violations of the
Corporation Code and Revised Securities Act, which, discounting its merits, should have been supposedly lodged with the
Securities and Exchange Commission. Finally, they pointed out that Consing, Jr.’s complaint suffers from a defective verification
and, thus, dismissible.34

Similar to Unicapital et al.’s course of action, PBI and its General Manager, Martinez (Unicapital and PBI, et al.), sought the
dismissal of Consing, Jr.’s complaint on the ground that it does not state a cause of action. They also denied having singled out
Consing, Jr. because their collection efforts were directed at both Consing, Jr. and Dela Cruz, which should be deemed as valid
and, therefore, should not be restrained.35

On September 14, 1999, the RTC-Pasig City issued a Resolution36 denying the above mentioned motions to dismiss, holding that
Consing, Jr.’s complaint sufficiently stated a cause of action for tort and damages pursuant to Article 19 of the Civil Code. It ruled
that where there is abusive behavior, a complainant, like Consing, Jr., has the right to seek refuge from the courts. It also noted that
the elements of libel in a criminal case are not the same as those for a civil action founded on the provisions of the Civil Code, and
therefore, necessitates a different treatment. It equally refused to dismiss the action on the ground of non-payment of docket fees,
despite Consing, Jr.’s escalated claims for damages therein, as jurisdiction was already vested in it upon the filing of the original
complaint. Moreover, it resolved to apply the liberal construction rule as regards the subject complaint’s verification and certification,
despite its improper wording, considering further that such defect was not raised at the first opportunity. Consequently, it ordered
Unicapital and PBI, et al. to file their Answer and, in addition, to submit" any Comment or Reaction within five (5) days from receipt
hereof on the allegations of Consing, Jr. in his rejoinder of September 9, 1999regarding the supposed filing of an identical case in
Makati City,"37 i.e., Civil Case No. 99-1418. Unperturbed, Unicapital and PBI, et al. moved for reconsideration therefrom which was,
however, denied by the RTC-Pasig City in an Order38 dated February 15, 2001 for lack of merit. Aggrieved, they elevated the denial
of their motions to dismiss before the CA via a petition for certiorari and prohibition,39 docketed as CA-G.R. SP Nos. 64019 and
64451.
On October 20, 2005, the CA rendered a Joint Decision40 holding that no grave abuse of discretion was committed by the RTC-
Pasig City in refusing to dismiss Consing, Jr.'s complaint.1âwphi1 At the outset, it ruled that while the payment of the prescribed
docket fee is a jurisdictional requirement, its non-payment will not automatically cause the dismissal of the case. In this regard, it
considered that should there be any deficiency in the payment of such fees, the same shall constitute a lien on the judgment
award.41 It also refused to dismiss the complaint for lack of proper verification upon a finding that the copy of the amended complaint
submitted to the RTC-Pasig City was properly notarized.42 Moreover, it upheld the order of the RTC-Pasig City for Unicapital and
PBI, et al. to submit their comment due to the alleged existence of a similar case filed before the RTC-Makati City.43

Anent the substantive issues of the case, the CA concurred with the RTC-Pasig City that Consing Jr.'s complaint states a cause of
action. It found that Unicapital and PBI, et al.’s purportedly abusive manner in enforcing their claims against Consing, Jr. was
properly constitutive of a cause of action as the same, if sufficiently proven, would have subjected him to "defamation of his name in
business circles, the threats and coercion against him to reimburse the purchase price, fraud and falsification and breach of fiduciary
obligation." It also found that the fact that Consing Jr.'s complaint contains "nebulous" allegations will not warrant its dismissal as
any vagueness therein can be clarified through a motion for a bill of particulars." 44 Furthermore, it noted that Consing, Jr. does not
seek to recover his claims against any particular provision of the corporation code or the securities act but against the actions of
Unicapital and PBI, et al.; hence, Consing, Jr.’s complaint was principally one for damages over which the RTC has jurisdiction, and,
in turn, there lies no misjoinder of causes of action.45

Dissatisfied, only Unicapital, et al. sought reconsideration therefrom but the same was denied by the CA in a Resolution46 dated
October 25,2006. Hence, the present petitions for review on certiorari in G.R. Nos.175277 and 175285.

The Proceedings Antecedent to G.R. No. 192073

On the other hand, on August 4, 1999, Unicapital filed a complaint 47 for sum of money with damages against Consing, Jr. and Dela
Cruz before the RTC-Makati City, docketed as Civil Case No. 99-1418, seeking to recover (a) the amount of ₱42,195,397.16,
representing the value of their indebtedness based on the Promissory Notes (subject promissory notes) plus interests; (b)
₱5,000,000.00 as exemplary damages; (c) attorney's fees; and (d) costs of suit. 48

PBI also filed a complaint for damages and attachment against Consing, Jr. and Dela Cruz before the RTC of Manila, Branch 12,
docketed as Civil Case No. 99-95381, also predicated on the same set of facts as above narrated. 49 In its complaint, PBI prayed that
it be allowed to recover the following: (a) ₱13,369,641.79, representing the total amount of installment payments made as actual
damages plus interests; (b) ₱200,000.00 as exemplary damages; (c) ₱200,000.00 as moral damages; (d) attorney's fees; and (e)
costs of suit.50 Civil Case No. 99-95381 was subsequently consolidated with SCA No. 1759 pending before the RTC-Pasig City.51

For his part, Consing, Jr. filed a Motion to Dismiss Civil Case No. 99-1418 which was, however, denied by the RTC-Makati City in an
Order52 dated November 16, 1999. Thereafter, he filed a Motion for Consolidation53 (motion for consolidation) of Civil Case No. 99-
1418 with his own initiated SCA No. 1759 pending before the RTC-Pasig City.

In an Order54 dated July 16, 2007, the RTC-Makati City dismissed Consing, Jr.’s motion for consolidation and, in so doing, ruled that
the cases sought to be consolidated had no identity of rights or causes of action and the reliefs sought for by Consing, Jr. from the
RTC-Pasig City will not bar Unicapital from pursuing its money claims against him. Moreover, the RTC-Makati City noted that
Consing, Jr. filed his motion only as an after thought as it was made after the mediation proceedings between him and Unicapital
failed. Consing, Jr.'s motion for reconsideration therefrom was denied in an Order55 dated September 4, 2007. Hence, he filed a
petition for certiorari before the CA, docketed as CA-G.R. SP No. 101355, ascribing grave abuse of discretion on the part of the
RTC-Makati City in refusing to consolidate Civil Case No. 99-1418 with SCA No. 1759 in Pasig City.

On September 30, 2009, the CA rendered a Decision56 sustaining the Orders dated July 16, 2007 and September 4, 2007 of the
RTC-Makati City which denied Consing, Jr.’s motion for consolidation. It held that consolidation is a matter of sound discretion on
the part of the trial court which could be gleaned from the use of the word "may" in Section 1, Rule38 of the Rules of Court.
Considering that preliminary steps (such as mediation) have already been undertaken by the parties in Civil Case No.99-1418
pending before the RTC-Makati City, its consolidation with SCA No. 1759 pending before the RTC-Pasig City "would merely result in
complications in the work of the latter court or squander the resources or remedies already utilized in the Makati case." 57 Moreover,
it noted that the records of the consolidated Pasig and Manila cases, i.e., SCA No. 1759 and Civil Case No. 99-95381, respectively,
had already been elevated to the Court, that joint proceedings have been conducted in those cases and that the pre-trial therein had
been terminated as early as October 23, 2007.Therefore, due to these reasons, the consolidation prayed for would be impracticable
and would only cause a procedural faux pas. Undaunted, Consing, Jr. filed a motion for reconsideration therefrom but was denied
by the CA in a Resolution58 dated April 28, 2010. Hence, the present petition for review on certiorari in G.R. No. 192073.

The Proceedings Before the Court

After the filing of the foregoing cases, the parties were required to file their respective comments and replies. Further, considering
that G.R. No.192073 (Makati case) involves the same parties and set of facts with those in G.R. Nos. 175277 & 175285 (Pasig
case), these cases were ordered consolidated per the Court's Resolution59 dated November 17, 2010. On March 9, 2011, the Court
resolved to give due course to the instant petitions and required the parties to submit their respective memoranda.60
 The Issues Before the Court

The essential issues in these cases are as follows: (a) in G.R. Nos.175277 and 175285, whether or not the CA erred in upholding
the RTC-Pasig City’s denial of Unicapital, et al.’s motion to dismiss; and (b) in G.R. No. 192073, whether or not the CA erred in
upholding the RTC-Makati City’s denial of Consing, Jr.’s motion for consolidation.

The Court’s Ruling

A. Propriety of the denial of

Unicapital, et al.’s motion to
dismiss and ancillary issues.

A cause of action is defined as the act or omission by which a party violates a right of another. 61 It is well-settled that the existence
of a cause of action is determined by the allegations in the complaint.62 In this relation, a complaint is said to sufficiently assert a
cause of action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed
for.63 Thus, if the allegations furnish adequate basis by which the complaint can be maintained, then the same should not be
dismissed, regardless of the defenses that may be averred by the defendants. 64 As edified in the case of Pioneer Concrete
Philippines, Inc. v. Todaro,65 citing Hongkong and Shanghai Banking Corporation, Limited. v. Catalan66 (HSBC):

The elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief
demanded. Stated otherwise, may the court render a valid judgment upon the facts alleged therein? The inquiry is into the
sufficiency, not the veracity of the material allegations. If the allegations in the complaint furnish sufficient basis on which it can be
maintained, it should not be dismissed regardless of the defense that may be presented by the defendants. 67 (Emphasis supplied)

Stated otherwise, the resolution on this matter should stem from an analysis on whether or not the complaint is able to convey a
cause of action; and not that the complainant has no cause of action. Lest it be misunderstood, failure to state a cause of action is
properly a ground for a motion to dismiss under Section 1(g), Rule 1668 of the Rules of Court(Rules), while the latter is not a ground
for dismissal under the same rule.

In this case, the Court finds that Consing, Jr.’s complaint in SCA No.1759 properly states a cause of action since the allegations
there insufficiently bear out a case for damages under Articles 19 and 26 of the Civil Code.

Records disclose that Consing, Jr.’s complaint contains allegations which aim to demonstrate the abusive manner in which
Unicapital and PBI, et al. enforced their demands against him. Among others, the complaint states that Consing, Jr. "has constantly
been harassed and bothered by Unicapital and PBI, et al.; x x x besieged by phone calls from them; x x x has had constant
meetings with them variously, and on a continuing basis, such that he is unable to attend to his work as an investment banker."69 In
the same pleading, he also alleged that Unicapital and PBI, et al.’s act of "demanding a postdated check knowing fully well that he
does not have the necessary funds to cover the same, nor is he expecting to have them is equivalent to asking him to commit a
crime under unlawful coercive force."70 Accordingly, these specific allegations, if hypothetically admitted, may result into the
recovery of damages pursuant to Article 19 of the Civil Code which states that "every person must, in the exercise of his rights and
in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith." As explained in the
HSBC case:

When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must beheld responsible. But a right, though by itself legal
because it is recognized or granted by law as such, may nevertheless become the source of some illegality. A person should be
protected only when he acts in the legitimate exercise of his right, that is, when he acts with prudence and in good faith; but not
when he acts with negligence or abuse. There is an abuse of right when it is exercised for the only purpose of prejudicing or injuring
another. The exercise of a right must be in accordance with the purpose for which it was established, and must not be excessive or
unduly harsh; there must be no intention to injure another.71 (Emphasis supplied)

Likewise, Consing, Jr.’s complaint states a cause of action for damages under Article 26 of the Civil Code which provides that:

Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The
following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages,
prevention and other relief:

(1) Prying into the privacy of another's residence;

(2) Meddling with or disturbing the private life or family relations of another;

(3) Intriguing to cause another to be alienated from his friends;

 (4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical defect, or
other personal condition.

The rationale therefor was explained in the case of Manaloto v. Veloso III, 72 citing Concepcion v. CA,73 to wit:

The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law. The Code Commission stressed in no
uncertain terms that the human personality must be exalted. The sacredness of human personality is a concomitant consideration of
every plan for human amelioration. The touchstone of every system of law, of the culture and civilization of every country, is how far
it dignifies man. If the statutes insufficiently protect a person from being unjustly humiliated, in short, if human personality is not
exalted - then the laws are indeed defective. Thus, under this article, the rights of persons are amply protected, and damages are
provided for violations of a person's dignity, personality, privacy and peace of mind.74

To add, a violation of Article 26 of the Civil Code may also lead to the payment of moral damages under Article 2219(10) 75 of the
Civil Code.

Records reveal that Consing, Jr., in his complaint, alleged that "he has come to discover that Unicapital and PBI, et al. are speaking
of him in a manner that is inappropriate and libelous; and that they have spread their virulent version of events in the business and
financial community such that he has suffered and continues to suffer injury upon his good name and reputation which, after all, is
the most sacred and valuable wealth he possesses - especially considering that he is an investment banker."76 In similar regard, the
hypothetical admission of these allegations may result into the recovery of damages pursuant to Article 26, and even
Article2219(10), of the Civil Code.

Corollary thereto, Unicapital, et al.’s contention77 that the case should be dismissed on the ground that it failed to set out the actual
libelous statements complained about cannot be given credence. These incidents, as well as the specific circumstances surrounding
the manner in which Unicapital and PBI, et al. pursued their claims against Consing, Jr. may be better ventilated during trial. It is a
standing rule that issues that require the contravention of the allegations of the complaint, as well as the full ventilation, in effect, of
the main merits of the case, should not be within the province of a mere motion to dismiss, 78 as in this case. Hence, as what is only
required is that the allegations furnish adequate basis by which the complaint can be maintained, the Court – in view of the above-
stated reasons – finds that the RTC-Pasig City’s denial of Unicapital, et al.’s motion to dismiss on the ground of failure to state a
cause of action was not tainted with grave abuse of discretion which would necessitate the reversal of the CA’s ruling. Verily, for
grave abuse of discretion to exist, the abuse of discretion must be patent and gross so as to amount to an evasion of a positive duty
or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law. 79 This the Court does not perceive in the
case at bar.

Further, so as to obviate any confusion on the matter, the Court equally finds that the causes of action in SCA No. 1759 were not –
as Unicapital, et al. claim – misjoined even if Consing, Jr. averred that Unicapital and PBI, et al. violated certain provisions of the
Corporation Law and the Revised Securities Act.80

The rule is that a party’s failure to observe the following conditions under Section 5, Rule 2 of the Rules results in a misjoinder of
causes of action:81

SEC. 5. Joinder of causes of action . - A party may in one pleading assert, in the alternative or otherwise, as many causes of action
as he may have against an opposing party, subject to the following conditions:

(a) The party joining the causes of action shall comply with the rules on joinder of parties;

(b) The joinder shall not include special civil actions governed by special rules;

(c) Where the causes of action are between the same parties but pertain to different venues or jurisdictions, the joinder
may be allowed in the Regional Trial Court provided one of the causes of action falls within the jurisdiction of said court
and the venue lies therein; and

(d) Where the claims in all the causes of action are principally for recovery of money the aggregate amount claimed shall
be the test of jurisdiction. (Emphasis supplied)

A careful perusal of his complaint discloses that Consing, Jr. did not seek to hold Unicapital and PBI, et al. liable for any specific
violation of the Corporation Code or the Revised Securities Act. Rather, he merely sought damages for Unicapital and PBI, et al.’s
alleged acts of making him sign numerous documents and their use of the same against him. In this respect, Consing, Jr. actually
advances an injunction and damages case82 which properly falls under the jurisdiction of the RTC-Pasig City.83 Therefore, there was
no violation of Section 5, Rule 2 of the Rules, particularly, paragraph (c) thereof. Besides, even on the assumption that there was a
misjoinder of causes of action, still, such defect should not result in the dismissal of Consing, Jr.’s complaint. Section 6, Rule 2 of
the Rules explicitly states that a "misjoinder of causes of action is not a ground for dismissal of an action" and that "a misjoined
cause of action may, on motion of a party or on the initiative of the court, be severed and proceeded with separately."
Neither should Consing, Jr.’s failure to pay the required docket fees lead to the dismissal of his complaint.1âwphi1 It has long been
settled that while the court acquires jurisdiction over any case only upon the payment of the prescribed docket fees, its non-payment
at the time of the filing of the complaint does not automatically cause the dismissal of the complaint provided that the fees are paid
within a reasonable period.84 Consequently, Unicapital, et al.’s insistence that the stringent rule on non-payment of docket fees
enunciated in the case of Manchester Development Corporation v. CA 85 should be applied in this case cannot be sustained in the
absence of proof that Consing, Jr. intended to defraud the government by his failure to pay the correct amount of filing fees. As
pronounced in the case of Heirs of Bertuldo Hinog v. Hon. Melicor: 86

Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its

non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the
applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules
prescribing such payment.

Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the
Manchester rule does not apply.87 (Emphasis and italics in the original)

Indeed, while the Court acknowledges Unicapital, et al.'s apprehension that Consing, Jr.'s "metered" claim for damages to the tune
of around ₱2,000,000.00 per month88 may balloon to a rather huge amount by the time that this case is finally disposed of, still, any
amount that may by then fall due shall be subject to assessment and any additional fees determined shall constitute as a lien
against the judgment as explicitly provided under Section 2,89Rule 141 of the Rules.

Finally, on the question of whether or not Consing, Jr.'s complaint was properly verified, suffice it to state that since the copy
submitted to the trial court was duly notarized by one Atty. Allan B. Gepty and that it was only Unicapital, et al.’s copy which lacks
the notarization, then there was sufficient compliance with the requirements of the rules on pleadings. 90

In fine, the Court finds no reversible error on the part of the CA in sustaining the RTC-Pasig City’s denial of Unicapital et al.’s motion
to dismiss. As such, the petitions in G.R. Nos. 175277 and 175285 must be denied.

B. Propriety of the denial of

Consing, Jr.’s motion for
consolidation.

The crux of G.R. No. 192073 is the propriety of the RTC-Makati City’s denial of Consing, Jr.’s motion for the consolidation of the
Pasig case, i.e., SCA No. 1759, and the Makati case, i.e., Civil Case No. 99-1418.Records show that the CA upheld the RTC-Makati
City’s denial of the foregoing motion, finding that the consolidation of these cases was merely discretionary on the part of the trial
court. It added that it was "impracticable and would cause a procedural faux pas

"if it were to "allow the RTC-Pasig City to preside over the Makati case."91

The CA’s ruling is proper.

It is hornbook principle that when or two or more cases involve the same parties and affect closely related subject matters, the same
must be consolidated and jointly tried, in order to serve the best interest of the parties and to settle the issues between them
promptly, thus, resulting in a speedy and inexpensive determination of cases. In addition, consolidation serves the purpose of
avoiding the possibility of conflicting decisions rendered by the courts in two or more cases, which otherwise could be disposed of in
a single suit.92 The governing rule is Section 1, Rule 31 of the Rules which provides:

SEC. 1. Consolidation. - When actions involving a common question of law or fact are pending before the court, it may order a joint
hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders
concerning proceedings therein as may tend to avoid unnecessary costs or delay.

In the present case, the Court observes that the subject cases, i.e., SCA No. 1759 and Civil Case No. 99-1418, although involving
the same parties and proceeding from a similar factual milieu, should remain unconsolidated since they proceed from different
sources of obligations and, hence, would not yield conflicting dispositions. SCA No. 1759 is an injunction and damages case based
on the Civil Code provisions on abuse of right and defamation, while Civil Case No. 99-1418 is a collection and damages suit based
on actionable documents, i.e., the subject promissory notes. In particular, SCA No. 1759 deals with whether or not Unicapital and
BPI, et al, abused the manner in which they demanded payment from Consing, Jr., while Civil Case No. 99-1418 deals with whether
or not Unicapital may demand payment from Consing, Jr. based on the subject promissory notes. Clearly, a resolution in one case
would have no practical effect as the core issues and reliefs sought in each case are separate and distinct from the other.

Likewise, as the CA correctly pointed out, the RTC-Makati City could not have been failured in retaining Civil Case No. 99-1418 in
its dockets since pre-trial procedures have already been undertaken therein and, thus, its consolidation with SCA No. 1759 pending
before the RTC-Pasig City would merely result in complications on the part of the latter court or squander the resources or remedies
already utilized in Civil Case No. 99-1418.93 In this light, aside from the perceived improbability of having conflicting decisions, the
consolidation of SCA No. 1759 and Civil Case No. 99-1418 would, contrary to its objective, only delay the proceedings and entail
unnecessary costs.

All told, the Court finds the consolidation of SCA No. 1759 and Civil Case No. 99-1418 to be improper, impelling the affirmance of
the CA’s ruling. Consequently, the petition in G.R. No. 192073 must also be denied.

WHEREFORE, the petitions in G.R. Nos. 175277, 175285 and 192073 are DENIED. Accordingly, the Court of Appeals’ Joint
Decision dated October 20, 2005 and Resolution dated October 25, 2006 in CA-G.R. SP Nos. 64019 and 64451 and the Decision
dated September 30, 2009 and Resolution dated April 28, 2010 in CA-G.R. No. 101355 are hereby AFFIRMED.

Kinds of Jurisdiction

Gen. Jurisdiction/RTC

[G.R. No. 121106. February 20, 2002]

DURISOL PHILIPPINES, INC., petitioner, vs. COURT OF APPEALS, HON. ADRIANO R. OSORIO, Judge, RTC, Branch 171,
Valenzuela, Metro Manila, DEVELOPMENT BANK OF THE PHILIPPINES, MANILA FERTILIZERS, INC., POLAR
MINES AND DEVELOPMENT CORPORATION, SPOUSES ISABEL S. VILLARAMA and CONRADO D. VILLARAMA,
SPOUSES MARIBEL CABRALES and DANILO CABRALES, ROLANDO ANG SEE, SPOUSES ALEXANDER GABRIEL
and MARILOU GO GABRIEL and REMEDIOS REYES, respondents.

DECISION

YNARES-SANTIAGO, J.:

This is a petition for review of the decision of the Court of Appeals in CA-G.R. SP No. 35069 dated January 20, 1995, dismissing
petitioner Durisol Philippines, Inc.s petition for annulment of judgment. [1]

On January 17, 1962 and December 5, 1969, petitioner Durisol obtained industrial loans from respondent Development Bank
of the Philippines (DBP) amounting to P1,213,000.00 and P2,698,800.00, respectively. As security therefor, petitioner executed a
mortgage on two parcels of registered land located in Polo (now Valenzuela), Bulacan, covered by Transfer Certificates of Title Nos.
29906 and 29909.

After petitioner defaulted in the payment of the loans, DBP instituted on August 21, 1970 a petition for the extrajudicial
foreclosure of mortgage. On March 6, 1972, petitioners president, Rene Knecht, borrowed from DBP the two TCTs purportedly to
obtain new titles in accordance with the approved subdivision plan of the properties. DBP agreed provided that the banks existing
encumbrances, including the mortgage, shall be annotated on all the new certificates of title.

In the meantime, the foreclosure sale was held, wherein DBP emerged as the highest bidder. On October 9, 1973, the
corresponding certificates of sale were issued to DBP. Petitioner, however, filed a complaint for annulment of the extrajudicial
foreclosure before the then Court of First Instance (CFI) of Valenzuela, Bulacan, docketed as Civil Case No. 605-V. The CFI rendered
judgment upholding the validity of the foreclosure. Petitioner appealed to the Court of Appeals, which affirmed the decision of the
CFI. The decision of the Court of Appeals became final on April 30, 1975.

Petitioner was able to obtain TCT Nos. T-167751 and T-167752 in lieu of the mother title, TCT No. 29906, and TCT Nos. T-
187023 to T-187027 in lieu of the other mother title, TCT No. 29909, all issued in its name.

Contrary to its promise, however, petitioner never returned the titles to the properties to DBP. Thus, despite having purchased
the properties at the foreclosure sale, DBP was unable to register the property in its name. On February 25, 1977, DBP instituted
before the Court of First Instance of Valenzuela, Bulacan, Branch VIII, a petition for surrender of the owners duplicate titles covering
the foreclosed properties, docketed as (AD) Case No. 35-V-77, LRC Record No. 5941.[2]

Petitioner filed its answer, raising the defenses that the petition fails to state a cause of action; that it had already paid its loans
to DBP; that it had a valid adverse claim on the properties covered by the seven new titles; and that DBPs action was barred by laches
and estoppel.[3] DBP filed a reply alleging that petitioner failed to exercise its right of redemption of the properties which were sold at
public auction after foreclosure of the mortgage thereof.

On April 15, 1977, the trial court rendered summary judgment, ordering petitioner to surrender to the court within five days the
seven certificates of title.[4] Petitioner filed a motion for reconsideration, which contained an alternative prayer to record in the titles its
adverse claim representing the amount of improvements it introduced on the property.[5] The lower court denied petitioners motion for
reconsideration in an Order dated August 22, 1977.[6]

Petitioner thus appealed to the Intermediate Appellate Court, docketed as AC-G.R. CV No. 65324. On July 9, 1984, the IAC
rendered a decision ordering that the case be remanded to the lower court for further proceedings.[7] The IAC held that it was improper
for the trial court to render summary judgment because there were genuine issues involved. This decision became final and executory.
 Respondent DBP filed before the lower court a motion to dispense with the proceedings and, instead, to pronounce judgment
based on the admissions contained in the pleadings and the decision of the IAC. [8] This motion was denied.[9] The case was then set
for hearing on November 15, 1988. On the scheduled date, neither petitioner nor its counsel appeared despite due notice. DBP was
therefore allowed to present evidence ex parte.

On January 10, 1989, the trial court issued the following Resolution:

IN VIEW OF ALL THE FOREGOING, the Court hereby holds that the petition should be granted and the respondent through its
President and General Manager is hereby ordered to surrender and deliver the owners duplicate of Transfer Certificate of Title Nos.
T-187023, T-187024, T-187025, T-187026, T-187027, T-167751 and T-167752, all of Bulacan Registry, to the Clerk of Court, or to
the petitioner, within five (5) from receipt of this resolution. [10]

Sixteen days after receipt of the copy of the resolution, petitioner filed a motion for reconsideration alleging that the ex
parte presentation of evidence, being akin to a judgment by default, was done in violation of its right to due process. The lower court
denied the motion for having been filed out of time and for lack of notice of hearing.[11]

Respondent DBP, thus, filed a motion for execution, which was granted.[12] The writ, however, was returned unserved because
petitioner was not found in the address stated in the record. An alias writ of execution was issued against petitioners president, Rene
Knecht, but the latter refused to comply with the order to surrender the titles.Hence, on motion of DBP, an Order was issued on April
4, 1990 directing the Register of Deeds of Bulacan to cancel the seven titles and to issue new ones in lieu thereof.[13]Accordingly, new
certificates of title were issued to DBP.[14]

Thereafter, DBP sold the lots covered by TCT Nos. T-180723 to T-180727 and T-167752 to respondent Manila Fertilizers,
Inc.. The latter, in turn, sold the lots covered by TCT Nos. T-108723 to T-108727 to respondent Polar Mines and Development
Corporation. On the other hand, the property included in TCT No. T-167751 was sold by DBP to respondent spouses Villarama, for
which TCT Nos. V-18494 to V-18501 were issued, and to respondents Rolando Ang See, Remedios Reyes, the spouses Cabrales
and the spouses Go Gabriel.

More than four years later, or on September 2, 1994, petitioner instituted before the Court of Appeals a petition to annul the trial
courts decision dated January 10, 1989and Resolution dated April 4, 1990, alleging for the first time that the trial court had no
jurisdiction over the case.[15] Petitioner prayed that the certificates of title issued in the names of all private respondents, except DBP,
be annulled and that TCT Nos. T-167751 and T-167752 and T-187023-187027 be reinstated.

On January 20, 1995, the Court of Appeals rendered the now assailed decision dismissing the petition for annulment of
judgment.[16] Petitioner Durisols subsequent motion for reconsideration was likewise denied for lack of merit. [17] Hence this petition.

The issues raised in this petition are: (1) whether or not the trial court had jurisdiction over the petition for issuance of new
duplicate owners certificate of title; and (2) whether or not petitioner was estopped from challenging the courts lack of jurisdiction.

The first paragraph of Rule 47, Section 2, of the 1997 Rules of Civil Procedure provides:

Grounds for annulment. The annulment may be based only on the ground of extrinsic fraud and lack of jurisdiction.

At the outset, it should be stressed that in a petition for annulment of judgment based on lack of jurisdiction, petitioner must
show not merely an abuse of jurisdictional discretion but an absolute lack of jurisdiction. Lack of jurisdiction means absence of or no
jurisdiction, that is, the court should not have taken cognizance of the petition because the law does not vest it with jurisdiction over
the subject matter. Jurisdiction over the nature of the action or subject matter is conferred by law.[18]

The regional trial court, formerly the court of first instance, is a court of general jurisdiction. All cases, the jurisdiction over which
is not specifically provided for by law to be within the jurisdiction of any other court, fall under the jurisdiction of the regional trial
court. But the regional trial court is also a court of limited jurisdiction over, among others, cadastral and land registration cases. All
proceedings involving title to real property,[19] or specifically land registration cases, including its incidents such as the issuance of
owners duplicate certificate of title, are matters cognizable by the regional trial courts.[20] It has been ruled that the regional trial courts
have jurisdiction over all actions involving possession of land, except forcible entry and illegal detainer. [21]

Respondent DBP, after petitioners president unjustly refused to comply with the directive of the trial court to surrender the seven
certificates of title, filed a petition under Section 107 of the Property Registration Decree (Presidential Decree No. 1529), to wit:

Surrender of withheld duplicate certificates. --- Where it is necessary to issue a new certificate of title pursuant to any involuntary
instrument which divests the title of the registered owner against his consent of where a voluntary instrument cannot be registered
by reason of the refusal or failure of the holder to surrender the owners duplicate certificate of title, the party in interest may file a
petition in court to compel the surrender of the same to the Register of Deeds. The court, after hearing, may order the registered
owner or any person withholding the duplicate certificate to surrender the same, and direct the entry of a new certificate or
memorandum upon such surrender. If the person withholding the duplicate certificate is not amenable to the process of the court, or
if for any reason the outstanding owners duplicate certificate cannot be delivered, the court may order the annulment of the same as
well as the issuance of a new certificate of title in lieu thereof. Such new certificate and all duplicates thereof shall contain a
memorandum of the annulment of the outstanding duplicate.
 The term court in the above-quoted section refers to Courts of First Instance, now Regional Trial Courts, as provided in Section
2 of the Property Registration Decree.

Even assuming arguendo that the regional trial court had no jurisdiction over the surrender of duplicate title, petitioner can no
longer raise this ground after having actively participated in the prosecution of the case. A judgment rendered by a trial court for
alleged lack of jurisdiction cannot be considered void where the party who has the right to challenge it failed to do so at the first
instance. In the case at bar, petitioner did not raise the defense of lack of jurisdiction in its answer to respondent DBPs petition for
surrender of owners duplicate certificate. Neither did petitioner file any motion to dismiss on this ground. On the contrary, petitioner
raised the affirmative defenses of failure to state a cause of action and payment. [22] To be sure, a courts lack of jurisdiction over the
subject matter and the failure of the complaint to state a cause of action are distinct and separate grounds for dismissal of a case.

As stated, petitioner actively participated in the course of the proceedings both in the trial court and in the appellate court. In its
motion for reconsideration, petitioner assailed the merits of the decision without raising any argument pertaining to lack of jurisdiction
of the trial court. When the case was elevated to the IAC and when the case was remanded to the trial court, petitioner did not allege
lack of jurisdiction. In its motion for reconsideration of the trial courts order directing the issuance of new certificates of title, petitioner
again failed to raise the ground of lack of jurisdiction.

Indeed, it was only two decades after the institution of the case at bar, when the issue of lack of jurisdiction was first
raised. However, it is already too late since the judgment had already attained finality, considering that more than four years have
elapsed without any action from petitioner.

