G.R. No.

82220 July 14, 1995

PABLITO MENESES and LORENZO MENESES, petitioners,

vs.
THE HONORABLE COURT OF APPEALS, EDUARDO QUISUMBING, NORBERTO QUISUMBING,
HEIRS OF EMILIO QUISUMBING (Carlos, Manuel and Paz, all surnamed Quisumbing), HEIRS OF
FERNANDO QUISUMBING (Perla, Josefina, Napoleon, Honorato, Remedios and Alfonso, all surnamed
Quisumbing), HEIRS OF MANUEL QUISUMBING, SR. (Petrona, Natividad, Manuel, Jr., Dolores and Lilia,
all surnamed Quisumbing) and HEIRS OF FRANCISCO QUISUMBING (Fe, Johnny, Ma. Luisa, Norberto,
Jimmy, Ma. Victoria, Elsa and Oscar, all surnamed Quisumbing), all represented by Atty. Galileo
Brion, respondents.

G.R. No. 82251 July 14, 1995

CESAR ALMENDRAL, petitioner,
vs.
EDUARDO QUISUMBING, respondent.

G.R. No. 83059 July 14, 1995

EDUARDO QUISUMBING, NORBERTO QUISUMBING, HEIRS OF EMILIO QUISUMBING (Carlos,

Manuel and Paz, all surnamed Quisumbing), HEIRS OF FERNANDO QUISUMBING, (Perla, Josefina,
Napoleon, Honorato, Remedios and Alfonso, all surnamed Quisumbing), HEIRS OF MANUEL
QUISUMBING, SR. (Petrona, Natividad, Manuel, Jr., Dolores and Lilia, all surnamed Quisumbing) and HEIRS
OF FRANCISCO QUISUMBING (Fe, Johnny, Ma. Victoria, Elsa and Oscar, all surnamed
Quisumbing), petitioners,
vs.
HON. COURT OF APPEALS, PABLITO MENESES, LORENZO MENESES and BRAULIO C.
DARUM, respondents.

QUIASON, J.:

For review in these consolidated petitions is the Decision dated August 31, 1987 of the Court of Appeals in CA-
G.R. CV No. 07049 affirming the Decision dated March 26, 1984 of the Regional Trial Court, Branch 37,
Calamba, Laguna, in Civil Case No. 474-83-C which declared as null and void the original certificates of title
and free patents issued to Pablito Meneses over lots found by the court to be accretion lands forming parts of the
bigger accretion land owned by Ciriaca Arguelles Vda. de Quisumbing.

On March 1, 1977, Braulio C. Darum, then the District Land Officer of Los Baños, Laguna, issued to Pablito
Meneses Free Patent No. (IV-5) P-12807 and Original Certificate of Title No. P-1268 covering Lot 1585 with
an area of 417 square meters, and Free Patent No (IV-5) 12808 and Original Certificate of Title No P-1269 for
Lot 190 with an area of 515 square meters. Both lots are located in Los Baños, Laguna.

Pablito Meneses acquired said property from Silverio Bautista through a Deed of Waiver and Transfer of Rights
executed on May 5, 1975 in consideration of Bautista's "love and affection" for and "some monetary
obligations" in favor of Pablito Meneses (Rollo, p. 45). After the execution of said document, Pablito Meneses
took possession of the land, introduced improvements thereon, declared the land as his own for tax purposes
and paid the corresponding realty taxes. In turn, Bautista acquired the 900-square-meter land from his aunt,
Sergia (Gliceria) M. Almeda. He had been occupying the land since 1956.

On the other hand, the Quisumbing family traces ownership of the land as far back as September 6, 1919 when
their matriarch, Ciriaca Arguelles Vda. de Quisumbing was issued Original Certificate of Title No. 989
covering a lot with an area of 859 square meters located in Los Baños, Laguna with the Laguna de Bay as its
northwestern boundary. The same parcel of land was registered on August 14, 1973 under Transfer Certificate
of Title No. T-33393 in the names of Ciriaca's heirs: Emilio, Manuel, Eduardo, Norberto, Perla, Josefina,
Napoleon, Honorato, Remedios and Alfonso, all surnamed Quisumbing.
In 1962, the Quisumbing instituted and accion publiciana in the then Court of First Instance of Biñan, Laguna
to recover possession over a portion of the property from Dominga Villamor and Lorenzo Lanuzo docketed as
Civil Case No. B-350. On January 3, 1966, the case was decided in favor of the Quisumbings. On appeal, the
Court of Appeals sustained the Quisumbings' right over the property.

In LRC Case No. B-327, the Quisumbings applied for registration and confirmation of title over an additional
area of 2,387 square meters which had gradually accrued to their property by the natural action of the waters of
Laguna de Bay. In its Decision of September 28, 1978, the Court of First Instance of Biñan confirmed the
Quisumbings' title thereto which, after it was duly surveyed, was identified as Psu-208327. The additional area
was divided into two lots in the survey plan approved by the Director of Lands on November 16, 1964. In
ordering the confirmation and registration of title on favor of the Quisumbings, the land registration court said:

. . . There is no doubt that the applicants' right to the property was bolstered by the unappealed decision of the
Court of Appeals in Civil Case No. B-350 of this Court when the properties applied for were classified as
accretions made by the waters of the Laguna Lake. . . . (G.R. No. 82229, Rollo, p. 20).

On April 17, 1979, the Quisumbings filed Civil Case No. 07049 before the Court of First Instance of Laguna,
Branch VI, Calamba against Lorenzo and Pablito Meneses, Braulio C. Darum and Cesar B. Almendral for
nullification of the free patents and titles issued to Pablito Meneses. They alleged that Lorenzo Menesis, then
the Mayor of Los Baños, using his brother Pablito as a "tool and dummy," illegally occupied their "private
accretion land" an August 6, 1976, and, confederating with District Land Officer Darum and Land Inspector
Cesar Almendral, obtained free patents and original certificates of title to the land.

On March 26, 1984, the trial court rendered the decision finding that the lands registered by the Meneses
brothers are accretion lands to which the Quisumbings have a valid right as owners of the riparian land to which
nature had gradually deposited the disputed lots. In so holding, the trial court relied heavily on the decision of
the Court of Appeals in Civil Case No. B-350, and quoted the following portions of the appellate court's
decision:

Plaintiffs-appellees are titled owners of a (sic) 859 square meters of land under TCT No. 25978 of the Laguna
Land Registry, the northwest boundary of which is the Laguna de Bay.

It is ascertained that the northwest portion of Quisumbing's lot is bounded by the Laguna de Bay. The nature of
the Laguna de Bay has long been settled in the case of Government of the Philippines v. Colegio de San Jose
(55 Phil. 423) when it held that:

Laguna de Bay is a body of water formed in depression of the earth; it contains fresh water coming
from rivers and brooks and springs, and is connected with Manila Bay by the Pasig River. According to the
definition first quoted, Laguna de Bay is a lake.

Consequently, since Laguna de Bay is a lake, the authorities cited by the appellants referring to seashore would
not apply. The provision of the law on waters will govern in determining the natural bed or basin of the lake.
And accordingly, to Art. 84 of the Law of Waters of August 3, 1866:

Accretions deposited gradually upon land contiguous to creeks, streams, rivers and lakes by accessions or
sediments from the waters thereof, belong to the owners of such lands.

Since the title indicate(s) that the northwest portion of the property is bounded by Laguna de Bay, which is
a lake, even if the area where Lanuza's house and Villamor's house for that matter is located is not included
within the title, it must necessarily be an accretion upon appellees' land by accessions or sediments from the
waters thereof which should belong to the owner of the adjacent land. The authorities cited by the appellants
treat of the ownership of accretions by water of the sea under Title I. Lakewaters being terrestrial waters, their
ownership is governed by Title II of the Law of Waters. As held in the Colegio de San Jose case, the provisions
of the Law of Waters regulating the ownership and use of sea water are not applicable to the ownership and use
of lakes which are governed by different provisions. As pointed out by the lower court, no act of appropriation
is necessary in order to acquire ownership of the alluvial formation as the law does not require the same
(Ignacio Grande, et al. vs. Hon. Court of Appeals, et al., G.R. No. L-17652, June 30, 1962 citing Roxas vs.
Tuazon, 9 Phil. 408; Cortez vs. City of Manila, 10 Phil. 567 and 3 Manresa, C.C. pp. 321-326, pp. 4-5)
(Records, pp. 80-84).

