Republic of the Philippines Respondent filed a motion for reconsideration but was denied by the RTC in its Order
SUPREME COURT dated December 16, 1998.
Manila
SECOND DIVISION
G.R. No. 140288             October 23, 2006
ST. AVIATION SERVICES CO., PTE., LTD., petitioner, 
vs.
GRAND INTERNATIONAL AIRWAYS, INC., respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
Challenged in the instant Petition for Review on Certiorari are the Decision of the
Court of Appeals dated July 30, 1999 and its Resolution dated September 29, 1999 in
CA-G.R. SP No. 51134 setting aside the Orders dated October 30, 1998 and
December 16, 1998 of the Regional Trial Court (RTC), Branch 117, Pasay City in Civil
Case No. 98-1389.
St. Aviation Services Co., Pte., Ltd., petitioner, is a foreign corporation based in
Singapore. It is engaged in the manufacture, repair, and maintenance of airplanes and
aircrafts. Grand International Airways, Inc., respondent, is a domestic corporation
engaged in airline operations.
Sometime in January 1996, petitioner and respondent executed an "Agreement for the
Maintenance and Modification of Airbus A 300 B4-103 Aircraft Registration No. RP-
C8882" (First Agreement). Under this stipulation, petitioner agreed to undertake
maintenance and modification works on respondent's aircraft. The parties agreed on
the mode and manner of payment by respondent of the contract price, including
interest in case of default. They also agreed that the "construction, validity and
performance thereof" shall be governed by the laws of Singapore. They further agreed
to submit any suit arising from their agreement to the non-exclusive jurisdiction of the
Singapore courts.
At about the same time, or on January 12, 1996, the parties verbally agreed that
petitioner will repair and undertake maintenance works on respondent's other aircraft,
Aircraft No. RP-C8881; and that the works shall be based on a General Terms of
Agreement (GTA). The GTA terms are similar to those of their First Agreement.
Petitioner undertook the contracted works and thereafter promptly delivered the
aircrafts to respondent. During the period from March 1996 to October 1997, petitioner
billed respondent in the total amount of US$303,731.67 or S$452,560.18. But despite
petitioner's repeated demands, respondent failed to pay, in violation of the terms
agreed upon.
On December 12, 1997, petitioner filed with the High Court of the Republic of
Singapore an action for the sum of S$452,560.18, including interest and costs, against
respondent, docketed as Suit No. 2101. Upon petitioner's motion, the court issued a
Writ of Summons to be served extraterritorially or outside Singapore upon respondent.
The court sought the assistance of the sheriff of Pasay City to effect service of the
summons upon respondent. However, despite receipt of summons, respondent failed
to answer the claim.
On February 17, 1998, on motion of petitioner, the Singapore High Court rendered a
judgment by default against respondent.
On August 4, 1998, petitioner filed with the RTC, Branch 117, Pasay City, a Petition for
Enforcement of Judgment, docketed as Civil Case No. 98-1389.
Respondent filed a Motion to Dismiss the Petition on two grounds: (1) the Singapore
High Court did not acquire jurisdiction over its person; and (2) the foreign judgment
sought to be enforced is void for having been rendered in violation of its right to due
process.
On October 30, 1998, the RTC denied respondent's motion to dismiss, holding that
"neither one of the two grounds (of Grand) is among the grounds for a motion to
dismiss under Rule 16 of the 1997 Rules of Civil Procedure."
On February 15, 1999, respondent filed with the Court of Appeals a Petition for
Certiorari assailing the RTC Order denying its motion to dismiss. Respondent alleged
that the extraterritorial service of summons on its office in the Philippines is defective
and that the Singapore court did not acquire jurisdiction over its person. Thus, its
judgment sought to be enforced is void. Petitioner, in its comment, moved to dismiss
the petition for being unmeritorious.
On July 30, 1999, the Court of Appeals issued its Decision granting the petition and
setting aside the Orders dated October 30, 1998 and December 16, 1998 of the RTC
"without prejudice to the right of private respondent to initiate another proceeding
before the proper court to enforce its claim." It found:
In the case at bar, the complaint does not involve the personal status of
plaintiff, nor any property in which the defendant has a claim or interest, or
which the private respondent has attached but purely an action for
collection of debt. It is a personal action as well as an action in personam,
not an action in rem or quasi in rem. As a personal action, the service of
summons should be personal or substituted, not extraterritorial, in order to
confer jurisdiction on the court.