Rule 47, Section 3 expressly provides that a petition for annulment of judgment based on lack of jurisdiction must be filed before
it is barred by laches or estoppel. Hence, it has been held that while jurisdiction over the subject matter of a case may be raised at
any time of the proceedings, this rule presupposes that laches or estoppel has not supervened. Thus:

This Court has time and again frowned upon the undesirable practice of a party submitting his case for decision and then accepting
the judgment, only if favorable, and attacking it for lack of jurisdiction when adverse. Here, the principle of estoppel lies. Hence, a
party may be estopped or barred from raising the question of jurisdiction for the first time in a petition before the Supreme Court
when it failed to do so in the early stages of the proceedings. [23]

Petitioner argues that the then CFI had no jurisdiction when the case was remanded to it by the then IAC because as a cadastral
court, the CFI had limited jurisdiction. It should be noted, however, that when the CFI took cognizance of the remanded case, the
distinction between the CFI acting as a land registration court with limited jurisdiction, on the one hand, and a CFI acting as an ordinary
court exercising general jurisdiction, on the other hand, has already been removed with the effectivity of the Property Registration
Decree (PD 1529). The amendment was aimed at avoiding multiplicity of suits. The change has simplified registration proceedings by
conferring upon the designated trial courts the authority to act not only on applications for original registration but also over all petitions
filed after original registration of title, with power to hear and determine all questions arising from such applications or petition.[24]

WHEREFORE, based on the foregoing, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 35069
dated January 20 1995 is AFFIRMED in toto.

SO ORDERED.

Shari’ah District Court

FIRST DIVISION

LUISA KHO MONTAER, ALEJANDRO MONTAER, JR., G.R. No. 174975

LILLIBETH MONTAER-BARRIOS, AND RHODORA
ELEANOR MONTAER-DALUPAN,
Petitioners,
Present:

- versus - PUNO, C.J., Chairperson,

CARPIO,
CORONA,
SHARIA DISTRICT COURT, FOURTH SHARIA JUDICIAL AZCUNA, and
DISTRICT, MARAWI CITY, LILING DISANGCOPAN, AND LEONARDO-DE CASTRO, JJ.
ALMAHLEEN LILING S. MONTAER,
Respondents.

Promulgated:
 JANUARY 20, 2009
x-----------------------------------------------------------------------------------------x

DECISION

PUNO, C.J.:

This Petition for Certiorari and Prohibition seeks to set aside the Orders of the Sharia District Court, Fourth Sharia Judicial

District, Marawi City, dated August 22, 2006[1] and September 21, 2006.[2]

On August 17, 1956, petitioner Luisa Kho Montaer, a Roman Catholic, married Alejandro Montaer, Sr. at the Immaculate Conception

Parish in Cubao, Quezon City.[3] Petitioners Alejandro Montaer, Jr., Lillibeth Montaer-Barrios, and Rhodora Eleanor Montaer-Dalupan

are their children.[4] On May 26, 1995, Alejandro Montaer, Sr. died.[5]

On August 19, 2005, private respondents Liling Disangcopan and her daughter, Almahleen Liling S. Montaer, both Muslims, filed a

Complaint for the judicial partition of properties before the Sharia District Court.[6] The said complaint was entitled Almahleen Liling S.

Montaer and Liling M. Disangcopan v. the Estates and Properties of Late Alejandro Montaer, Sr., Luisa Kho Montaer, Lillibeth K.

Montaer, Alejandro Kho Montaer, Jr., and Rhodora Eleanor K. Montaer, and docketed as Special Civil Action No. 7-05.[7] In the said

complaint, private respondents made the following allegations: (1) in May 1995, Alejandro Montaer, Sr. died; (2) the late Alejandro

Montaer, Sr. is a Muslim; (3) petitioners are the first family of the decedent; (4) Liling Disangcopan is the widow of the decedent; (5)

Almahleen Liling S. Montaer is the daughter of the decedent; and (6) the estimated value of and a list of the properties comprising the

estate of the decedent.[8]Private respondents prayed for the Sharia District Court to order, among others, the following: (1) the partition

of the estate of the decedent; and (2) the appointment of an administrator for the estate of the decedent. [9]

Petitioners filed an Answer with a Motion to Dismiss mainly on the following grounds: (1) the Sharia District Court has no jurisdiction

over the estate of the late Alejandro Montaer, Sr., because he was a Roman Catholic; (2) private respondents failed to pay the correct

amount of docket fees; and (3) private respondents complaint is barred by prescription, as it seeks to establish filiation between

Almahleen Liling S. Montaer and the decedent, pursuant to Article 175 of the Family Code.[10]

On November 22, 2005, the Sharia District Court dismissed the private respondents complaint. The district court held that Alejandro

Montaer, Sr. was not a Muslim, and its jurisdiction extends only to the settlement and distribution of the estate of deceased Muslims.[11]

On December 12, 2005, private respondents filed a Motion for Reconsideration.[12] On December 28, 2005, petitioners filed

an Opposition to the Motion for Reconsideration, alleging that the motion for reconsideration lacked a notice of hearing. [13] On January

17, 2006, the Sharia District Court denied petitioners opposition.[14] Despite finding that the said motion for reconsideration lacked
notice of hearing, the district court held that such defect was cured as petitioners were notified of the existence of the pleading, and it

took cognizance of the said motion.[15] The Sharia District Court also reset the hearing for the motion for reconsideration. [16]

In its first assailed order dated August 22, 2006, the Sharia District Court reconsidered its order of dismissal dated November

22, 2005.[17] The district court allowed private respondents to adduce further evidence. [18] In its second assailed order dated September

21, 2006, the Sharia District Court ordered the continuation of trial, trial on the merits, adducement of further evidence, and pre-trial

conference.[19]

Seeking recourse before this Court, petitioners raise the following issues:

I.

RESPONDENT SHARIA DISTRICT COURT MARAWI CITY LACKS JURISDICTION OVER PETITIONERS
WHO ARE ROMAN CATHOLICS AND NON-MUSLIMS.

II.

RESPONDENT SHARIA DISTRICT COURT MARAWI CITY DID NOT ACQUIRE JURISDICTION OVER THE
ESTATES AND PROPERTIES OF THE LATE ALEJANDRO MONTAER, SR. WHICH IS NOT A NATURAL OR
JURIDICAL PERSON WITH CAPACITY TO BE SUED.

III.

RESPONDENT SHARIA DISTRICT COURT DID NOT ACQUIRE JURISDICTION OVER THE COMPLAINT OF
PRIVATE RESPONDENTS AGAINST PETITIONERS DUE TO NON-PAYMENT OF THE FILING AND
DOCKETING FEES.

IV.

RESPONDENT SHARIA DISTRICT COURTMARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OF JURISDICTION WHEN IT DENIED THE OPPOSITION OF PETITIONERS AND
THEN GRANTED THE MOTION FOR RECONSIDERATION OF RESPONDENTS LILING DISANGCOPAN, ET
AL. WHICH WAS FATALLY DEFECTIVE FOR LACK OF A NOTICE OF HEARING.

V.

RESPONDENT SHARIA DISTRICT COURTMARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OF JURISDICTION WHEN IT SET SPL. CIVIL ACTION 7-05 FOR TRIAL EVEN IF THE
COMPLAINT PLAINLY REVEALS THAT RESPONDENT ALMAHLEEN LILING S. MONTAER SEEKS
RECOGNITION FROM ALEJANDRO MONTAER, SR. WHICH CAUSE OF ACTION PRESCRIBED UPON THE
DEATH OF ALEJANDRO MONTAER, SR. ON MAY 26, 1995.

In their Comment to the Petition for Certiorari, private respondents stress that the Sharia District Court must be given the opportunity

to hear and decide the question of whether the decedent is a Muslim in order to determine whether it has jurisdiction. [20]

Jurisdiction: Settlement of the Estate of Deceased Muslims

Petitioners first argument, regarding the Sharia District Courts jurisdiction, is dependent on a question of fact, whether the

late Alejandro Montaer, Sr. is a Muslim. Inherent in this argument is the premise that there has already been a determination resolving
such a question of fact. It bears emphasis, however, that the assailed orders did not determine whether the decedent is a Muslim.

The assailed orders did, however, set a hearing for the purpose of resolving this issue.

Article 143(b) of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws of the Philippines,

provides that the Sharia District Courts have exclusive original jurisdiction over the settlement of the estate of deceased Muslims:

ARTICLE 143. Original jurisdiction. (1) The Shari'a District Court shall have exclusive original jurisdiction over:

xxxx

(b) All cases involving disposition, distribution and settlement of the estate of deceased Muslims, probate of wills,
issuance of letters of administration or appointment of administrators or executors regardless of the nature or the
aggregate value of the property.

The determination of the nature of an action or proceeding is controlled by the averments and character of the relief sought in the

complaint or petition.[21] The designation given by parties to their own pleadings does not necessarily bind the courts to treat it

according to the said designation. Rather than rely on a falsa descriptio or defective caption, courts are guided by the substantive

averments of the pleadings.[22]

Although private respondents designated the pleading filed before the Sharia District Court as a Complaint for judicial

partition of properties, it is a petition for the issuance of letters of administration, settlement, and distribution of the estate of the

decedent. It contains sufficient jurisdictional facts required for the settlement of the estate of a deceased Muslim, [23] such as the fact

of Alejandro Montaer, Sr.s death as well as the allegation that he is a Muslim. The said petition also contains an enumeration of the

names of his legal heirs, so far as known to the private respondents, and a probable list of the properties left by the decedent, which

are the very properties sought to be settled before a probate court. Furthermore, the reliefs prayed for reveal that it is the intention of

the private respondents to seek judicial settlement of the estate of the decedent.[24] These include the following: (1) the prayer for the

partition of the estate of the decedent; and (2) the prayer for the appointment of an administrator of the said estate.

We cannot agree with the contention of the petitioners that the district court does not have jurisdiction over the case because

of an allegation in their answer with a motion to dismiss that Montaer, Sr. is not a Muslim. Jurisdiction of a court over the nature of the

action and its subject matter does not depend upon the defenses set forth in an answer[25] or a motion to dismiss.[26] Otherwise,

jurisdiction would depend almost entirely on the defendant [27] or result in having a case either thrown out of court or its proceedings

unduly delayed by simple stratagem.[28] Indeed, the defense of lack of jurisdiction which is dependent on a question of fact does not

render the court to lose or be deprived of its jurisdiction.[29]

 The same rationale applies to an answer with a motion to dismiss. [30] In the case at bar, the Sharia District Court is not

deprived of jurisdiction simply because petitioners raised as a defense the allegation that the deceased is not a Muslim. The Sharia

District Court has the authority to hear and receive evidence to determine whether it has jurisdiction, which requires an a

priori determination that the deceased is a Muslim. If after hearing, the Sharia District Court determines that the deceased was not in

fact a Muslim, the district court should dismiss the case for lack of jurisdiction.

Special Proceedings

The underlying assumption in petitioners second argument, that the proceeding before the Sharia District Court is an

ordinary civil action against a deceased person, rests on an erroneous understanding of the proceeding before the court a quo. Part

of the confusion may be attributed to the proceeding before the Sharia District Court, where the parties were designated either as

plaintiffs or defendants and the case was denominated as a special civil action. We reiterate that the proceedings before the court a

quo are for the issuance of letters of administration, settlement, and distribution of the estate of the deceased, which is a special

proceeding. Section 3(c) of the Rules of Court (Rules) defines a special proceeding as a remedy by which a party seeks to establish

a status, a right, or a particular fact. This Court has applied the Rules, particularly the rules on special proceedings, for the settlement

of the estate of a deceased Muslim.[31] In a petition for the issuance of letters of administration, settlement, and distribution of estate,

the applicants seek to establish the fact of death of the decedent and later to be duly recognized as among the decedents heirs, which

would allow them to exercise their right to participate in the settlement and liquidation of the estate of the decedent. [32] Here, the

respondents seek to establish the fact of Alejandro Montaer, Sr.s death and, subsequently, for private respondent Almahleen Liling

S. Montaer to be recognized as among his heirs, if such is the case in fact.

Petitioners argument, that the prohibition against a decedent or his estate from being a party defendant in a civil

action[33] applies to a special proceeding such as the settlement of the estate of the deceased, is misplaced. Unlike a civil action which

has definite adverse parties, a special proceeding has no definite adverse party. The definitions of a civil action and a special

proceeding, respectively, in the Rules illustrate this difference. A civil action, in which a party sues another for the enforcement or

protection of a right, or the prevention or redress of a wrong[34] necessarily has definite adverse parties, who are either the plaintiff or

defendant.[35] On the other hand, a special proceeding, by which a party seeks to establish a status, right, or a particular fact, [36] has

one definite party, who petitions or applies for a declaration of a status, right, or particular fact, but no definite adverse party. In the

case at bar, it bears emphasis that the estate of the decedent is not being sued for any cause of action. As a special proceeding, the

purpose of the settlement of the estate of the decedent is to determine all the assets of the estate, [37]pay its liabilities,[38] and to distribute

the residual to those entitled to the same.[39]

Docket Fees

Petitioners third argument, that jurisdiction was not validly acquired for non-payment of docket fees, is untenable. Petitioners

point to private respondents petition in the proceeding before the court a quo, which contains an allegation estimating the decedents

estate as the basis for the conclusion that what private respondents paid as docket fees was insufficient. Petitioners argument

essentially involves two aspects: (1) whether the clerk of court correctly assessed the docket fees; and (2) whether private respondents

paid the correct assessment of the docket fees.

Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a trial court with jurisdiction

over the subject matter.[40] If the party filing the case paid less than the correct amount for the docket fees because that was the

amount assessed by the clerk of court, the responsibility of making a deficiency assessment lies with the same clerk of court.[41] In

such a case, the lower court concerned will not automatically lose jurisdiction, because of a partys reliance on the clerk of courts

insufficient assessment of the docket fees.[42] As every citizen has the right to assume and trust that a public officer charged by law

with certain duties knows his duties and performs them in accordance with law, the party filing the case cannot be penalized with the

clerk of courts insufficient assessment.[43] However, the party concerned will be required to pay the deficiency. [44]

In the case at bar, petitioners did not present the clerk of courts assessment of the docket fees. Moreover, the records do

not include this assessment. There can be no determination of whether private respondents correctly paid the docket fees without the

clerk of courts assessment.

Exception to Notice of Hearing

Petitioners fourth argument, that private respondents motion for reconsideration before the Sharia District Court is defective

for lack of a notice of hearing, must fail as the unique circumstances in the present case constitute an exception to this requirement.

The Rules require every written motion to be set for hearing by the applicant and to address the notice of hearing to all parties

concerned.[45] The Rules also provide that no written motion set for hearing shall be acted upon by the court without proof of service

thereof.[46] However, the Rules allow a liberal construction of its provisions in order to promote [the] objective of securing a just, speedy,

and inexpensive disposition of every action and proceeding. [47] Moreover, this Court has upheld a liberal construction specifically of

the rules of notice of hearing in cases where a rigid application will result in a manifest failure or miscarriage of justice especially if a

party successfully shows that the alleged defect in the questioned final and executory judgment is not apparent on its face or from the

recitals contained therein.[48] In these exceptional cases, the Court considers that no party can even claim a vested right in

technicalities, and for this reason, cases should, as much as possible, be decided on the merits rather than on technicalities.[49]
 The case at bar falls under this exception. To deny the Sharia District Court of an opportunity to determine whether it has

jurisdiction over a petition for the settlement of the estate of a decedent alleged to be a Muslim would also deny its inherent power as

a court to control its process to ensure conformity with the law and justice. To sanction such a situation simply because of a lapse in

fulfilling the notice requirement will result in a miscarriage of justice.

In addition, the present case calls for a liberal construction of the rules on notice of hearing, because the rights of the petitioners were

not affected. This Court has held that an exception to the rules on notice of hearing is where it appears that the rights of the adverse

party were not affected.[50] The purpose for the notice of hearing coincides with procedural due process, [51] for the court to determine

whether the adverse party agrees or objects to the motion, as the Rules do not fix any period within which to file a reply or

opposition.[52] In probate proceedings, what the law prohibits is not the absence of previous notice, but the absolute absence thereof

and lack of opportunity to be heard.[53] In the case at bar, as evident from the Sharia District Courts order dated January 17, 2006,

petitioners counsel received a copy of the motion for reconsideration in question. Petitioners were certainly not denied an opportunity

to study the arguments in the said motion as they filed an opposition to the same. Since the Sharia District Court reset the hearing for

the motion for reconsideration in the same order, petitioners were not denied the opportunity to object to the said motion in a hearing.

Taken together, these circumstances show that the purpose for the rules of notice of hearing, procedural process, was duly observed.

Prescription and Filiation

Petitioners fifth argument is premature. Again, the Sharia District Court has not yet determined whether it has jurisdiction to settle the

estate of the decedent. In the event that a special proceeding for the settlement of the estate of a decedent is pending, questions

regarding heirship, including prescription in relation to recognition and filiation, should be raised and settled in the said

proceeding.[54] The court, in its capacity as a probate court, has jurisdiction to declare who are the heirs of the decedent. [55] In the case

at bar, the determination of the heirs of the decedent depends on an affirmative answer to the question of whether the Sharia District

Court has jurisdiction over the estate of the decedent.

IN VIEW WHEREOF, the petition is DENIED. The Orders of the Sharia District Court, dated August 22, 2006 and September

21, 2006 respectively, are AFFIRMED. Cost against petitioners.

SO ORDERED.

Concurrent/Confluent/Coordinate

G.R. No. L-25721 May 26, 1969

MISAEL VERA, as Commissioner of Internal Revenue; EDUARDO ROMUALDEZ, as Secretary of Finance; and RAFAEL
SALAS, as Executive Secretary, petitioners,
vs.
HON. JUDGE FRANCISCO ARCA, ANTONIO J. VILLEGAS, as Mayor of Manila; GREGORIO EJERCITO, as Assistant
Secretary to said Mayor; and ANGEL C. CRUZ and ROMEO L. KAHAYON, respondents.

Office of the Solicitor General Antonio P. Barredo and Solicitor Ricardo L. Pronove, Jr. for petitioners.
Antonio J. Villegas and Gregorio Ejercito in their own behalf as respondents.

FERNANDO, J.:

With the judiciary called upon to apply the law on the facts as found by it and with the supremacy of the Constitution as a cardinal
postulate, the exercise of the power of the judicial review by a court of justice, an inferior tribunal not accepted, is
unavoidable. 1 There are times, and not infrequently either, when both a constitutional provision and a statute may govern the matter
before it. In the event, therefore, that there is a contrariety or repugnancy between them, such delicate and awesome power comes
into play. Even prior to adjudication, at the inception of a lawsuit, a party who seeks to annul such legislative act may pray for a writ
of preliminary injunction so that its operation would be arrested.

So it was in this case, respondent Judge Francisco Arca, now retired, indulging the other respondents 2 in their plea for a preliminary
injunction against the enforcement of the Tax Census Act. 3 Petitioners 4 through this special civil action of certiorari and prohibition
would have the validity of such preliminary injunction tested. That is the initial issue before us. In the event that there was such an
improvident exercise of the power to issue a writ of preliminary injunction, does a petition for certiorari and prohibition lie? That
question, we must likewise resolve.

The other respondents, on February 4, 1966, started a special civil action for prohibition and injunction in the sala of respondent
Judge, seeking to declare the Tax Census Act 5 as unconstitutional, illegal and invalid. The respondents in that suit were the
Commissioner of Internal Revenue, the Secretary of Finance and the Executive Secretary, now the petitioners before us. 6

Reference was made to its first section, which would require of every resident of the Philippines over 18 years of age within the
month of February, 1962 and thereafter within the same month every four years to file with the City or Municipal Treasurer in a form
prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of Finance, a statement under oath
containing such data as the name; age; sex; nationality (if alien, the number of the Alien Registration Certificate, and aliases used,
or authorized to be used, if any), address; occupation; place of business; wife's or husband's name, age, sex, occupation and place
of business; and the members of his family, age and sex 7 as well as real property owned, stating the nature thereof, location and
assessed value thereof, and the annual gross income therefrom during the preceding year; property held under lease stating also
the nature, location and assessed value thereof and the annual income during the preceding year; business subject to tax giving the
nature and location thereof and the annual gross receipts or earnings during the preceding year; stocks in corporations or shares in
partnerships or associations; inventories of assets particularly machineries and buildings, merchandise on hand, unfinished goods
and raw materials on hand, short and long term receivables, and investments in stocks and bonds; professions or occupations,
stating the kind and location thereof and the annual salaries or gross receipts or earnings during the preceding year; and personal
properties except those worth less than five hundred pesos. 8 Two other sections were likewise cited in the petition. 9 It was then
alleged that the Tax Census Act has been enforced and implemented since 1962 and that the parties who filed the suit, now
respondents before us, "are required to make and file Sworn Statements of Assets, Income and Liabilities" in accordance with the
Act. 10 It was likewise asserted that the then Senator Camilo Osias filed a bill to repeal such legislation and that the Secretary of
Finance had admitted that it had not been able to produce the result expected from it, the information yielded not justifying the
trouble caused not only to the public but also to the government. 11

The main portion of the petition before respondent Judge dealt with the alleged infirmity of the Tax Census Act as being violative of
the constitutional right to liberty, to the guarantee against self-incrimination and the protection against unreasonable searches and
seizures with a citation from both Philippine and American cases in support of such a plea. 12 A writ of preliminary injunction was
therein likewise sought, the argument being advanced that the other respondents before us in the petition before respondent Judge
"would suffer great and irreparable damage arising from the non-filing of their Sworn Statement of Assets, Income and Liabilities, as
they are subject to criminal prosecution under Section 5 of the Tax Census Law which is in clear violation of herein petitioners'
aforesaid constitutional and legal rights and which would render the judgment in favor of herein petitioners ineffectual" 13

The present petitioners, as respondents in such special civil action, in their answer filed on February 18, 1966, after denying
specifically the allegations contained in the petition intended to establish the unconstitutionality of the Tax Census Act, emphasized
in the special and affirmative defenses interposed that such an enactment was intended to implement the governmental function "for
a just, equal and efficient system of collecting taxes." The purpose of Republic Act No. 2070, in the language of its authors,
Senators Puyat and Roy, is to provide" "for a national tax census and the keeping of national registers in every city and municipality
of the Philippines. ... to provide the Department of Finance and the Bureau of Internal Revenue with vital tax statistics upon which
they can formulate sound policies and recommend reforms in the tax system and in revenue to achieve efficiency and honesty in the
collection of taxes. ... It is believed that the establishment of a national tax census will enhance revenue collection, minimize evasion
of taxes, promote honesty and efficiency in revenue administration and, above all, give fair assurance that every citizen pays his just
proportion of the public burden, and thus develop in this country tax consciousness which is vital to tax collection.; ..." 14 Stress was
likewise laid on the undeniable power of Congress to enact such a measure. Then came an extended discussion to demonstrate
that the right against self-incrimination as well as the right against unreasonable searches and seizures did not suffer any
infringement as a result of the challenged legislation. 15 There was a vehement opposition to the plea for preliminary
injunction. 16 The prayer was for a denial of the preliminary injunction and the dismissal of the petition.

Then came the order of respondent Judge of February 21, 1966, which is the basis of the present petition for certiorari and
prohibition, noting that a hearing on the plea for the issuance of the writ for preliminary injunction took place on February 19, 1966
and ordering the issuance thereof upon the posting of a bond of P1,000.00, thus restraining petitioners before us from requiring the
other respondents and other similarly situated to file their sworn statements of assets, income and liabilities under Republic Act No.
2070. Hence this petition for certiorari and prohibition, dated February 23, 1966.

Petitioners in this special civil action seek the setting aside of the writ of preliminary injunction issued by respondent Judge and
would restrain him perpetually from further hearing the suit for prohibition and injunction pending before him. Petitioners predicate
their plea on the allegation that respondent Judge gravely abused his discretion in issuing the writ of preliminary injunction as the
Tax Census Act is valid and constitutional, there being neither any self-incrimination feature nor unreasonable search and seizure
taint, there being moreover a presumption of its conformity with the fundamental law and no grave and irreparable injury being
suffered by the other respondents, petitioners before respondent Judge. 17 Petitioners likewise justify their contention that there was
a grave abuse of discretion on the part of respondent Judge in the issuance of such writ of preliminary injunction due to his failure to
consider the serious injury it would cause the paramount public interest, to realize that the enforcement of penal laws cannot thus be
restrained and to take note that the other respondents as petitioners before him are guilty of laches. 18

This Court, in a resolution dated February 25, 1966, gave due course to the foregoing petition for certiorari and prohibition and
required respondents to file an answer within 10 days from notice.

Such an answer was filed on March 8, 1966, wherein after admitting the jurisdictional facts alleged as well as the statement of the
case as set forth in the petition, respondents specially denied the allegations in the petition to the effect that Republic Act No. 2070
is valid and constitutional, reference being made to the alleged violation of the constitutional right against self-incrimination and
against unreasonable searches and seizures. 19 Then came the specific denial of that portion of the petition which pointed to the
alleged grave abuse of discretion of respondent Judge in issuing the writ of preliminary injunction. 20 In their special and affirmative
defenses respondents would reiterate their argument against the validity of the Act for the asserted transgression on the
constitutional protection against self-incrimination and against unreasonable searches and seizures. They did likewise question its
validity as being in excess of the State's taxing power, ignoring the fact that the Act is more properly a police power legislation.

At the hearing of the case scheduled for May 16, 1966, nobody appeared for any of the parties, petitioners however filing a motion,
seeking a period of 30 days within which to submit a memorandum. With its filing on September 5, 1966, the arguments set forth in
the petition to uphold the validity of the Tax Census Act being reiterated therein and the respondents' reply memorandum on
December 27, 1966, the case was deemed submitted for decision.

1. The primary question before us then is whether respondent Judge ought to have issued the writ of preliminary injunction to
restrain the enforcement of the Tax Census Act. The answer must be in the negative.

As far back as March 23, 1909, more than 60 years ago, this Court, in the leading case of Devesa v. Arbes, 21 made the categorical
pronouncement that the issuance of an injunction is addressed to the sound discretion of the Court, the exercise of which is
controlled not so much by the then applicable sections of the Code of Civil Procedure, now the Rules of Court, but by the accepted
doctrines, one of which is that it should not be granted while the rights between the parties are undetermined except in extraordinary
cases where material and irreparable injury will be done. For it is an action in equity appropriate only when there can be no
compensation in damages for the injury thus sustained and where no adequate remedy in law exists. Such a holding reflected the
prevailing American doctrine that there is no power "the exercise of which is more delicate, which requires greater caution,
deliberation and sound discretion or more dangerous in a doubtful case," being "the strong arm of equity, that never ought to be
extended," except where the injury is great and irreparable. 22

We have remained committed to such an approach since then. Only last year, in Palanan Lumber & Plywood Co. v. Arranz, 23 we
emphasized: "It is not amiss to recall here that time and again this Court has had occasion to deplore the readiness of some judges
to grant and issue injunctions ex parte against acts of public functionaries, ignoring the presumption of regularity and validity of
official actuations, in disregard of the deference and courtesy due to a coordinate branch of the government, and with no other guide
than the far from impartial assertions in pleadings of interested parties, which a summary hearing would have shown to be either
dubious or unfounded. The result has been that all too often, the public interest has been prejudiced through unnecessary delays. It
bears repeating here that preliminary injunctions remain extraordinary remedies that should be dispensed with circumspection, and
that both sides should be first heard whenever possible."

It is true that the evil of ex parte injunction was stressed in the above excerpt. It is equally true that a reminder was made of the
extraordinary character of this remedy "to be dispensed with circumspection" to avoid its invocation by interested parties whose
claims could be shown "to be either dubious or unfounded." What cannot be sufficiently pointed out is that a party seeking injunction
must show that his right to it must be clear and unmistakable. 24 The propriety of its issuance, therefore, requires unmistakable proof
"that the plaintiff is entitled to the relief demanded and only when his complaint shows fact entitling him to such relief." 25
Whatever may be said of the original petition for prohibition and injunction filed by the other respondents before the respondent
Judge, it cannot be plausibly asserted the facts have been alleged which would make manifest the violation of any of their
constitutional rights. Instead of relying on facts, they contended themselves with the general allegation that for them the Tax Census
Act was null. It was assailed for presumably violating the right to liberty, the protection against unreasonable searches and seizures
and the prohibition against self-incrimination. What was thus being sought in effect was a declaration of invalidity based on the belief
that its constitutional infirmity is apparent on its face.

Independently then of whether or not there has been an unwarranted departure from the governing principle that the power to issue
a preliminary injunction is not to be availed of indiscriminately, the more specific and pivotal question is whether it could be
exercised to restrain the enforcement of the Tax Census Act under the circumstances disclosed. The answer, to repeat, must be in
the negative.

In the order granting the petition for the issuance of the writ of preliminary injunction, 26 it was stated that a hearing on the matter
took place on February 19, 1966. Then came a summary of the legal arguments advanced both by the other respondents as
petitioners and the then Solicitor General, now Justice Antonio P. Barredo, on behalf of the petitioners before us, who were the
parties proceeded against before the lower court..

It is apparent on the face of such order that respondent Judge took into consideration purely legal arguments, no evidence being
introduced, both for and against the validity of the challenged statute. Moreover, his attention was invited to the presumption of
validity that every legislative act has in its favor as well as the doctrine that the task of suspending the operation of the law "is a
matter of extreme delicacy because that is an interference with the official acts not only with the duly elected representatives of the
people in Congress but also of the highest magistrate of the land." 27 Respondent Judge was deaf to the force of such cogent and
persuasive constitutional law doctrines. He issued the preliminary injunction nonetheless.

It is manifest that respondent Judge did overstep the bounds of discretion that set limits to the authority he is entitled to exercise in
the issuance of the preliminary injunction to restrain the enforcement of a statute. There can be no dissent from the proposition that
where the action required of a lower court would be tantamount, even if only for a temporary period, to disregarding the clearly
expressed will of the two branches of the government, the need for caution is greatest. Here, respondent Judge was apparently
oblivious of such a need.

It might be said, of course, that the issuance of a preliminary injunction does not have the impress of finality. After hearing on the
merits, the legislative act could regain its full vigor and could then be enforced. There is much to be said though in favor of Cooley's
approach in the exercise of what he referred to as the "high prerogative of declaring a legislative enactment void," a lower court,
"conscious of the fallibility of human judgment" being admonished to manifest the utmost reluctance. 28 That attitude should be
displayed even at the stage of considering whether a preliminary injunction should issue. Had respondent Judge been of such a
frame of mind, he would have arrived at a more acceptable conclusion. He would have refrained from indulging the other
respondents in their plea for a preliminary injunction.

To borrow from the language of Justice Laurel, he was hardly conscious of the truism "that a becoming modesty of inferior courts
demands conscious realization of the position they occupy in the interrelation and operation of the integrated judicial system of the
nation." 29 For if note be taken of the rigorous requirement of a two-thirds vote for this Court to annul a statute, 30 the confidence
displayed by respondent Judge in thus restraining the enforcement of the act does indeed appear to be quite excessive, under all
the circumstances disclosed by the record. Correspondingly, it could be interpreted as the failure to observe what Cooley referred to
as "due caution and circumspection" as well as "the respect due to the action and judgement of the lawmakers." 31

It might have been different if at the hearing the attention of respondent Judge was invited to facts which would overcome the
presumption of validity. Even with reference to municipal ordinances, Justice Malcolm so clearly emphasized that "the presumption
is all in favor of validity." 32 In the recent decision of Ermita-Malate Hotel & Motel Operators Asso. v. City Mayor of Manila, 33 we
announced the view that as underlying questions of fact may condition the constitutionality of legislation, "the presumption of
constitutionality must prevail in the absence of some factual foundation of record for overthrowing the statute." It would appear clear,
therefore, that the force of such a presumption would preclude the issuance of a preliminary injunction, unless there be facts
disclosed which would serve to weaken if not to defeat the presumption of validity. No such facts have even been alleged.

It could be argued, of course, that what was sought before the lower court was to declare the Tax Census Act void on its face which
would do away with the requirement of a factual foundation to establish nullity. Considering that its operation would serve to curtail
individual liberty as every resident of the Philippines above 18 years of age would be required to furnish certain information even
against his will, such a plea could indeed have been raised. 34 It could then be plausibly maintained that the need for a factual
foundation for invalidity vanishes. Support for such a view may be furnished by the cardinal principle that on the whole the Bill of
Rights does raise barriers to unwarranted intrusion and that in such a realm the primacy of liberty demands that the individual be left
alone. 35

That is so but it is equally undeniable that the liberty in its general sense enshrined by the Constitution does not rule out in
appropriate cases legislative deprivation as long as due process is observed. 36 While courts should not relax its vigilance in
assuring that no undue curtailment of liberty exists, still it is to be admitted that except in cases where the specific freedoms of belief
whether religious or secular, of expression, of assembly and of association are concerned, 37 a domain where Congress is forbidden
to trespass except under the clear and present danger doctrine, 38 the need for introducing evidence to counteract the assumption
that a statute is valid may be unavoidable. So it was in this case. The absence thereof sufficed to cast on the issuance of the
preliminary injunction, now challenged, the mark of a grave abuse of discretion.