The trial court also found that the free patents issued to Pablito Meneses had been procured through fraud,
deceit and bad faith, citing the following facts as bases for its conclusion: (1) The Deed of Waiver and Transfer
of Rights allegedly executed by Silverio Bautista in favor of Pablito Meneses was a simulated contract for lack
of consideration; (2) The said instrument was sworn to before Mayor Lorenzo Meneses who had no authority to
notarize deeds of conveyances; (3) Although the lots subject of the deed of conveyance were placed in his
brother's name, Mayor Meneses actually exercised rights of ownership thereto; (4) Land Inspector Cesar
Almendral admitted having anomalously prepared the documents to support the free patent applications of
Pablito Meneses and, having personally filled up the blank forms, signed them in the absence of the persons
concerned; (5) Almendral kept the documents in his possession from 1979 to 1980 despite orders from the
Director of Lands to produce and surrender the same; (6) District Land Officer Braulio Darum approved the
free patent applications and issued the questioned titles without the required cadastral survey duly approved by
the Director of Lands and despite the pendency of LRC Case No. B-327 involving the contested lots; (7) Darum
represented the Bureau of Lands in LRC Case No. B-327 without authority from the Director of Lands and after
he had withdrawn his appearance in said case, persisted in filing a motion to set aside the order for the issuance
of a decree in favor of the Quisumbings; (8) Darum and Almendral in bad faith, refused to produce the missing
original records of the free patent applications and their supporting documents; and (9) When Darum was not
yet an oppositor in LRC Case No. B-327, he admitted in his letter to the Land Registration Commission that the
contested lots are portions of the land being claimed by the Quisumbings contrary to his later representation in
the joint answer to the petition that the subject lots are not portions of Lots 1 and 2, Psu-208327 owned by the
Quisumbings. Accordingly, the trial court disposed of the case as follows:

WHEREFORE, judgment is hereby rendered:

1. Declaring that the lands covered by Pablito Meneses' Original Certificate of Title No. P-1268/Free Patent No.
12807 (Exh. "J"), covering Lot No. 1585, consisting of 417 square meters and Original Certificate of Title No.
P-1269/Free Patent No. 12808 (Exh. "H"), covering Lot No. 190, consisting of 515 square meters, both located
at Los Baños, Laguna, as accretion lands forming parts of a bigger accretion land owned by plaintiffs as
declared in a final judgment (Exh. "A"), rendered by the Court of First Instance of Biñan, Laguna, in LRC Case
No. B-327, which bigger accretion land is directly adjacent to or at the back of plaintiffs' riparian land, and
consequently, declaring as null and void and cancelled Original Certificate of Title No. P-1268/Free Patent No.
12807 and Original Certificate of Title No. P-1269/Free Patent No. 12808;

2. Directing that the Register of Deeds of Laguna or his Deputy at Calamba, Laguna, to make the corresponding
entries of cancellation in his Registry of the above mentioned Original Certificate of Titles/Free Patents;

3. Directing defendants Lorenzo Meneses and Pablito Meneses and all persons acting in their behalves to vacate
the subject lands and surrender the possession thereof to the plaintiffs immediately; and

4. Directing the defendants to pay jointly and severally, the plaintiffs the sums of:

a) P20,000.00, plus P500.00 per month from January, 1977, until the subject property is completely vacated, as
actual and compensatory damages;

b) P350,000.00, as moral damages;

c) P70,000.00 as exemplary damages;

d) P40,000.00, as attorney's fees; and

e) the costs (Rollo, pp. 41-42).

Thereafter, the Quisumbings filed a motion for execution pending appeal which the trial court granted in its
Order of September 7, 1984 subject to the posting by the Quisumbings of a bond in the amount of P500,000.00.
The defendants unsuccessfully moved for the reconsideration of said order.
The Quisumbings also filed before the Sandiganbayan a complaint against Pablito Meneses, Silverio Bautista,
Pablo Silva, Virgilio Cruz and Cesar Almendral for violation of paragraphs (e) and (j), Section 3 of Republic
Act No. 3019, for conspiring in the approval and grant of the free patents over portions of Lots 1 & 2 of Psu-
208327 owned by the heirs of Ciriaca Arguelles Vda. de Quisumbing. In due course, the Sandiganbayan
rendered a decision finding the defendants guilty as charged. The case was elevated to this Court but on August
27, 1987, the judgment of conviction was affirmed (Meneses v. People, 153 SCRA 303 [1987]).

Meanwhile, the Meneses brothers and Darum appealed the decision in Civil Case No. 07049 to the Court of
Appeals. On August 31, 1987, the Court of Appeals found the appeal to be without merit and affirmed in
toto the lower court's decision.

The defendants-appellants filed two motions for the reconsideration of the appellate court's decision but it was
denied in the Resolution of February 23, 1988 which in pertinent part stated:

However, for humanitarian considerations, and considering the appeal of the defendants-appellants for a
reduction of the moral and exemplary damages, We favor the reduction of the moral damages from P350,000.00
to P50,000.00 and the exemplary damages from P70,000.00 to P5,000.00. In all other respects, We find no
justification for modifying the dispositive portion of the decision of the lower court (G.R. No. 82220, Rollo, p.
67).

Pablito and Lorenzo Meneses filed the instant petition for review on certiorari, which was docketed as G.R. No.
82220. Cesar Almendral filed a motion in G.R. No. 82251 for a 45-day extension within which to file a petition
for review on certiorari. After this Court had granted them a 30-day extension, Almendral still failed to file any
petition. The Quisumbings also filed a petition for review on certiorari, docketed as G.R. No. 83059, solely on
the issue of the propriety of the reduction of the amount of damages in the Court of Appeals' Resolution of
February 23, 1988. Upon motion of petitioners in G.R. No. 83059, the three petitions were consolidated in the
Resolution of August 1, 1988.

Petitioners in G.R. No. 82220 retell the same errors they had raised before the Court of Appeals, contending in
the main: (1) that the lands in question were not accretion lands but lands of the public domain; (2) that no
conspiracy to commit fraud, deceit and bad faith attended the issuance of the free patent and titles to Pablito
Meneses; and (3) that the Deed of Waiver and Transfer of Rights was founded on a valid consideration.

As regards the issue of whether the lands in question are accretion lands, petitioners relied on the Decision of
the Court of Appeals in Republic of the Philippines v. Braga, CA-G.R. No. 55390-R, October 23, 1980, holding
that the property involved therein was part of the natural bed of the Laguna de Bay and therefore what had to be
determined was whether said property was covered by water when the lake was at its highest depth.

Petitioners' assigned errors in G.R. No. 82220 are evidently factual issues which have been thoroughly passed
upon and settled both by the trial court and the appellate court. Factual findings of the Court of Appeals are
conclusive on the parties and not reviewable by this Court (Coca-Cola Bottlers Philippines, Inc. v. Court of
Appeals, 229 SCRA 533 [1994]) and they carry even more weight when the Court of Appeals affirms the
factual findings of the trial court (Binalay v. Manalo, 195 SCRA 374 [1991]). The jurisdiction of this Court is
thus limited to reviewing errors of law unless there is a showing that the findings complained of are totally
devoid of support in the record or that they are so glaringly erroneous as to constitute serious abuse of discretion
(BA Finance Corporation v. Court of Appeals, 229 SCRA 566 [1941]). We find no such showing in this case.

Petitioners' protestations notwithstanding the final decision of the Court of Appeals in Civil Case No. B-350 has
a bearing in the resolution of this case for while the lots occupied by Villamor and Lanuzo may not be the very
same lots petitioners are claiming here, the two cases refer to the same accretion lands northwest of the original
land owned by the Quisumbings.

In the same vein, the decision of the land registration court in LRC Case No. B-327 ordering the confirmation
and registration of title in favor of the Quisumbings over 2,387 square meters of accretion land is binding on
petitioners in G.R. No. 82220. As correctly pointed out by the Court of Appeals, said decision, being the result
of a proceeding in rem, binds the whole world, more so because it became final and executory upon the Bureau
of Lands' failure to interpose an appeal.
Since petitioners in G.R. No. 82220 claim that "the foreshore land known as Lots 190 and 1585 are part of
Laguna de Bay" and therefore the Quisumbings "have no legal right to claim the same as accretion land," we
quote the following pertinent portions of the decision in Republic v. Court of Appeals, 131 SCRA 532 (1984)
which, although the case deals with the registration of a reclaimed land along the Laguna de Bay, is nonetheless
enlightening:

Laguna de Bay is a lake. While the waters of a lake are also subject to the same gravitational forces that cause
the formation of tides in seas and oceans, this phenomenon is not a regular daily occurrence in the case of lakes.
Thus, the alternation of high tides and low tides, which is an ordinary occurrence, could hardly account for the
rise in the water level of the Laguna de Bay as observed four to five months a year during the rainy season.
Rather, it is the rains which bring about the inundation of a portion of the land in question. Since the rise in the
water level which causes the submersion of the land occurs during a shorter period (four to five months a year)
than the level of the water at which the land is completely dry, the latter should be considered as the "highest
ordinary depth" of Laguna de Bay. Therefore, the land sought to be registered is not part of the bed or basin of
Laguna de Bay. Neither can it be considered as foreshore land. The Brief for the Petitioner Director of Lands
cites an accurate definition of a foreshore land, to wit:

. . . . that part of (the land) which is between high and low water and left dry by the flux and reflux of the tides.