Petitioner seasonably filed a motion for reconsideration but it was denied on
September 29, 1999.
Hence, the instant Petition for Review on Certiorari.
The issues to be resolved are: (1) whether the Singapore High Court has acquired
jurisdiction over the person of respondent by the service of summons upon its office in
the Philippines; and (2) whether the judgment by default in Suit No. 2101 by the
Singapore High Court is enforceable in the Philippines.
Generally, in the absence of a special contract, no sovereign is bound to give effect
within its dominion to a judgment rendered by a tribunal of another country; however,
under the rules of comity, utility and convenience, nations have established a usage
among civilized states by which final judgments of foreign courts of competent
jurisdiction are reciprocally respected and rendered efficacious under certain
conditions that may vary in different countries. 1 Certainly, the Philippine legal system
has long ago accepted into its jurisprudence and procedural rules the viability of an
action for enforcement of foreign judgment, as well as the requisites for such valid
enforcement, as derived from internationally accepted doctrines. 2
The conditions for the recognition and enforcement of a foreign judgment in our legal
system are contained in Section 48, Rule 39 of the 1997 Rules of Civil Procedure, as
amended, thus:
SEC. 48. Effect of foreign judgments. – The effect of a judgment or final
order of a tribunal of a foreign country, having jurisdiction to render the
judgment or final order is as follows:
(a) In case of a judgment or final order upon a specific thing,
the judgment or final order is conclusive upon the title to the
thing; and
(b) In case of a judgment or final order against a person, the
judgment or final order is presumptive evidence of a right as
between the parties and their successors in interest by a
subsequent title;
In either case, the judgment or final order may be repelled by evidence of
a want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact.
Under the above Rule, a foreign judgment or order against a person is merely
presumptive evidence of a right as between the parties. It may be repelled, among
others, by want of jurisdiction of the issuing authority or by want of notice to the party
against whom it is enforced. The party attacking a foreign judgment has the burden of
overcoming the presumption of its validity.3
Respondent, in assailing the validity of the judgment sought to be enforced, contends
that the service of summons is void and that the Singapore court did not acquire
jurisdiction over it.
Generally, matters of remedy and procedure such as those relating to the service of
process upon a defendant are governed by the lex fori or the internal law of the
forum,4 which in this case is the law of Singapore. Here, petitioner moved for leave of
court to serve a copy of the Writ of Summons outside Singapore. In an Order dated
December 24, 1997, the Singapore High Court granted "leave to serve a copy of the
Writ of Summons on the Defendant by a method of service authorized by the law of
the Philippines for service of any originating process issued by the Philippines  at
ground floor, APMC Building, 136 Amorsolo corner Gamboa Street, 1229 Makati
City,or elsewhere in the Philippines."5 This service of summons outside Singapore is in
accordance with Order 11, r. 4(2) of the Rules of Court 1996 6 of Singapore, which
provides.
(2) Where in accordance with these Rules, an originating process is to be
served on a defendant in any country with respect to which there does not
subsist a Civil Procedure Convention providing for service in that country
of process of the High Court, the originating process may be served –
a) through the government of that country, where that government is
willing to effect service;
b) through a Singapore Consular authority in that country, except where
service through such an authority is contrary to the law of the country; or
c) by a method of service authorized by the law of that country for service
of any originating process issued by that country.
In the Philippines, jurisdiction over a party is acquired by service of summons by the
sheriff,7 his deputy or other proper court officer either personally by handing a copy
thereof to the defendant8 or by substituted service.9 In this case, the Writ of Summons
issued by the Singapore High Court was served upon respondent at its office located
at Mercure Hotel (formerly Village Hotel), MIA Road, Pasay City. The Sheriff's Return
shows that it was received on May 2, 1998 by Joyce T. Austria, Secretary of the
General Manager of respondent company. 10 But respondent completely ignored the
summons, hence, it was declared in default.
Considering that the Writ of Summons was served upon respondent in accordance
with our Rules, jurisdiction was acquired by the Singapore High Court over its person.