Such a temporary injunction, in the language of Justice Black, "is in reality a suspension of an act, delaying the date selected by
Congress to put its chosen policies into effect. [Judicial] power to stay an act of Congress, like judicial power to hold an act
unconstitutional, is an awesome responsibility calling for the utmost circumspection in its exercise." 39 Respondent Judge was of a
different persuasion.

2. Petitioners thus are clearly entitled to the writ of certiorari prayed for. Respondent Judge did possess discretion to issue or not to
issue a preliminary injunction. That discretion, however, according to the circumstances disclosed, was abused, and abused
gravely. Even on a matter of less significance, this Court has not hesitated to exercise its supervisory authority by correcting such
failure to abide by controlling legal principles with a petition for certiorari as the appropriate remedy. We have made that, clear in
past pronouncements. Thus, in a 1919 decision: 40 "We are also of the opinion that the action of a Court of First Instance in
exercising this power may, under certain conditions, amount to an abuse of discretion and constitute an irregularity so far in excess
of the proper power of the court as to give rise to a right in the injured part to have relief by the writ of certiorari." So also in Silen v.
Vera: 41 "Therefore, the respondent Judge acted in excess of his jurisdiction and abused his discretion in issuing the writ of
preliminary injunction the nullity of which is sought, and the writ of certiorari applied for should be issued.

There is much greater reason for a writ of preliminary injunction being set aside in this case by the grant of the certiorari prayed for.
It may serve to deter other inferior tribunals similarly minded. It may serve to induce the conviction on the part of a lower court judge
that it is a matter of the utmost seriousness to stop the enforcement of an act after it has been enacted by a bicameral legislative
body composed of the House and the Senate and approved by the President, two of the coordinate branches of the government.
The greatest care should thus be taken before its operation is enjoined. Thereby, it would be manifesting not judicial timidity but
judicial wisdom.lawphi1.ñet

This is not to say that in no case should a writ of preliminary injunction issue. There are times the exercise of such an authority is
appropriate. Thus when there is an invasion of the preferred freedoms of belief, of expression as well as the cognate rights to
freedom of assembly and association, an affirmative response to a plea for preliminary injunction would indeed be called for. The
primacy of the freedom of the mind is entitled to the highest respect. This is not such a case, however, and the writ of certiorari must
be granted.

3. Petitioners likewise seek from us a writ of prohibition to restrain respondent Judge "from further hearing the petition before him
filed by the other respondents to annul and declare invalid the Tax Census Act." Considering that as of now what had transpired
was merely the hearing on the preliminary injunction, this particular prayer obviously poses a more difficult question than the plea for
a writ of certiorari. There may be cases where at this particular stage reached, prohibition may be granted. 42

After due reflection, we feel that it is not one of them. To call a halt to any further proceeding before respondent Judge in connection
with this particular suit before him to invalidate such legislative act might be to run the risk of acting prematurely. Since the lower
court is possessed of the power to act in the premises, respect must be accorded such authority in the absence of any compelling
reason justifying direct action on our part. It is our conclusion that under the circumstances disclosed, prohibition does not lie.

WHEREFORE, the writ of certiorari prayed for declaring null and void and setting aside the writ of preliminary injunction issued by
respondent Judge on February 21, 1966 is granted. The writ of prohibition sought is denied. Without pronouncement as to costs.

Supreme Court/ CA/ (Sandiganbayan)/ RTC

CONSTANCIO F. MENDOZA and SANGGUNIANG G.R. No. 187256

BARANGAY OF BALATASAN, BULALACAO,
ORIENTAL MINDORO,

Petitioners,
- versus -
Present:

CORONA, C.J., Chairperson, VELASCO, JR.,

MAYOR ENRILO VILLAS and BRGY. KAGAWAD
LIWANAG HERATO and MARLON DE CASTRO, NACHURA,*
Manager, Pinamalayan Branch, Land Bank of
DEL CASTILLO, and
the Philippines,
Respondents. PEREZ, JJ.

Promulgated:

February 23, 2011

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

RESOLUTION

VELASCO, JR., J.:

Before this Court is a Petition dated April 7, 2009[1] filed by Constancio F. Mendoza and Sangguniang Barangay of
Balatasan, Bulalacao, Oriental Mindoro.In the Petition, it is prayed that the Court: (1) set aside the Order dated February 2, 2009[2] of
the Regional Trial Court (RTC), Branch 43 in Roxas, Oriental Mindoro and its Order dated March 17, 2009[3] denying petitioners motion
for reconsideration of the Order dated February 2, 2009; and (2) direct the RTC to continue with the proceedings in Special Civil Action
No. 08-10 entitled Constancio Mendoza v. Mayor Enrilo Villas.

The factual antecedents of the case are as follows:

In the 2007 barangay elections, Mendoza obtained the highest votes for the position of Punong
Barangay of Barangay Balatasan, Bulalacao, Oriental Mindoro, while respondent Liwanag Herato obtained the highest number of
votes for the position of Barangay Kagawad. Notably, Mayor Enrilo Villas was the incumbent Mayor of Bulalacao, Oriental Mindoro at
the time of the barangay elections.[4]

After the elections, the Commission on Elections (COMELEC) proclaimed Mendoza as the duly-elected Punong
Barangay of Balatasan. Thus, the losing candidate, Thomas Pajanel, filed a petition for quo warranto with the Municipal Trial Court
(MTC) of Mansalay-Bulalacao which was docketed as Election Case No. 407-B. The MTC issued a Decision dated February 23, 2008,
disqualifying Mendoza and declaring that Herato was entitled to succeed him as Punong Barangaywith Herato garnering the highest
number of votes as a Barangay Kagawad. Mendoza appealed the MTC Decision to the COMELEC.

On February 28, 2008, Villas administered the Oath of Office to Herato. [5] Then, Villas issued Memorandum No. 2008-03-
010 dated March 3, 2008,[6]directing all department heads of the Municipal Government to act only on documents signed or authorized
by Herato.

Meanwhile, Mendoza sought the advice of the Department of the Interior and Local Government (DILG) as to who should
exercise the powers of Punong Barangay of Balatasan given the prevailing controversy.
 In a letter dated April 11, 2008,[7] DILG Undersecretary Austere A. Panadero responded to Mendozas inquiry informing
Villas that Mendoza should occupy the post of Punong Barangay as there was no Writ of Execution Pending Appeal of the MTC
Decision dated February 23, 2008.

Nevertheless, the Bulalacao Municipal Administrator, Edezer Aceron, by the authority of Villas, issued a letter dated April
23, 2008[8] to respondent Marlon de Castro, Manager, Pinamalayan Branch, Land Bank of the Philippines (LBP), requesting that
transactions entered into by Mendoza in behalf of BarangayBulalacao should not be honored. In the same letter, Aceron dismissed
the DILG letter dated April 11, 2008, saying that it is merely advisory and not binding on the municipal government of Bulalacao and
the LBP.

In response, de Castro issued Villas and Mendoza a letter dated April 24, 2008,[9] advising both parties that the LBP shall
not honor any transaction with regard the accounts of Barangay Balatasan.

Thereafter, petitioners filed a Petition dated May 5, 2008 for Mandamus with Damages and Prayer for the Writ of Preliminary
Mandatory Injunction, docketed as Special Civil Action No. 08-10 pending with the Regional Trial Court, Branch 43 in Roxas, Oriental
Mindoro. Petitioners prayed that the LBP be directed to release the funds of Barangay Balatasan to them in order to render necessary,
basic public services to the inhabitants of the barangay.

Thus, Villas and Herato filed an Answer dated May 16, 2008 interposing the following affirmative defenses: (1) that the
petition for mandamus was defective, being directed against two or more different entities and requiring to perform different acts; and
(2) that Mendoza does not have any clear and legal right for the writ of mandamus.

On the other hand, the LBP also filed its Answer dated June 5, 2008, stating that its decision of withholding
the barangay funds was a mere act of prudence given the controversy surrounding the true Punong Barangay of Balatasan while
manifesting that it will release the funds to whom the Court directs it to.

Thereafter, Villas and Herato filed a Motion to Dismiss dated November 7, 2008. In the Motion, a copy of the COMELEC
Resolution dated September 8, 2008 in COMELEC Case No. SPA-07-243-BRGY was attached. This case originated from a
disqualification case against Mendoza filed with the COMELEC by Senen Familara before the conduct of the
2007 barangay elections. In the Resolution, the COMELEC disqualified Mendoza as a candidate for Punong
Barangay ofBarangay Balatasan in the 2007 barangay elections for having already served three (3) consecutive terms for the same
position. In response, Mendoza presented a Certification dated February 27, 2009[10] from the COMELEC which stated that COMELEC
Case No. SPA-07-243-BRGY is still pending with the Commission.
 In an attempt to clarify the issues on the matter, Mendoza again sought the opinion of the DILG regarding the controversy.
Thus, the DILG issued another letter, denominated as DILG Opinion No. 5, Series of 2009 dated January 2009,[11] reiterating its stance
that the MTC Decision dated February 23, 2008 has not yet become final and executory.

Nevertheless, the RTC issued the assailed order dated February 2, 2009 dismissing the petition on the strength of the
COMELEC Resolution dated September 8, 2008 disqualifying Mendoza from running in the 2007 elections. As stated, petitioners
motion for reconsideration of the Order dated February 2, 2009 was denied in an Order dated March 17, 2009.

From such orders the petitioners went directly to this Court.

The instant petition is a direct recourse to this Court from the assailed orders of the RTC. Notably, petitioners did not cite
the rule under the Rules of Court by which the petition was filed. If the petition is to be treated as a petition filed under Rule 65 of the
Rules of Court, the petition must be dismissed outright for having been filed prematurely.

In Chamber of Real Estate and Builders Associations, Inc. (CREBA) v. Secretary of Agrarian Reform,[12] a petition for
certiorari filed under Rule 65 was dismissed for having been filed directly with the Court, violating the principle of hierarchy of courts,
to wit:

Primarily, 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. In Heirs of Bertuldo Hinog
v. Melicor, citing People v. Cuaresma, this Court made the following pronouncements:

This Courts 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
Courts 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 Courts time and
attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent
further over-crowding of the Courts docket. (Emphasis supplied.)

Similarly, there are no special and important reasons that petitioners cite to justify their direct recourse to this Court under
Rule 65.
 On the other hand, direct recourse to this Court has been allowed for petitions filed under Rule 45 when only questions of
law are raised, as in this case. Thus, the Court ruled in Barcenas v. Tomas:[13]

Section 1 of Rule 45 clearly states that the following may be appealed to the Supreme Court through a
petition for review by certiorari: 1) judgments; 2) final orders; or 3) resolutions of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or similar courts, whenever authorized by law. The appeal must involve
only questions of law, not of fact.

This Court has, time and time again, pointed out that it is not a trier of facts; and that, save for a few
exceptional instances, its function is not to analyze or weigh all over again the factual findings of the lower courts.
There is a question of law when doubts or differences arise as to what law pertains to a certain state of facts, and
a question of fact when the doubt pertains to the truth or falsity of alleged facts.

Under the principle of the hierarchy of courts, decisions, final orders or resolutions of an MTC should
be appealed to the RTC exercising territorial jurisdiction over the former. On the other hand, RTC judgments, final
orders or resolutions are appealable to the CA through either of the following: an ordinary appeal if the case was
originally decided by the RTC; or a petition for review under Rule 42, if the case was decided under the RTC's
appellate jurisdiction.

Nonetheless, a direct recourse to this Court can be taken for a review of the decisions, final orders or
resolutions of the RTC, but only on questions of law. Under Section 5 of Article VIII of the Constitution, the
Supreme Court has the power to

(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:

xxxx

(e) All cases in which only an error or question of law is involved.

This kind of direct appeal to this Court of RTC judgments, final orders or resolutions is provided for in
Section 2(c) of Rule 41, which reads:

SEC. 2. Modes of appeal.

xxxx

(c) Appeal by certiorari.In all cases where only questions of law are raised or involved, the
appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45.

Procedurally then, petitioners could have appealed the RTC Decision affirming the MTC (1) to
this Court on questions of law only; or (2) if there are factual questions involved, to the CA -- as they in fact
did. Unfortunately for petitioners, the CA properly dismissed their petition for review because of serious procedural
 defects. This action foreclosed their only available avenue for the review of the factual findings of the RTC.
(Emphasis supplied.)

Thus, the Court shall exercise liberality and consider the instant petition as one filed under Rule 45. In Artistica Ceramica,
Inc. v. Ciudad Del Carmen Homeowners Association, Inc.,[14] citing Republic v. Court of Appeals,[15] the Court noted that it has the
discretion to determine whether a petition was filed under Rule 45 or 65 of the Rules of Court:

Admittedly, this Court, in accordance with the liberal spirit pervading the Rules of Court and in the
interest of justice, has the discretion to treat a petition for certiorari as having been filed under Rule 45, especially
if filed within the reglementary period for filing a petition for review.

Nevertheless, even providing that the petition was not filed prematurely, it must still be dismissed for having become moot
and academic.

In Gunsi, Sr. v. Commissioners, The Commission on Elections,[16] the Court defined a moot and academic case as follows:

A moot and academic case is one that ceases to present a justiciable controversy by virtue of
supervening events, so that a declaration thereon would be of no practical value. As a rule, courts decline
jurisdiction over such case, or dismiss it on ground of mootness.

With the conduct of the 2010 barangay elections, a supervening event has transpired that has rendered this case moot and
academic and subject to dismissal.This is because, as stated in Fernandez v. Commission on Elections,[17] whatever judgment is
reached, the same can no longer have any practical legal effect or, in the nature of things, can no longer be enforced. Mendozas term
of office has expired with the conduct of last years local elections. As such, Special Civil Action No. 08-10, where the assailed Orders
were issued, can no longer prosper. Mendoza no longer has any legal standing to further pursue the case, rendering the instant
petition moot and academic.

WHEREFORE, the Petition is DENIED.

SO ORDERED.

G.R. No. 183409 June 18, 2010

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA), petitioner,
vs.
THE SECRETARY OF AGRARIAN REFORM, Respondent.

DECISION

PEREZ, J.:

This case is a Petition for Certiorari and Prohibition (with application for temporary restraining order and/or writ of preliminary
injunction) under Rule 65 of the 1997 Revised Rules of Civil Procedure, filed by herein petitioner Chamber of Real Estate and
Builders Associations, Inc. (CREBA) seeking to nullify and prohibit the enforcement of Department of Agrarian Reform (DAR)
Administrative Order (AO) No. 01-02, as amended by DAR AO No. 05-07,1and DAR Memorandum No. 88,2 for having been issued
by the Secretary of Agrarian Reform with grave abuse of discretion amounting to lack or excess of jurisdiction as some provisions of
the aforesaid administrative issuances are illegal and unconstitutional.

Petitioner CREBA, a private non-stock, non-profit corporation duly organized and existing under the laws of the Republic of the
Philippines, is the umbrella organization of some 3,500 private corporations, partnerships, single proprietorships and individuals
directly or indirectly involved in land and housing development, building and infrastructure construction, materials production and
supply, and services in the various related fields of engineering, architecture, community planning and development financing. The
Secretary of Agrarian Reform is named respondent as he is the duly appointive head of the DAR whose administrative issuances
are the subject of this petition.

The Antecedent Facts

The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,3 entitled "Omnibus Rules and Procedures
Governing Conversion of Agricultural Lands to Non-Agricultural Uses," which consolidated all existing implementing guidelines
related to land use conversion. The aforesaid rules embraced all private agricultural lands regardless of tenurial arrangement and
commodity produced, and all untitled agricultural lands and agricultural lands reclassified by Local Government Units (LGUs) into
non-agricultural uses after 15 June 1988.

Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-99,4 entitled "Revised Rules and
Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses," amending and updating the previous rules on land
use conversion. Its coverage includes the following agricultural lands, to wit: (1) those to be converted to residential, commercial,
industrial, institutional and other non-agricultural purposes; (2) those to be devoted to another type of agricultural activity such as
livestock, poultry, and fishpond ─ the effect of which is to exempt the land from the Comprehensive Agrarian Reform Program
(CARP) coverage; (3) those to be converted to non-agricultural use other than that previously authorized; and (4) those reclassified
to residential, commercial, industrial, or other non-agricultural uses on or after the effectivity of Republic Act No. 6657 5 on 15 June
1988 pursuant to Section 206 of Republic Act No. 71607 and other pertinent laws and regulations, and are to be converted to such
uses.

On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e., DAR AO No. 01-02, entitled
"2002 Comprehensive Rules on Land Use Conversion," which further amended DAR AO No. 07-97 and DAR AO No. 01-99, and
repealed all issuances inconsistent therewith. The aforesaid DAR AO No. 01-02 covers all applications for conversion from
agricultural to non-agricultural uses or to another agricultural use.

Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions 8 of DAR AO No. 01-02 by formulating
DAR AO No. 05-07, particularly addressing land conversion in time of exigencies and calamities.

To address the unabated conversion of prime agricultural lands for real estate development, the Secretary of Agrarian Reform
further issued Memorandum No. 88 on 15 April 2008, which temporarily suspended the processing and approval of all land use
conversion applications.

By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in turn, aggravated the housing
shortage, unemployment and illegal squatting problems to the substantial prejudice not only of the petitioner and its members but
more so of the whole nation.

Hence, this petition.

The Issues

In its Memorandum, petitioner posits the following issues:

 I.

WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN RECLASSIFIED AS RESIDENTIAL,
COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-AGRICULTURAL USES.

II.

WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND GRAVELY ABUSED HIS DISCRETION BY
ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED] WHICH SEEK TO REGULATE RECLASSIFIED LANDS.

III.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL GOVERNMENT UNITS.

IV.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL PROTECTION CLAUSE[S] OF
THE CONSTITUTION.

V.

WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER. 9

The subject of the submission that the DAR Secretary gravely abused his discretion is AO No. 01-02, as amended, which states:

Section 3. Applicability of Rules. – These guidelines shall apply to all applications for conversion, from agricultural to non-agricultural
uses or to another agricultural use, such as:

xxxx

3.4 Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a Presidential Proclamation, to
residential, commercial, industrial, or other non-agricultural uses on or after the effectivity of RA 6657 on 15 June 1988, x x x.
[Emphasis supplied].

Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435, 10 the term agricultural lands refers to "lands devoted
to or suitable for the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the
harvesting of such farm products, and other farm activities and practices performed by a farmer in conjunction with such farming
operations done by a person whether natural or juridical, and not classified by the law as mineral, forest, residential, commercial or
industrial land." When the Secretary of Agrarian Reform, however, issued DAR AO No. 01-02, as amended, he included in the
definition of agricultural lands "lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15
June 1988." In effect, lands reclassified from agricultural to residential, commercial, industrial, or other non-agricultural uses after 15
June 1988 are considered to be agricultural lands for purposes of conversion, redistribution, or otherwise. In so doing, petitioner
avows that the Secretary of Agrarian Reform acted without jurisdiction as he has no authority to expand or enlarge the legal
signification of the term agricultural lands through DAR AO No. 01-02. Being a mere administrative issuance, it must conform to the
statute it seeks to implement, i.e., Republic Act No. 6657, or to the Constitution, otherwise, its validity or constitutionality may be
questioned.

In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation of Section 6511of Republic Act
No. 6657 because it covers all applications for conversion from agricultural to non-agricultural uses or to other agricultural uses,
such as the conversion of agricultural lands or areas that have been reclassified by the LGUs or by way of Presidential
Proclamations, to residential, commercial, industrial or other non-agricultural uses on or after 15 June 1988. According to petitioner,
there is nothing in Section 65 of Republic Act No. 6657 or in any other provision of law that confers to the DAR the jurisdiction or
authority to require that non-awarded lands or reclassified lands be submitted to its conversion authority. Thus, in issuing and
enforcing DAR AO No. 01-02, as amended, the Secretary of Agrarian Reform acted with grave abuse of discretion amounting to
lack or excess of jurisdiction.

Petitioner further asseverates that Section 2.19,12 Article I of DAR AO No. 01-02, as amended, making reclassification of agricultural
lands subject to the requirements and procedure for land use conversion, violates Section 20 of Republic Act No. 7160, because it
was not provided therein that reclassification by LGUs shall be subject to conversion procedures or requirements, or that the DAR’s
approval or clearance must be secured to effect reclassification. The said Section 2.19 of DAR AO No. 01-02, as amended, also
contravenes the constitutional mandate on local autonomy under Section 25, 13 Article II and Section 2,14 Article X of the 1987
Philippine Constitution.
Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended, constitute deprivation of liberty
and property without due process of law. There is deprivation of liberty and property without due process of law because under DAR
AO No. 01-02, as amended, lands that are not within DAR’s jurisdiction are unjustly, arbitrarily and oppressively prohibited or
restricted from legitimate use on pain of administrative and criminal penalties. More so, there is discrimination and violation of the
equal protection clause of the Constitution because the aforesaid administrative order is patently biased in favor of the peasantry at
the expense of all other sectors of society.

As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police power for it is the prerogative
of the legislature and that it is unconstitutional because it suspended the land use conversion without any basis.

The Court’s Ruling

This petition must be dismissed.

Primarily, 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.15 In Heirs of Bertuldo Hinog v. Melicor,16citing People v. Cuaresma,17 this Court made
the following pronouncements:

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.18 (Emphasis
supplied.)

The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court; and (b) 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.19

This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the redress desired cannot be obtained in
the appropriate 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, calling for the exercise of its primary jurisdiction.20

Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v. Romulo, 21 on citizens’ right to
bear arms; (b) Government of [the] United States of America v. Hon. Purganan, 22 on bail in extradition proceedings; (c) Commission
on Elections v. Judge Quijano-Padilla,23 on government contract involving modernization and computerization of voters’ registration
list; (d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,24on status and existence of a public office; and (e) Hon. Fortich v. Hon.
Corona,25 on the so-called "Win-Win Resolution" of the Office of the President which modified the approval of the conversion to
agro-industrial area.26

In the case at bench, petitioner failed to specifically and sufficiently set forth special and important reasons to justify direct recourse
to this Court and why this Court should give due course to this petition in the first instance, hereby failing to fulfill the conditions set
forth in Heirs of Bertuldo Hinog v. Melicor.27 The present petition should have been initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of this petition.

Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks the declaration by this Court of the
unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88. It, thus, partakes of the
nature of a Petition for Declaratory Relief over which this Court has only appellate, not original, jurisdiction.28 Section 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. (Emphasis
supplied.)

With that, this Petition must necessarily fail because this Court does not have original jurisdiction over a Petition for Declaratory
Relief even if only questions of law are involved.

Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still dismissible.

The special civil action for certiorari is intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting
to lack or excess of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its jurisdiction or to
prevent it from committing such a grave abuse of discretion amounting to lack or excess of jurisdiction.29

The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a tribunal, a board, or an officer
exercising judicial or quasi-judicial functions; (2) such tribunal, board, or officer has 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.30

Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the general power of a tribunal,
board or officer, is not authorized and invalid with respect to the particular proceeding, because the conditions which alone authorize
the exercise of the general power in respect of it are wanting. 31 Without jurisdiction means lack or want of legal power, right or
authority to hear and determine a cause or causes, considered either in general or with reference to a particular matter. It means
lack of power to exercise authority.32Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of passion,
prejudice, or personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal
to perform the duty enjoined or to act at all in contemplation of law. 33

In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the proper invocation of a Petition for
Certiorari under Rule 65. The Secretary of Agrarian Reform in issuing the assailed DAR AO No. 01-02, as amended, as well as
Memorandum No. 88 did so in accordance with his mandate to implement the land use conversion provisions of Republic Act No.
6657. In the process, he neither acted in any judicial or quasi-judicial capacity nor assumed unto himself any performance of judicial
or quasi-judicial prerogative. A Petition for Certiorari is a special civil action that may be invoked only against a tribunal, board, or
officer exercising judicial functions. Section 1, Rule 65 of the 1997 Revised Rules of Civil Procedure is explicit on this matter, viz.:

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, nor 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 must be rendered annulling or modifying the
proceedings of such tribunal, board or officer.1avvphi1

A tribunal, board, or officer is said to be exercising judicial function where it 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.
Quasi-judicial function, on the other hand, is "a term which applies to the actions, 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." 34

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.35

The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer exercising judicial or quasi-judicial
functions. The issuance and enforcement by the Secretary of Agrarian Reform of the questioned DAR AO No. 01-02, as amended,
and Memorandum No. 88 were done in the exercise of his quasi-legislative and administrative functions and not of judicial or quasi-
judicial functions. In issuing the aforesaid administrative issuances, the Secretary of Agrarian Reform never made any adjudication
of rights of the parties. As such, it can never be said that the Secretary of Agrarian Reform had acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing and enforcing DAR AO No. 01-02, as amended, and Memorandum No. 88 for
he never exercised any judicial or quasi-judicial functions but merely his quasi-legislative and administrative functions.

Furthermore, as this Court has previously discussed, the instant petition in essence seeks the declaration by this Court of the
unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88. Thus, the adequate
and proper remedy for the petitioner therefor is to file a Petition for Declaratory Relief, which this Court has only appellate and not
original jurisdiction. It is beyond the province of certiorari to declare the aforesaid administrative issuances unconstitutional and
illegal because certiorari is confined only to the determination of the existence of grave abuse of discretion amounting to lack or
excess of jurisdiction. Petitioner cannot simply allege grave abuse of discretion amounting to lack or excess of jurisdiction and then
invoke certiorari to declare the aforesaid administrative issuances unconstitutional and illegal. Emphasis must be given to the fact
that the writ of certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil Procedure is a prerogative writ, never demandable
as a matter of right, "never issued except in the exercise of judicial discretion." 36

At any rate, even if the Court will set aside procedural infirmities, the instant petition should still be dismissed.

Executive Order No. 129-A37 vested upon the DAR the responsibility of implementing the CARP. Pursuant to the said mandate and
to ensure the successful implementation of the CARP, Section 5(c) of the said executive order authorized the DAR to establish and
promulgate operational policies, rules and regulations and priorities for agrarian reform implementation. Section 4(k) thereof
authorized the DAR to approve or disapprove the conversion, restructuring or readjustment of agricultural lands into non-agricultural
uses. Similarly, Section 5(l) of the same executive order has given the DAR the exclusive authority to approve or disapprove
conversion of agricultural lands for residential, commercial, industrial, and other land uses as may be provided for by law. Section 7
of the aforesaid executive order clearly provides that "the authority and responsibility for the exercise of the mandate of the [DAR]
and the discharge of its powers and functions shall be vested in the Secretary of Agrarian Reform x x x."

Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial, industrial or other non-agricultural uses
before 15 June 1988" have been included in the definition of agricultural lands. In so doing, the Secretary of Agrarian Reform merely
acted within the scope of his authority stated in the aforesaid sections of Executive Order No. 129-A, which is to promulgate rules
and regulations for agrarian reform implementation and that includes the authority to define agricultural lands for purposes of land
use conversion. Further, the definition of agricultural lands under DAR AO No. 01-02, as amended, merely refers to the category of
agricultural lands that may be the subject for conversion to non-agricultural uses and is not in any way confined to agricultural lands
in the context of land redistribution as provided for under Republic Act No. 6657.

More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in many cases decided by this
Court, clarified that after the effectivity of Republic Act No. 6657 on 15 June 1988 the DAR has been given the authority to approve
land conversion.38 Concomitant to such authority, therefore, is the authority to include in the definition of agricultural lands "lands not
reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988" for purposes of land use
conversion.

In the same vein, the authority of the Secretary of Agrarian Reform to include "lands not reclassified as residential, commercial,
industrial or other non-agricultural uses before 15 June 1988" in the definition of agricultural lands finds basis in jurisprudence. In
Ros v. Department of Agrarian Reform,39 this Court has enunciated that after the passage of Republic Act No. 6657, agricultural
lands, though reclassified, have to go through the process of conversion, jurisdiction over which is vested in the DAR. However,
agricultural lands, which are already reclassified before the effectivity of Republic Act No. 6657 which is 15 June 1988, are
exempted from conversion.40 It bears stressing that the said date of effectivity of Republic Act No. 6657 served as the cut-off period
for automatic reclassifications or rezoning of agricultural lands that no longer require any DAR conversion clearance or authority. 41 It
necessarily follows that any reclassification made thereafter can be the subject of DAR’s conversion authority. Having recognized
the DAR’s conversion authority over lands reclassified after 15 June 1988, it can no longer be argued that the Secretary of Agrarian
Reform was wrongfully given the authority and power to include "lands not reclassified as residential, commercial, industrial or other
non-agricultural uses before 15 June 1988" in the definition of agricultural lands. Such inclusion does not unduly expand or enlarge
the definition of agricultural lands; instead, it made clear what are the lands that can be the subject of DAR’s conversion authority,
thus, serving the very purpose of the land use conversion provisions of Republic Act No. 6657.

The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section 65 of Republic Act No. 6657,
as it covers even those non-awarded lands and reclassified lands by the LGUs or by way of Presidential Proclamations on or after
15 June 1988 is specious. As explained in Department of Justice Opinion No. 44, series of 1990, it is true that the DAR’s express
power over land use conversion provided for under Section 65 of Republic Act No. 6657 is limited to cases in which agricultural
lands already awarded have, after five years, ceased to be economically feasible and sound for agricultural purposes, or the locality
has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes. To
suggest, however, that these are the only instances that the DAR can require conversion clearances would open a loophole in
Republic Act No. 6657 which every landowner may use to evade compliance with the agrarian reform program. It should logically
follow, therefore, from the said department’s express duty and function to execute and enforce the said statute that any
reclassification of a private land as a residential, commercial or industrial property, on or after the effectivity of Republic Act No.
6657 on 15 June 1988 should first be cleared by the DAR.42

This Court held in Alarcon v. Court of Appeals43 that reclassification of lands does not suffice. Conversion and reclassification differ
from each other. Conversion is the act of changing the current use of a piece of agricultural land into some other use as approved
by the DAR while reclassification is the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as
residential, industrial, and commercial, as embodied in the land use plan, subject to the requirements and procedures for land use
conversion. In view thereof, a mere reclassification of an agricultural land does not automatically allow a landowner to change its
use. He has to undergo the process of conversion before he is permitted to use the agricultural land for other purposes. 44
It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands though reclassified to
residential, commercial, industrial or other non-agricultural uses must still undergo the process of conversion before they can be
used for the purpose to which they are intended.

Nevertheless, emphasis must be given to the fact that DAR’s conversion authority can only be exercised after the effectivity of
Republic Act No. 6657 on 15 June 1988.45 The said date served as the cut-off period for automatic reclassification or rezoning of
agricultural lands that no longer require any DAR conversion clearance or authority.46Thereafter, reclassification of agricultural lands
is already subject to DAR’s conversion authority. Reclassification alone will not suffice to use the agricultural lands for other
purposes. Conversion is needed to change the current use of reclassified agricultural lands.

It is of no moment whether the reclassification of agricultural lands to residential, commercial, industrial or other non-agricultural
uses was done by the LGUs or by way of Presidential Proclamations because either way they must still undergo conversion
process. It bears stressing that the act of reclassifying agricultural lands to non-agricultural uses simply specifies how agricultural
lands shall be utilized for non-agricultural uses and does not automatically convert agricultural lands to non-agricultural uses or for
other purposes. As explained in DAR Memorandum Circular No. 7, Series of 1994, cited in the 2009 case of Roxas & Company, Inc.
v. DAMBA-NFSW and the Department of Agrarian Reform,47 reclassification of lands denotes their allocation into some specific use
and providing for the manner of their utilization and disposition or the act of specifying how agricultural lands shall be utilized for
non-agricultural uses such as residential, industrial, or commercial, as embodied in the land use plan. For reclassified agricultural
lands, therefore, to be used for the purpose to which they are intended there is still a need to change the current use thereof through
the process of conversion. The authority to do so is vested in the DAR, which is mandated to preserve and maintain agricultural
lands with increased productivity. Thus, notwithstanding the reclassification of agricultural lands to non-agricultural uses, they must
still undergo conversion before they can be used for other purposes.