The strip of land that lies between the high and low water marks and that is alternately wet and dry according to
the flow of the tide.

As aptly found by the Court a quo, the submersion in water of a portion of the land in question is due to the
rains "falling directly on or flowing into Laguna de Bay from different sources." Since the inundation of a
portion of the land is not due to "flux and reflux of tides" it cannot be considered a foreshore land within the
meaning of the authorities cited by petitioner Director of Lands. The land sought to be registered not being part
of the bed or basin of Laguna de Bay, nor a foreshore land as claimed by the Director of Lands, it is not a public
land and therefore capable of registration as private property provided that the applicant proves that he has a
registerable title (at pp. 538-539).

Accretion as a mode of acquiring property under Article 457 of the Civil Code requires the concurrence of these
requisites: (1) that the deposition of soil or sediment be gradual and imperceptible; (2) that it be the result of the
action of the waters of the river (or sea); and (3) that the land where accretion takes place is adjacent to the
banks of rivers (or the sea coast). While the trial court mainly relied on the findings in Civil Case No. B-350
that the lands in controversy are accretion lands and it has not determined on its own the presence of said
requisites, it is too late now for petitioners in G.R. No. 82220 to claim otherwise. Consequently, the lands held
to be accretion lands could only benefit the Quisumbings, who own the property adjacent to the lands in
controversy (Cruz v. Court of Appeals, 216 SCRA 350 [1992]).

Petitioners in G.R. No. 82220 also assert that the principle of indefeasibility of title should favor them as the
one-year period provided for by law to impugn their title had elapsed. They also urged that, having been granted
by the state, their title is superior to that of the Quisumbings. We hold, however, that in the light of the fraud
attending the issuance of the free patents and titles of Pablito Meneses, said assertions crumble. Such fraud was
confirmed by this Court in Meneses v. People, 153 SCRA 303 (1987) which held the petitioners therein liable
for violation of the Anti-Graft and Corrupt Practices Act in the issuance of the same free patents and titles.

Unlike the petition in G.R. No. 82220, the petition in G.R. No. 83059 (questioning the reduction of the damages
awarded to the Quisumbings by the Court of Appeals in the Resolution of February 23, 1988) is meritorious.
The task of fixing the amount of damages is primarily with the trial court (Air France v. Carrascoso, 18 SCRA
155 [1966]). While it is the appellate court's duty to review the same, a reduction of the award of damages must
pass the test of reasonableness. The Court of Appeals can only modify or change the amount awarded as
damages when they are palpably or scandalously and reasonably excessive (Philippine Airlines, Inc. v. Court of
Appeals, 226 SCRA 423 [1993]; Prudenciano v. Alliance Transport System, Inc., 148 SCRA 440 [1987]).

There is no justification for the radical reduction by the Court of Appeals of the damages awarded by the trial
court. Its action was premise merely on "humanitarian considerations" and the plea of the defendants-appellants.
We may agree with the Court of Appeals in reducing the award after scrutinizing its factual findings only if
such findings are diametrically opposed to that of the trial court (Prudenciado v. Alliance Transport System,
Inc., supra). But as it is, the Court of Appeals affirmed point by point the factual findings if the lower court
upon which the award of damages had been based.

We, therefore, see no reason to modify the award of damages made by the trial court. Respondent Braulio C.
Darum in G.R. No. 83059 must also be solidarily liable for said damages in his capacity as a public officer. A
public official is by law not immune from damages in his personal capacity for acts done in bad faith which,
being outside the scope of his authority, are no longer protected by the mantle of immunity for official actions
(Vidad v. RTC of Negros, Br. 42, 227 SCRA 271 [1993]).

WHEREFORE, the petition in G.R. No. 82220 is DENIED while the petition in G.R. No. 83059 is GRANTED.
The Decision dated August 31, 1987 of the Court of Appeals is AFFIRMED while its Resolution of February
23, 1988 insofar as it reduces the amount of damages awarded to the Quisumbing family is SET ASIDE. Costs
against petitioners in G.R. No. 82220 and respondent Braulio Darum in G.R. No. 83059.

SO ORDERED.

Padilla, Davide Jr., Bellosillo and Kapunan, JJ., concur.

[ GR No, Mar 28, 1919 ]

FLORENCIO GORDILLO v. SIMPLICIO DEL ROSARIO + 39 Phil. 829

STREET, J.:

For a number of years past there has existed in the city of Manila a limited partnership, under the style of
"Gutierrez, Gordillo, Salgado y Martinez," engaged in general merchandise business and conducting the
establishments, on the Escolta, known as the "New York-Paris-Manila" and "St. Louis Dry Goods Store." The
resident managers of this business during the period of the transactions which gave rise to this litigation were
Florencio Gordillo Ortiz and Isidro Martinez Garcia, petitioners in the present proceeding. Other collective
members of the firm were Rafael Gutierrez Rabago, Justo Salgado Bozano, Francisco Gutierrez Garcia
residents of Spain and Eduardo Gutierrez Repide, resident of the city of Manila.

Upon January 14, 1919, an action was instituted on behalf of the partners Francisco Gutierrez Garcia, Rafael
Gutierrez Rabago, Justo Salgado Bozano, and Eduardo Gutierrez Repide, against Florencio Gordillo and Isidoro
Martinez, the two resident managers then in charge of the business. In this complaint it was alleged that the
defendants, in the abuse of their authority as managers, had unlawfully diverted large sums of money from the
legitimate uses of the firm and had appropriated the same to their own use in violation of law and the articles of
partnership. For this reason the plaintiffs prayed that the court should decree a partial rescission of the articles
of partnership; that the defendants, Gordillo and Martinez, should be required to restore to the firm all of the
money improperly withdrawn by them from its resources; that they be required to bring into the common fund
all profits of the operations conducted by them with partnership capital; and that they be required further to
indemnify the firm in the sum of P75,000 as compensation for damage inflicted by them upon the business.

On February 1, 1919, and before the complaint in the cause just mentioned had been answered, the period fixed
in the articles of partnership expired; and as the life of the firm had not been extended by mutual consent, it
became necessary for the firm to be liquidated. Gordillo and Martinez, then in possession as managers, insisted
that liquidation should be effected, in accordance with paragraph 13 of the articles of partnership, upon their
inventory and under their supervision as liquidators. Said articles in the part here material to be noted, reads as
follows:

"On the expiration of the term fixed for the duration of the present partnership, if all the partners in common
accord do not extend the term, the liquidation shall be effected upon preparation of a general inventory of all the
stock on hand, and, when made and approved, the following procedure shall be followed: On the tenth day,
countingfrom the date of the approval of the said general inventory of the partnership property, and after a call
for a meeting made in writing by the managers who should fix the time therein, all the partners shall meet, in
person or by proxy, in the firm's domicile, and, in the presence of one or more notaries public of the city of
Manila, if they so desire, the latter shall open the proposals for the purchase of the business which the partners
may deem proper to present in sealed envelops, on that occasion. After the envelopes shall have been opened
and the offers made known, the business shall be awarded to the partner or partners, general or limited, who
should offer the highest bid. The deed of conveyance of the business must be executed within the first three
days immediately following the, meeting. If, in said meeting, no offer is made by the partners, the sale shall be
advertised to take place at public auction, and if then no advantageous bid is tendered, a liquidation shall
immediately be had in the best manner possible, and if this cannot be carried into effect, then the stock and
credits shall be distributed among the partners in proportion to the capital which ea'ch one of them may have in
the partnership."