Clearly, the judgment of default rendered by that court against respondent is valid.
WHEREFORE, we GRANT the petition. The challenged Decision and Resolution of
the Court of Appeals in CA-G.R. SP No. 51134 are set aside.
The RTC, Branch 117, Pasay City is hereby DIRECTED to hear Civil Case No. 98-
1389 with dispatch.
SO ORDERED.
Puno, J., Chairperson, Corona, Azcuna, and Garcia, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 169341               November 22, 2006
CITY OF CEBU, Petitioner,  4. THAT modern sanitation and pollution controls be
vs.
VICENTE B. DEL ROSARIO, represented by his Attorney-in-Fact PANTALEON U.
DEL ROSARIO,Respondent.
DECISION
CALLEJO, SR., J.:
This is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA)
in CA-G.R. Ceb-SP No. 00090 and its Resolution2 denying the motion for
reconsideration of the said decision.
The Antecedents
Teresita Reyes-de Leon and her uncle, Vicente S. del Rosario, were co-owners of 17
parcels of land with a total area of 21,000 square meters located in Mambaling, Basak-
Sur, Cebu City. Among the properties were Lots 3113, 3114, 3147, 3148, and 8401,
8403, 8494 and 8405, collectively known as the "Asinan Fishpond," later renamed
"Alumnus." On December 13, 1983, Teresita de Leon executed a Contract of Sale in
favor of her uncle’s eldest son, Pantaleon U. del Rosario, covering her share, rights
and interests over the property consisting of "salt beds, fishponds, coconuts and other
improvements thereon, and the other properties she inherited from the estate of
Ceferina Flores Vda. del Rosario." The purchase price of P250,000.00 was payable
via downpayment ofP50,000.00 and monthly installments of P50,000.00.3
On August 24, 1984, Vicente S. del Rosario and Pantaleon U. Del Rosario executed a
Contract to Buy and Sell covering the Asinan Fishpond in favor of the City of Cebu,
through then Mayor Ronald R. Duterte. The contract price was P113.00 per square
meter, or a total of P2,156,040.00. The lots were to be used for the construction of a
modern abattoir to replace the already dilapidated and almost unsanitary one. 4 The
parties agreed that the contract shall become effective upon the approval by the
President of the Philippines, Commission on Audit (COA), and Ministry of Finance, and
that the purchase price would be deposited in an escrow account in a bank authorized
by the city, to be payable to the vendors after the titles to the properties shall have
been transferred in the buyer’s name pursuant to COA regulations.
On January 20, 1985, Teresita de Leon executed a Deed of Absolute Sale covering
her rights, shares and interests over the 17 parcels of land, including those she
inherited from Ceferina Vda. del Rosario, in favor of her nephew Vicente B. del
Rosario, son of Pantaleon, as vendee, also for P250,000.00, receipt of which was duly
acknowledged.5 Vicente S. Del Rosario wrote his son a letter dated August 25, 1985,
which reads:
Capt. Pantaleon U. del Rosario
Metro Cebu Abattoir and Meat
Processing Services
City of Cebu
Sir:
When we jointly signed the contract to Buy and Sell a portion of the Asinan Property to
the City of Cebu, it was agreed that you will comply with the following conditions, to
wit:
1. THAT the areas sold to the City of Cebu for its abattoir
project, the subject of the above contract, will be entirely
taken from the share of Teresita R. Reyes de Leon bought by
your son Vicente B. del Rosario per Deed of Absolute Sale
dated January 20, 1985, entered as Doc. 490, page 98, Book
52, series of 1985 of the Notarial Registry of Notary Public
Carlito P. Valente;
2. THAT all proceeds in connection with the sale of the
above-mentioned properties shall accrue in your favor only;
3. THAT you will pay me for the cost of the house and bodega
which will be demolished when the abattoir building will be
constructed;
implemented in accordance with the standards acceptable to
the National Pollution Control Commission;
5. THAT the City of Cebu will provide a ten (10)-meter road
right of way for passage to our property at their expense.
THESE FOREGOING CONDITIONS were mutually agreed upon precedent to our
signing of the above-stated contract, so please sign your conformity in the space
provided for to make this agreement final, executory and effective immediately.