Even reclassification of agricultural lands by way of Presidential Proclamations to non-agricultural uses, such as school sites, needs
conversion clearance from the DAR. We reiterate that reclassification is different from conversion. Reclassification alone will not
suffice and does not automatically allow the landowner to change its use. It must still undergo conversion process before the
landowner can use such agricultural lands for such purpose. 48Reclassification of agricultural lands is one thing, conversion is
another. Agricultural lands that are reclassified to non-agricultural uses do not ipso facto allow the landowner thereof to use the
same for such purpose. Stated differently, despite having reclassified into school sites, the landowner of such reclassified
agricultural lands must apply for conversion before the DAR in order to use the same for the said purpose.

Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other non-agricultural uses either by the
LGUs or by way of Presidential Proclamations enacted on or after 15 June 1988 must undergo the process of conversion, despite
having undergone reclassification, before agricultural lands may be used for other purposes.

It is different, however, when through Presidential Proclamations public agricultural lands have been reserved in whole or in part for
public use or purpose, i.e., public school, etc., because in such a case, conversion is no longer necessary. As held in Republic v.
Estonilo,49 only a positive act of the President is needed to segregate or reserve a piece of land of the public domain for a public
purpose. As such, reservation of public agricultural lands for public use or purpose in effect converted the same to such use without
undergoing any conversion process and that they must be actually, directly and exclusively used for such public purpose for which
they have been reserved, otherwise, they will be segregated from the reservations and transferred to the DAR for distribution to
qualified beneficiaries under the CARP.50 More so, public agricultural lands already reserved for public use or purpose no longer
form part of the alienable and disposable lands of the public domain suitable for agriculture. 51 Hence, they are outside the coverage
of the CARP and it logically follows that they are also beyond the conversion authority of the DAR.

Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in excess of jurisdiction or with grave
abuse of discretion amounting to lack or excess of jurisdiction in (1) including lands not reclassified as residential, commercial,
industrial or other non-agricultural uses before 15 June 1988 in the definition of agricultural lands under DAR AO No. 01-02, as
amended, and; (2) issuing and enforcing DAR AO No. 01-02, as amended, subjecting to DAR’s jurisdiction for conversion lands
which had already been reclassified as residential, commercial, industrial or for other non-agricultural uses on or after 15 June 1988.

Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by LGUs shall be subject to the
requirements of land use conversion procedure or that DAR’s approval or clearance must be secured to effect reclassification, did
not violate the autonomy of the LGUs.

Section 20 of Republic Act No. 7160 states that:

SECTION 20. Reclassification of Lands. – (a) A city or municipality may, through an ordinance passed by the sanggunian after
conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their
utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural
purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for
residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassification
shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance:

xxxx
(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands distributed to agrarian reform
beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-seven (R.A. No. 6657), otherwise known as "The
Comprehensive Agrarian Reform Law," shall not be affected by the said reclassification and the conversion of such lands into other
purposes shall be governed by Section 65 of said Act.

xxxx

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of R.A. No. 6657.

The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural lands is not absolute. The authority of
the DAR to approve conversion of agricultural lands covered by Republic Act No. 6657 to non-agricultural uses has been validly
recognized by said Section 20 of Republic Act No. 7160 by explicitly providing therein that, "nothing in this section shall be
construed as repealing or modifying in any manner the provisions of Republic Act No. 6657."

DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal protection clause of the
Constitution. In providing administrative and criminal penalties in the said administrative order, the Secretary of Agrarian Reform
simply implements the provisions of Sections 73 and 74 of Republic Act No. 6657, thus:

Sec. 73. Prohibited Acts and Omissions. – The following are prohibited:

xxxx

(c) The conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid the application of this
Act to his landholdings and to disposes his tenant farmers of the land tilled by them;

xxxx

(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right over the land he acquired by
virtue of being a beneficiary, in order to circumvent the provisions of this Act.

xxxx

Sec. 74. Penalties. ─ Any person who knowingly or willfully violates the provisions of this Act shall be punished by imprisonment of
not less than one (1) month to not more than three (3) years or a fine of not less than one thousand pesos (₱1,000.00) and not more
than fifteen thousand pesos (₱15,000.00), or both, at the discretion of the court.

If the offender is a corporation or association, the officer responsible therefor shall be criminally liable.

And Section 11 of Republic Act No. 8435, which specifically provides:

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. – x x x.

Any person found guilty of premature or illegal conversion shall be penalized with imprisonment of two (2) to six (6) years, or a fine
equivalent to one hundred percent (100%) of the government's investment cost, or both, at the discretion of the court, and an
accessory penalty of forfeiture of the land and any improvement thereon.

In addition, the DAR may impose the following penalties, after determining, in an administrative proceedings, that violation of this
law has been committed:

a. Consolation or withdrawal of the authorization for land use conversion; and

b. Blacklisting, or automatic disapproval of pending and subsequent conversion applications that they may file with the
DAR.

Contrary to petitioner’s assertions, the administrative and criminal penalties provided for under DAR AO No. 01-02, as amended, are
imposed upon the illegal or premature conversion of lands within DAR’s jurisdiction, i.e., "lands not reclassified as residential,
commercial, industrial or for other non-agricultural uses before 15 June 1998."

The petitioner’s argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land use conversion without any
basis, stands on hollow ground.
It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the President in order to address the unabated
conversion of prime agricultural lands for real estate development because of the worsening rice shortage in the country at that time.
Such measure was made in order to ensure that there are enough agricultural lands in which rice cultivation and production may be
carried into. The issuance of said Memorandum No. 88 was made pursuant to the general welfare of the public, thus, it cannot be
argued that it was made without any basis.

WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs against petitioner.

SO ORDERED.

Manner of Acquiring Jurisdiction

a. Over Subject Matter

ALLIED DOMECQ PHIL., INC., petitioner, vs. HON. SESINANDO E. VILLON of the Regional Trial Court of Manila, Branch 23;
CLARK LIBERTY WAREHOUSE, INC., BUREAU OF CUSTOMS and/or DISTRICT COLLECTORS OF CUSTOMS,
PORT OF MANILA and CLARK SPECIAL ECONOMIC ZONE, and BUREAU OF FOOD AND DRUGS (BFAD) and/or
DIRECTOR OF BFAD, respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari assailing the Decision[1] of the Court of Appeals dated May 27, 2002 and
Resolution[2] dated November 29, 2002 in CA-G.R. SP No. 63802 which dismissed the special civil action for certiorari filed by Allied
Domecq, Philippines Inc. (ADPI), herein petitioner, for want of jurisdiction.

The factual background of this case is as follows:

On May 8, 1996, petitioner ADPI entered into an exclusive distributorship agreement with Pedro Domecq, S.A., a corporation
organized and existing under the laws of Spain, engaged in the manufacture of wine and brandy. Under the said agreement, Pedro
Domecq, S.A. granted petitioner the sole and exclusive right to import and distribute in the Philippines various Pedro Domecq, S.A.
products including Fundador brandy until May 17, 2000. Upon its expiration, the agreement is deemed automatically extended for an
indefinite period of time.

Petitioner then applied for a Certificate of Registration with the Bureau of Food and Drugs (BFAD), pursuant to Department of
Health Administrative Order No. 17, series of 1979, requiring all imported food products to be registered with the BFAD prior to their
distribution in the local markets.

On June 2, 1998, BFAD wrote then Director Quintin L. Kintanar of the Bureau of Customs, requesting that entry of imported
shipments of Fundador brandy should not be allowed in the Philippines, unless the importer presents a valid Certificate of Registration
issued by the BFAD. The Bureau of Customs granted petitioners request and on July 13, 1998, issued Customs Memorandum Circular
No. 228-098.

On April 12, 1999, Clark Liberty Warehouse, Inc. (Clark Liberty), herein private respondent, a duly licensed duty-free shop
operating in the Clark Special Economic Zone, imported 800 cases or a total of 9,420 bottles of Fundador brandy.

Since the importation by respondent Clark Liberty was not covered by the BFAD Certificate of Product Registration, the Bureau
of Customs seized and impounded the shipment pursuant to Customs Memorandum Circular No. 228-98, in relation to Sections 101
(K) and 2530 of the Tariff and Customs Code. The imported brandy then became the subject of seizure proceedings before the District
Collector of Customs of the Port of Manila, docketed as S.I. No. 99-140.

Petitioner then filed a motion to intervene in S.I. No. 99-140 alleging, among others, that it sustained damages caused by
respondent Clark Libertys illegal importation.However, the Bureau of Customs District Collector failed to resolve the motion.

On September 15, 1999, petitioner sent respondent Clark Liberty a letter demanding that the latter cease and desist from
importing, distributing, selling, or marketing Fundador brandy in the Philippines. Petitioner also demanded that Clark Liberty refrain
from claiming the seized shipment and participating in the seizure proceedings. Clark Liberty, however, refused to heed petitioners
demands.

On October 8, 1999, petitioner filed with the Regional Trial Court (RTC) of Manila a complaint for injunction and damages with
prayer for the issuance of a temporary restraining order (TRO) and a writ of preliminary injunction. The complaint was raffled to Branch
23 of the Manila RTC, docketed therein as Civil Case No. 99-95337.
 On August 15, 2000, after hearing petitioners application for TRO and injunctive relief, the RTC issued an Order denying the
same. The trial court held that petitioner failed to prove that respondent Clark Liberty engaged in unfair competition as there is no
showing that it employed deceit or otherwise committed acts constituting bad faith;[3] that the bottles of Fundador brandy imported by
respondent are the ones imported by plaintiff[4] and that these bottles are not genuine, defective, or of poor quality.[5]

Petitioner filed a motion for reconsideration but was denied by the RTC in its Order dated December 28, 2000.

On March 16, 2001, petitioner filed with the Court of Appeals a special civil action for certiorari, docketed as CA-G.R. SP No.
63802.

On May 27, 2002, the Court of Appeals issued its assailed Decision dismissing the petition for lack of jurisdiction. Its ratiocination
is quoted as follows:

[I]t is an admitted fact respondent Clark Liberty is one of the duly licensed and authorized duty free shops at the Clark Special
Economic Zone since 1998 which sells imported grocery items including liquors, appliances, household wares, etc. and is
exclusively regulated by the Clark Development Corporation, created by Republic Act No. 7227, known as the Bases Conversion
and Development Act of 1992. It is therefore a juridical creation of Republic Act No. 7227 in relation to Executive Order No. 62 and
Presidential Proclamation No. 163, creating the Clark Special Economic Zone, under the exclusive jurisdiction, authority and
regulation of the Clark Development Corporation. As such juridical creation, this Court has no jurisdiction to determine whether or
not petitioner is entitled to the issuance of an injunctive relief since such authority and jurisdiction belong the Honorable Supreme
Court in accordance with Section 21 of Republic Act No. 7227.[6]

Hence, the instant petition for review anchored on the following grounds:

THE FORMER THIRTEENTH DIVISION OF THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERRORS IN
LAW IN DISMISSING THE PETITION FOR CERTIORARI IN CA-G.R. SP NO. 63802 UNDER RULE 65 OF THE 1997 RULES ON
CIVIL PROCEDURE FOR LACK OF JURISDICTION.

II

THE FORMER THIRTEENTH DIVISION OF THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION BY NOT LOOKING INTO THE MERITS OF THE CASE AND IN NOT
RESOLVING WHETHER OR NOT PETITION IS ENTITLED TO THE INJUNCTION RELIEF PRAYED FOR IN ITS PETITION.

III

IN DISMISSING THE PETITION IN CA-G.R. SP NO. 63802, THE HONORABLE COURT OF APPEALS HAS DECIDED A
QUESTION OF SUBSTANCE NOT THEREFORE DETERMINED BY THE SUPREME COURT OR HAS DECIDED IT IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH APPLICABLE DECISIONS OF THIS HONORABLE SUPREME COURT.[7]

Petitioner submits that the Appellate Court gravely abused its discretion in holding that under Section 21 of Republic Act No.
7227, only the Supreme Court can issue a writ of preliminary injunction. Petitioner contends that its cause of action has nothing to
do with the implementation of the projects for the conversion of the military reservation into alternative productive uses
governed by the said law. Since jurisdiction is conferred by law, the Court of Appeals cannot diminish its own jurisdiction under Batas
Pambansa Blg. 129, as amended.

The Solicitor General and respondent Clark Liberty counter that the Court of Appeals was correct in dismissing the petition
before it for lack of jurisdiction. They point out that in the proceedings before the trial court, petitioner admitted that Clark Liberty is a
registered enterprise of the Clark Special Economic Zone, thus subject to the operation of R.A. 7227. Under Section 21 of this law,
only the Supreme Court has jurisdiction to grant injunctive relief to enjoin the implementation of the projects for the conversion into
alternative productive uses of the military reservation.

The pivotal issue, therefore, is whether the Court of Appeals gravely abused its discretion in holding that it has no jurisdiction
over CA-G.R. SP No. 63802 pursuant to Section 21 of Republic Act 7227.

Jurisdiction is the authority to hear and determine a cause. [8] Jurisdiction over the subject matter is the power to hear and
determine the general class to which the proceedings in question belong. [9] Jurisdiction over the subject matter is conferred by law
and not by the consent or acquiescence of any or all of the parties or by erroneous belief of the court that it exists. [10] Basic is the rule
that jurisdiction over the subject matter is determined by the cause or causes of action as alleged in the complaint. [11] But where the
actual issues are evident from the records of the case, then jurisdiction over the subject matter need not depend upon the literal
averments in the complaint, but on the law as applied to established facts.[12]

Here, in order to determine whether the court a quo has jurisdiction over petitioners complaint for injunction, we have to interpret
the law as applied to the established facts. There is no question that respondent Clark Liberty is a registered enterprise of the
Clark Special Economic Zone and is primarily regulated by R.A. No. 7227, otherwise known as the Bases Conversion and
Development Act of 1992.

The underlying purpose of the Legislature in enacting R.A. No. 7227 is provided by Section 2, thus:

SEC. 2. Declaration of Policies. It is hereby declared the policy of the Government to accelerate the sound and balanced conversion
into alternative productive uses of the Clark and Subic military reservations and their extensions (John Hay Station, Wallace Air
Station, ODonnell Transmitter Station, San Miguel Naval Communications Station and Capas Relay station), to raise funds by the
sale of portions of Metro Manila military camps and to apply said funds for the development and conversion to productive civilian
use of the lands covered under the 1947 Military Bases Agreement between the Philippines and the United States of America, as
amended.

It is likewise the declared policy of the Government to enhance the benefits to be derived from said properties in order to promote
the economic and social development of Central Luzon in particular and the country in general.

Republic Act No. 7227 goes on further to provide that:

SEC. 4. Purposes of the Conversion Authority. The Conversion authority shall have the following purposes:

xxx

(c) To encourage the active participation of the private sector in transforming the Clark and Subic military reservations and their
extensions into other productive uses;

The establishment, registration, and operation of respondent Clark Liberty and the other enterprises within the Clark Special
Economic Zone are projects (involving the private sector) which convert Clark Air Base, a military reservation, into productive uses. In
this connection, Section 21 of R.A. No. 7227 provides:

SEC. 21. Injunction and Restraining Order. The implementation of the projects for the conversion into alternative productive uses of
the military reservations are urgent and necessary and shall not be restrained or enjoined except by an order issued by the
Supreme Court of the Philippines.

Verily, the Court of Appeals did not err when it dismissed CA-G.R. SP No. 63802 for want of jurisdiction.

WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals dated May 27, 2002 and its Resolution
dated November 29, 2002, in CA-G.R. SP No. 63802 are AFFIRMED. Costs against petitioner.

SO ORDERED.

G.R. No. 180321 March 20, 2013

EDITHA PADLAN, Petitioner,

vs.
ELENITA DINGLASAN and FELICISIMO DINGLASAN, Respondents.

DECISION

PERALTA, J.:

This is a petition for review on certiorari assailing the Decision1 dated June 29, 2007 of the Court of Appeals (CA) in CA-G.R. CV
No. 86983, and the Resolution2 dated October 23, 2007 denying petitioner's Motion for Reconsideration. 3

The factual and procedural antecedents are as follows:

Elenita Dinglasan (Elenita) was the registered owner of a parcel of land designated as Lot No. 625 of the Limay Cadastre which is
covered by Transfer Certificate of Title (TCT) No. T-105602, with an aggregate area of 82,972 square meters. While on board a
jeepney, Elenita’s mother, Lilia Baluyot (Lilia), had a conversation with one Maura Passion (Maura) regarding the sale of the said
property. Believing that Maura was a real estate agent, Lilia borrowed the owner’s copy of the TCT from Elenita and gave it to
Maura. Maura then subdivided the property into several lots from Lot No. 625-A to Lot No. 625-O, under the name of Elenita and her
husband Felicisimo Dinglasan (Felicisimo).
Through a falsified deed of sale bearing the forged signature of Elenita and her husband Felicisimo, Maura was able to sell the lots
to different buyers. On April 26, 1990, Maura sold Lot No. 625-K to one Lorna Ong (Lorna), who later caused the issuance of TCT
No. 134932 for the subject property under her name. A few months later, or sometime in August 1990, Lorna sold the lot to
petitioner Editha Padlan for ₱4,000.00. Thus, TCT No. 134932 was cancelled and TCT No. 137466 was issued in the name of
petitioner.

After learning what had happened, respondents demanded petitioner to surrender possession of Lot No. 625-K, but the latter
refused. Respondents were then forced to file a case before the Regional Trial Court (RTC) of Balanga, Bataan for the Cancellation
of Transfer Certificate of Title No. 137466, docketed as Civil Case No. 438-ML. Summons was, thereafter, served to petitioner
through her mother, Anita Padlan.

On December 13, 1999, respondents moved to declare petitioner in default and prayed that they be allowed to present evidence ex
parte.4

On January 17, 2000, petitioner, through counsel, filed an Opposition to Declare Defendant in Default with Motion to Dismiss Case
for Lack of Jurisdiction Over the Person of Defendant.5 Petitioner claimed that the court did not acquire jurisdiction over her,
because the summons was not validly served upon her person, but only by means of substituted service through her mother.
Petitioner maintained that she has long been residing in Japan after she married a Japanese national and only comes to the
Philippines for a brief vacation once every two years.

On April 5, 2001, Charlie Padlan, the brother of petitioner, testified that his sister is still in Japan and submitted a copy of petitioner’s
passport and an envelope of a letter that was allegedly sent by his sister. Nevertheless, on April 5, 2001, the RTC issued an
Order6 denying petitioner’s motion to dismiss and declared her in default. Thereafter, trial ensued.

On July 1, 2005, the RTC rendered a Decision7 finding petitioner to be a buyer in good faith and, consequently, dismissed the
complaint.

Not satisfied, respondents sought recourse before the CA, docketed as CA-G.R. No. CV No. 86983.

On June 29, 2007, the CA rendered a Decision8 in favor of the respondent. Consequently, the CA reversed and set aside the
Decision of the RTC and ordered the cancellation of the TCT issued in the name of Lorna and the petitioner, and the revival of
respondents’ own title, to wit:

WHEREFORE, in view of the foregoing, the Decision dated July

1, 2005 of the Regional Trial Court, Third Judicial Region, Branch 4, Mariveles, Bataan (Stationed in Balanga, Bataan) in Civil Case
No. 438-ML is hereby REVERSED and SET ASIDE.

The Transfer Certificate of Title No. 134932 issued in the name of Lorna Ong and Transfer Certificate of Title No. 137466 issued in
the name of defendant-appellee Editha Padlan are CANCELLED and Transfer Certificate of Title No. 134785 in the name of the
plaintiffs-appellants is REVIVED.

SO ORDERED.9

The CA found that petitioner purchased the property in bad faith from Lorna. The CA opined that although a purchaser is not
expected to go beyond the title, based on the circumstances surrounding the sale, petitioner should have conducted further inquiry
before buying the disputed property. The fact that Lorna bought a 5,000-square-meter property for only ₱4,000.00 and selling it after
four months for the same amount should have put petitioner on guard. With the submission of the Judgment in Criminal Case No.
4326 rendered by the RTC, Branch 2, Balanga, Bataan, entitled People of the Philippines v. Maura Passion 10 and the testimonies of
respondents, the CA concluded that respondents sufficiently established that TCT No. 134932 issued in the name of Lorna and TCT
No. 137466 issued in the name of petitioner were fraudulently issued and, therefore, null and void.

Aggrieved, petitioner filed a Motion for Reconsideration. Petitioner argued that not only did the complaint lacks merit, the lower court
failed to acquire jurisdiction over the subject matter of the case and the person of the petitioner.

On October 23, 2007, the CA issued a Resolution11 denying the motion. The CA concluded that the rationale for the exception made
in the landmark case of Tijam v. Sibonghanoy12 was present in the case. It reasoned that when the RTC denied petitioner’s motion
to dismiss the case for lack of jurisdiction, petitioner neither moved for a reconsideration of the order nor did she avail of any remedy
provided by the Rules. Instead, she kept silent and only became interested in the case again when the CA rendered a decision
adverse to her claim.

Hence, the petition assigning the following errors:

 I

WHETHER OR NOT THE HONORABLE COURT HAS JURISDICTION OVER THE PERSON OF THE PETITIONER.

II

WHETHER OR NOT THE HONORABLE COURT HAS JURISDICTION OVER THE SUBJECT MATTER OF THE CASE.

III

WHETHER OR NOT PETITIONER IS A BUYER IN GOOD FAITH AND FOR VALUE.13

Petitioner maintains that the case of Tijam v. Sibonghanoy finds no application in the case at bar, since the said case is not on all
fours with the present case. Unlike in Tijam, wherein the petitioner therein actively participated in the proceedings, petitioner herein
asserts that she did not participate in any proceedings before the RTC because she was declared in default.

Petitioner insists that summons was not validly served upon her, considering that at the time summons was served, she was
residing in Japan. Petitioner contends that pursuant to Section 15, Rule 14 of the Rules of Civil Procedure, when the defendant does
not reside in the Philippines and the subject of the action is property within the Philippines of the defendant, service may be effected
out of the Philippines by personal service or by publication in a newspaper of general circulation. In this case, summons was served
only by substituted service to her mother. Hence, the court did not acquire jurisdiction over her person.

Also, petitioner posits that the court lacks jurisdiction of the subject matter, considering that from the complaint, it can be inferred
that the value of the property was only ₱4,000.00, which was the amount alleged by respondents that the property was sold to
petitioner by Lorna.

Finally, petitioner stresses that she was a buyer in good faith. It was Maura who defrauded the respondents by selling the property
to Lorna without their authority.

Respondents, on the other hand, argue that the CA was correct in ruling in their favor.

The petition is meritorious.

Respondents filed the complaint in 1999, at the time Batas Pambansa Blg. (BP) 129, the Judiciary Reorganization Act of 1980, was
already amended by Republic Act (RA) No. 7691, An Act Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts, amending for the purpose BP Blg. 129. 14

Section 1 of RA 7691, amending BP Blg. 129, provides that the RTC shall exercise exclusive original jurisdiction on the following
actions:

Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980," is hereby
amended to read as follows:

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;

(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed
value of the property involved exceeds Twenty Thousand Pesos (₱20,000.00) or for civil actions in Metro Manila, where
such value exceeds Fifty Thousand Pesos (₱50,000.00), except actions for forcible entry into and unlawful detainer of
lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts; x x x

Section 3 of RA 7691 expanded the exclusive original jurisdiction of the first level courts, thus:

Section 3. Section 33 of the same law BP Blg. 129 is hereby amended to read as follows:

Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. –
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
xxxx

(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where
the assessed value of the property or interest therein does not exceed Twenty Thousand Pesos (₱20,000.00) or, in civil actions in
Metro Manila, where such assessed value does not exceed Fifty Thousand Pesos (₱50,000.00) exclusive of interest, damages of
whatever kind, attorney's fees, litigation expenses and costs: Provided, That in cases of land not declared for taxation purposes, the
value of such property shall be determined by the assessed value of the adjacent lots.

Respondents filed their Complaint with the RTC; hence, before proceeding any further with any other issues raised by the petitioner,
it is essential to ascertain whether the RTC has jurisdiction over the subject matter of this case based on the above-quoted
provisions.

However, in order to determine which court has jurisdiction over the action, an examination of the complaint is essential. Basic as a
hornbook 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 plaintiff's 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 therein. The
averments in the complaint and the character of the relief sought are the ones to be consulted. Once vested by the allegations in the
complaint, jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of the
claims asserted therein.15

What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint.
The averments therein and the character of the relief sought are the ones to be consulted. 16

Respondents’ Complaint17 narrates that they are the duly registered owners of Lot No. 625 of the Limay Cadastre which was
covered by TCT No. T-105602. Without their knowledge and consent, the land was divided into several lots under their names
through the fraudulent manipulations of Maura. One of the lots was Lot 625-K, which was covered by TCT No. 134785. On April 26,
1990, Maura sold the subject lot to Lorna. By virtue of the fictitious sale, TCT No. 134785 was cancelled and TCT No. 134932 was
issued in the name of Lorna. Sometime in August 1990, Lorna sold the lot to petitioner for a consideration in the amount of
₱4,000.00. TCT No. 134932 was later cancelled and TCT No. 137466 was issued in the name of petitioner. Despite demands from
the respondents, petitioner refused to surrender possession of the subject property. Respondents were thus constrained to engage
the services of a lawyer and incur expenses for litigation. Respondents prayed for the RTC (a) to declare TCT No. 137466 null and
to revive TCT No. T-105602 which was originally issued and registered in the name of the respondents; and (b) to order petitioner to
pay attorney’s fees in the sum of ₱50,000.00 and litigation expenses of ₱20,000.00, plus cost of suit.18

An action "involving title to real property" means that the plaintiff's cause of action is based on a claim that he owns such property or
that he has the legal rights to have exclusive control, possession, enjoyment, or disposition of the same. Title is the "legal link
between (1) a person who owns property and (2) the property itself." "Title" is different from a "certificate of title" which is the
document of ownership under the Torrens system of registration issued by the government through the Register of Deeds. While
title is the claim, right or interest in real property, a certificate of title is the evidence of such claim. 19

In the present controversy, before the relief prayed for by the respondents in their complaint can be granted, the issue of who
between the two contending parties has the valid title to the subject lot must first be determined before a determination of who
between them is legally entitled to the certificate of title covering the property in question.1âwphi1

From the Complaint, the case filed by respondent is not simply a case for the cancellation of a particular certificate of title and the
revival of another. The determination of such issue merely follows after a court of competent jurisdiction shall have first resolved the
matter of who between the conflicting parties is the lawful owner of the subject property and ultimately entitled to its possession and
enjoyment. The action is, therefore, about ascertaining which of these parties is the lawful owner of the subject lot, jurisdiction over
which is determined by the assessed value of such lot.20

In no uncertain terms, the Court has already held that a complaint must allege the assessed value of the real property subject of the
complaint or the interest thereon to determine which court has jurisdiction over the action. 21In the case at bar, the only basis of
valuation of the subject property is the value alleged in the complaint that the lot was sold by Lorna to petitioner in the amount of
₱4,000.00. No tax declaration was even presented that would show the valuation of the subject property. In fact, in one of the
hearings, respondents’ counsel informed the court that they will present the tax declaration of the property in the next hearing since
they have not yet obtained a copy from the Provincial Assessor’s Office. 22 However, they did not present such copy.

To reiterate, where the ultimate objective of the plaintiffs is to obtain title to real property, it should be filed in the proper court having
jurisdiction over the assessed value of the property subject thereof.23 Since the amount alleged in the Complaint by respondents for
the disputed lot is only ₱4,000.00, the MTC and not the RTC has jurisdiction over the action. Therefore, all proceedings in the RTC
are null and void.24

Consequently, the remaining issues raised by petitioner need not be discussed further.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 86983, dated June 29, 2007,
and its Resolution dated October 23, 2007, are REVERSED and SET ASIDE. The Decision of the Regional Trial Court, dated July I,
2005, is declared NULL and VOID. The complaint in Civil Case No. 438-ML is dismissed without prejudice.

SO ORDERED.

FIRST DIVISION

GILBERT G. GUY, Petitioner, G.R. No. 165849

- versus -

THE COURT OF APPEALS (8THDIVISION), NORTHERN

ISLANDS CO., INCORPORATED, SIMNY G. GUY,
GERALDINE G. GUY, GLADYS G. YAO, and EMILIA
TABUGADIR,
Respondents.
x--------------------------x
IGNACIO AND IGNACIO LAW OFFICES, G.R. No. 170185
Petitioner,

- versus -

THE COURT OF APPEALS (7THDIVISION), NORTHERN

ISLANDS CO., INCORPORATED, SIMNY G. GUY,
GERALDINE G. GUY, GLADYS G. YAO, and EMILIA A.
TABUGADIR,
Respondents.
x--------------------------x G.R. No. 170186
SMARTNET PHILIPPINES, Petitioner,

- versus -

THE COURT OF APPEALS (7THDIVISION), NORTHERN

ISLANDS CO., INCORPORATED, SIMNY G. GUY,
GERALDINE G. GUY, GLADYS

G. YAO, and EMILIA A. TABUGADIR,

Respondents.
x--------------------------x G.R. No. 171066
LINCOLN CONTINENTAL DEVELOPMENT CO., INC.,
Petitioner,

- versus -
NORTHERN ISLANDS CO., INCORPORATED, SIMNY G.
GUY, GERALDINE G. GUY, GRACE G. CHEU, GLADYS G.
YAO, and EMILIA A. TABUGADIR,
Respondents.
x--------------------------x
LINCOLN CONTINENTAL DEVELOPMENT COMPANY, G.R. No. 176650
INC.,
Petitioner, Present:

- versus - PUNO, C.J., Chairperson,

*
YNARES-SANTIAGO,
NORTHERN ISLANDS CO., INCORPORATED, SIMNY G. SANDOVAL-GUTIERREZ,
GUY, GERALDINE G. GUY, GRACE G. CHEU, GLADYS G. CORONA, and
YAO, and EMILIA A. TABUGADIR, AZCUNA, JJ.
Respondents.
Promulgated:
 December 10, 2007

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

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us are five (5) consolidated cases which stemmed from Civil Case No. 04-109444 filed with the Regional Trial Court

(RTC), Branch 24, Manila, subsequently re-raffled to Branch 46[1] and eventually to Branch 25.[2]

The instant controversies arose from a family dispute. Gilbert Guy is the son of Francisco and Simny Guy. Geraldine, Gladys and

Grace are his sisters. The family feud involves the ownership and control of 20,160 shares of stock of Northern Islands Co., Inc.

(Northern Islands) engaged in the manufacture, distribution, and sales of various home appliances bearing the 3-D trademark.

Simny and her daughters Geraldine, Gladys and Grace, as well as Northern Islands and Emilia Tabugadir, have been impleaded as

respondents in the above-entitled cases. Northern Islands is a family-owned corporation organized in 1957 by spouses Francisco and

respondent Simny Guy. In November 1986, they incorporated Lincoln Continental Development Corporation, Inc. (Lincoln Continental)

as a holding company of the 50% shares of stock of Northern Islands in trust for their three (3) daughters, respondents Geraldine,

Gladys and Grace. Sometime in December 1986, upon instruction of spouses Guy, Atty. Andres Gatmaitan, president of Lincoln

Continental, indorsed in blank Stock Certificate No. 132 (covering 8,400 shares) and Stock Certificate No. 133 (covering 11,760

shares) and delivered them to Simny.

In 1984, spouses Guy found that their son Gilbert has been disposing of the assets of their corporations without authority. In order to

protect the assets of Northern Islands, Simny surrendered Stock Certificate Nos. 132 and 133 to Emilia Tabugadir, an officer

of Northern Islands. The 20,160 shares covered by the two Stock Certificates were then registered in the names of respondent sisters,

thus enabling them to assume an active role in the management of Northern Islands.

On January 27, 2004, during a special meeting of the stockholders of Northern Islands, Simny was elected President; Grace as Vice-

President for Finance; Geraldine as Corporate Treasurer; and Gladys as Corporate Secretary. Gilbert retained his position as

Executive Vice President. This development started the warfare between Gilbert and his sisters.