The other parties in interest, being the plaintiffs in the action then pending in the.Court of First Instance, did not
acquiesce in the proposal of Gordillo and Martinez to serve as liquidators; and a general meeting of the partners
was accordingly convoked, due notice of which was served on the managers, for the purpose of electing a
liquidator, in conformity with the provisions of article 229 of the Code of Commerce. This meeting was held on
February 10, 1919, and Francisco Gutierrez Repide was there chosen liquidator by interest representing a
majority of the capital invested in the business. Gordillo and Martinez abstained from attending and
subsequently refused to surrender the possession of the firm properties to the liquidator who had been thus
chosen. The parties who were interested in sustaining the liquidator thereupon filed a supplemental complaint in
the action already instituted by them in the Court of First Instance and alleged (1) that the period fixed for the
duration of the partnership had expired on February 1, 1919; (2) that a general meeting of the partners had been
convoked and a liquidator elected as above stated; and (3) that the defendants, Gordillo and Martinez, had
refused to surrender possession of the goods and properties of the company to said liquidator and refused to
permit him to exercise the functions of his office. They accordingly prayed for a peremptory writ of injunction
directed against the defendants, commanding them to abstain during the pendency of the action from doing any
act tending to obstruct the liquidator in taking possession of properties pertaining to the firm.

Pursuant to the prayer of the complaint, as thus amended, the Honorable Simplicio del Rosario, judge of the
Court of First Instance of the city of Manila, upon the execution of a bond in the sum of P20,000, issued, on
February 14, 1919, an ex parte injunction, without preliminary notice to the defendants. The dispositive part of
said injunction is of the following tenor:

"It is hereby ordered by the undersigned judge of this Court of First Instance that, until the issuance of a new
order, you, the said Florencio Gordillo and Isidoro Martinez, and all your attorneys, representatives, agents, and
other persons who may act in your behalf, desist from performing any acts whatever tending to prevent
Francisco Gutierrez Repide, appointed liquidator of the dissolved partnership of Gutierrez, Gordillo, Salgado y
Martinez, S. en C, from taking charge of the property, books, documents, papers, vouchers, stubbooks of
cheques, of receipts or deposits, securities, funds, money, stock, and any other property of said company, and
desist and abstain from preventing or hindering said liquidator from performing the acts which, in such
capacity, it is incumbent upon him to perform."

The attorneys for Gordillo and Martinez at once moved the Court of First Instance to dissolve said injunction;
but after a hearing, at which the respective parties presented affidavits and such oral testimony as they saw fit to
adduce, the judge of first instance denied said motion, leaving the injunction in full force.

Thereupon, on February 26,1919, the defendants, Gordillo and Martinez, as petitioners, instituted the present
original proceeding in the Supreme Court wherein they apply for the writ of certiorari and ask the court to
supersede, quash, and dissolve the aforesaid injunction. The grounds upon which relief is sought are that in
granting said injunction the Court of First Instance acted irregularly and in excess of its jurisdiction and that the
issuance of said writ constituted an, abuse of discretion on the part of the judge below.

The defendants named in the petition as respondents are: Judge Simplicio del Rosario, Eduardo Gutierrez
Repide, Francisco Gutierrez Repide, Rodolfo Ortiz Arnau, and Angel Ortiz Arnau. Of these the two last named
had not been named as original parties in the proceeding below but had intervened as additional parties plaintiff.
The non-resident members of the firm, as will be seen, are not named as parties defendant in the present
application.

The cause is now before us upon a demurrer interposed by the respondents to the petition, and the merits of the
application must therefore be determined upon the allegations of the petition itself, to which is annexed a
transcript of the proceedings in the court below.

A preliminary point of minor interest is presented with reference to the parties to the proceeding. In the first
place it is said that the liquidator, Francisco Gutierrez Repide, is not a proper party respondent. We think this
contention is not well founded. It is true he is not a formal party to the action in the court below but the
injunctive order granted by that court was made for the purpose of placing him in possession of the firm
property. He is manifestly interested in sustaining that order; and this is sufficient, in the language of Act No.
1159, to make him a proper party respondent in this proceeding. In the second place it is urged that this
proceeding should not be entertained because of the failure of the petitioner to join the nonresident partners
among the parties respondent herein. We consider this contention to be likewise untenable. AH the parties
immediately concerned with the operation of the injunction are before the court; and though the nonresident
members might be considered proper parties if within the jurisdiction of the court, they are not necessary with
respect to the relief sought in this case. The chief purpose of the law in requiring the parties in interest to be
joined as respondents in such a proceeding as this is to assure that someone shall be before the court who, on
account of his interest in the controversy, may be properly held liable for the costs, thereby avoiding the
necessity of holding the respondent judge liable for costs in case the petition should be granted. (See Act No.
1159.)

The principal question in the case is whether the action of the Court of First Instance in granting the injunction
in question was irregular and in excess of its jurisdiction in the sense necessary to justify this court in
superseding said inj'unction upon writ of certiorari. In this connection it is insisted for the petitioners that the
injunction in question is mandatory, and not merely prohibitory in its operation and that its effect is to transfer
the possession of the business in question from the hands of the petitioners to those of the liquidator, contrary to
the provisions of the articles of partnership. It is also said that the proper object of a preliminary injunction,
whether mandatory or prohibitory in form, is to preserve the status quo until the trial, and that a judge of First
Instance must not make use of the injunctive power to change such status.

It is undeniable that the injunctive power is one capable of abuse; and this Court has not infrequently been
called upon to criticise the practice, formerly quite general in our Courts of First Instance, of granting
preliminary injunctions for the purpose of taking property, which is the subject of litigation and as to which the
legal title is in dispute, out of the possession of one person and putting it into the hands of another before the
right is determined. (Devesa i?s. Arbes, 13 Phil. Rep., 273; Golding vs. Balatbat, 36 Phil. Rep., 941.) 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 party to have relief by the writ of certiorari. However, in the
case before us we see none of the elements requisite to the granting of the relief here sought. On the contrary,
we are of the opinion that the action of Judge Del Rosario in granting the injunction in question was entirely
within his power and constituted a most salutary exercise thereof.

It is admitted that when the injunction was applied for the period prescribed for the duration of the partnership
had passed. Th% parties in interest were, therefore, confronted with the necessity of liquidating the business.
Whether this process should be accomplished in conformity with the provisions of paragraph 13 of the articles
of partnership or in accordance with law regardless of those provisions, it was necessary that the business
should be confided to the care of a liquidator. As the respondents in the present petition plaintiffs in the action
below would not consent for Gordillo and Martinez to continue in charge as liquidators, it was necessary to
proceed to the election of a liquidator ir conformity with article 229 of the Code of Commerce There is
absolutely nothing in the articles of partnershij which excludes the operation of said article, and in fact thii legal
provision, allowing the election of a liquidator, must bt taken to be supplemental to the articles of partnership, s(
far as concerns the situation which presented itself whei the term of the partnership in question expired.

This is not a case, such as is supposed in the argumen for the petitioners, where a person in possession claiming
te be owner in his own right has been turned out of possessioi merely that the property may be turned over to his
adversary pending the determination of the question of ownership. I is the case of agents who, by reason of their
alleged lacl of; fidelity to the interests of their principal, have demon strated their unfitness to retain possession
of the busines, which had been entrusted to their management. The allega tions of the complaint are to the effect
that the defendantspetitioners here have violated their trust as managers o the business in question and have
misapplied or misappro priated nearly P300,000 of the firm assets. If this be true they are not suitable persons
longer to remain in possessioi either as managers or liquidators.

The cases relied upon by the petitioners, wherein this court has had occasion to condemn or criticise the practice
ol using the preliminary injunction to transfer possession o the property in controversy from one person to
another, before the right is determined, all have reference to the situation where there is a dispute as to
ownership. In such case the party in possession is presumed to haf e the better right until the contrary is
adjudged, and hence he should not be turned out until the court is prepared to adjudicate the right of ownership
to the other. In the present case it is not pretended that the petitioners are owners. They are admittedly agents
holding for others, and of course, upon a complaint showing that they have been unfaithful, the court has power
to divest possession out of them and transfer it to a properly chosen liquidator.
A liquidator, it is to be noted, exercises a function similar to that of the receiver of a court of equity; and if no
sta tutory provision had been made for the election of a liquidator, it would undoubtedly have been appropriate
for the lower court, upon the complaint there filed, to have appointed a receiver in conformity with section 174
of the Code of Civil Procedure. That a court of equity has power to clothe a receiver appointed by it with the
possession of the property which is the subject of contention is a matter that does not admit of the slightest
doubt. The mere appointment of a receiver carries with it, by implication, the duty on his part of taking
possession, and the further duty on the part of those in possession of yielding up such possession to him. The
court, therefore, necessarily has authority to put him in possession. The saine is true of a liquidator.

It should not pass unobserved that the authority of the Court of First Instance to grant the injunction with which
we are here concerned rests primarily on the fact that the complaint which was addressed to that court seeks
relief of such a character that the injunction was a proper auxiliary remedy to be applied in connection with the
principal relief. The plaintiffs in the action pending in the court below alleges facts which, if true, entitle them
to a judgment declaring a partial rescission of the contract of partnership, excluding the defendants from the
partnership and requiring them to account to the firm for any money or property misapplied or misappropriated
by them (arts. 218, 219, Code of Commerce). The allegations on which that relief is sought, taken in connection
with the effluxion of the period fixed for the life of the partnership, constitute in our opinion a proper basis for
the injunction which was granted. The preliminary injunction is essentially an auxiliary remedy, and it cannot
properly be issued where no ulterior relief is sought.

We note that the complaint referred to does not ask that the firm be liquidated under judicial supervision, either
in conformity with the articles of partnership or otherwise. Other relief is, however, sought to which the
granting of the preliminary injunction is properly incident, and this is sufficient. If the petitioners herein wish to
have the firm liquidated under paragraph 13 of the articles of partnership, we see nothing which would prevent
them from asking for such relief in their answer, though of course we do not mean here to express any opinion
upon the right thereto.

For the reasons stated we are of the opinion that the petition is without merit. The demurrer must, therefore, be
sustained; and inasmuch as it is obvious from the complete transcript before us that the facts of the opinion are
not amendable, judgment absolute will be here entered, denying the petition, with costs. So ordered.

Arellano, C.J., Torres, Johnson, Araullo, Malcolm, Avanceña, and Moir, JJ., concur.

Writ denied.
G.R. No. L-52823 November 2, 1982
PHILIPPINE NATIONAL BANK, petitioner,
vs.
Hon. MIDPANTAO ADIL, in his capacity as Presiding Judge of the CFI Iloilo, Branch II, and the HEIRS OF
THE LATE TEODORO MELLIZA Composed of ANGELINA LOBATON VDA. DE MELLIZA, etc.,
ROSEMARIE CHANG, RAYMUNDO TEODORO MELLIZA, JR., MARILYN MELLIZA, JOSE
TEODORO MELLIZA, et al., respondents.

DE CASTRO, J:

This is a special civil action for certiorari which seeks to annul the several injunctive orders issued by
respondent judge, and praying that, instead, the writ of possession issued in favor of petitioner, as purchaser in
the foreclosure sale, dated April 20, 1979, be immediately enforced.

It appears that on 'August 2, 1974, respondent Angelina Lobaton Melliza, for herself and as judicial
administratrix of the estate of Teodoro Uy Melliza, obtained a loan from petitioner in the amount of P80,000.00
which was secured by a mortgage over two parcels of land covered by TCT Nos. 8266 and T-8267, For failure
of said respondent to pay the loan on maturity, the mortgage was foreclosed extrajudicially on February 16,
1976 at which foreclosure sale, petitioner purchased the properties for P97,923.73. The properties were not
redeemed within the period, hence the title over the same were consolidated in the name of petitioner, and
consequently TCT .Nos. T-50422 and T-50423 were issued in its name on June 26, 1978.

On April 19, 1979, petitioner filed an ex-parte petition for issuance of a writ of possession before the Court of
First Instance of Iloilo, Branch II, which was granted by an order dated April 20, 1979. Upon issuance of the
writ, the Deputy Sheriff served the same upon private respondents, but the latter requested for a grace period of
seven (7) days to vacate the premises in question to which the Sheriff agreed. On May 8, 1979, the Sheriff
returned to the premises in question and finding that private respondents are still staying in the premises and had
not complied with the writ of possession, immediately ordered their ejectment. At around one o'clock in the
afternoon, before the ejectment was completed, the Sheriff received an order dated May 8, 1979, issued motu
proprio by respondent judge, suspending the implementation of the writ of possession for "humanitarian
reasons" for a period of fifteen (15) days. Before the expiration of the fifteen (15) day period, private
respondents filed a complaint dated May 14, 1979 for the annulment of the extrajudicial foreclosure, writ of
possession and consolidation of ownership on ground that the properties were foreclosed without personal
notice to any of the private respondents. The complaint was docketed as Civil Case No. 12894 and was assigned
to the Court of First Instance of Iloilo, Branch V. Upon motion of private respondents "to consolidate the trial of
the two cases," the Presiding Judge of said Branch, in an order dated May 24, 1979, transferred the case of
Branch II, presided by respondent judge.

In the proceeding for the writ of possession, private respondents filed a motion for reconsideration of the order
granting the writ of possession, while petitioner filed a motion to declare private respondents in contempt for
refusal to vacate the premises, which motions were ordered by respondent judge held in abeyance pending the
resolution of the prejudicial question raised by private respondents in Civil Case No. 12894.

On June 1, 1979, respondent judge, acting on private respondents' prayer for injunction, issued an order
restraining petitioner from disturbing the status quo, and on July 5, 1979, respondent judge issued an order
granting the writ of preliminary injunction.

Subsequently, petitioner filed the following: 1) Motion to Require Plaintiff to Deposit Income/Fruits of the
Disputed Property dated July 6, 1979; 2) Motion for Reconsideration of the order of July 5, 1979 dated July 17,
1979; and 3) Motion to Dismiss, the Complaint dated August 2, 1979. The first two motions were denied by,
respondent judge on August 13, 1979, and the last motion, on November 22, 1979.

As could readily be seen, the main question is whether or not respondent judge grave abused his discretion,
amounting to lack of jurisdiction. in issuing the orders dated May 8, 1979, June 1, 1979, July 5, 1979 and
August 13, 1979 all of which, in effect, enjoined the enforcement of the writ of possession. The petitioner
sustains the affirmative, contending that since pursuant to De los Angeles vs. Court of Appeals, et al. 1 citing De
Gracia vs. San Jose, 94 Phil. 675, it is ministerial upon the court to issue a writ of possession in favor of the
purchaser in a foreclosure sale of a mortgaged property, it follows that the execution of the writ of possession
cannot be suspended, much less, restrained by respondent judge. It also contends that, as purchaser, it becomes
the owner of the property entitled to jus possidendi as provided in Article 428 of the Civil Code.

It is, however, claimed by private respondents that respondent judge, contrary to petitioner's submission, acted
within his authority, alleging that pursuant to Section 5 of Rule 135 of the Rules of Court, the court has inherent
power to "amend and control (the court's) processes and order so as to make them conformable to law and
justice." They further claimed that the case cited by petitioner is not applicable because in the instant case the
writ has already been issued. Petition should be granted.

Section 4 of P.D. No. 385 "requiring governmental financial institutions to foreclosure mandatorily all loans
with arrearages, including interest and charges amounting to at least 20 % of the total outstanding obligations,"
provides:

Section 4. As a result of foreclosure or any other legal proceedings wherein the properties of the debtor which
are foreclosed, attached, or levied upon in satisfaction of a judgment are sold to a government financial
institution, the said properties shall be placed in the possession and control of the financial institution
concerned, with the assistance of the Armed Forces of the Philippines whenever necessary. The Petition for
Writ of Possession shall be acted upon by the court within fifteen (15) days from the date of filing.

Pursuant to the above provision, it is mandatory for the court to place the government financial institution,
which petitioner is, in the possession and control of the property. As stated, the said decree was enacted "in
order to effect the early collection of delinquent loans from government financial institutions and enable them to
continue effectively financing the development needs of the country" without being hampered by actions
brought to the courts by borrowers.

Also, Section 6 of Act No. 3135, as amended by Act 4118, the law that regulates the methods affecting
extrajudicial foreclosure of mortgage provides that in cases in which an extrajudicial sale is made, "redemption
shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six,
inclusive, of the Code of Civil Procedure insofar as these are not inconsistent with the provisions of this Act."
(Sections 464-466 of the Code of Civil Procedure were superseded by Sections 25-27 and Section 31 of Rule 39
of the Rules of Court which in turn were replaced by Sections 29 to 31 and Section 35 of Rule 39 of the Revised
Rules of Court. 2 Section 35 which is one of the specific provisions applicable to the case at bar provides that "if
no redemption be made within twelve (12) months after the sale, the purchaser, or his assignee, is entitled to a
conveyance and possession of property. ... . The possession of the property shall be given to the purchaser or
last redemptioner by the officer unless a third party is actually holding the property adversely to the judgment
debtor."

The rule, therefore, is that after the redemption period has expired, the purchaser of the property has the right to
be placed in possession thereof. Accordingly, it is the inescapable duty of the Sheriff to enforce the writ of
possession, especially, as in this case, a new title has already been issued in the name of the purchaser, In fact,
under Section 7 of the said Act 3135, upon which the de los Angeles and de Gracia cases were based, even
before the redemption period, it is ministerial upon the court to issue a writ of possession in favor of a
purchaser, provided that a proper motion has been filed, a bond approved, and no third person is involved.