On March 18, 2004, Lincoln Continental filed with the RTC, Branch 24, Manila a Complaint for Annulment of the Transfer of Shares

of Stock against respondents, docketed as Civil Case No. 04-109444. The complaint basically alleges that Lincoln Continental owns

20,160 shares of stock of Northern Islands; and that respondents, in order to oust Gilbert from the management of Northern Islands,

falsely transferred the said shares of stock in respondent sisters names. Lincoln Continental then prayed for an award of damages
and that the management of Northern Islands be restored to Gilbert. Lincoln also prayed for the issuance of a temporary restraining

order (TRO) and a writ of preliminary mandatory injunction to prohibit respondents from exercising any right of ownership over the

shares.

On June 16, 2004, Lincoln Continental filed a Motion to Inhibit the Presiding Judge of Branch 24, RTC, Manila on the ground of

partiality. In an Order dated June 22, 2004, the presiding judge granted the motion and inhibited himself from further hearing Civil

Case No. 04-109444. It was then re-raffled to Branch 46 of the same court.

On July 12, 2004, Branch 46 set the continuation of the hearing on Lincoln Continentals application for a TRO.

On July 13, 2004, respondents filed with the Court of Appeals a Petition for Certiorari and Mandamus, docketed as CA-G.R. SP No.

85069, raffled off to the Tenth Division. Respondents alleged that the presiding judge of Branch 24, in issuing the Order dated June

22, 2004 inhibiting himself from further hearing Civil Case No. 04-109444, and the presiding judge of Branch 46, in issuing the Order

dated July 12, 2004 setting the continuation of hearing on Lincoln Continentals application for a TRO, acted with grave abuse of

discretion tantamount to lack or excess of jurisdiction.

Meanwhile, on July 15, 2004, the trial court issued the TRO prayed for by Lincoln Continental directing respondents to restore to

Gilbert the shares of stock under controversy. In the same Order, the trial court set the hearing of Lincoln Continentals application for

a writ of preliminary injunction on July 19, 20, and 22, 2004.

On July 16, 2004, the Court of Appeals (Tenth Division) issued a TRO enjoining Branch 46, RTC, Manila from enforcing, maintaining,

or giving effect to its Order of July 12, 2004 setting the hearing of Lincoln Continentals application for a TRO.

Despite the TRO, the trial court proceeded to hear Lincoln Continentals application for a writ of preliminary injunction. This prompted

respondents to file in the same CA-G.R. SP No. 85069 a Supplemental Petition for Certiorari, Prohibition, and Mandamus seeking to

set aside the Orders of the trial court setting the hearing and actually hearing Lincoln Continentals application for a writ of preliminary

injunction. They prayed for a TRO and a writ of preliminary injunction to enjoin the trial court (Branch 46) from further hearing Civil

Case No. 04-109444.

On September 17, 2004, the TRO issued by the Court of Appeals (Tenth Division) in CA-G.R. SP No. 85069 expired.
On September 20, 2004, Gilbert filed a Motion for Leave to Intervene and Motion to Admit Complaint-in-Intervention in Civil Case No.

04-109444. In its Order dated October 4, 2004, the trial court granted the motions.

Meantime, on October 13, 2004, the trial court issued the writ of preliminary mandatory injunction prayed for by Lincoln Continental in

Civil Case No. 04-109444.

On October 20, 2004, the Court of Appeals (Tenth Division) denied respondents application for injunctive relief since the trial court

had already issued a writ of preliminary injunction in favor of Lincoln Continental. Consequently, on October 22, 2004, respondents

filed with the Tenth Division a Motion to Withdraw Petition and Supplemental Petition in CA-G.R. SP No. 85069.

On October 26, 2004, respondents filed a new Petition for Certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 87104,

raffled off to the Eighth Division. They prayed that the TRO and writ of preliminary injunction issued by the RTC, Branch 46, Manila be

nullified and that an injunctive relief be issued restoring to them the management of Northern Islands. They alleged that Gilbert has

been dissipating the assets of the corporation for his personal gain.

On October 28, 2004, the Court of Appeals Eighth Division issued a TRO enjoining the implementation of the writ of preliminary

injunction dated October 13, 2004issued by the trial court in Civil Case No. 04-109444; and directing Lincoln Continental to turn over

the assets and records of Northern Islands to respondents.

On November 2, 2004, respondents filed with the appellate court (Eighth Division) an Urgent Omnibus Motion praying for the issuance

of a break-open Order to implement its TRO.

On November 4, 2004, the Eighth Division issued a Resolution granting respondents motion. Pursuant to this Resolution, respondents

entered the Northern Islandspremises at No. 3 Mercury Avenue, Libis, Quezon City.

On November 18, 2004, Gilbert filed with this Court a petition for certiorari, docketed as G.R. No. 165849, alleging that the Court of

Appeals (Eighth Division), in granting an injunctive relief in favor of respondents, committed grave abuse of discretion tantamount to

lack or in excess of jurisdiction. The petition also alleges that respondents resorted to forum shopping.
Meanwhile, on December 16, 2004, Smartnet Philippines, Inc. (Smartnet) filed with the Metropolitan Trial Court (MeTC), Branch

35, Quezon City a complaint for forcible entry against respondents, docketed as Civil Case No. 35-33937. The complaint alleges that

in entering the Northern Islands premises, respondents took possession of the area being occupied by Smartnet and barred its officers

and employees from occupying the same.

Likewise on December 16, 2004, Ignacio and Ignacio Law Offices also filed with Branch 37, same court, a complaint for forcible entry

against respondents, docketed as Civil Case No. 34106. It alleges that respondents forcibly occupied its office space when they took

over the premises of Northern Islands.

On December 22, 2004, the Eighth Division issued the writ of preliminary injunction prayed for by respondents in CA-G.R. SP No.

87104.

Subsequently, the presiding judge of the RTC, Branch 46, Manila retired. Civil Case No. 04-109444 was then re-raffled to Branch 25.

On January 20, 2005, respondents filed with the Eighth Division of the appellate court a Supplemental Petition for Certiorari with

Urgent Motion for a Writ of Preliminary Injunction to Include Supervening Events. Named as additional respondents were 3-D

Industries, Judge Celso D. Lavia, Presiding Judge, RTC, Branch 71, Pasig City and Sheriff Cresencio Rabello, Jr. This supplemental

petition alleges that Gilbert, in an attempt to circumvent the injunctive writ issued by the Eighth Division of the appellate court, filed

with the RTC, Branch 71, Pasig City a complaint for replevin on behalf of 3-D Industries, to enable it to take possession of the assets

and records of Northern Islands. The complaint was docketed as Civil Case No. 70220. On January 18, 2005, the RTC issued the writ

of replevin in favor of 3-D Industries.

On April 15, 2005, respondents filed with the Eighth Division a Second Supplemental Petition for Certiorari and Prohibition with Urgent

Motion for the Issuance of an Expanded Writ of Preliminary Injunction. Impleaded therein as additional respondents were Ignacio and

Ignacio Law Offices, Smartnet, Judge Maria Theresa De Guzman, Presiding Judge, MeTC, Branch 35, Quezon City, Judge Augustus

C. Diaz, Presiding Judge, MeTC, Branch 37, Quezon City, Sun Fire Trading Incorporated, Zolt Corporation, Cellprime Distribution

Corporation, Goodgold Realty and Development Corporation, John Does and John Doe Corporations. Respondents alleged in the

main that the new corporations impleaded are alter egos of Gilbert; and that the filing of the forcible entry cases with the MeTC was

intended to thwart the execution of the writ of preliminary injunction dated December 22, 2004 issued by the Court of Appeals (Eighth

Division) in CA-G.R. SP No. 87104.

On April 26, 2005, the Eighth Division issued a Resolution admitting respondents new pleading. On August 19, 2005, the Eighth

Division (now Seventh Division) rendered its Decision in CA-G.R. SP No. 87104, the dispositive portion of which reads:

WHEREFORE, premises considered, the petition is hereby GRANTED and the October 13, 2004 Order and the
October 13, 2004 Writ of Preliminary Mandatory Injunction issued by Branch 46 of the Regional Trial Court of
Manila are hereby REVERSED and SET ASIDE. The December 17, 2004 Order and Writ of Preliminary
Injunction issued by this Court of Appeals are hereby MADE PERMANENT against all respondents herein.

SO ORDERED.

Meanwhile, in a Decision[3] dated September 19, 2005, the RTC, Branch 25, Manila dismissed the complaint filed by Lincoln

Continental and the complaint-in-intervention of Gilbert in Civil Case No. 04-109444, thus:

WHEREFORE, in view of the foregoing, the Complaint and the Complaint-in-Intervention are hereby
DISMISSED. Plaintiff and plaintiff-intervenor are hereby ordered to jointly and severally pay defendants the
following:

(a) Moral damages in the amount of Php2,000,000.00 each for defendants Simny Guy,
Geraldine Guy, Grace Guy-Cheu and Gladys Yao;
(b) Moral damages in the amount of Php200,000.00 for defendant Emilia Tabugadir;
(c) Exemplary damages in the amount of Php2,000,000.00 each for defendants Simny Guy,
Geraldine Guy, Grace Guy-Cheu, and Gladys Yao;
(d) Exemplary damages in the amount of Php200,000.00 for defendant Emilia Tabugadir;
(e) Attorneys fees in the amount of Php2,000.000.00; and
(f) Costs of suit.

SO ORDERED.

The trial court held that Civil Case No. 04-109444 is a baseless and an unwarranted suit among family members; that based

on the evidence, Gilbert was only entrusted to hold the disputed shares of stock in his name for the benefit of the other family members;

and that it was only when Gilbert started to dispose of the assets of the familys corporations without their knowledge that respondent

sisters caused the registration of the shares in their respective names.

Both Lincoln Continental and Gilbert timely appealed the RTC Decision to the Court of Appeals, docketed therein as CA-

G.R. CV No. 85937.

On September 15, 2005, 3-D Industries, Inc. filed a petition for certiorari, prohibition, and mandamus with this Court

assailing the Decision of the Court of Appeals in CA-G.R. SP No. 87104 setting aside the writ of preliminary injunction issued by the

RTC, Branch 46. The petition was docketed as G.R. No. 169462 and raffled off to the Third Division of this Court.
 On October 3, 2005, the Third Division of this Court issued a Resolution[4] dismissing the petition of 3-D Industries in G.R.

No. 169462. 3-D Industries timely filed its motion for reconsideration but this was denied by this Court in its

Resolution[5] dated December 14, 2005.

Meanwhile, on October 10, 2005, Gilbert, petitioner in G.R. No. 165849 for certiorari, filed with this Court a Supplemental

Petition for Certiorari, Prohibition, and Mandamus with Urgent Application for a Writ of Preliminary Mandatory Injunction challenging

the Decision of the Court of Appeals (Seventh Division), dated August 19, 2005, in CA-G.R. SP No. 87104. This Decision set aside

the Order dated October 13, 2004 of the RTC, Branch 46 granting the writ of preliminary injunction in favor of Lincoln Continental.

On November 8, 2005, Ignacio and Ignacio Law Offices and Smartnet filed with this Court their petitions for certiorari,

docketed as G.R. Nos. 170185 and 170186, respectively.

On February 27, 2006, Lincoln Continental filed with this Court a petition for review on certiorari challenging the Decision of

the Court of Appeals (Seventh Division) in CA-G.R. CV No. 85937, docketed as G.R. No. 171066.

On March 20, 2006, we ordered the consolidation of G.R. No. 171066 with G.R. Nos. 165849, 170185, and 170186.

In the meantime, in a Decision dated November 27, 2006 in CA-G.R. CV No. 85937, the Court of Appeals (Special Second

Division) affirmed the Decision in Civil Case No. 04-109444 of the RTC (Branch 25) dismissing Lincoln Continentals complaint and

Gilberts complaint-in-intervention, thus:

WHEREFORE, the appeals are dismissed and the assailed decision AFFIRMED with modifications that
plaintiff and plaintiff-intervenor are ordered to pay each of the defendants-appellees Simny Guy, Geraldine Guy,
Grace Guy-Cheu and Gladys Yao moral damages of P500,000.00, exemplary damages of P100,000.00 and
attorneys fees of P500,000.00.

SO ORDERED.

Lincoln Continental and Gilbert filed their respective motions for reconsideration, but they were denied in a Resolution

promulgated on February 12, 2007.

 Lincoln Continental then filed with this Court a petition for review on certiorari assailing the Decision of the Court of Appeals

(Former Special Second Division) in CA-G.R. CV No. 85937. This petition was docketed as G.R. No. 176650 and raffled off to the

Third Division of this Court.

In our Resolution dated June 6, 2007, we ordered G.R. No. 176650 consolidated with G.R. Nos. 165849, 170185, 170186,

and 171066.

THE ISSUES

In G.R. Nos. 165849 and 171066, petitioners Gilbert and Lincoln Continental raise the following issues: (1) whether

respondents are guilty of forum shopping; and (2) whether they are entitled to the injunctive relief granted in CA-G.R. SP No. 87104.

In G.R. Nos. 170185 and 170186, the pivotal issue is whether the Court of Appeals committed grave abuse of discretion

amounting to lack or excess of jurisdiction in ruling that petitioners Ignacio and Ignacio Law Offices and Smartnet are also covered by

its Resolution granting the writ of preliminary injunction in favor of respondents.

In G.R. No. 176650, the core issue is whether the Court of Appeals (Special Second Division) erred in affirming the Decision

of the RTC, Branch 25, Maniladated September 19, 2005 dismissing the complaint of Lincoln Continental and the complaint-in-

intervention of Gilbert in Civil Case No. 04-109444.

THE COURTS RULING

A. G.R. Nos. 165849 and 171066

On the question of forum shopping, petitioners Gilbert and Lincoln Continental contend that the acts of respondents in filing a petition

for certiorari and mandamus in CA-G.R. SP No. 85069 and withdrawing the same and their subsequent filing of a petition

for certiorari in CA-G.R. SP No. 87104 constitute forum shopping; that respondents withdrew their petition in CA-G.R. SP No. 85069

after the Tenth Division issued a Resolution dated October 20, 2004 denying their application for a writ of preliminary injunction; that

they then filed an identical petition in CA-G.R. SP No. 87104 seeking the same relief alleged in their petition in CA-G.R. SP No. 85069;

and that by taking cognizance of the petition in CA-G.R. SP No. 87104, instead of dismissing it outright on the ground of forum

shopping, the Court of Appeals committed grave abuse of discretion tantamount to lack or excess of jurisdiction.
A party is guilty of forum shopping when he repetitively avails of several judicial remedies in different courts, simultaneously or

successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising

substantially the same issues either pending in, or already resolved adversely by some other court.[6] It is prohibited by Section 5, Rule

7 of the 1997 Rules of Civil Procedure, as amended, which provides:

SECTION 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath in the
complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and
simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any other claim
involving the same issues in any court, tribunal, or quasi-judicial agency and, to the best of his knowledge, no
such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action has
been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or
other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise
provided, upon motion and hearing. The submission of a false certification or non-compliance with any of the
undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate
forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct
contempt, as well as a cause for administrative sanctions.

Forum shopping is condemned because it unnecessarily burdens our courts with heavy caseloads, unduly taxes the manpower and

financial resources of the judiciary and trifles with and mocks judicial processes, thereby affecting the efficient administration of

justice.[7] The primary evil sought to be proscribed by the prohibition against forum shopping is, however, the possibility of conflicting

decisions being rendered by the different courts and/or administrative agencies upon the same issues. [8]

Forum shopping may only exist where the elements of litis pendentia are present or where a final judgment in one case will amount

to res judicata in the other.[9]Litis pendentia as a ground for dismissing a civil action is that situation wherein another action is pending

between the same parties for the same cause of action, such that the second action is unnecessary and vexatious. The elements

of litis pendentia are as follows: (a) identity of parties, or at least such as representing the same interest in both actions; (b) identity of

rights asserted and the relief prayed for, the relief being founded on the same facts; and (c) the identity of the two cases such that

judgment in one, regardless of which party is successful, would amount to res judicata in the other.[10] From the foregoing, it is clear

that sans litis pendentia or res judicata, there can be no forum shopping.

While the first element of litis pendentia identity of parties is present in both CA-G.R. SP No. 85069 and CA-G.R. SP No. 87104,

however, the second element, does not exist. The petitioners in CA-G.R. SP No. 85069 prayed that the following Orders be set aside:
 (1) the Order of inhibition dated June 22, 2004 issued by the presiding judge of the RTC of Manila, Branch

24; and

(2) the Order dated July 12, 2004 issued by Branch 46 setting Gilberts application for preliminary injunction

for hearing.

In their petition in CA-G.R. SP No. 87104, respondents prayed for the annulment of the writ of preliminary injunction issued

by the RTC, Branch 46 after the expiration of the TRO issued by the Tenth Division of the Court of Appeals. Evidently, this relief is not

identical with the relief sought by respondents in CA-G.R. SP No. 85069. Clearly, the second element of litis pendentia the identity of

reliefs sought - is lacking in the two petitions filed by respondents with the appellate court. Thus, we rule that no grave abuse of

discretion amounting to lack or excess of jurisdiction may be attributed to the Court of Appeals (Eighth Division) for giving due course

to respondents petition in CA-G.R. SP No. 87104.

On the second issue, Section 3, Rule 58 of the 1997 Rules of Civil Procedure, as amended provides:

SECTION 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.

For a party to be entitled to an injunctive writ, he must show that there exists a right to be protected and that the acts against

which the injunction is directed are violative of this right.[11] In granting the respondents application for injunctive relief and making the

injunction permanent, the Court of Appeals (Seventh Division) found that they have shown their clear and established right to the

disputed 20,160 shares of stock because: (1) they have physical possession of the two stock certificates equivalent to the said number

of shares; (2) Lincoln Continental is a mere trustee of the Guy family; and (3) respondents constitute a majority of the board of directors

of Northern Islands, and accordingly have management and control of the company at the inception of Civil Case No. 94-109444. The

appellate court then ruled that the trial court committed grave abuse of discretion in issuing a writ of preliminary mandatory injunction

in favor of Guy. The writ actually reduced the membership of Northern Islands board to just one member - Gilbert Guy. Moreover, he

failed to establish by clear and convincing evidence his ownership of the shares of stock in question. The Court of Appeals then held
there was an urgent necessity to issue an injunctive writ in order to prevent serious damage to the rights of respondents and Northern

Islands.

We thus find no reason to depart from the findings of the Court of Appeals. Indeed, we cannot discern any taint of grave

abuse of discretion on its part in issuing the assailed writ of preliminary injunction and making the injunction permanent.

B. G.R. Nos. 170185 & 170186

Ignacio and Ignacio Law Offices and Smartnet, petitioners, claim that the Court of Appeals never acquired jurisdiction over

their respective persons as they were not served with summons, either by the MeTC or by the appellate court in CA-G.R. SP No.

87104. Thus, they submit that the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction

when it included them in the coverage of its injunctive writ.

Jurisdiction is the power or capacity given by the law to a court or tribunal to entertain, hear, and determine certain

controversies.[12] Jurisdiction over the subject matter of a case is conferred by law.

Section 9 (1) of Batas Pambansa Blg. 129,[13] as amended, 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.

Rule 46 of the 1997 Rules of Civil Procedure, as amended, governs all cases originally filed with the Court of

Appeals. The following provisions of the Rule state:

SEC. 2. To what actions applicable. This Rule shall apply to original actions
for certiorari, prohibition, mandamus and quo warranto.

Except as otherwise provided, the actions for annulment of judgment shall be governed by Rule 47,
for certiorari, prohibition, and mandamus by Rule 65, and for quo warranto by Rule 66.

xxx
 SEC. 4. Jurisdiction over person of respondent, how acquired. The court shall acquire jurisdiction over
the person of the respondent by the service on him of its order or resolution indicating its initial action on the
petition or by his voluntary submission to such jurisdiction.

SEC. 5. Action by the court. The court may dismiss the petition outright with specific reasons for such
dismissal or require the respondent to file a comment on the same within ten (10) days from notice. Only pleadings
required by the court shall be allowed. All other pleadings and papers may be filed only with leave of court.

It is thus clear that in cases covered by Rule 46, the Court of Appeals acquires jurisdiction over the persons of the

respondents by the service upon them of its order or resolution indicating its initial action on the petitions or by their voluntary

submission to such jurisdiction.[14] The reason for this is that, aside from the fact that no summons or other coercive process is served

on respondents, their response to the petitions will depend on the initial action of the court thereon. Under Section 5, the court may

dismiss the petitions outright, hence, no reaction is expected from respondents and under the policy adopted by Rule 46, they are not

deemed to have been brought within the courts jurisdiction until after service on them of the dismissal order or resolution. [15]

Records show that on April 27, 2005, petitioners in these two forcible entry cases, were served copies of the Resolution of

the Court of Appeals (Seventh Division) dated April 26, 2005 in CA-G.R. SP No. 87104.[16] The Resolution states:

Private respondents SMARTNET PHILIPPINES, INC., IGNACIO & IGNACIO LAW OFFICE, SUNFIRE
TRADING, INC., ZOLT CORPORATION, CELLPRIME DISTRIBUTION CORPO., GOODGOLD REALTY &
DEVELOPMENT CORP., are hereby DIRECTED to file CONSOLIDATED COMMENT on the original Petition for
Certiorari, the First Supplemental Petition for Certiorari, and the Second Supplemental Petition for Certiorari (not
a Motion to Dismiss) within ten (10) days from receipt of a copy of the original, first and second Petitions for
Certiorari.[17]

Pursuant to Rule 46, the Court of Appeals validly acquired jurisdiction over the persons of Ignacio and Ignacio Law Offices

and Smartnet upon being served with the above Resolution.

But neither of the parties bothered to file the required comment. Their allegation that they have been deprived of due process

is definitely without merit. We have consistently held that when a party was afforded an opportunity to participate in the proceedings

but failed to do so, he cannot complain of deprivation of due process for by such failure, he is deemed to have waived or forfeited his

right to be heard without violating the constitutional guarantee.[18]

On the question of whether the Court of Appeals could amend its Resolution directing the issuance of a writ of preliminary

injunction so as to include petitioners, suffice to state that having acquired jurisdiction over their persons, the appellate court could do

so pursuant to Section 5 (g), Rule 135 of the Revised Rules of Court, thus:

SEC. 5. Inherent powers of courts. Every court shall have power:

 xxx

(g) To amend and control its process and orders so as to make them conformable to law and
justice.

In Villanueva v. CFI of Oriental Mindoro[19] and Eternal Gardens Memorial Parks Corp. v. Intermediate Appellate Court,[20] we

held that under this Rule, a court has inherent power to amend its judgment so as to make it conformable to the law applicable,

provided that said judgment has not yet acquired finality, as in these cases.

C. G.R. No. 176650

The fundamental issue is who owns the disputed shares of stock in Northern Islands.

We remind petitioner Lincoln Continental that what it filed with this Court is a petition for review on certiorari under Rule 45

of the 1997 Rules of Civil Procedure, as amended. It is a rule in this jurisdiction that in petitions for review under Rule 45, only questions

or errors of law may be raised.[21] There is a question of law when the doubt or controversy concerns the correct application of law or

jurisprudence to a certain set of facts, or when the issue does not call for an examination of the probative value of the evidence

presented. There is a question of fact when the doubt arises as to the truth or falsehood of facts or when there is a need to calibrate

the whole evidence considering mainly the credibility of the witnesses, the existence and relevancy of specific surrounding

circumstances, as well as their relation to each other and to the whole, and the probability of the situation. [22] Obviously, the issue

raised by the instant petition for review on certiorari, involves a factual matter, hence, is outside the domain of this Court. However, in

the interest of justice and in order to settle this controversy once and for all, a ruling from this Court is imperative.

One thing is clear. It was established before the trial court, affirmed by the Court of Appeals, that Lincoln Continental

held the disputed shares of stock of Northern Islands merely in trust for the Guy sisters. In fact, the evidence proffered by

Lincoln Continental itself supports this conclusion. It bears emphasis that this factual finding by the trial court was affirmed by the

Court of Appeals, being supported by evidence, and is, therefore, final and conclusive upon this Court.

Article 1440 of the Civil Code provides that:

ART. 1440. A person who establishes a trust is called the trustor; one in whom confidence is reposed
as regards property for the benefit of another person is known as the trustee; and the person for whose benefit
the trust has been created is referred to as the beneficiary.

In the early case of Gayondato v. Treasurer of the Philippine Islands,[23] this Court defines trust, in its technical sense, as a

right of property, real or personal, held by one party for the benefit of another. Differently stated, a trust is a fiduciary relationship with
respect to property, subjecting the person holding the same to the obligation of dealing with the property for the benefit of another

person.[24]

Both Lincoln Continental and Gilbert claim that the latter holds legal title to the shares in question. But record shows

that there is no evidence to support their claim. Rather, the evidence on record clearly indicates that the stock certificates

representing the contested shares are in respondents possession. Significantly, there is no proof to support his allegation that the

transfer of the shares of stock to respondent sisters is fraudulent. As aptly held by the Court of Appeals, fraud is never presumed but

must be established by clear and convincing evidence.[25] Gilbert failed to discharge this burden. We, agree with the Court of Appeals

that respondent sisters own the shares of stocks, Gilbert being their mere trustee. Verily, we find no reversible error in the challenged

Decision of the Court of Appeals (Special Second Division) in CA-G.R. CV No. 85937.

WHEREFORE, we DISMISS the petitions in G.R. Nos. 165849, 170185, 170186 and 176650; and DENY the petitions in G.R. Nos.

171066 and 176650. The Resolutions of the Court of Appeals (Eighth Division), dated October 28, 2004 and November 4, 2004, as

well as the Decision dated October 10, 2005 of the Court of Appeals (Seventh Division) in CA-G.R. SP No. 87104 are AFFIRMED. We

likewise AFFIRM IN TOTO the Decision of the Court of Appeals (Special Second Division), dated November 27, 2006 in CA-G.R. CV

No. 85937. Costs against petitioners.

SO ORDERED.

[G.R. No. 168008 : August 17, 2011]

PETRONILO J. BARAYUGA, PETITIONER, VS. ADVENTIST UNIVERSITY OF THE PHILIPPINES, THROUGH ITS BOARD OF
TRUSTEES, REPRESENTED BY ITS CHAIRMAN, NESTOR D. DAYSON, RESPONDENTS.

DECISION

BERSAMIN, J.:

The injunctive relief protects only a right in esse. Where the plaintiff does not demonstrate that he has an existing right to be
protected by injunction, his suit for injunction must be dismissed for lack of a cause of action.

The dispute centers on whether the removal of the petitioner as President of respondent Adventist University of the Philippines
(AUP) was valid, and whether his term in that office was five years, as he insists, or only two years, as AUP insists.

We hereby review the decision promulgated on August 5, 2004,[1] by which the Court of Appeals (CA) nullified and set aside the writ
of preliminary injunction issued by the Regional Trial Court (RTC), Branch 21, in Imus, Cavite to prevent AUP from removing the
petitioner.

Antecedents

AUP, a non-stock and non-profit domestic educational institution incorporated under Philippine laws on March 3, 1932, was directly
under the North Philippine Union Mission (NPUM) of the Southern Asia Pacific Division of the Seventh Day Adventists. During the
3rd Quinquennial Session of the General Conference of Seventh Day Adventists held from November 27, 2000 to December 1,
2000, the NPUM Executive Committee elected the members of the Board of Trustees of AUP, including the Chairman and the
Secretary. Respondent Nestor D. Dayson was elected Chairman while the petitioner was chosen Secretary.

On January 23, 2001, almost two months following the conclusion of the 3rd Quinquennial Session, the Board of Trustees appointed
the petitioner President of AUP.[2] During his tenure, or from November 11 to November 13, 2002, a group from the NPUM
conducted an external performance audit. The audit revealed the petitioner's autocratic management style, like making major
decisions without the approval or recommendation of the proper committees, including the Finance Committee; and that he had
himself done the canvassing and purchasing of materials and made withdrawals and reimbursements for expenses without valid
supporting receipts and without the approval of the Finance Committee. The audit concluded that he had

committed serious violations of fundamental rules and procedure in the disbursement and use of funds.

The NPUM Executive Committee and the Board of Trustees decided to immediately request the services of the General Conference
Auditing Service (GCAS) to determine the veracity of the audit findings. Accordingly, GCAS auditors worked in the campus from
December 4 to December 20, 2002 to review the petitioner's transactions during the period from April 2002 to October 2002. On
December 20, 2002, CGAS auditors reported the results of their review, and submitted their observations and recommendations to
the Board of Trustees.

Upon receipt of the CGAS report that confirmed the initial findings of the auditors on January 8, 2003, the NPUM informed the
petitioner of the findings and required him to explain.

On January 15, 2003, Chairman Dayson and the NPUM Treasurer likewise informed the petitioner inside the NPUM office on the
findings of the auditors in the presence of the AUP Vice-President for Financial Affairs, and reminded him of the possible
consequences should he fail to satisfactorily explain the irregularities cited in the report. He replied that he had already prepared his
written explanation.

The Board of Trustees set a special meeting at 2 p.m. on January 22, 2003. Being the Secretary, the petitioner himself prepared
the agenda and included an item on his case. In that meeting, he provided copies of the auditors' report and his answers to the
members of the Board of Trustees. After hearing his explanations and oral answers to the questions raised on issues arising from
the report, the members of the Board of Trustees requested him to leave to allow them to analyze and evaluate the report and his
answers. Despite a long and careful deliberation, however, the members of the Board of Trustees decided to adjourn that night and
to set another meeting in the following week considering that the meeting had not been specifically called for the purpose of
deciding his case. The adjournment would also allow the Board of Trustees more time to ponder on the commensurate disciplinary
measure to be meted on him.

On January 23, 2003, Chairman Dayson notified the petitioner in writing that the Board of Trustees would hold in abeyance its
deliberation on his answer to the auditors' report and would meet again at 10:00 a.m. on January 27, 2003. Chairman Dayson
indicated that some sectors in the campus had not been properly represented in the January 22, 2003 special meeting, and
requested the petitioner as Secretary to ensure that all sectors are duly represented in the next meeting of the Board of Trustees.[3]

In the January 27, 2003 special meeting, the petitioner sent a letter to the Board of Trustees. The members, by secret ballot, voted
to remove him as President because of his serious violations of fundamental rules and procedures in the disbursement and use of
funds as revealed by the special audit; to appoint an interim committee consisting of three members to assume the powers and
functions of the President; and to recommend him to the NPUM for consideration as Associate Director for Secondary Education. [4]

On January 28, 2003, the petitioner was handed inside the NPUM office a letter, together with a copy of the minutes of the special
meeting held the previous day. In turn, he handed to Chairman Dayson a letter requesting two weeks within which to seek a
reconsideration, stating that he needed time to obtain supporting documents because he was then attending to his dying mother. [5]

In the evening of January 28, 2003, the Board of Trustees, most of whose members had not yet left Cavite, reconvened to consider
and decide the petitioner's request for reconsideration. During the meeting, he made an emotional appeal to allow him to continue
as President, promising to immediately vacate his office should he again commit any of the irregularities cited in the auditors' report.
He added that should the Board of Trustees not favor his appeal, he would settle for a retirement package for him and his wife and
would leave the church.

The Board of Trustees denied the petitioner's request for reconsideration because his reasons were not meritorious. Board Member
Elizabeth Role served the notice of the denial on him the next day, but he refused to receive the notice, simply saying Alam ko na
yan.[6]

The petitioner later obtained a copy of the inter-school memorandum dated January 31, 2003 informing AUP students, staff, and
faculty members about his relief as President and the appointment of an interim committee to assume the powers and duties of the
President.