The right of the purchaser to be placed in the possession of the property is bolstered by Section 8 of the
aforecited Act which provides that if the judge finds the complaint assailing the legality of the foreclosure sale
justified, it shall not transfer the possession of the property, even on appeal, but will only proceed against the
bond posted by the purchaser. Section 8 reads:

The debtor may, in the proceedings in which possession was requested; but not later than thirty days after the
purchaser was given possession, petition that the sale be set aside and the writ of possession cancelled,
specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in
accordance with the provisions thereof, and the court shall take cognizance of this petition in accordance with
the summary procedure provided for in section one hundred and twelve of Act Numbered Four Hundred and
Ninety-Six, and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the
bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the
judge in accordance with sections fourteen of act numbered Four Hundred and Ninety-Six.

In the case at bar, the writ of possession was issued but its enforcement was suspended by the grace period
given by the Sheriff who has no authority to do so, and later by the order of the judge on a very dubious ground
as "humanitarian reason." If the applicable laws clearly allow the purchaser to have possession of the property
foreclosed and mandate the court to give effect to such right, it would be a gross error for the judge to suspend
the implementation of the writ of possession, which, as shown, should issue as a matter of course. We are of the
opinion that once the writ of possession has been issued, the Court has no alternative but to enforce the writ
without delay, especially as in this case, no motion for the suspension of the enforcement was filed.

The right of the petitioner to the possession of the property is clearly unassailable. It is founded on its right of
ownership. As the purchaser of the properties in the foreclosure sale, and to which the respective titles thereto
have already been issued, petitioner's right o-,,er the property has become absolute, vesting upon him the right
of possession over an enjoyment of the property which the Court must aid in effecting its delivery. After such
delivery, the purchaser becomes the absolute owner of the property. As We said , in Tan Soo Huat vs.
Ongwico, 3 the deed of conveyance entitled the purchaser to have and to hold the purchased property, this
means, that the purchaser is entitled to go immediately upon the real property, and that it is the Sheriff's
inescapable duty to place him in such possession.

Respondents cannot claim that the writ of possession was suspended under the authority set forth in Rule 1135
of the Rules of Court. To invoke the power granted therein, the court must act within the law and with justice.
When the reason given by the judge in issuing the order of suspension was not specified in the order, but stated
only in general term, as "humanitarian reasons," the Court did not act within the bounds of the law. The order
was, furthermore, issued motu proprio and without the petitioner being afforded the right to present its side. We
cannot give Our approval to the actuation of respondent judge, for an order suspending the implementation of
an earlier order is like an injunction which must be issued always with circumspection, and upon proper motion
of the party concerned.

As it is, the suspension order has a far-reaching effect. It enabled private respondents to withhold the possession
from petitioner and file the complaint where an injunction was sought. Had not respondent judge issued such
order, petitioner could have already taken possession of the property, thereby acquiring an absolute ownership
over the property, and injunction could no longer have been issued. A prohibitory injunction cannot be issued
when the act sought to be enjoined has already been committed. 4 Neither can a mandatory injunction issue, for
it is a well-settled rule that injunction will not lie to take the property out of control of the party in possession. 5

The orders of the judge enjoining the enforcement of the writ of possession are vulnerable to attack. Firstly, the
right of private respondents to injunctive order is, at least, doubtful, and it is a settled rule that to be entitled to
the injunction, the applicant's right or title must be clear and unquestioned.

In the instant case, the ground relied upon by private respondents is not indubitable, while the foreclosure
proceeding has in its favor the presumption of regularity. And secondly, P.D. No. 385, as aforestated, makes it
mandatory for the court to place a government financial institution in possession of the property. To enjoin PTB
from taking possession of the property would be to render nugatory the provisions of said decree, particularly
Section 2 thereof:

Section 2. No restraining order, temporary or permanent in. junction shall be issued by the court against any
government financial institution in any action taken by such institution in compliance with the mandatory
foreclosure provided in Section 1 hereof, whether such restraining order, temporary or permanent injunction is
sought by the borrower(s) or any third party or parties, except after due hearing in which it is established by the
borrower and admitted by the government financial institution concerned that twenty percent (20%) of the
outstanding arrearages has been paid after the firing of foreclosure proceedings.

In case a restraining order or injunction is issued the borrower shall nevertheless be legally obligated to
liquidate the remaining balance of the arrearages, paying ten percent (10%) of the arrearages outstanding as of
the time of foreclosure, plus interest and other charges, on every succeeding thirtieth (30th) day after the
issuance of such restraining order or injunction until the entire arrearages have been liquidated. These shall be
in addition to the payment of amortizations currently maturing. The restraining order or injunction shall
automatically be dissolved should the borrower fail to make any of the above-mentioned payments on due
dates, and no restraining order or injunction shall be issued thereafter. This shall be without prejudice to the
exercise by the government financial institutions of such rights and/or remedies available to them under their
respective charters and their respective contracts with their debtors, nor should this provision be construed as
restricting the government financial institutions concerned from approving, solely at its own discretion, any
restructuring, recapitalization, or any other arrangement that would place the entire account on a current basis,
provided, however, that at least twenty percent (20%) of the arrearages outstanding at the time of the
foreclosure is paid.

All restraining orders and injunctions existing as of the date of this Decree on foreclosure proceedings filed by
said government financial institutions shall be considered lifted unless finally resolved by the court within sixty
(60) days from date hereof.

WHEREFORE, judgment is hereby rendered annulling and setting aside all the injunctive orders issued by
respondent judge dated May 8, 1979, June 1, 1979, July 5, 1979 and August 13, 1979; and ordering respondent
judge to place petitioner in possession of the purchased property without delay. Without cost.

SO ORDERED.

Makasiar, Concepcion, Jr., Guerrero and Escolin, JJ., concur.

Abad Santos, J., took no part.

G.R. No. 80908 & 80909 May 24, 1989

EMERITO M. RAMOS, SR., SUSANA B. RAMOS, JOSEFA RAMOS DE LA RAMA, HORACIO DE LA

RAMA, EMERITO B. RAMOS, JR., ANTONIO B. RAMOS, FILOMENA RAMOS LEDESMA, RODOLFO
LEDESMA, VICTORIA RAMOS TANJUATCO, TEOFILO TANJUATCO, JANUARIO B. RAMOS,
SUSANA RAMOS MONTERMOSO, JUAN MONTERMOSO, E.M. RAMOS & CO., INC., E.M. RAMOS
DEVELOPMENT CORPORATION, E.M. RAMOS & SONS, INC., and XAVIERVILLE ESTATE,
INC., petitioners,
vs.
COURT OF APPEALS, THE GOVERNMENT SERVICE INSURANCE SYSTEM, COMMERCIAL BANK
OF MANILA, THE FIRST NATIONAL BANK OF BOSTON and EDGARDO L.
TORDESILLAS, respondents.

GANCAYCO, J.:

The propriety of an injunctive relief granted by the Court of Appeals against the trial court from preventing the
sale by the GSIS of the COMBANK to the First National Bank of Boston (FNBB) and a group of investors is
the issue in the instant Petition.

The petitioners erroneously denominated the instant Petition as one for certiorari under Rule 45 of the Rules of
Court even if no question of law has been raised 1 and the private respondents called the attention of the Court
on the matter. 2 This error notwithstanding, and in the interest of justice, the Court resolved to treat the instant
Petition as a special civil action for certiorari under Rule 65 on account of the jurisdictional issues raised
herein. 3

The pertinent facts of the case are as follows —

On June 15, 1987, the petitioners filed before the Regional Trial Court in Makati a Complaint for specific
performance, rescission of contract and damages against the private respondents Government Service Insurance
System (GSIS), the Commercial Bank of Manila (COMBANK) and the Atrium Capital Corporation. The case
was docketed as Civil Case No. 17027. 4

The petitioners prayed, among others, for the issuance of a restraining order or writ of preliminary injunction
enjoining the GSIS and COMBANK from pushing through with a reported plan to sell COMBANK to the
private respondent FNBB and a group of Filipino investors represented by the private respondent Edgardo L.
Tordesillas. In support thereof, the petitioners alleged that the GSIS has no legal right to sell COMBANK
inasmuch as both the GSIS and COMBANK failed to comply with their obligations to the petitioners as
embodied in an Agreement of May 9, 1980 executed by the petitioners and the IUCP investors group where
petitioners sold to the latter 187,649 shares in the Overseas Bank of Manila under the terms and conditions
provided therein. 5 In sum, the petitioners maintained that they have considerable proprietary interest in
COMBANK and, accordingly, their consent must be obtained before COMBANK can be legally sold to
interested purchasers.

The case was tially raffled to Branch 133 with judge Buenaventura Guerrero presiding therein. Ven Judge
Guerrero inhibited himself from further hearing the case, the suit was raffled anew, this time to Branch 57, the
sala of Judge Francisco X. Velez. In the meantime, the petitioners filed an Amended Complaint to implead the
FNBB and private respondent Tordesillas.

The Amended Complaint notwithstanding, the GSIS, the FNBB and the group of Tordesillas executed a
Memorandum of Agreement for the sale of the bank to FNBB and the Tordesillas group on June 22, 1987 for
the price of P510,000,000.00. The agreement provides, among others, that the GSIS will be responsible for any
claims which may be brought by the petitioners against the FNBB and/or Tordesillas on account of the sale of
COMBANK. 6

On July 24, 1987, the trial court issued the restraining order i prayed for and set the hearing on the application
for the issu ance of a writ of preliminary injunction on August 12,1987. On August 31, 1987, and after due
hearing, the trial court issued the writ of preliminary injunction upon a bond in the amount of Five Million
Pesos (P5,000,000.00) filed by the petitioners in favor of the private respondents. 7
On September 7, 1987, the FNBB and Tordesillas sought a reconsideration of the action taken by the trial court.
On September 8,1987, the GSIS and COMBANK also asked the trial court to reconsider the injunctive relief it
granted. As of September 20, 1987, the trial court had yet to resolve the motions for reconsideration filed by the
private respondents.

On September 21, 1987, the FNBB and Tordesillas flied a special civil action for certiorari and prohibition with
the Court of Appeals praying, inter alia, for the issuance of a restraining order enjoining the trial court from
enforcing the writ of preliminary injunction issued on August 31, 1987. The case was docketed as CA-G.R.
SPNO 12859 and raffled to the Eleventh Division of the appellate court. 8

On September 25, 1987, the Eleventh Division of the appellate court resolved to hold in abeyance the
consideration of the Petition for certiorari and prombition pending the resolution of the motions for
reconsideration by the trial court. 9

On the same day, September 25, 1987, the GSIS and COMBANK filed a special civil action for certiorari and
mandamus , with the Court of Appeals, praying for the same reliefs sought in the special civil action filed by the
FNBB and Tordesillas. The case was docketed as CA-G.R. SP No. 12903 and raffled to the Seventh Division of
the appellate court. 10

On September 30, 1987, the Seventh Division of the appellate court resolved to give due course to the Petition
(CA-G.R. SP No. 12903) and to issue a temporary restraining order enjoining the trial court from enforcing the
writ of preliminary injunction it had issued upon a bond in the amount of Five Million Pesos (P5,000,000.00) to
be filed by the GSIS and COMBANK in favor of the petitioners. 11

In view of the said Resolution of the Seventh Division, the petitioners filed a Motion seeking the consolidation
of the two cases (CA-G.R. SP Nos. 12859 and 12903) and praying that the temporary restraining order issued
by the Seventh Division be lifted. The Seventh Division heard oral arguments on the said Motion.

On October 7, 1987, the Seventh Division resolved to consolidate the two cases under the Seventh Division in
accordance with the internal rules of the appellate court on such matters and upon observing that both cases
raise almost identical issues. 12 The Seventh Division also resolved to hold in abeyance the consideration of the
motion to lift the temporary restraining order it had earlier issued in order not to pre-empt the action of the
Eleventh Division on the matter. 13

Meanwhile, in an order dated October 12,1987, the trial court denied the two motions seeking a reconsideration
of its previous order relating to the writ of preliminary injunction it had issued. 14

The petitioners filed an Urgent Manifestation/Motion praying that the restraining order issued by the Seventh
Division be lifted. 15 They also asked the appellate court to schedule a hearing on the motion. The petitioners
likewise accused the herein private respondents of engaging in forum shopping. 16

On November 10, 1987, the Eleventh Division resolved to deny the Urgent Manifestation/Motion on the ground
that there is no cogent reason for granting the same. 17 The appellate court also instructed the parties to submit
their respective memoranda on the issue of whether or not the restraining order issued by the Seventh Division
should be converted into a writ of preliminary injunction, in lieu of oral argument. 18

On December 7, 1987, the Eleventh Division resolved to convert the restraining order issued by the Seventh
Division into a writ of preliminary injunction. 19 The same Division, however, did not pass upon the issue of
forum shopping. The pertinent portions of the said Resolution are as follows —

After considering the arguments of the parties contained in their respective memoranda, and without going into
the merits of the petition, this Court holds that the restraining order should be converted into a (writ of) preary
injunction. In this regard, We are not unmindful of the fact that the Memorandum of Agreement provides
additional protection to private respondents (herein petitioners), particularly paragraph 10 thereof, which
provides:

By closing, the seller shall further have executed a document holding ComBank and the Buyeri free and
harmless from any and all present or future claims which may be raised by Mr. Emerita M. Ramos, Sr. and/or
such entities owned, managed or controlled by him, whether directly or indirectly, and agreeing to fully
indemnify ComBank and/or the Buyers for all actual and other damages wch may be suffered therefrom.'

Indeed, the existing bond and stipulation amply protect the interests of private respondents (herein petitioners)
without unnecessarily hampering the privatization program of the government.

... The Court's main concem at this stage of the prdings is to determine whether the issuance of a (writ of)
preliminary injunction to enjoin the lower court from enforcing the questioned order and writ, would work
injustice to private respondents (herein petitioners) or render the judgment in the main case ineffectual. From
what have (sic) been discuss above, the Court is constrained to rule in the negative.

IN VIEW OF THE FOREGOING, a writ of prenary injunction is hereby ISSUED in the same tenor as the
restraining order issued by the Seventh Division and adopted by this Court. (Page 54, Rollo.)

In effect, the writ of preliminary injunction issued by the Eleventh Division set aside the writ of preliminary
injunction issued by the trial court. Therefore, there was no more judicial obstacle to the sale of COMBANK On
December 11, 1987, the GSIS and the FNBB and the group of Filipino investors represented by Tordesillas
executed the chase and Sale Agreement of the COMBANK pursuant to the Memorandum Agreement of June
22, 1987. 20

On December 15, 1987, the instant Petition was filed with this Court. The petition raised the following issues:

WHILE THE TWO PETITIONS WHICH PRIVATE RESPONDENTS FILED WITH RESPONDENT
COURT CLEARLY CONSTITUTE 'FORUM SHOPPING' AND HENCE, SHOULD HAVE BEEN
DISMISSED OUTRIGHT, RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION IN
GIVING DUE COURSE TO THE TWO PETITIONS AND GRANTING THE ANCILLARY RELIEFS
THEREIN SOUGHT.

II

IN ISSUING THE RESOLUTION DATED DECEMBER 7, 1987 CONWRTING THE RESTRAINING

ORDER OF SEPTEMBER 30, 1987 INTO AN INJUNCTION, RESPONDENT COURT OVERSTEPPED ITS
JURISDICTIONAL BOUNDS OR COMMITTED GRAVE ABUSE OF DISCRETION BY MAKING
FINDINGS AND CONCLUSIONS WITHOUT FACTUAL OR LEGAL BASIS BUT BASED MERELY ON
SPECULATIONS AND CONJECTURES.

III

RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION IN REFUSING TO TAKE

COGNIZANCE OF THE FACT THAT FNBB WAS FOUND GUILTY OF VIOLATING U.S. FEDERAL
BANKING LAWS AND IN CONSIDERING PRESS REPORTS ON THIS MATTER AS HEARSAY WHEN
FNBB ITSELF HAS ADMITTED SUCH FACT IN ITS OWN PLEADINGS." (Pages 15, 18 and 29, Rollo.)

As instructed by the Court, the private respondents filed their respective Comments on the Petition. 21 Private
respondent Tordesillas filed a Manifestation and Motion on January 20, 1988 informing the Court that he
ceased to have any real interest in the subject matter of this case, and that there is no possible act of his which
can be properly enjoined by the Court. 22 This Court granted the prayer that he be excused from filing a
Comment on the Petition. 23

For their part, the other private respondents maintain that the Petition should be dismissed on the ground that,
among others, the act sought to be enjoined, i.e., the sale of COMBANK to the FNBB and the group of Filipino
investors, is already a consummated act. In addition thereto, the private respondents contend that the instant
Petition is insufficient in form and substance.

In the course of the proceedings, the parties submitted other pleadings in support of their arguments. Thereafter,
the case was considered submitted for decision. 24
After a careful examination of the entire record of the case, the Court finds the instant petition to be devoid of
merit. There is no cogent reason to hold that the Eleventh Division of the Court of Appeals committed a grave
abuse of discretion amounting to lack of jurisdiction as alleged by the petitioners.

I.