On February 4, 2003, the petitioner brought his suit for injunction and damages in the RTC, with prayer for the issuance of a
temporary restraining order (TRO), impleading AUP and its Board of Trustees, represented by Chairman Dayson, and the interim
committee. His complaint alleged that the Board of Trustees had relieved him as President without valid grounds despite his five-
year term; that the Board of Trustees had thereby acted in bad faith; and that his being denied ample and reasonable time to
present his evidence deprived him of his right to due process.[7]

The suit being intra-corporate and summary in nature, the application for TRO was heard by means of affidavits. In the hearing of
February 7, 2003, the parties agreed not to harass each other. The RTC used the mutual agreement as its basis to issue a status
quo order on February 11, 2003.[8]

In their answer with counterclaim, the respondents denied the allegations of the petitioner, and averred that he had been validly
removed for cause; and that he had been granted ample opportunity to be heard in his defense.[9]
 Order of the RTC

On March 21, 2003, after summary hearing, the RTC issued the TRO enjoining the respondents and persons acting for and in their
behalf from implementing the resolution removing him as President issued by the Board of Trustees during the January 27, 2003
special meeting, and enjoining the interim committee from performing the functions of President of AUP. The RTC did not require a
bond.[10]

After further hearing, the RTC issued on April 25, 2003 its controversial order, [11] granting the petitioner's application for a writ of
preliminary injunction. It thereby resolved three issues, namely: (a) whether the special board meetings were valid; (b) whether the
conflict-of-interest provision in the By-Laws and Working Policy was violated; and (c) whether the petitioner was denied due
process. It found for the petitioner upon all the issues. On the first issue, it held that there was neither a written request made by any
two members of the Board of Trustees nor proper notices sent

to the members as required by AUP's By-Laws, which omissions, being patent defects, tainted the special board meetings with
nullity. Anent the second issue, it ruled that the purchase of coco lumber from his balae (i.e., mother-in-law of his son) was not
covered by the conflict-of-interest provision, for AUP's Model Statement of Acceptance form mentioned only the members of the
immediate family and did not extend to the relationship between him and his balae. On the third issue, it concluded that he was
deprived of due process when the Board of Trustees refused to grant his motion for reconsideration and his request for additional
time to produce his evidence, and instead immediately implemented its decision by relieving him from his position without according
him the treatment befitting a university President.

Proceedings in the CA

With the Interim Rules for Intra-Corporate Controversies prohibiting a motion for reconsideration, the respondents forthwith filed a
petition for certiorari in the CA,[12] contending that the petitioner's complaint did not meet the requirement that an injunctive writ
should be anchored on a legal right; and that he had been merely appointed, not elected, as President for a term of office of only
two years, not five years, based on AUP's amended By-Laws.

In the meanwhile, on September 17, 2003, the petitioner filed a supplemental petition in the CA, [13]alleging that after the
commencement of his action, he filed in the RTC an urgent motion for the issuance of a second TRO to enjoin the holding of an
AUP membership meeting and the election of a new Board of Trustees, capitalizing on the admission in the respondents' answer
that he had been elected in 2001 to a five-year term of office. He argued that the admission estopped the respondents from insisting
to the contrary.

The respondents filed in the CA a verified urgent motion for a TRO and to set a hearing on the application for preliminary injunction
to enjoin the RTC from implementing the assailed order granting a writ of preliminary injunction and from further proceeding in the
case. The petitioner opposed the motion for TRO, but did not object to the scheduling of preliminary injunctive hearings.

On February 24, 2004, the CA issued a TRO to enjoin the RTC from proceeding for a period of 60 days, and declared that the
prayer for injunctive relief would be resolved along with the merits of the main case.

The petitioner sought a clarification of the TRO issued by the CA, considering that his cause of action in his petitions to cite the
respondents in indirect contempt dated March 5, 2004 and March 16, 2004 filed in the RTC involved the election of a certain Robin
Saban as the new President of AUP in blatant and malicious violation of the writ of preliminary injunction issued by the RTC. In
clarifying the TRO, the CA explained that it did not go beyond the reliefs prayed for in the respondents' motion for TRO and
preliminary injunctive hearings.

On August 5, 2004, the CA rendered its decision nullifying the RTC's writ of preliminary injunction. It rejected the petitioner's
argument that Article IV, Section 3 of AUP's Constitution and By-Laws and Working Policy of the Conference provided a five-year
term for him, because the provision was inexistent. It ruled that the petitioner's term of office had expired on January 22, 2003, or
two years from his appointment, based on AUP's amended By-Laws; that, consequently, he had been a mere de facto officer
appointed by the members of the Board of Trustees; and that he held no legal right warranting the issuance of the writ of preliminary
injunction.

The CA declared that the rule on judicial admissions admitted of exceptions, as held in National Power Corporation v. Court of
Appeals,[14] where the Court held that admissions were not evidence that prevailed over documentary proof; that the petitioner's
being able to answer the results of the special audit point-by-point belied his allegation of denial of due process; that AUP was the
party that stood to be injured by the issuance of the injunctive writ in the form of a "demoralized administration, studentry, faculty
and staff, sullied reputation, and dishonest leadership;" and that the assailed RTC order sowed confusion and chaos because the
RTC thereby chose to subordinate the interest of the entire AUP community to that of the petitioner who had been deemed not to
have satisfied the highest ideals required of his office.

Issues

Undeterred, the petitioner has appealed, contending that:

I.
THE COURT OF APPPEALS HAS DECIDED CONTRARY TO LAW AND JURISPRUDENCE WHEN IT RULED THAT THE
EXTRAORDINARY WRIT OF CERTIORARI APPLIED IN THE CASE AT BAR.

II.

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH THE ESTABLISHED
LAW AND JURISPRUDENCE THAT "ADMISSIONS, VERBAL OR WRITTEN, MADE BY A PARTY IN THE COURSE OF THE
PROCEEDINGS IN THE SAME CASE, DOES NOT REQUIRE PROOF," BY REQUIRING PETITIONER BARAYUGA TO PRESENT
EVIDENCE THAT HIS TERM AS PRESIDENT OF AUP IS FOR FIVE (5) YEARS.

III.

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND
ESTABLISHED FACTS WHEN IT RULED THAT PETITIONER BARAYUGA HAS ONLY A TERM OF TWO (2) YEARS INSTEAD
OF FIVE (5) YEARS AS CLEARLY ADMITTED BY PRIVATE RESPONDENT AUP IN ITS ANSWER.

IV.

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND
JURISPRUDENCE BY SOLELY RELYING ON THE CASE OF NATIONAL POWER CORPORATION v. COURT OF APPEALS,
WHICH INVOLVE FACTS DIFFERENT FROM THE PRESENT CASE.

V.

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND
ESTABLISHED FACTS WHEN IT UNJUSTIFIABLY ALLOWED THE WAIVER OF NOTICE FOR THE SPECIAL MEETING OF THE
BOARD OF TRUSTEES.

VI.

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND
ESTABLISHED FACTS WHEN IT ERRONEOUSLY CONCLUDED THAT PETITIONER BARAYUGA WAS MERELY OCCUPYING
THE POSITION OF AUP PRESIDENT IN A HOLD-OVER CAPACITY.

The petitioner argues that the assailed RTC order, being supported by substantial evidence, accorded with law and jurisprudence;
that his tenure as President under the Constitution, By-Laws and the Working Policy of the Conference was for five years, contrary
to the CA's findings that he held the position in a hold-over capacity; that instead, the CA should have applied the rule on judicial
admission, because the holding in National Power Corporation v. Court of Appeals, cited by the CA, did not apply, due to AUP not
having presented competent evidence to prove that he had not been elected by the Board of Trustees as President of AUP; and that
his removal during the special board meeting that was invalidly held for lack of notice denied him due process.

AUP counters that:

PETITIONER IS NOT AN ELECTED TRUSTEE OF THE AUP BOARD, NOR WAS (HE) ELECTED AS PRESIDENT, AND AS
SUCH, HE CAN CLAIM NO RIGHT TO THE AUP PRESIDENCY, BEING TWICE DISQUALIFIED BY LAW, WHICH RENDERS
MOOT AND ACAMEDIC ALL OF THE ARGUMENTS IN THIS PETITION.

II

EVEN IF WE FALSELY ASSUME EX GRATIA THAT PETITIONER IS AN ELECTED TRUSTEE AND ELECTED PRESIDENT, THE
TWO (2) YEAR TERM PROVIDED IN AUP'S BY-LAWS - REQUIRED BY THE CORPORATION CODE AND APPROVED BY THE
SEC - IS WHAT GOVERNS THE INTRA-CORPORATE CONTROVERSY, THE AUP'S ADMISSION IN ITS ANSWER THAT HE
HAS A FIVE (5) YEAR TERM BASED ON HIS INVOKED SAMPLE CONSTITUTION, BY-LAWS AND POLICY OF THE SEVENTH
DAY ADVENTIST NOTWITHSTANDING.

III

PURSUANT TO THE RULES AND SETTLED JURISPRUDENCE, THE ADMISSION IN THE ANSWER IS NOT EVEN
PREJUDICIAL AT ALL.

IV

EVEN IF WE FALSELY ASSUME, JUST FOR THE SAKE OF ARGUMENT, THAT THE PETITIONER HAD A FIVE (5) YEAR TERM
AS UNIVERSITY PRESIDENT, HE WAS NONETHELESS VALIDLY TERMINATED FOR LOSS OF CONFIDENCE, GIVEN THE
NUMEROUS ADMITTED ANOMALIES HE COMMITTED.

PETITIONER CANNOT COMPLAIN THAT NOTICES OF THE BOARD MEETING WERE NOT SENT TO ALL "THE TWENTY FIVE
(25) TRUSTEES OF THE AUP BOARD", SINCE: [1] AS THE AUP SECRETARY, IT WAS HE WHO HAD THE DUTY TO SEND THE
NOTICES; [2] WORSE, HE ATTENDED AND EXHAUSTIVELY DEFENDED HIS WRITTEN ANSWER IN THE AUP BOARD OF
TRUSTEES MEETING, THUS, WAIVING ANY "NOTICE OBJECTION"; [3] WORST OF ALL, HIS AFTERTHOUGHT OBJECTION IS
DECEPTIVELY FALSE IN FACT.

The decisive question is whether the CA correctly ruled that the petitioner had no legal right to the position of President of AUP that
could be protected by the injunctive writ issued by the RTC.

Ruling

We deny the petition for review for lack of merit.

1.
Petition is already moot

The injunctive writ issued by the RTC was meant to protect the petitioner's right to stay in office as President. Given that the lifetime
of the writ of preliminary injunction was co-extensive with the duration of the act sought to be prohibited,[15] this injunctive relief
already became moot in the face of the admission by the petitioner himself, through his affidavit, [16] that his term of office premised
on his alleged five-year tenure as President had lasted only until December 2005. In short, the injunctive writ granted by the RTC
had expired upon the end of the term of office (as posited by him).

The mootness of the petition warranted its denial. When the resolution of the issue submitted in a case has become moot and
academic, and the prayer of the complaint or petition, even if granted, has become impossible of enforcement - for there is nothing
more to enjoin - the case should be dismissed.[17] No useful purpose would then be served by passing on the merits of the petition,
because any ruling could hardly be of any practical or useful purpose in the premises. It is a settled rule that a court will not
determine a moot question or an abstract proposition, nor express an opinion in a case in which no practical relief can be
granted.[18] Indeed, moot and academic cases cease to present any justiciable controversies by virtue of supervening events, [19] and
the courts of law will not determine moot questions,[20] for the courts should not engage in academic declarations and determine a
moot question.[21]

2.
RTC acted in patently grave abuse of discretion
in issuing the TRO and writ of injunction

Nonetheless, the aspect of the case concerning the petitioner's claim for damages has still to be decided. It is for this reason that we
have to resolve whether or not the petitioner had a right to the TRO and the injunctive writ issued by the RTC.

A valid writ of preliminary injunction rests on the weight of evidence submitted by the plaintiff establishing: (a) a present and
unmistakable right to be protected; (b) the acts against which the injunction is directed violate such right; and (c) a special and
paramount necessity for the writ to prevent serious damages.[22] In the absence of a clear legal right, the issuance of the injunctive
writ constitutes grave abuse of discretion[23] and will result to nullification thereof. Where the complainant's right is doubtful or
disputed, injunction is not proper. The possibility of irreparable damage sans proof of an actual existing right is not a ground for a
preliminary injunction.[24]

It is clear to us, based on the foregoing principles guiding the issuance of the TRO and the writ of injunction, that the issuance of the
assailed order constituted patently grave abuse of discretion on the part of the RTC, and that the CA rightly set aside the order of
the RTC.

To begin with, the petitioner rested his claim for injunction mainly upon his representation that he was entitled to serve for five years
as President of AUP under the Constitution, By-Laws and Working Policy of the General Conference of the Seventh Day Adventists
(otherwise called the Bluebook). All that he presented in that regard, however, were mere photocopies of pages 225-226 of
the Bluebook, which read:

Article IV-Board of Directors

Sec. 1. This school operated by the _____________ Union Conference/Mission of Seventh-Day Adventists shall be under the direct
control of a board of directors, elected by the constituency in its quinquennial sessions. The board of directors shall consist of 15 to
21 members, depending on the size of the institution. Ex officio members shall be the union president as chairperson, the head of
the school as secretary, the union secretary, the union treasurer, the union director of education, the presidents of the
conferences/missions within the union. xxx.

Sec. 2. The term of office of members of the board of directors shall be five years to coincide with the ______________ Union
Conference/Mission quinquennial period.

Sec. 3. The duties of the board of directors shall be to elect quinquenially the president, xxx.

Yet, the document had no evidentiary value. It had not been officially adopted for submission to and approval of the Securities and
Exchange Commission. It was nothing but an unfilled model form. As such, it was, at best, only a private document that could not
be admitted as evidence in judicial proceedings until it was first properly authenticated in court.

Section 20, Rule 132 of the Rules of Court requires authentication as a condition for the admissibility of a private document, to wit:

Section 20. Proof of private document. - Before any private document offered as authentic is received in evidence, its due execution
and authenticity must be proved either:

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.

Any other private document need only be identified as that which it is claimed to be. (21 a)

For the RTC to base its issuance of the writ of preliminary injunction on the mere photocopies of the document, especially that such
document was designed to play a crucial part in the resolution of the decisive issue on the length of the term of office of the
petitioner, was gross error.

Secondly, even assuming that the petitioner had properly authenticated the photocopies of the Bluebook, the provisions contained
therein did not vest the right to an office in him. An unfilled model form creates or establishes no rights in favor of anyone.

Thirdly, the petitioner's assertion of a five-year duration for his term of office lacked legal basis.

Section 108 of the Corporation Code determines the membership and number of trustees in an educational corporation, viz:

Section 108. Board of trustees. - Trustees of educational institutions organized as educational corporations shall not be less than
five (5) nor more than fifteen (15): Provided, however, That the number of trustees shall be in multiples of five (5).

Unless otherwise provided in the articles of incorporation or the by-laws, the board of trustees of incorporated schools, colleges, or
other institutions of learning shall, as soon as organized, so classify themselves that the term of office of one-fifth (1/5) of their
number shall expire every year. Trustees thereafter elected to fill vacancies, occurring before the expiration of a particular
term, shall hold office only for the unexpired period. Trustees elected thereafter to fill vacancies caused by expiration of
term shall hold office for five (5) years. A majority of the trustees shall constitute a quorum for the transaction of business. The
powers and authority of trustees shall be defined in the by-laws.

For institutions organized as stock corporations, the number and term of directors shall be governed by the provisions on stock
corporations.

The second paragraph of the provision, although setting the term of the members of the Board of Trustees at five years, contains a
proviso expressly subjecting the duration to what is otherwise providedin the articles of incorporation or by-laws of the educational
corporation. That contrary provision controls on the term of office. [25]

In AUP's case, its amended By-Laws provided the term of the members of the Board of Trustees, and the period within which to
elect the officers, thusly:

Article I
Board of Trustees

Section 1. At the first meeting of the members of the corporation, and thereafter every two years, a Board of Trustees shall be
elected. It shall be composed of fifteen members in good and regular standing in the Seventh-day Adventist denomination, each of
whom shall hold his office for a term of two years, or until his successor has been elected and qualified. If a trustee ceases
at any time to be a member in good and regular standing in the Seventh-day Adventist denomination, he shall thereby cease to be a
trustee.

xxxx

Article IV
Officers

Section 1. Election of officers. - At their organization meeting, the members of the Board of Trustees shall elect from among
themselves a Chairman, a Vice-Chairman, a President, a Secretary, a Business Manager, and a Treasurer. The same persons
may hold and perform the duties of more than one office, provided they are not incompatible with each other.[26]
In light of foregoing, the members of the Board of Trustees were to serve a term of office of only two years; and the officers, who
included the President, were to be elected from among the members of the Board of Trustees during their organizational meeting,
which was held during the election of the Board of Trustees every two years. Naturally, the officers, including the President, were to
exercise the powers vested by Section 2 of the amended By-Laws for a term of only two years, not five years.

Ineluctably, the petitioner, having assumed as President of AUP on January 23, 2001, could serve for only two years, or until
January 22, 2003. By the time of his removal for cause as President on January 27, 2003, he was already occupying the office in a
hold-over capacity, and could be removed at any time, without cause, upon the election or appointment of his successor. His
insistence on holding on to the office was untenable, therefore, and with more reason when one considers that his removal was due
to the loss of confidence on the part of the Board of Trustees.

4.
Petitioner was not denied due process

The petitioner complains that he was denied due process because he was deprived of the right to be heard and to seek
reconsideration; and that the proceedings of the Board of Trustees were illegal due to its members not being properly notified of the
meeting.

Still, the petitioner fails to convince us.

The requirements of due process in an administrative context are satisfied when the parties are afforded fair and reasonable
opportunity to explain their respective sides of the controversy,[27] for the essence of due process is an opportunity to be
heard.[28] Here, the petitioner was accorded the full opportunity to be heard, as borne by the fact that he was granted the
opportunity to refute the adverse findings contained in the GCAS audit report and that the Board of Trustees first heard his side
during the board meetings before his removal. After having voluntarily offered his refutations in the proceedings before the Board of
Trustees, he should not now be permitted to denounce the proceedings and to plead the denial of due process after the decision of
the Board of Trustees was adverse to him.

Nor can his urging that the proceedings were illegal for lack of prior notification be plausible in light of the fact that he willingly
participated therein without raising the objection of lack of notification. Thereby, he effectively waived his right to object to the validity
of the proceedings based on lack of due notice.[29]

5.
Conclusion

The removal of the petitioner as President of AUP, being made in accordance with the AUP Amended By-Laws, was valid. With that,
our going into the other issues becomes unnecessary. We conclude that the order of the RTC granting his application for the writ of
preliminary injunction was tainted with manifestly grave abuse of discretion; that the CA correctly nullified and set aside the order;
and that his claim for damages, being bereft of factual and legal warrant, should be dismissed.

WHEREFORE, we DENY the petition for review on certiorari for lack of merit, and hereby DISMISS SEC Case No. 028-03
entitled Dr. Petronilo Barayuga v. Nelson D. Dayson, et al.

The petitioner shall pay the cost of suit.

SO ORDERED.

Republic of the Philippines

Supreme Court
Manila

FIRST DIVISION

CITY OF DUMAGUETE, herein Represented by City G.R. No. 168973

Mayor, Agustin R. Perdices,
Petitioner, Present:

CORONA, C.J.,
Chairperson,
- versus - LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
 VILLARAMA, JR., JJ.
PHILIPPINE PORTS AUTHORITY,
Respondent. Promulgated:

August 24, 2011

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

DECISION

LEONARDO-DE CASTRO, J.:

Before Us is a Petition for Review under Rule 45 of the Rules of Court assailing the Decision [1] dated March 4, 2005 and

Resolution[2] dated June 6, 2005 of the Court Appeals in CA-G.R. SP No. 64379, which granted the Petition for Certiorari and

Prohibition of respondent Philippine Ports Authority and set aside the Orders dated December 7, 2000 and February 20, 2001 of the

Regional Trial Court (RTC), Branch 44 of the City of Dumaguete in LRC Case No. N-201.

The antecedent facts are as follows:

On October 14, 1998, petitioner City of Dumaguete, through Mayor Felipe Antonio B. Remollo (Remollo), filed before the
RTC an Application for Original Registration of Title over a parcel of land with improvements, located at Barangay Looc, City of
Dumaguete (subject property), under the Property Registration Decree. The application was docketed as LRC Case No. N-201.

Petitioner alleged in support of its application:

1. That the applicant, City of Dumaguete through its Honorable Mayor Felipe Antonio B.
Remollo, is the owner of the land subject of this application with all improvements and buildings comprising the
Engineers Compound where it is now situated and has been in continuous occupation and possession of the
same for more than 30 years or from the year 1960 (Affidavit of Ownership executed by Felipe Antonio G.
Remollo, the City Mayor, dated August 21, 1998 herein attached as ANNEX A). The said land consist of 5,410
square meters and is situated and bounded and described as shown on the plan (true and photostatic copies of
the original plan marked Psu-07-006805 approved by the Regional Technical Director of the [Department of
Environment and Natural Resources] DENR, Regional Office, Cebu City herein attached as ANNEX B) and
technical descriptions attached hereto (technical description attached as ANNEX C) and made a part hereof;

2. That said land at the last assessment for taxation was assessed at P676,250, Philippine
currency, with market value of P1,352,500.00, Philippine currency. (Declaration of Real Property with the
assessed and market values attached as ANNEX D);

3. That to the best of my knowledge and belief, there is no mortgage or encumbrance of any
kind whatsoever affecting said land, nor another person having any estate or interest therein, legal or equitable,
in possession, remainder, reversion or expectancy;

4. That the land was acquired by possessory title in open, continuous, adverse occupation
and possession in the concept of owner for more than thirty years since 1960 (please refer to ANNEX A);

5. That the land is adjoined by the following:

NorthWest
NorthEast
SouthEast

All along line 1-2-3-4-5-6-7-8-9-10 by Flores Avenue, City Road and the Dumaguete Port Road
SouthWest along line 10-1 by Plan Msi-V-20453

xxxx
 8. That the land included is bounded on the West by Flores Avenue and on the North by the City Road,
all public highways and on the East by the Dumaguete Port Road, a private road made part of the Port Zone.[3]

In an Order[4] dated October 23, 1998, the RTC noted that:

A perusal of the records of the case shows that the annexes lack the following copies:

a) two blue print copies of the approved plan;

b) two copies of the technical description of the lot sought to be registered;

c) two copies of the Surveyors certificate;

d) a certificate in quadruplicate of the City Assessor of the assessed value of the land;

e) all original muniments of title in the possession of the applicant which prove ownership of
the land;

f) two copies of the petition/application.

Further, the application did not state the number of the lot sought to be registered, the number of parcels
applied for, the improvements found thereon, and indicate whether it claims a portion of the road which serves as
a boundary line.

All these must be alleged in the petition so that the Court will know the nature of the property.

The RTC explained that the extra copies submitted by petitioner shall be forwarded by the RTC Clerk of Court to the Land

Registration Commission (LRC) in Manila for comment. Only thereafter would the RTC set the application for hearing.

Petitioner filed its Compliance[5] with the above-mentioned Order, submitting additional copies of the required documents

and clarifying thus:

1. The approved plan does not state the number of lot sought to be registered because it is a public
land, thus, only PSU-07-006805 appears on the plan which is being applied for registration;
2. Only one (1) parcel of land is applied for by petitioners which consist of five thousand four hundred
ten (5,410) square meters, more or less;
3. The City Engineers Building within the City Engineers compound are the only improvement found
thereon; and
4. Petitioners do not claim any portion of the road which serves as a boundary line.

The RTC accordingly set the initial hearing of LRC Case No. N-201 on April 12, 1999, and sent notices to the parties.

The Republic of the Philippines, represented by the Director of Lands, and respondent, represented by the Office of the

Government Corporate Counsel, filed separate Oppositions [6] to the application for registration of petitioner. Both the Republic and

respondent averred that petitioner may not register the subject property in its name since petitioner had never been in open,

continuous, exclusive, and notorious possession of the said property for at least 30 years immediately preceding the filing of the

application; and the subject property remains to be a portion of the public domain which belongs to the Republic.
 After several postponements of the scheduled hearings, petitioner presented the testimony of its first witness, Engineer

Rilthe P. Dorado (Engr. Dorado), on January 14, 2000. Engr. Dorados examination on the witness stand was terminated on April 7,

2000. The presentation of the other witnesses of petitioner was then scheduled to continue on June 2, 2000.[7]

However, before the next hearing, respondent filed a Motion to Dismiss,[8] seeking the dismissal of LRC Case No. N-201 on

the ground that the RTC lacked jurisdiction to hear and decide the case. Respondent argued that Section 14(1) of Presidential Decree

No. 1529, otherwise known as the Property Registration Decree, refers only to alienable and disposable lands of the public domain

under a bona fide claim of ownership. The subject property in LRC Case No. N-201 is not alienable and disposable, since it is a

foreshore land, as explicitly testified to by petitioners own witness, Engr. Dorado. A foreshore land is not registerable. This was

precisely the reason why, respondent points out, that the subject property was included in Presidential Proclamation No. 1232

(delineating the territorial boundaries of the Dumaguete Port Zone), so that the same would be administered and managed by the

State, through respondent, for the benefit of the people.

In its Terse Opposition to Oppositors Motion to Dismiss, petitioner claimed that the subject property was a swamp reclaimed

about 40 years ago, which it occupied openly, continuously, exclusively, and notoriously under a bona fide claim of ownership. The

technical description and approved plan of the subject property showed that the said property was not bounded by any part of the

sea. Petitioner invoked Republic Act No. 1899,[9] which authorizes chartered cities and municipalities to undertake and carry out, at

their own expense, the reclamation of foreshore lands bordering them; and grants said chartered cities and municipalities ownership

over the reclaimed lands. Presidential Proclamation No. 1232 is immaterial to the present application for registration because it merely

authorizes respondent to administer and manage the Dumaguete Port Zone and does not confer upon respondent ownership of the

subject property.[10]

Respondent filed a Reply/Rejoinder (To Applicants Opposition to Oppositors Motion to Dismiss), [11] asserting that there are

no factual or legal basis for the claim of petitioner that the subject property is reclaimed land. Petitioner sought the original registration

of its title over the subject property acquired through alleged continuous possession for 30 years under Section 14(1) of the Property

Registration Decree, and not through the reclamation of the said property at its own expense under Republic Act No. 1899. The

present claim of petitioner that the subject property is reclaimed land should not be allowed for it would improperly change the earlier

theory in support of the application for registration. Respondent reiterated that the subject property is foreshore land which cannot be

registered; and that Presidential Proclamation No. 1232 is very material to LRC Case No. N-201 because it confirms that areas within

the Dumaguete Port Zone, including the subject property, are not alienable and disposable lands of the public domain.

On September 7, 2000, the RTC issued an Order[12] granting the Motion to Dismiss of respondent based on the following

ratiocination:

The Court agrees with [herein respondent] Philippine Ports Authority that the basis of the [herein
petitioners] application for original registration of the subject lot is Section 14 of the Presidential Decree No. 1529,
otherwise known as the Property Registration Decree. A circumspect scrutiny of said Section readily shows that
 it refers to alienable and disposable lands of the public domain as proper subjects of registration, provided the
applicant has met the other requirements such as open, continuous, exclusive and notorious possession for at
least thirty (30) years under a bona fide claim of ownership.

It having been shown by [petitioners] own evidence that the lot subject of the application for original
registration is a foreshore land, and therefore not registerable (Dizon, et al. vs. Bayona, et al., 98 SCRA 942,
944), the application must be denied.

Again as correctly argued by [respondent], [petitioners] reliance on Republic Act 1899 which authorizes
all municipalities and chartered cities to undertake and carry out the reclamation by dredging, filling or other
means of any foreshore lands bordering them and which confers ownership on them of the lands so reclaimed,
is misplaced, as such has never been alleged in the application. It is fundamental that a party cannot prove what
it has not alleged in his complaint or application, as in this case.

The admission by Engr. Dorado that there is no formal declaration from the executive branch of
government or law passed by Congress that the land in question is no longer needed for public use or special
industries x x x further militates against the application.

Moreover, the authority granted to municipalities and chartered cities to undertake and carry out at their
own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them is for
the purpose of establishing, providing, constructing, maintaining, and repairing proper and adequate docking and
harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of
Finance and the Secretary of Public Works and Communications.

By its own evidence, [petitioner] has utilized the subject property allegedly reclaimed by it as Office of
the City Engineer and not as docking and harboring facilities.[Petitioner] has failed to show that such reclamation
was undertaken by it in consultation with the Secretary of Finance and the Secretary of Public Works and
Communications.[13]

The RTC decreed in the end that the instant application for original registration is dismissed for lack of merit.[14]

In its Motion for Reconsideration[15] and Supplemental Motion for Reconsideration,[16] petitioner contended that the dismissal

of its application was premature and tantamount to a denial of its right to due process. It has yet to present evidence to prove factual

matters in support of its application, such as the subject property already being alienable and disposable at the time it was occupied

and possessed by petitioner.

Petitioner also pointed out that its witness, Engr. Dorado, testified only as to the physical status of the land in question at

the time when the cadastral survey of Dumaguete was made sometime in 1916. [17] In fact, Engr. Dorado expressly testified that the

subject property was part of the shore or foreshore a long time ago[;][18] and he did not testify at all that the subject property was a

foreshore lot at the time petitioner occupied and possessed the same. The physical state of the subject property had already changed

since 1916. It is now within the alienable and disposable area as per the Land Classification Map No. 674, Project No. 1-D, BL C-6,

certified on July 3, 1927, of the Bureau of Lands, now Land Management Sector of the Department of Environment and Natural

Resources[,][19] as verified and certified by the Chief of the Map Projection Section, Land Management Sector, DENR Regional Office

in Cebu City, who has yet to take the witness stand before the RTC.

Petitioner insisted that the RTC should continue with the hearing of LRC Case No. N-201 and allow petitioner to present

evidence that the subject property is reclaimed land. Petitioner sufficiently alleged in its application for registration that it has been in

open, continuous, exclusive, and notorious possession of the [subject property] for more than thirty (30) years under a bona fide claim
of ownership.[20] In support of such allegation, petitioner must necessarily prove that the subject property was previously a swampy

area, which had to be filled or reclaimed before the construction of the City Engineers Office building thereon.

Respondent based its Opposition (To Applicants Motion for Reconsideration dated September 28, 2000) [21] and Opposition

(To Applicants Supplemental Motion for Reconsideration)[22] on technical and substantive grounds.

According to respondent, the Motion for Reconsideration of petitioner violated Sections 4 (Hearing of motion), 5 (Notice of

hearing), and 6 (Proof of service necessary), Rule 15 of the Rules of Court. Petitioner did not set its Motion for Reconsideration for

hearing even when the said Motion could not be considered as non-litigable. The RTC could not hear the motion for reconsideration ex

parte as they are prejudicial to the rights of respondent. Petitioner also failed to comply with Section 11, Rule 13 of the Rules of Court

when it did not attach to the Motion for Reconsideration a written explanation why it did not resort to personal service of the said

Motion. Thus, respondent averred that the Motion for Reconsideration of petitioner should be treated as a mere scrap of paper with

no legal effect. It did not interrupt the reglementary period to appeal and the RTC Order dated September 7, 2000, dismissing LRC

Case No. N-201, had already attained finality. Respondent also pointed out that the Supplemental Motion for Reconsideration of

petitioner suffered from the same fatal defects as the original Motion for Reconsideration.

Respondent again posited that the subject property was foreshore land belonging to the State and not subject to private

appropriation, unless the same had already been declared by the executive or legislative department of the national government as

no longer needed for coast guard service, public use, or special industries, and classified as alienable and disposable. Full- blown trial

in LRC Case No. N-201 was no longer necessary as the evidence so far presented by petitioner had already established that the RTC

lacked jurisdiction over the subject matter of the case.

In its Order[23] dated November 16, 2000, the RTC initially agreed with respondent that the Motion for Reconsideration of

petitioner violated Sections 4, 5, and 6, Rule 15 and Section 11, Rule 13 of the Rules of Court. Resultantly, the Motion for

Reconsideration of petitioner was considered as not filed and did not toll the running of the period to file an appeal, rendering final and

executory the order of dismissal of LRC Case No. N-201.

However, after taking into consideration the Supplemental Motion for Reconsideration of petitioner, the RTC issued another
[24]
Order dated December 7, 2000, setting aside its Order dated September 7, 2000 in the interest of justice and resolving to have a

full-blown proceeding to determine factual issues in LRC Case No. N-201.