The Court is not persuaded that the private respondents were engaged in forum shopping in the Court of
Appeals.

It should be noted that this controversy involves three groups of litigants — the petitioners as the first group, the
GSIS and COMBANK as the second group, and the FNBB and the group of Filipino investors composing the
third group. When the GSIS and COMBANK felt aggrieved by the action taken by the trial court, they had the
prerogative to question the same by way of a separate special civil action filed with Court of Appeals. By the
same token, the FNBB and the group of Filipino investors can avail of the same remedy. Since they were not
satisfied with the action taken by the trial court, they had the option to challenge the same through a separate
special civil action filed with the appellate court. The two groups of private respondents are different litigants
with different interests. One group need not get the consent of the other before seeking relief in the appellate
court through a special civil action. Each group was represented by its own lawyers. The two groups filed
separate pleadings.

The private respondents can be considered to have engaged in forum shopping if all of them, acting as one
group, filed identical special civil actions in the Court of Appeals and in this Court. There must be identity of
parties or interests represented, rights asserted and relief sought in different tribunals. 25 In the case at bar, the
two groups of private respondents appear to have acted independently of each other when they sought relief
from the appellate court. Both groups sought relief from the same tribunal.

It would not matter even if there are several divisions in the Court of Appeals and that both suits could be
assigned to different divisions. The adverse party can always ask for the consolidation of the two cases. In fact,
the petitioners sought the consolidation of both CA-G.R. SP Nos. 12859 and 12903.

The petitioners must have been aware that the two groups of private respondents are different entities. When the
petitioners filed their Complaint with the trial court, the GSIS and COMBANK were the original defendants
therein. The petitioners later amended their Complaint by including the FNBB and the Tordesillas investors
group as defendants.

The Court, therefore, holds that the Court of Appeals did not commit a grave abuse of discretion amounting to
lack of jurisdiction when it refused to order the dismissal of CA-G.R. SP Nos. 12859 and 12903 on the ground
of forum shopping.

II.

This Court finds that the Eleventh Division of the Court of Appeals did not commit a grave abuse of discretion
amounting to lack of jurisdiction when it issued the questioned writ of preliminary injunction. The court
reproduces with approval the disquisition of the respondent court in its resolution of December 7, 1987 —

The principal relief sought by private respondents as plaintiffs in the court below is one for specific
performance. Rescission is invoked merely as an alternative remedy should specific performance be impossible
of compliance. This is as it should be because 'the action for rescission is subsidiary; it cannot be instituted
except when the party suffering damages has no other legal means to obtain reparation for the same.' (Art 1383,
Civil Code; Vinco v. Fuentebella, 12 C.A. Rep. 645; Guash v. Espirity 11 Phil. 184; Goquiolay et al. v. Sycip,
et al., 108 Phil. 947).

What are those matters which private respondents seek to be performed by petitioners, particularly petitioners
GSIS and COMBANK?

They are:

(1) To release their titles within 90 days from the opening of the COMBANK on January 8, 1981;
(2) To grant them a loan of P20,000,000.00;

(3) To restructure their loan of P45 million on the books of OBM (now COMBANK) over a period of eight
years with a 3-year grace period on principal and interest;

(4) To implement the non-accrual of interest on the aforesaid P45 million loan during the closure of OBM (now
COMBANK);

5) To grant them the option to purchase 10% of the COMBANK shares within three (3) years from the re-
opening of ComBank on January 9, 1981 and pending the exercise of said option, to assign voting rights
equivalent to 10% of COMBANK equity.

Private respondents contend that the foregoing conditions have not been complied with, and that therefore, the
earlier sales of Overseas Bank (now COMBANK), organized and founded by the Ramos family, to the
IUCP/Herdis group, and by the latter to the GSIS should be rescinded. In the meanwhile, they contend that the
proposed sole by GSIS to FNBB/Tordesillas group should be enjoined as it has been enjoined by respondent
court.

The foregoing, in their bare essence, are the issues to be resolved.

Private respondents do not deny the existence of the Memorandum of Agreement in connection with the sale of
COMBANK which includes a provision that GSIS would assurre the latter's obligation. Nor is the solvency of
GSIS denied, as it could not be denied, by them. Hence, insofar as the principal relief of specific Performance
of the conditions heretofore mentioned are concerned, private respondents are duly protected and assured that
the same will be complied with by GSIS itself provided that private respondents themselves comply with their
end of the agreement. Ius is in keeping with the policy of the State to promote privatization through an orderly,
coordinated and efficient program for the prompt disposition of the large number of non-performing assets of
the government financial institutions, and certain government owned or controlled corporations which have
been found unnecesary or inappropriate for the government sector to main- tain (Sec. 1, Proclamation No. 50 of
December 8, 1986). In fine, private respondents have failed to show indubitably that Specific Performance of
the conditions earlier mentioned is impossible of compliance considering the guarantee of GSIS.

Of course, private respondents may be right in claiming that the privatization policy of the government will not
be violated if they succeed in re-acquiring OBM, now COMBANK. After all, the Ramos group are also Filipino
private enterprises who were the founders of OBM and should, as a rule, be entitled to priority, instead of a
foreign group whose reputation is allegedly tainted or questionable. But that is not the point here. In asking for
rescission, private respondents as plaintiffs failed to allege in their complaint their ability and willingness to
restore or return what they have received from the IUCP-Herdis group under the Basic Agreement of May 9,
1980. Instead, they confirm their inability or unwillingness to restore what they had received by saying that 'no
offer of restoration is necessary where it i would be in vain and useless as where it is patent that a tender, if
made, would be rejected,' (Langdon v. Loup Rive Public Power District, 139, Neb. 296, 297 NW 557 as cited in
17 Am. Jur. 2nd 997; Schlake v. McConnel, 83 Cal. App. 725; Esau v. Briggs, 89 Cal. App 2nd 427; Simmons
v. Briggs, 69 Cal. App. 447 cited on p. 40 of Answer to Petition). Aside from the foregoing, private respondents
do not deny having sold their own remaining shares in COMBANK to petitioner GSIS, thereby placing serious
doubt whether they could still question the sale of the bank by IUCP-Herdis group to GSIS.

In view of the foregoing circumstances, the proposed sale or negotiation and eventual consummation of said
sale to the prospective buyer (FNBB/Tordesillas) would be unduly hampered, if the order and writ of
preliminary injunction issued by the respondent court would be allowed to remain in force in contravention of
the state policy to effect 'prompt disposition of ... government owned controlled corporation.' (pages 51-53,
Rollo.)

Respondent GSIS denies non-compliance with any of its commitment under the agreement of May 9,1980 or
that if any had not been complied with it was because of the default of petitioners. Nevertheless, as above
discussed the Memorandum of Agreement regarding the sale of COMBANK executed by the GSIS on one hand
and the FNBB and the group of Filipino investors on the other provides sufficient protection to the petitioners in
the event that their claim against the GSIS and COMBANK is substantiated before the trial court. The
Memorandum of Agreement clearly provides that the GSIS will be responsible for any claims which may be
brought by the petitioners against the FNBB and/or Tordesillas on account of the sale of COMBANK. The same
provision can be found in the Purchase and Sale Agreement covering COMBANK 26 In a Deed of Assignment
executed also on December 11, 1987, COMBANK assigned to GSIS "all outstanding and existing loans,
accrued interest and other receivables" of petitioners. 27 On the same date too, a separate Indemnity Agreement
was executed by GSIS in favor of FNBB holding the 'matter "free and harmless from any and all present or
future claims which may be raised" by petitioners. 28 Moreover, as correctly pointed out by the Court of
Appeals, the bond in the amount of Five Million Pesos filed by the GSIS and COMBANK with the Court of
Appeals provides additional protection to the petitioners.

As to the alleged repeated violation of Federal Banking laws by FNBB, it must be assumed that when the GSIS
sold the COMBANK to the FNBB with the approval of the President of the Philippines, the credit standing and
reputation of FNBB had been taken into consideration. There is a presumption of regularity in the performance
of official duties. 29

III.

The instant Petition should also be dismissed on another ground. The act sought to be enjoined in this case, i.e.,
the sale of COMBANK to the FNBB and the group of Filipino investors, is already a consummated act. The
established principle is that when the events sought to be prevented by injunction or prohibition have already
happened, nothing more could be enjoined or prohibited. 30 Thus, the instant Petition is moot and academic.

The petitioners, however, may still pursue their claim against the GSIS in the trial court pursuant to the
provisions of the Memorandum of Agreement and the Purchase and Sale Agreement and the accompanying
documents aforestated.

WHEREFORE, the instant Petition is hereby DISMISSED for lack of merit without pronouncement as to costs.

SO ORDERED.