It was then the turn of respondent to file with the RTC a Motion for Reconsideration[25] of the Order dated December 7,

2000. In an Order[26] dated February 20, 2001, the RTC denied the motion of respondent and admitted the following:

A thorough review and perusal of the disputed order dated September 7, 2000 and December 7, 2000,
whereby this Court dismissed [petitioners] petition for registration of Lot No. 1, Dumaguete Cadastre, and later
set aside the Order of September 7, 2000, shows that there was honest mistake in declaring said lot 1, as a
shoreline. Indeed, the adjoining lots are already titled and bounded by a City Road. It is not bounded by a sea. The
Court wants to correct this error in its findings on the September 7, 2000 Order, that Lot No. 1 is situated on the
 shoreline of Dumaguete City. The Court simply committed an oversight on the petitioners evidence that the lot in
question is a foreshore land x x x when in fact it is not. And it is for this reason that the court reconsidered and
set aside said September 7, 2000 Order, to correct the same while it is true that said September 7, 2000 Order
had attained its finality, yet this Court cannot in conscience allow injustice to perpetuate in this case and that
hearing on the merits must proceed to determine the legality and truthfulness of its application for registration of
title.

Respondent sought recourse from the Court of Appeals by filing a Petition for Certiorari and Prohibition under Rule 65 of

the Rules of Court, docketed as CA-G.R. SP No. 64379. Respondent challenged the RTC Orders dated December 7, 2000 and

February 20, 2001 for having been issued by the RTC in grave abuse of discretion amounting to lack or excess of

jurisdiction. Respondent reiterated that the RTC Order dated September 7, 2000, dismissing LRC Case No. N-201 had already

attained finality. The defects of the Motion for Reconsideration of petitioner rendered the same as a mere scrap of paper, which did

not toll the running of the prescriptive period to appeal the RTC Order dated September 7, 2000.

The Court of Appeals, in its Decision dated March 4, 2005, found merit in the Petition of respondent and set aside the RTC

Orders dated December 7, 2000 and February 20, 2001. The appellate court, in its Resolution dated June 6, 2005, denied the Motion

for Reconsideration of petitioner.

Hence, petitioner comes before us via the instant Petition for Review with the following assignment of error:

GROUND FOR THE APPEAL

Error of law: The March 4, 2005 decision of the Court of Appeals and its June 6, 2005 Resolution, erred
on question of law in setting aside the Orders of the Regional Trial Court, Branch 44, dated December 7, 2000
and February 20, 2001. The said Orders of the trial court were made in order to determine factual issues and to
correct its error in its findings on the September 7, 2000 Order. Thus, the Court of Appeals decision is contrary to
law, justice, equity and existing jurisprudence.[27]

Respondent insists on the strict application of Sections 4, 5, and 6, Rule 15 and Section 11, Rule 13 of the Rules of

Court. Violations of the said rules were fatal to the Motion for Reconsideration and Supplemental Motion for Reconsideration of the

petitioner, and as a result, the RTC Order dated September 7, 2000, dismissing LRC Case No. N-201, had already become final and

executory and, thus, beyond the jurisdiction of the RTC to set aside. Respondent urges us to reject the plea of petitioner for a liberal

application of the rules in the absence of a compelling reason to do so.

We grant the Petition.

The grant of a petition for certiorari under Rule 65 of the Rules of Court requires grave abuse of discretion amounting to

lack or excess of jurisdiction. Grave abuse of discretion exists where an act is performed with a capricious or whimsical exercise of

judgment equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of positive
duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised

in an arbitrary and despotic manner by reason of passion or personal hostility.[28]

The Court of Appeals erred in granting the writ of certiorari in favor of respondent. The RTC did not commit grave abuse of

discretion when, in its Orders dated December 7, 2000 and February 20, 2001, it set aside the order of dismissal of LRC Case No. N-

201 and resolved to have a full-blown proceeding to determine factual issues in said case.

Procedural rules were conceived to aid the attainment of justice. If a stringent application of the rules would hinder rather

than serve the demands of substantial justice, the former must yield to the latter. [29] In Basco v. Court of Appeals,[30] we allowed a

liberal application of technical rules of procedure, pertaining to the requisites of a proper notice of hearing, upon consideration of the

importance of the subject matter of the controversy, as illustrated in well-settled cases, to wit:

The liberal construction of the rules on notice of hearing is exemplified in Goldloop Properties, Inc. v.
CA:

Admittedly, the filing of respondent-spouses' motion for reconsideration did not

stop the running of the period of appeal because of the absence of a notice of hearing
required in Secs. 3, 4 and 5, Rule 15, of the Rules of Court. As we have repeatedly held, a
motion that does not contain a notice of hearing is a mere scrap of paper; it presents no
question which merits the attention of the court. Being a mere scrap of paper, the trial court
had no alternative but to disregard it. Such being the case, it was as if no motion for
reconsideration was filed and, therefore, the reglementary period within which respondent-
spouses should have filed an appeal expired on 23 November 1989.

But, where a rigid application of that rule will result in a manifest failure or
miscarriage of justice, then the rule may be relaxed, especially if a party successfully shows
that the alleged defect in the questioned final and executory judgment is not apparent on its
face or from the recitals contained therein. Technicalities may thus be disregarded in
order to resolve the case. After all, no party can even claim a vested right in
technicalities. Litigations should, as much as possible, be decided on the merits and
not on technicalities.

Hence, this Court should not easily allow a party to lose title and ownership over a
party worth P4,000,000.00 for a measly P650,000.00 without affording him ample opportunity
to prove his claim that the transaction entered into was not in fact an absolute sale but one
of mortgage. Such grave injustice must not be permitted to prevail on the anvil of
technicalities.

Likewise, in Samoso v. CA, the Court ruled:

But time and again, the Court has stressed that the rules of procedure are not to
be applied in a very strict and technical sense. The rules of procedure are used only to help
secure not override substantial justice (National Waterworks & Sewerage System vs.
Municipality of Libmanan, 97 SCRA 138 [1980]; Gregorio v. Court of Appeals, 72 SCRA 120
[1976]). The right to appeal should not be lightly disregarded by a stringent application
of rules of procedure especially where the appeal is on its face meritorious and the
interests of substantial justice would be served by permitting the appeal (Siguenza v.
Court of Appeals, 137 SCRA 570 [1985]; Pacific Asia Overseas Shipping Corporation v.
National Labor Relations Commission, et al., G.R. No. 76595, May 6, 1998). . . .

In the instant case, it is petitioner's life and liberty that is at stake. The trial court has sentenced him to
suffer the penalty of reclusion perpetua and his conviction attained finality on the basis of mere technicality. It is
but just, therefore, that petitioner be given the opportunity to defend himself and pursue his appeal. To do
otherwise would be tantamount to grave injustice. A relaxation of the procedural rules, considering the particular
circumstances herein, is justified.[31] (Emphasis ours.)
 In the case at bar, the Motion for Reconsideration and Supplemental Motion for Reconsideration of petitioner, which sought

the reversal of RTC Order dated September 7, 2000 dismissing LRC Case No. N-201, cite meritorious grounds that justify a liberal

application of procedural rules.

The dismissal by the RTC of LRC Case No. N-201 for lack of jurisdiction is patently erroneous.

Basic as a hornbook 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 plaintiff's 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

therein. The averments in the complaint and the character of the relief sought are the ones to be consulted. Once vested by the

allegations in the complaint, jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all

or some of the claims asserted therein.[32]

As a necessary consequence, the jurisdiction of the court cannot be made to depend upon the defenses set up in the answer

or upon the motion to dismiss; for otherwise, the question of jurisdiction would almost entirely depend upon the defendant. What

determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. The

averments therein and the character of the relief sought are the ones to be consulted. [33]

Under Act No. 496, otherwise known as the Land Registration Act, as amended by Act No. 2347, jurisdiction over all

applications for registration of title to land was conferred upon the Courts of First Instance (CFI) of the respective provinces in which

the land sought to be registered was situated. Jurisdiction over land registration cases, as in ordinary actions, is acquired upon the

filing in court of the application for registration, and is retained up to the end of the litigation.[34]

The land registration laws were updated and codified by the Property Registration Decree, and under Section 17 thereof,

jurisdiction over an application for land registration was still vested on the CFI of the province or city where the land was situated, viz:

SEC. 17. What and where to file. The application for land registration shall be filed with the Court of
First Instance of the province or city where the land is situated. The applicant shall file together with the application
all original muniments of titles or copies thereof and a survey plan of the land approved by the Bureau of Lands.

The Clerk of Court shall not accept any application unless it is shown that the applicant has furnished
the Director of Lands with a copy of the application and all annexes.

Batas Pambansa Blg. 129, otherwise known as The Judiciary Reorganization Act of 1980, created the RTC[35] in place of

the CFI. Presently, jurisdiction over an application for land registration remains with the RTC where the land is situated, except when

such jurisdiction is delegated by the Supreme Court to the Metropolitan Trial Court, Municipal Trial Courts, and Municipal Circuit Trial

Courts under certain circumstances.[36]

 It is not disputed that the Application for Original Registration of Title filed by petitioner before the RTC of the City

of Dumaguete conformed to Section 15 of the Property Registration Decree, which prescribes the form and contents of such

applications. In its Application, petitioner prayed that its title to the subject property, which it repeatedly alleged to have acquired

through continuous and adverse possession and occupation of the said property for more than 30 years or since 1960, be placed

under the land registration laws. The allegations and prayer in the Application of petitioner were sufficient to vest jurisdiction on the

RTC over the said Application upon the filing thereof.

Respondent sought the dismissal of LRC Case No. N-201 on the ground of lack of jurisdiction, not because of the

insufficiency of the allegations and prayer therein, but because the evidence presented by petitioner itself during the trial supposedly

showed that the subject property is a foreshore land, which is not alienable and disposable. The RTC granted the Motion to Dismiss

of respondent in its Order dated September 7, 2000. The RTC went beyond the allegations and prayer for relief in the Application for

Original Registration of petitioner, and already scrutinized and weighed the testimony of Engr. Dorado, the only witness petitioner was

able to present.

As to whether or not the subject property is indeed foreshore land is a factual issue which the RTC should resolve in the

exercise of its jurisdiction, after giving both parties the opportunity to present their respective evidence at a full-blown trial. As we have

explained in the Estate of the Late Jesus S. Yujuico v. Republic[37]:

The plain import of Municipality of Antipolo is that a land registration court, the RTC at present, has no
jurisdiction over the subject matter of the application which respondent Republic claims is public land. This ruling
needs elucidation.

Firmly entrenched is the principle that jurisdiction over the subject matter is conferred by
law. Consequently, the proper CFI (now the RTC) under Section 14 of PD 1529 (Property Registration Decree)
has jurisdiction over applications for registration of title to land.

xxxx

Conformably, the Pasig-Rizal CFI, Branch XXII has jurisdiction over the subject matter of the land
registration case filed by Fermina Castro, petitioners predecessor-in-interest, since jurisdiction over the subject
matter is determined by the allegations of the initiatory pleading the application. Settled is the rule that the
authority to decide a case and not the decision rendered therein is what makes up jurisdiction. When there is
jurisdiction, the decision of all questions arising in the case is but an exercise of jurisdiction.

In our view, it was imprecise to state in Municipality of Antipolo that the Land Registration Court [has]
no jurisdiction to entertain the application for registration of public property x x x for such court precisely has the
jurisdiction to entertain land registration applications since that is conferred by PD 1529. The applicant in a land
registration case usually claims the land subject matter of the application as his/her private property, as in the
case of the application of Castro. Thus, the conclusion of the CA that the Pasig-Rizal CFI has no jurisdiction over
the subject matter of the application of Castro has no mooring. The land registration court initially has
jurisdiction over the land applied for at the time of the filing of the application. After trial, the court, in the
exercise of its jurisdiction, can determine whether the title to the land applied for is registerable and can
be confirmed. In the event that the subject matter of the application turns out to be inalienable public
land, then it has no jurisdiction to order the registration of the land and perforce must dismiss the
application. [38] (Emphasis ours.)

It is true that petitioner, as the applicant, has the burden of proving that the subject property is alienable and disposable and

its title to the same is capable of registration. However, we stress that the RTC, when it issued its Order dated September 7, 2000,
had so far heard only the testimony of Engr. Dorado, the first witness for the petitioner. Petitioner was no longer afforded the

opportunity to present other witnesses and pieces of evidence in support of its Application. The RTC Order dated September 7,

2000 already declaring the subject property as inalienable public land, over which the RTC has no jurisdiction to order registration

was evidently premature.

The RTC Order dated September 7, 2000 has not yet become final and executory as petitioner was able to duly file a Motion

for Reconsideration and Supplemental Motion for Reconsideration of the same, which the RTC eventually granted in its Order

dated December 7, 2000. Admittedly, said motions filed by petitioner did not comply with certain rules of procedure. Ordinarily, such

non-compliance would have rendered said motions as mere scraps of paper, considered as not having been filed at all, and unable

to toll the reglementary period for an appeal. However, we find that the exceptional circumstances extant in the present case warrant

the liberal application of the rules.

Also, the Motion for Reconsideration and Supplemental Motion for Reconsideration of the Order dated September 7, 2000

filed by petitioner did not comply with Section 11, Rule 13 of the Rules of Court, for these did not include a written explanation why

service or filing thereof was not done personally. Nonetheless, in Maceda v. Encarnacion de Guzman Vda. de
[39]
Magpantay, citing Solar Team Entertainment, Inc. v. Ricafort,[40] and Musa v. Amor,[41] we explained the rationale behind said rule

and the mandatory nature of the same, vis--vis the exercise of discretion by the court in case of non-compliance therewith:

In Solar Team Entertainment, Inc. v. Ricafort, this Court, passing upon Section 11 of Rule 13 of the
Rules of Court, held that a court has the discretion to consider a pleading or paper as not filed if said rule is not
complied with.

Personal service and filing are preferred for obvious reasons. Plainly, such should
expedite action or resolution on a pleading, motion or other paper; and conversely, minimize,
if not eliminate, delays likely to be incurred if service or filing is done by mail, considering the
inefficiency of the postal service. Likewise, personal service will do away with the practice
of some lawyers who, wanting to appear clever, resort to the following less than ethical
practices: (1) serving or filing pleadings by mail to catch opposing counsel off-guard, thus
leaving the latter with little or no time to prepare, for instance, responsive pleadings or an
opposition; or (2) upon receiving notice from the post office that the registered containing the
pleading of or other paper from the adverse party may be claimed, unduly procrastinating
before claiming the parcel, or, worse, not claiming it at all, thereby causing undue delay in
the disposition of such pleading or other papers.

If only to underscore the mandatory nature of this innovation to our set of adjective
rules requiring personal service whenever practicable, Section 11 of Rule 13 then gives the
court the discretion to consider a pleading or paper as not filed if the other modes of service
or filing were not resorted to and no written explanation was made as to why personal service
was not done in the first place. The exercise of discretion must, necessarily consider
the practicability of personal service, for Section 11 itself begins with the clause
whenever practicable.

We thus take this opportunity to clarify that under Section 11, Rule 13 of the 1997
Rules of Civil Procedure, personal service and filing is the general rule, and resort to other
modes of service and filing, the exception. Henceforth, whenever personal service or filing
is practicable, in the light of the circumstances of time, place and person, personal service
or filing is mandatory. Only when personal service or filing is not practicable may resort to
other modes be had, which must then be accompanied by a written explanation as to why
personal service or filing was not practicable to begin with. In adjudging the plausibility of an
explanation, a court shall likewise consider the importance of the subject matter of the case
or the issues involved therein, and the prima facie merit of the pleading sought to be
expunged for violation of Section 11.
 In Musa v. Amor, this Court, on noting the impracticality of personal service, exercised its discretion
and liberally applied Section 11 of Rule 13:

As [Section 11, Rule 13 of the Rules of Court] requires, service and filing of
pleadings must be done personally whenever practicable. The court notes that in the
present case, personal service would not be practicable. Considering the distance
between the Court of Appeals and Donsol, Sorsogon where the petition was posted, clearly,
service by registered mail [sic] would have entailed considerable time, effort and expense. A
written explanation why service was not done personally might have been
superfluous. In any case, as the rule is so worded with the use of may, signifying
permissiveness, a violation thereof gives the court discretion whether or not to
consider the paper as not filed. While it is true that procedural rules are necessary to
secure an orderly and speedy administration of justice, rigid application of Section 11, Rule
13 may be relaxed in this case in the interest of substantial justice.

In the case at bar, the address of respondents counsel is Lopez, Quezon, while petitioner Sonias
counsels is Lucena City. Lopez, Quezon is 83 kilometers away from Lucena City. Such distance makes personal
service impracticable. As in Musa v. Amor, a written explanation why service was not done personally might have
been superfluous.[42] (Emphases supplied and citations omitted.)

Our ruling in the above-cited cases is relevant to the instant case. Counsel for petitioner holds office in Dumaguete City,

Negros Oriental, in the Visayas; while counsel for respondent holds office in Quezon City, Metro Manila, in Luzon. Given the

considerable distance between the offices of these two counsels, personal service of pleadings and motions by one upon the other

was clearly not practicable and a written explanation as to why personal service was not done would only be superfluous. [43] In addition,

we refer once more to the merits of the Motion for Reconsideration and Supplemental Motion for Reconsideration of the RTC Order

dated September 7, 2000 filed by petitioner, which justify the liberal interpretation of Section 11, Rule 13 of the Rules of Court in this

case.

Jurisprudence confirms that the requirements laid down in Sections 4, 5, and 6, Rule 15 of the Rules of Court that the notice

of hearing shall be directed to the parties concerned, and shall state the time and place for the hearing of the motion, are mandatory. If

not religiously complied with, they render the motion pro forma.As such, the motion is a useless piece of paper that will not toll the

running of the prescriptive period.[44]

Yet, again, there were previous cases with peculiar circumstances that had compelled us to liberally apply the rules on

notice of hearing and recognize substantial compliance with the same. Once such case is Philippine National Bank v.

Paneda,[45] where we adjudged:

Thus, even if the Motion may be defective for failure to address the notice of hearing of said motion to the parties
concerned, the defect was cured by the court's taking cognizance thereof and the fact that the adverse party was
otherwise notified of the existence of said pleading. There is substantial compliance with the foregoing rules if a
copy of the said motion for reconsideration was furnished to the counsel of herein private respondents.

In the present case, records reveal that the notices in the Motion were addressed to the respective
counsels of the private respondents and they were duly furnished with copies of the same as shown by the
receipts signed by their staff or agents.

Consequently, the Court finds that the petitioner substantially complied with the pertinent
provisions of the Rules of Court and existing jurisprudence on the requirements of motions and
pleadings.[46] (Emphasis supplied.)

It was not refuted that petitioner furnished respondent and respondent actually received copies of the Motion for

Reconsideration, as well as the Supplemental Motion for Reconsideration of the RTC Order dated September 7, 2000 filed by
petitioner. As a result, respondent was able to file its Oppositions to the said Motions. The RTC, in issuing its Order dated December

7, 2000, was able to consider the arguments presented by both sides. Hence, there was substantial compliance by petitioner with the

rules on notice of hearing for its Motion for Reconsideration and Supplemental Motion for Reconsideration of the RTC Order dated

September 7, 2000. Respondent cannot claim that it was deprived of the opportunity to be heard on its opposition to said Motions.

In view of the foregoing circumstances, the RTC judiciously, rather than abusively or arbitrarily, exercised its discretion when

it subsequently issued the Order dated December 7, 2000, setting aside its Order dated September 7, 2000 and proceeding with the

trial in LRC Case No. N-201.

WHEREFORE, the instant Petition for Review of petitioner City of Dumaguete is hereby GRANTED. The Decision dated

March 4, 2005 and Resolution dated June 6, 2005 of the Court Appeals in CA-G.R. SP No. 64379 are SET ASIDE, and the Orders

dated December 7, 2000 and February 20, 2001 of Branch 44 of the Regional Trial Court of the City of Dumaguete in LRC Case No.

N-201 are REINSTATED. The said trial court is DIRECTED to proceed with the hearing of LRC Case No. N-201 with dispatch.

SO ORDERED.

REPUBLIC OF THE PHILIPPINES, G. R. No. 162322

Petitioner,
Present:

CARPIO, J., Chairperson,

- versus - BRION,
PEREZ,
SERENO, and
REYES, JJ.
BANTIGUE POINT DEVELOPMENT CORPORATION,
Respondent. Promulgated:

March 14, 2012

DECISION

SERENO, J.:

This Rule 45 Petition requires this Court to address the issue of the proper scope of the delegated jurisdiction of municipal trial courts

in land registration cases. Petitioner Republic of the Philippines (Republic) assails the Decision of the Court of Appeals (CA)[1] in CA-
G.R. CV No. 70349, which affirmed the Decision of the Municipal Trial Court (MTC) of San Juan, Batangas [2] in LRC Case No. N-98-

20, LRA Record No. 68329, granting respondent Bantigue Point Development Corporations (Corporation) application for original

registration of a parcel of land. Since only questions of law have been raised, petitioner need not have filed a Motion for

Reconsideration of the assailed CA Decision before filing this Petition for Review.

The Facts

On 17 July 1997, respondent Bantigue Point Development Corporation filed with the Regional Trial Court (RTC) of Rosario, Batangas

an application for original registration of title over a parcel of land with an assessed value of ₱4,330, ₱1,920 and ₱8,670, or a total

assessed value of ₱14,920 for the entire property, more particularly described as Lot 8060 of Cad 453-D, San Juan Cadastre, with an

area of more or less 10,732 square meters, located at Barangay Barualte, San Juan, Batangas. [3]

On 18 July 1997, the RTC issued an Order setting the case for initial hearing on 22 October 1997. [4] On 7 August 1997, it issued a

second Order setting the initial hearing on 4 November 1997.[5]

Petitioner Republic filed its Opposition to the application for registration on 8 January 1998 while the records were still with the RTC.[6]

On 31 March 1998, the RTC Clerk of Court transmitted motu proprio the records of the case to the MTC of San Juan, because the

assessed value of the property was allegedly less than ₱100,000.[7]

Thereafter, the MTC entered an Order of General Default[8] and commenced with the reception of evidence.[9] Among the documents

presented by respondent in support of its application are Tax Declarations, [10] a Deed of Absolute Sale in its favor,[11] and a Certification

from the Department of Environment and Natural Resources (DENR) Community Environment and Natural Resources Office

(CENRO) of Batangas City that the lot in question is within the alienable and disposable zone.[12] Thereafter, it awarded the land to

respondent Corporation.[13]

Acting on an appeal filed by the Republic,[14] the CA ruled that since the former had actively participated in the proceedings before the

lower court, but failed to raise the jurisdictional challenge therein, petitioner is thereby estopped from questioning the jurisdiction of

the lower court on appeal.[15] The CA further found that respondent Corporation had sufficiently established the latters registrable title

over the subject property after having proven open, continuous, exclusive and notorious possession and occupation of the subject

land by itself and its predecessors-in-interest even before the outbreak of World War II.[16]

Dissatisfied with the CAs ruling, petitioner Republic filed this instant Rule 45 Petition and raised the following arguments in support of

its appeal:
 I.

THE REPUBLIC CANNOT BE ESTOPPED FROM QUESTIONING THE JURISDICTION OF THE MUNICIPAL
TRIAL COURT OVER THE APPLICATION FOR ORIGINAL REGISTRATION OF LAND TITLE EVEN FOR THE
FIRST TIME ON APPEAL

II.

THE MUNICIPAL TRIAL COURT FAILED TO ACQUIRE JURISDICTION OVER THE APPLICATION FOR
ORIGINAL REGISTRATION OF LAND TITLE.[17]

The Courts Ruling

We uphold the jurisdiction of the MTC, but remand the case to the court a quo for further proceedings in order to determine if the

property in question forms part of the alienable and disposable land of the public domain.

I
The Republic is not estopped from raising the issue of jurisdiction in this case.

At the outset, we rule that petitioner Republic is not estopped from questioning the jurisdiction of the lower court, even if the former

raised the jurisdictional question only on appeal. The rule is settled that lack of jurisdiction over the subject matter may be raised at

any stage of the proceedings.[18] Jurisdiction over the subject matter is conferred only by the Constitution or the law. [19] It cannot be

acquired through a waiver or enlarged by the omission of the parties or conferred by the acquiescence of the court. [20] Consequently,

questions of jurisdiction may be cognizable even if raised for the first time on appeal.[21]

The ruling of the Court of Appeals that a party may be estopped from raising such [jurisdictional] question if he has actively taken part

in the very proceeding which he questions, belatedly objecting to the courts jurisdiction in the event that the judgment or order

subsequently rendered is adverse to him[22] is based on the doctrine of estoppel by laches. We are aware of that doctrine first

enunciated by this Court in Tijam v. Sibonghanoy.[23] In Tijam, the party-litigant actively participated in the proceedings before the

lower court and filed pleadings therein. Only 15 years thereafter, and after receiving an adverse Decision on the merits from the

appellate court, did the party-litigant question the lower courts jurisdiction. Considering the unique facts in that case, we held that

estoppel by laches had already precluded the party-litigant from raising the question of lack of jurisdiction on appeal. In Figueroa v.

People,[24] we cautioned that Tijam must be construed as an exception to the general rule and applied only in the most exceptional

cases whose factual milieu is similar to that in the latter case.

The facts are starkly different in this case, making the exceptional rule in Tijam inapplicable. Here, petitioner Republic filed

its Opposition to the application for registration when the records were still with the RTC. [25] At that point, petitioner could not have

questioned the delegated jurisdiction of the MTC, simply because the case was not yet with that court. When the records were

transferred to the MTC, petitioner neither filed pleadings nor requested affirmative relief from that court. On appeal, petitioner
immediately raised the jurisdictional question in its Brief. [26] Clearly, the exceptional doctrine of estoppel by laches is inapplicable to

the instant appeal.

Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which, by

exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable

time, warranting the presumption that the party entitled to assert it either has abandoned or declined to assert it. [27] In this case,

petitioner Republic has not displayed such unreasonable failure or neglect that would lead us to conclude that it has abandoned or

declined to assert its right to question the lower court's jurisdiction.

II
The Municipal Trial Court properly acquired jurisdiction over the case.

In assailing the jurisdiction of the lower courts, petitioner Republic raised two points of contention: (a) the period for setting the date

and hour of the initial hearing; and (b) the value of the land to be registered.

First, petitioner argued that the lower court failed to acquire jurisdiction over the application, because the RTC set the date

and hour of the initial hearing beyond the 90-day period provided under the Property Registration Decree.[28]

We disagree.

The Property Registration Decree provides:

Sec. 23. Notice of initial hearing, publication, etc. - The court shall, within five days from filing of the
application, issue an order setting the date and hour of the initial hearing which shall not be earlier than forty-five
days nor later than ninety days from the date of the order. x x x.

In this case, the application for original registration was filed on 17 July 1997.[29] On 18 July 1997, or a day after the filing of the

application, the RTC immediately issued an Order setting the case for initial hearing on 22 October 1997, which was 96 days from the

Order.[30] While the date set by the RTC was beyond the 90-day period provided for in Section 23, this fact did not affect the jurisdiction

of the trial court. In Republic v. Manna Properties, Inc.,[31] petitioner Republic therein contended that there was failure to comply with

the jurisdictional requirements for original registration, because there were 125 days between the Order setting the date of the initial

hearing and the initial hearing itself. We ruled that the lapse of time between the issuance of the Order setting the date of initial hearing

and the date of the initial hearing itself was not fatal to the application. Thus, we held:

x x x [A] party to an action has no control over the Administrator or the Clerk of Court acting as a land
court; he has no right to meddle unduly with the business of such official in the performance of his duties. A party
cannot intervene in matters within the exclusive power of the trial court. No fault is attributable to such party if the
trial court errs on matters within its sole power. It is unfair to punish an applicant for an act or omission over which
the applicant has neither responsibility nor control, especially if the applicant has complied with all the
requirements of the law.[32]
 Indeed, it would be the height of injustice to penalize respondent Corporation by dismissing its application for registration

on account of events beyond its control.

Moreover, since the RTC issued a second Order on 7 August 1997 setting the initial hearing on 4 November 1997, [33] within the 90-

day period provided by law, petitioner Republic argued that the jurisdictional defect was still not cured, as the second Order was issued

more than five days from the filing of the application, again contrary to the prescribed period under the Property Registration Decree.[34]

Petitioner is incorrect.

The RTCs failure to issue the Order setting the date and hour of the initial hearing within five days from the filing of the application for

registration, as provided in the Property Registration Decree, did not affect the courts its jurisdiction. Observance of the five-day period

was merely directory, and failure to issue the Order within that period did not deprive the RTC of its jurisdiction over the case. To rule

that compliance with the five-day period is mandatory would make jurisdiction over the subject matter dependent upon the trial court.

Jurisdiction over the subject matter is conferred only by the Constitution or the law.[35] It cannot be contingent upon the action or

inaction of the court.

This does not mean that courts may disregard the statutory periods with impunity. We cannot assume that the law deliberately meant

the provision to become meaningless and to be treated as a dead letter.[36] However, the records of this case do not show such blatant

disregard for the law. In fact, the RTC immediately set the case for initial hearing a day after the filing of the application for

registration,[37] except that it had to issue a second Order because the initial hearing had been set beyond the 90-day period provided

by law.

Second, petitioner contended[38] that since the selling price of the property based on the Deed of Sale annexed to

respondents application for original registration was ₱160,000,[39] the MTC did not have jurisdiction over the case. Under Section 34

of the Judiciary Reorganization Act, as amended,[40] the MTCs delegated jurisdiction to try cadastral and land registration cases is

limited to lands, the value of which should not exceed ₱100,000.

We are not persuaded.

The delegated jurisdiction of the MTC over cadastral and land registration cases is indeed set forth in the Judiciary Reorganization

Act, which provides:

Sec. 34. Delegated Jurisdiction in Cadastral and Land Registration Cases. - Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme Court to hear and
determine cadastral or land registration cases covering lots where there is no controversy or opposition,
or contested lots where the value of which does not exceed One hundred thousand pesos (₱100,000.00),
such value to be ascertained by the affidavit of the claimant or by agreement of the respective claimants if there
are more than one, or from the corresponding tax declaration of the real property. Their decision in these cases
 shall be appealable in the same manner as decisions of the Regional Trial Courts. (As amended by R.A. No.
7691) (Emphasis supplied.)

Thus, the MTC has delegated jurisdiction in cadastral and land registration cases in two instances: first, where there is no controversy

or opposition; or, second, over contested lots, the value of which does not exceed ₱100,000.

The case at bar does not fall under the first instance, because petitioner opposed respondent Corporations application for registration

on 8 January 1998.[41]

However, the MTC had jurisdiction under the second instance, because the value of the lot in this case does not exceed ₱100,000.

Contrary to petitioners contention, the value of the land should not be determined with reference to its selling price. Rather, Section

34 of the Judiciary Reorganization Act provides that the value of the property sought to be registered may be ascertained in three

ways: first, by the affidavit of the claimant; second, by agreement of the respective claimants, if there are more than one; or, third,

from the corresponding tax declaration of the real property.[42]

In this case, the value of the property cannot be determined using the first method, because the records are bereft of any affidavit

executed by respondent as to the value of the property. Likewise, valuation cannot be done through the second method, because this

method finds application only where there are multiple claimants who agree on and make a joint submission as to the value of the

property. Here, only respondent Bantigue Point Development Corporation claims the property.

The value of the property must therefore be ascertained with reference to the corresponding Tax Declarations submitted by respondent

Corporation together with its application for registration. From the records, we find that the assessed value of the property

is ₱4,330, ₱1,920 and ₱8,670, or a total assessed value of ₱14,920 for the entire property.[43] Based on these Tax Declarations, it is

evident that the total value of the land in question does not exceed ₱100,000. Clearly, the MTC may exercise its delegated jurisdiction

under the Judiciary Reorganization Act, as amended.

III
A certification from the CENRO is not sufficient proof that the property in question is alienable and
disposable land of the public domain.

Even as we affirm the propriety of the MTCs exercise of its delegated jurisdiction, we find that the lower court erred in

granting respondent Corporations application for original registration in the absence of sufficient proof that the property in question

was alienable and disposable land of the public domain.

The Regalian doctrine dictates that all lands of the public domain belong to the State. [44] The applicant for land registration

has the burden of overcoming the presumption of State ownership by establishing through incontrovertible evidence that the land

sought to be registered is alienable or disposable based on a positive act of the government.[45] We held in Republic v. T.A.N.
Properties, Inc. that a CENRO certification is insufficient to prove the alienable and disposable character of the land sought to be

registered.[46] The applicant must also show sufficient proof that the DENR Secretary has approved the land classification and released

the land in question as alienable and disposable.[47]

Thus, the present rule is that an application for original registration must be accompanied by (1) a CENRO or
[48]
PENRO Certification; and (2) a copy of the original classification approved by the DENR Secretary and certified as a true copy by

the legal custodian of the official records.[49]

Here, respondent Corporation only presented a CENRO certification in support of its application. [50] Clearly, this falls short

of the requirements for original registration.

We therefore remand this case to the court a quo for reception of further evidence to prove that the property in question

forms part of the alienable and disposable land of the public domain. If respondent Bantigue Point Development Corporation presents

a certified true copy of the original classification approved by the DENR Secretary, the application for original registration should be

granted. If it fails to present sufficient proof that the land in question is alienable and disposable based on a positive act of the

government, the application should be denied.

WHEREFORE, premises considered, the instant Petition for Review is DENIED. Let this case be REMANDED to the Municipal Trial

Court of San Juan, Batangas, for reception of evidence to prove that the property sought to be registered is alienable and disposable

land of the public domain.

SO ORDERED.

b. Over the Case

[G.R. No. 153176. March 29, 2004]

PEOPLE OF THE PHILIPPINES, petitioner, vs. HON. ZEIDA AURORA B. GARFIN, In her capacity as Presiding Judge of RTC,
Branch 19, of the City of Naga and SERAFIN SABALLEGUE, respondents.

DECISION

PUNO, J:

For determination in this petition is a question in procedural law - - - whether an information filed by a state prosecutor without
the prior written authority or approval of the city or provincial prosecutor or chief state prosecutor should be dismissed after the accused
has entered his plea under the information.

Petitioner comes before us with a petition for certiorari and mandamus under Rule 65 of the Revised Rules of Court, seeking to
declare as null and void the Orders issued by the Regional Trial Court of Naga City, Branch 19 dated February 26, 2002 [1] and April
3, 2002[2] which dismissed for lack of jurisdiction the case of People vs. Serafin Saballegue, Criminal Case No. RTC 2001-0597, and
denied petitioners motion for reconsideration.

The antecedent facts are undisputed.

 On June 22, 2001, private respondent was charged with violation of Section 22(a) in relation to Sections 19(b) and 28(e) of
Republic Act No. 8282, otherwise known as the Social Security Act, in an information which reads:

The undersigned State Prosecutor of the Office of the Regional State Prosecutor, Legazpi City, accuses SERAFIN SABALLEGUE,
as proprietor of Saballegue Printing Press with business address at 16 San Mateo St., Peafrancia Ave., Naga City for Violation of
Section 22(a) in relation to Sections 19(b) and 28(e) of R.A. 8282 otherwise known as the Social Security Act of 1997, committed as
follows:

That on or about February 1990 and up to the present, in the City of Naga, Philippines, within the functional jurisdiction of SSS Naga
Branch and the territorial jurisdiction of this Honorable Court, the above named accused, while being the proprietor of Saballegue
Printing Press, did then and there willfully, unlawfully, and criminally refuse and fail and continuously refuse and fail to remit the
premiums due for his employee to the SSS in the amount of SIX THOUSAND FIVE HUNDRED THIRTY-THREE PESOS
(P6,533.00), Philippine Currency, representing SSS and EC premiums for the period from January 1990 to December 1999 (n.i.),
and the 3% penalty per month for late remittance in the amount of ELEVEN THOUSAND ONE HUNDRED FORTY-THREE PESOS
and 28/100 (P11,143.28) computed as of 15 March 2000, despite lawful demands by letter in violation of the above-cited provisions
of the law, to the damage and prejudice of the SSS and the public in general.

CONTRARY TO LAW.

Legazpi City for Naga City. 22 June 2001.

(sgd.) ROMULO SJ. TOLENTINO

State Prosecutor
Special Prosecutor on SSS Cases
in Region V[3]

The information contains a certification signed by State Prosecutor Romulo SJ. Tolentino which states:

I hereby certify that the required investigation in this case has been conducted by the undersigned Special Prosecutor in accordance
with law and under oath as officer of the court, that there is reasonable ground to believe that the offense has been committed, that
the accused is probably guilty thereof and that the filing of the information is with the prior authority and approval of the Regional
State Prosecutor.[4]

The case was raffled to Branch 19 of the Regional Trial Court of Naga City presided by respondent judge Hon. Zeida Aurora B.
Garfin. On September 24, 2001, accused Serafin Saballegue pleaded not guilty to the charge and the case was set for pre-
trial.[5] Three days thereafter, the accused filed a motion to dismiss[6] on the ground that the information was filed without the prior
written authority or approval of the city prosecutor as required under Section 4, Rule 112 of the Revised Rules of Court.[7]

The People, through State Prosecutor Tolentino, filed an opposition,[8] against which the accused filed a rejoinder.[9] The People
filed a reply to the rejoinder[10] on December 21, 2001. A rejoinder to the reply[11] was filed by the accused on January 21, 2002.

After considering the arguments raised, the trial court granted the motion to dismiss in its first questioned Order dated February
26, 2002, to wit:

After considering the respective arguments raised by the parties, the Court believes and so resolves that the Information has not
been filed in accordance with Section 4, par. 3 of Rule 112 of the 2000 Rules on Criminal Procedure, thus:

Rule 112, Section 4 x x x x x x

No complaint or information may be filed or dismissed by an investigating prosecutor without the prior written authority or approval of
the provincial or city prosecutor or chief state prosecutor or the Ombudsman or his deputy.

Expresio unius est exclusio alterius.

The Information will readily show that it has not complied with this rule as it has not been approved by the City Prosecutor.

This Court holds that the defendants plea to the Information is not a waiver to file a motion to dismiss or to quash on the ground of
lack of jurisdiction. By express provision of the rules and by a long line of decisions, questions of want of jurisdiction may be raised
at any stage of the proceedings (People vs. Eduarte, 182 SCRA 750).

The Supreme Court in Villa vs. Ibaez (88 Phil 402) dwelt on lack of authority of the officer who filed the information and on
jurisdiction at the same time, pertinent portions run as follows:

The defendant had pleaded to the information before he filed a motion to quash, and it is contended that by his plea he waived all
objections to the information. The contention is correct as far as formal objections to the pleadings are concerned. But by clear
implication, if not by express provision of section 10 of Rule 113 of the Rules of Court, and by a long line of uniform decisions,
questions of want of jurisdiction may be raised at any stage of the proceedings. Now, the objection to the respondents actuations
goes to the very foundations of jurisdiction. It is a valid information signed by a competent officer which, among other requisites,
confers jurisdiction on the court over the person of the accused and the subject matter of the accusation. In consonance with this
view, an infirmity of the nature noted in the information cannot be cured by silence, acquiescence, or even by express consent.

Prosecutor Tolentino also contends that having been duly designated to assist the City Prosecutor in the investigation and
prosecution of all SSS cases by the Regional State prosecutor as alter ego of the Secretary of Justice in Region V, then that
authority may be given to other than the City Prosecutor. The Court finds this contention to be devoid of merit. The Regional State
Prosecutor is not the alter ego of the Secretary of Justice but a mere subordinate official and if ever the former files cases, it is by
virtue of a delegated authority by the Secretary of Justice. Potestas delegada non potesta delegare (sic) what has been delegated
cannot be redelegated.

In his opposition, the state prosecutor also attached a memorandum dated June 22, 2001 by Regional State Prosecutor Santiago M.
Turingan addressed to Provincial Prosecutor and City Prosecutors of Region V directing them to inhibit and to append the following
NOTATION after the certification in the Information for filing.

NOTATION: The herein City/Provincial Prosecutor is inhibiting from this case and the Special Prosecution Team on SSS Cases in
Region V is authorized to dispose of the case without my approval in view of the request for inhibition of the SSS Regional Manager
as granted by the Regional State Prosecutor.

A perusal of the Information, however, would readily show that nowhere in the Information has the City Prosecutor of Naga City
appended the above-quoted notation/inhibition. At most, the authority of the special prosecutor is only for the conduct of preliminary
investigations and the prosecution of cases after they are filed. The Court, however, believes that the filing of this Information must
be in conformity with the Rules on Criminal Procedure, particularly Section 4 of Rule 112.

WHEREFORE, premises considered and for lack of jurisdiction, the Court hereby resolves to DISMISS this case without
pronouncement as to cost.

SO ORDERED.[12]

A motion for reconsideration was filed by the People contending that as a special prosecutor designated by the regional state
prosecutor to handle SSS cases within Region V, State Prosecutor Tolentino is authorized to file the information involving violations
of the SSS law without need of prior approval from the city prosecutor. [13] Letters of commendation from Chief State Prosecutor
Jovencito Zuo[14] and Secretary Hernando Perez[15] were offered as proof to show that State Prosecutor Tolentinos authority to file the
information was recognized. In response, the defense pointed out in its opposition that the motion for reconsideration lacked a notice
of hearing, hence it is pro forma or a mere scrap of paper. [16]

On April 3, 2002, respondent judge issued the second questioned Order which reads:

Acting upon the Motion for Reconsideration filed by State Prosecutor Romulo SJ. Tolentino, Special Prosecutor on SSS cases in
Region V, and it appearing that the same has failed to comply with the requirement of notice prescribed in Sections 4 and 5, Rule 15
of the Rules of Court, the same is hereby DENIED for being a mere scrap of paper.

SO ORDERED.[17]

Hence, this petition by the People through Regional State Prosecutor Santiago Turingan and State Prosecutor Romulo SJ.
Tolentino. Petitioner attributes grave abuse of discretion amounting to lack or excess of jurisdiction on the part of respondent
judge, viz:[18]

1. RESPONDENT JUDGE DISMISSED THE INFORMATION WITHOUT THE REQUIRED SUPPORTING FACTUAL
AND LEGAL BASES;
 2. RESPONDENT JUDGE DELIBERATELY AND CAPRICIOUSLY IGNORED THE PRESUMPTION OF REGULARITY
IN FAVOR OF THE PROSECUTION WITHOUT THE REQUIRED SUFFICIENCY OF REBUTTAL EVIDENCE. THE
WORD MAY IN SEC. 4, RULE 112 OF THE RULES OF COURT IS NOT MANDATORY;

3. RESPONDENT JUDGE COMMITTED GRAVE ERROR IN DELIBERATELY IGNORING THE JUDICIALLY KNOWN
INHIBITION OF THE CITY PROSECUTOR AND THE SETTLED JURISPRUDENCE ON THE MATTER;

4. RESPONDENT JUDGE GRAVELY ABUSED HER DISCRETION IN INTERFERING WITH THE PURELY EXECUTIVE
FUNCTION OF FILING AN INFORMATION BY RULING ON THE AUTHORITY OF THE FILING OFFICER TO FILE
THE INFORMATION.

The Office of the Solicitor General (OSG) filed its comment[19] in compliance with this Courts Resolution dated September 23,
2002.[20] It opines that the dismissal of the information is mandated under Section 4, Rule 112 of the Rules of Criminal Procedure.

Private respondent contends that:[21] 1) the instant petition was filed out of time; 2) the special State Prosecutor is only authorized
to conduct preliminary investigation and prosecution of SSS cases and not to sign the information; and 3) the City Prosecutor did not
expressly inhibit himself from handling SSS cases nor signing the information.

We shall first resolve the procedural issues. Respondent contends that the motion for reconsideration filed on April 1, 2002 is
late because it was filed eighteen days after March 14, 2002, the date when petitioner received the first questioned order. Respondent
has overlooked that the 15th day after March 14 is a Good Friday. Hence, petitioners last day to file the motion for reconsideration was
on the next working day after Good Friday, April 1.[22]

Next, respondent argues that having been considered as a mere scrap of paper, the motion for reconsideration of the petitioner
did not toll the running of the reglementary period. Respondent, however, erroneously assumes that the present case is an appeal by
certiorari under Rule 45. As stated at the outset, this is an original petition for certiorari and mandamus under Rule 65.

Sec. 2, Rule 37 of the Rules of Court is clear. It provides that (a) pro forma motion for new trial or reconsideration shall not toll
the reglementary period of appeal. (emphases supplied) Hence, the same provision has no application in the case at bar.

The reckoning date is the receipt of the second questioned Order and not the receipt of the first. Section 4, Rule 65, as amended
by En Banc Resolution A.M. No. 00-2-03-SC, September 1, 2000, provides, viz:

Sec. 4. When and where petition filed.-- The petition may be filed not later than sixty (60) days from notice of the judgment, order or
resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60)- day
period shall be counted from notice of the denial of said motion.

xxxxxxxxx

As shown by the records, petitioner received the first questioned order dated February 26, 2002 on March 14, 2002.[23] A motion
for reconsideration was timely filed on April 1, 2002[24] which was dismissed for lack of notice of hearing in an Order dated April 3,
2002.[25] This second questioned order was received by petitioner on April 11, 2002. [26] A motion for extension of time to file a petition
for review on certiorari was filed on April 18, 2002.[27] A motion for leave to file and admit the instant petition
for certiorari and mandamus was filed on May 29, 2002.[28] Having been filed within the reglementary period, petitioners motion for
leave to file the instant petition was granted in this Courts Resolution dated July 15, 2002. [29]

We now come to the other issue: whether the prior written authority and approval of the city or provincial prosecutor or chief
state prosecutor is necessary in filing the information at bar.

Petitioner takes the unbending view that the approval of the city or provincial prosecutor is no longer required. It is contended
that the Regional State Prosecutor has already directed the city or provincial prosecutor to inhibit from handling SSS
cases.[30] Petitioner cites the letter of Regional State Prosecutor Santiago M. Turingan to SSS Regional Director in Naga City dated
June 6, 1997[31] and copies of Regional Orders No. 97-024-A[32] and 2001-033[33] dated July 14, 1997 and September 28, 2001,
respectively, showing the designation of State Prosecutor Tolentino as special prosecutor for SSS cases in Region V. Petitioner relies
on Galvez, et al. v. Court of Appeals, et al.[34] and Sanchez v. Demetriou, et al.[35] to prop up its contention that given the
designation of State Prosecutor Tolentino, the city prosecutor need not participate in the filing and prosecution of the information in
the case at bar.

We disagree. Under Presidential Decree No. 1275, the powers of a Regional State Prosecutor are as follows:

Sec. 8. The Regional State Prosecution Office: Functions of Regional State Prosecutor. - The Regional State Prosecutor
shall, under the control of the Secretary of Justice, have the following functions:

a) Implement policies, plans, programs, memoranda, orders, circulars and rules and regulations of the Department of Justice
relative to the investigation and prosecution of criminal cases in his region.

b) Exercise immediate administrative supervision over all provincial and city fiscals and other prosecuting officers of provinces
and cities comprised within his region.
c) Prosecute any case arising within the region.

d) With respect to his regional office and the offices of the provincial and city fiscals within his region, he shall:

1) Appoint such member of subordinate officers and employees as may be necessary; and approve transfers of subordinate
personnel within the jurisdiction of the regional office.

2) Investigate administrative complaints against fiscals and other prosecuting officers within his region and submit his
recommendation thereon to the Secretary of Justice who shall, after review thereof, submit the appropriate recommendation to the
Office of the President: Provided, that where the Secretary of Justice finds insufficient grounds for the filing of charges, he may
render a decision of dismissal thereof.

3) Investigate administrative complaints against subordinate personnel of the region and submit his recommendations thereon to the
Secretary of Justice who shall have the authority to render decision thereon. (emphases supplied)

The power of administrative supervision is limited to the authority of the department or its equivalent to generally oversee the
operations of such agencies and to insure that they are managed effectively, efficiently and economically but without interference with
day-to-day activities; or require the submission of reports and cause the conduct of management audit, performance evaluation and
inspection to determine compliance with policies, standards and guidelines of the department; to take such action as may be necessary
for the proper performance of official functions, including rectification of violations, abuses and other forms of maladministration; and
to review and pass upon budget proposals of such agencies but may not increase or add to them. [36] This is distinguished from the
power of supervision and control which includes the authority to act directly whenever a specific function is entrusted by law or
regulation to a subordinate; direct the performance of duty; restrain the commission of acts; review, approve, reverse or modify acts
and decisions of subordinate officials or units; determine priorities in the execution of plans and programs; and prescribe standards,
guidelines, plans and programs.[37]

The Regional State Prosecutor is clearly vested only with the power of administrative supervision. As administrative supervisor,
he has no power to direct the city and provincial prosecutors to inhibit from handling certain cases. At most, he can request for their
inhibition. Hence, the said directive of the regional state prosecutor to the city and provincial prosecutors is questionable to say the
least.

Petitioner cannot lean on the cases of Galvez and Sanchez. In those cases, the special prosecutors were acting under the
directive of the Secretary of Justice. They were appointed in accordance with law. Nowhere in P.D. No. 1275 is the regional state
prosecutor granted the power to appoint a special prosecutor armed with the authority to file an information without the prior written
authority or approval of the city or provincial prosecutor or chief state prosecutor. P.D. No. 1275 provides the manner by which special
prosecutors are appointed, to wit:

Sec. 15. Special Counsels. - Whenever the exigencies of the service require the creation of positions of additional counsel to
assist provincial and city fiscals in the discharge of their duties, positions of Special Counsels may be created by any
province or city, subject to the approval of the Secretary of Justice, and with salaries chargeable against provincial or city
funds. The Secretary of Justice shall appoint said Special Counsels, upon recommendation of the provincial or city fiscal
and regional state prosecutors concerned, either on permanent or temporary basis.

Special Counsel shall be appointed from members of the bar and shall be allowed not more than the salary rate provided in this
Decree for the lowest rank or grade of assistant fiscal in the province or city where assigned. (emphases supplied)

Under Department Order No. 318,[38] Defining the authority, duties and responsibilities of regional state prosecutors, then Acting
Secretary of Justice Silvestre H. Bello III ordered the appointed regional state prosecutors (which included Regional State Prosecutor
Turingan for Region V) to, among others, (i)nvestigate and/or prosecute, upon the directive of the Secretary of Justice, specific
criminal cases filed within the region. (emphasis supplied)

In the case at bar, there is no pretense that a directive was issued by the Secretary of Justice to Regional State Prosecutor
Turingan to investigate and/or prosecute SSS cases filed within his territorial jurisdiction. A bare reading of the alleged letter of
commendation by then Secretary Hernando Perez would show that it does not amount to a directive or even a recognition of this
authority. In fact, while the letter of Secretary Perez commends the efforts of Regional State Prosecutor Turingan in successfully
prosecuting SSS cases, it also negates his authority to prosecute them. Secretary Perez called the Regional State Prosecutors
attention to DOJ Circular No. 27, series of 2001, which states that all important cases of the SSS should be referred to the Office of
the Government Corporate Counsel.[39] Thus, Regional State Prosecutor Turingan cannot be considered a special prosecutor within
the meaning of the law.

Petitioner argues that the word may is permissive. Hence, there are cases when prior written approval is not required, and this
is one such instance. This is too simplistic an interpretation. Whether the word may is mandatory or directory depends on the context
of its use. We agree with the OSG that the use of the permissive word may should be read together with the other provisions in the
same section of the Rule. The paragraph immediately preceding the quoted provision shows that the word may is mandatory. It states:

Sec. 4, Rule 112. x x x

Within five (5) days from his resolution, he (investigating prosecutor) shall forward the record of the case to the provincial or city
prosecutor or chief state prosecutor, or to the Ombudsman or his deputy in cases of offenses cognizable by the Sandiganbayan in
the exercise of its original jurisdiction. They shall act on the resolution within ten (10) days from their receipt thereof and shall
immediately inform the parties of such action. (emphasis supplied)

Having settled that the prior authority and approval of the city, provincial or chief state prosecutor should have been obtained,
we shall now resolve the more important issue: whether the lack of prior written approval of the city, provincial or chief state prosecutor
in the filing of an information is a defect in the information that is waived if not raised as an objection before arraignment.

We hold that it is not.

The provisions in the 2000 Revised Rules of Criminal Procedure that demand illumination are Sections 3 and 9 of Rule 117 in
relation to paragraph 3, Section 4 of Rule 112, to wit:

Rule 117, Section 3. Grounds.The accused may move to quash the complaint or information on any of the following grounds:

(a) That the facts charged do not constitute an offense;

(b) That the court trying the case has no jurisdiction over the offense charged;

(c) That the court trying the case has no jurisdiction over the person of the accused;

(d) That the officer who filed the information had no authority to do so;

(e) That it does not conform substantially to the prescribed form;

(f) That more than one offense is charged except when a single punishment for various offenses is prescribed by law;

(g) That the criminal action or liability has been extinguished;

(h) That it contains averments which, if true, would constitute a legal excuse or justification; and

(i) That the accused has been previously convicted or acquitted of the offense charged, or the case against him was dismissed or
otherwise terminated without his express consent.

xxx xxx xxx

Section 9. Failure to move to quash or to allege any ground therefor.The failure of the accused to assert any ground of a motion to
quash before he pleads to the complaint or information, either because he did not file a motion to quash or failed to allege the same
in said motion, shall be deemed a waiver of any objections except those based on the grounds provided for in paragraphs (a), (b),
(g), and (i) of section 3 of this Rule. (emphasis supplied)

Rule 112, Section 4, paragraph 3 provides, viz:

No complaint or information may be filed or dismissed by an investigating prosecutor without the prior written authority or
approval of the provincial or city prosecutor or chief state prosecutor or the Ombudsman or his deputy. (emphasis supplied)

Private respondent and the OSG take the position that the lack of prior authority or approval by the city or provincial prosecutor
or chief state prosecutor is an infirmity in the information that prevented the court from acquiring jurisdiction over the case. Since lack
of jurisdiction is a defect that may be raised as an objection anytime even after arraignment, the respondent judge did not err in
granting the motion to dismiss based on this ground. As basis, they cite the case of Villa v. Ibaez, et al.[40] where we held, viz:

The defendant had pleaded to an information before he filed a motion to quash, and it is contended that by his plea he waived all
objections to the informations. The contention is correct as far as formal objections to the pleadings are concerned. But by clear
implication, if not by express provision of section 10 of Rule 113 of the Rules of Court (now Section 9 of Rule 117), and by a long
line of uniform decisions, questions of want of jurisdiction may be raised at any stage of the proceeding. Now, the objection to the
respondents actuations goes to the very foundation of the jurisdiction. It is a valid information signed by a competent
officer which, among other requisites, confers jurisdiction on the court over the person of the accused and the subject
matter of the accusation. In consonance with this view, an infirmity in the information cannot be cured by silence,
acquiescence, or even by express consent.[41] (emphasis supplied)
 The case of Villa is authority for the principle that lack of authority on the part of the filing officer prevents the court from acquiring
jurisdiction over the case. Jurisdiction over the subject matter is conferred by law while jurisdiction over the case is invested by the
act of plaintiff and attaches upon the filing of the complaint or information.[42]Hence, while a court may have jurisdiction over the subject
matter, like a violation of the SSS Law, it does not acquire jurisdiction over the case itself until its jurisdiction is invoked with the filing
of the information.

In the United States, an information has been held as a jurisdictional requirement upon which a defendant stands trial. Thus, it
has been ruled that in the absence of probable cause, the court lacks jurisdiction to try the criminal offense. [43] In our jurisdiction, we
have similarly held that:

While the choice of the court where to bring an action, where there are two or more courts having concurrent jurisdiction thereon, is
a matter of procedure and not jurisdiction, as suggested by appellant, the moment such choice has been exercised, the matter
becomes jurisdictional. Such choice is deemed made when the proper complaint or information is filed with the court having
jurisdiction over the crime, and said court acquires jurisdiction over the person of the defendant, from which time the right
and power of the court to try the accused attaches. (citations omitted) It is not for the defendant to exercise that choice,
which is lodged upon those who may validly file or subscribe to the complaint or information under sections 2 and 3 of
Rule 106 of the Rules of Court. [44] (emphasis supplied)

A closer look at Villa would be useful in resolving the issue at hand. In that case, Atty. Abelardo Subido, Chief of the Division of
Investigation in the Office of the Mayor of Manila, was appointed by the Secretary of Justice as special counsel to assist the City Fiscal
of Manila in the cases involving city government officials or employees. Pursuant to his appointment, Atty. Subido filed an information
against Pedro Villa for falsification of a payroll. Atty. Subidos authority to file the information was challenged on the ground that he
was disqualified for appointment under Section 1686 of the Revised Administrative Code, as amended by Section 4 of Commonwealth
Act No. 144, to wit:

SEC. 1686. Additional counsel to assist fiscal. The Secretary of Justice may appoint any lawyer, being either a subordinate from his
office or a competent person not in the public service, temporarily to assist a fiscal or prosecuting attorney in the discharge of his
duties, and with the same authority therein as might be exercised by the Attorney General or Solicitor General. [45]

We held, viz:

Appointments by the Secretary of Justice in virtue of the foregoing provisions of the Revised Administrative Code, as amended,
were upheld in Lo Cham vs. Ocampo et al., 44 Official Gazette, 458, and Go Cam et al., vs. Gatmaitan et al., (47 Official Gazette,
5092). But in those cases, the appointees were officials or employees in one or another of the bureaus or offices under the
Department of Justice, and were rightly considered subordinates in the office of the Secretary of Justice within the meaning of
section 1686, ante.

The case at bar does not come within the rationale of the above decisions. Attorney Subido is a regular officer or employee in the
Department of Interior, more particularly in the City Mayors office. For this reason, he belongs to the class of persons disqualified for
appointment to the post of special counsel.

That to be eligible as special counsel to aid a fiscal the appointee must be either an employee or officer in the Department of Justice
is so manifest from a bare reading of section 1686 of the Revised Administrative Code as to preclude construction. And the
limitation of the range of choice in the appointment or designation is not without reason.

The obvious reason is to have appointed only lawyers over whom the Secretary of Justice can exercise exclusive and absolute
power of supervision. An appointee from a branch of the government outside the Department of Justice would owe obedience to,
and be subject to orders by, mutually independent superiors having, possibly, antagonistic interests. Referring particularly to the
case at hand for illustration, Attorney Subido could be recalled or his time and attention be required elsewhere by the Secretary of
Interior or the City Mayor while he was discharging his duties as public prosecutor, and the Secretary of Justice would be helpless to
stop such recall or interference. An eventuality or state of affairs so undesirable, not to say detrimental to the public service and
specially the administration of justice, the Legislature wisely intended to avoid.

The application of the 1951 Villa ruling is not confined to instances where the person who filed the information is disqualified
from being a special prosecutor under Section 1686 of the Revised Administrative Code, as amended, but has been extended to
various cases where the information was filed by an unauthorized officer as in the case at bar. In Cruz, Jr. v. Sandiganbayan, et
al.,[46] the Court held that it is a fundamental principle that when on its face the information is null and void for lack of authority to file
the same, it cannot be cured nor resurrected by amendment. In that case, the Presidential Commission on Good Government (PCGG)
conducted an investigation and filed an information with the Sandiganbayan against petitioner Roman Cruz, Jr. charging him with graft
and corruption. The petitioner sought to quash the information on the ground that the crime charged did not constitute a Marcos crony
related crime over which the PCGG had authority to investigate and file an information. The Court found that the crime alleged in the
information was not among those which PCGG was authorized to investigate under Executive Orders No. 1 and 14 of then President
Corazon Aquino and ruled that the information was null and void. Of similar import is Romualdez v. Sandiganbayan, et al.[47] where
we ruled that the information having been filed by an unauthorized party (the PCGG), the information was fatally flawed. We noted
that this defect is not a mere remediable defect of form, but a defect that could not be cured.
 In Cudia v. Court of Appeals, et al.,[48] we also reiterated the Villa ruling. The accused in that case was apprehended in
Mabalacat, Pampanga for illegal possession of firearms and was brought to Angeles City where the headquarters of the arresting
officers was located. The City Prosecutor of Angeles City filed an information in the Regional Trial Court of Angeles City. We invalidated
the information filed by the City Prosecutor because he had no territorial jurisdiction, as the offense was committed in Mabalacat,
Pampanga and his territorial jurisdiction was only in Angeles City. We held that an information, when required by law to be filed by a
public prosecuting officer, cannot be filed by another.[49] Otherwise, the court does not acquire jurisdiction.[50] It is a valid information
signed by a competent officer which, among other requisites, confers jurisdiction on the court over the person of the accused and the
subject matter thereof. The accuseds plea to an information may be a waiver of all formal objections to the said information but not
when there is want of jurisdiction. Questions relating to lack of jurisdiction may be raised at any stage of the proceeding. An infirmity
in the information, such as lack of authority of the officer signing it, cannot be cured by silence, acquiescence, or even by express
consent.[51]

Despite modifications of the provisions on unauthorized filing of information contained in the 1940 Rules of Criminal Procedure
under which Villa was decided, the 1951 Villa ruling continues to be the prevailing case law on the matter.[52]

The 1940 Rules of Court provided in Rule 113, Section 10 that, if the defendant fails to move to quash the complaint or
information before he pleads thereto, he shall be taken to have waived all objections which are grounds for a motion to
quash except (1) when the complaint or information does not charge an offense or (2) the court iswithout jurisdiction of the same.
(emphasis ours) Among the enumerated grounds for a motion to quash under Section 2 of the same Rule was (t)hat the fiscal has no
authority to file the information. With only the above two exceptions provided by the 1940 Rules, the Court nevertheless made the Villa
ruling that if the filing officer lacks authority to file the information, jurisdiction is not conferred on the court and this infirmity cannot be
cured by silence or waiver, acquiescence, or even by express consent.

The 1940 Rules of Court was amended in 1964. With only minimal changes introduced, the 1964 Rules of Court contained
provisions on unauthorized filing of information similar to the above provisions of the 1940 Rules. [53]

Then came the 1985 Rules of Criminal Procedure. Lack of authority of the officer who filed the information was also a ground
for a motion to quash under these rules. The 1985 Rules also provided for waiver of the grounds for a motion to quash under Rule
117, Section 8, but enumerated the following exceptions to the waiver: (a) the facts charged do not constitute an offense; (b) the court
trying the case has no jurisdiction over the offense charged or the person of the accused; (c) the criminal action or liability has been
extinguished; and (d) the accused has been previously convicted or in jeopardy of being convicted, or acquitted of the offense charged.
Apparently, the want of jurisdiction under the 1985 Rules refers to jurisdiction over the offense and the person, and not over the
case as in Villa where the court did not acquire jurisdiction over the case for lack of authority of the officer who filed the information.
Still, despite the enumeration, the Court continued to apply the Villa ruling as shown in the afore-cited Cruzand Cudia cases.

The 1985 Rules was amended in 2000. The 2000 Revised Rules of Criminal Procedure also provide for lack of authority of the
filing officer as among the grounds for a motion to quash and the waiver of these grounds. Similar to the 1985 Rules, the Revised
Rules enumerate the exceptions from the waiver, namely: (a) that the facts charged do not constitute an offense; (b) that the court
trying the case has no jurisdiction over the offense charged; (c) that the criminal action or liability has been extinguished; and (d) that
the accused has been previously convicted or acquitted of the offense charged, or the case against him was dismissed or otherwise
terminated without his express consent. Under the regime of the 2000 Revised Rules, we reiterated the Villa ruling in the above-
cited Romualdez case. With the enumeration of the four exceptions, which was almost a replica of the enumeration in the 1985 Rules,
the 2000 Rules did not intend to abandon Villa. The Villa ruling subsisted alongside the enumerated exceptions under the 1985
Rules, and it remains to do so under the enumerated exceptions under the 2000 Rules. Neither the Rationale of the 2000 Revised
Rules of Criminal Procedure nor the Minutes of the Meeting of the Committee on the Revision of the Rules of Court evinces any intent
to abandon the doctrine enunciated in Villa.

In sum, we hold that, in the absence of a directive from the Secretary of Justice designating State Prosecutor Tolentino as
Special Prosecutor for SSS cases or a prior written approval of the information by the provincial or city prosecutor, the information in
Criminal Case No. RTC 2001-0597 was filed by an officer without authority to file the same. As this infirmity in the information
constitutes a jurisdictional defect that cannot be cured, the respondent judge did not err in dismissing the case for lack of jurisdiction.

WHEREFORE, premises considered, the petition is DENIED. The respondent courts orders dated February 26, 2002 and April
3, 2002 are AFFIRMED. Criminal Case No. RTC 2001-0597 is DISMISSED without prejudice to the filing of a new information by an
authorized officer.

SO ORDERED.