Truly yours,
(Signature)
VICENTE S. DEL ROSARIO
(Signature)
PANTALEON U. DEL ROSARIO
Conforme6
The Contract to Buy and Sell was approved by the President on January 7, 1986.
Thereafter, respondent and his father Pantaleon executed an Agreement which, in
part, reads:
NOW, THEREFORE, the City of Cebu represented by the City Mayor, Ronald R.
Duterte, through the Office of the City Treasurer, hereby deposits in escrow with the
Philippine National Bank, Cebu Branch the total amount ofP2,156,040.00 and the
Vendors pursuant to their obligations under the contract hereby allows the peaceful
and uninterrupted possession by the Vendee of the aforementioned parcels of land
which shall take effect on January 7, 1986, subject to the following conditions:
1. The vendors Vicente S. del Rosario and Pantaleon U. del Rosario may
not withdraw any amount from said deposit in escrow until they shall have
delivered to the Vendee City of Cebu all the clean titles to the
aforementioned eight parcels of land, however, if the titles are not issued
at one and the same time, the Vendee may allow the Vendors to partially
collect for every title or titles they could deliver to the City of Cebu.
2. The City of Cebu shall immediately facilitate the release of the sum
deposited as soon as the clean title or titles shall have been delivered to
the City of Cebu.
3. That in spite of the delay in the delivery of the clean titles and therefore
the vendors cannot withdraw the amount deposited, the Vendee City of
Cebu shall have the absolute right of possession of the aforementioned
parcels of land and the Vendors undertake not to disturb said possession
and that as agreed upon in the Contract to Buy and Sell the Vendors shall
cause the immediate clearing of the properties from any and all
obstructing improvements and the filling up of the existing fishponds. 7
As agreed upon, the City of Cebu deposited in escrow the purchase price with the
Philippine National Bank, Cebu City Branch. The City also engaged the services of the
H. Franco Construction Company for the construction of the abattoir. The contractor
commenced the work and as of early 1986 had completed 40% of the work.
Meanwhile, respondent was able to have two lots titled to the City under TCT Nos.
55557 and 40590. On February 10, 1986, the City remitted to Vicente S. del
Rosario P167,353.00 in payment for said lots.8
After the EDSA People Power upheaval in 1986, John Osmeña was appointed as
Officer-in-Charge of the Office of the City Mayor of Cebu City. After assuming office,
Osmeña ordered the construction of the abattoir stopped. In a letter dated July 3,
1986, he proposed the following to the Del Rosarios:
1) The ownership of the vendees of Lot 3443, 3447 and 3448 subject of
the Contract to Buy and Sell be documented;
2) If the City decides to relocate the abattoir, the properties will be used
for the relocation of squatters;
3) A renegotiation of the purchase price;
4) The decision of the RTC in Bohol had been annotated at the dorsal
portion of the titles of the property. Steps should be undertaken to deliver
titles to the property to the City free from any other liens or
encumbrances.9
All these were rejected by respondent in his reply letter 10 dated July 8, 1986, where he
emphatically stated that he could not agree to the proposal to make the area into a
relocation site for squatters, and that such proposal was a naïve attempt to taunt and
harass him.
On January 22, 1987, respondent filed a complaint in the Regional Trial Court (RTC)
of Cebu against Cebu City for Specific Performance and/or Rescission of Contract and
Damages, with a plea for injunctive relief. The case was docketed as Civil Case No.
5705.
On February 26, 1987, the City, through John Osmeña, and the Dakay Construction
and Development Corporation, executed a contract for the construction of a modern
abattoir at the reclamation area.11
Meanwhile, Vicente S. del Rosario died on May 9, 1987. He was survived by Ceferina
del Rosario and their children, including Pantaleon U. del Rosario, Carlos U. del
Rosario and Manuel U. del Rosario.
In a letter dated July 16, 1991, incumbent City Mayor Tomas Osmeña informed
Pantaleon U. del Rosario of the City’s intention to use the property as lechon area or
chicken slaughter house.12 On October 16, 1991, Pantaleon, acting as attorney-in-fact
of all the heirs of Vicente S. del Rosario, wrote the City Mayor that they had no
objection to reduce the land area of the lot to be purchased by the City – from the
original 10,000 sq m to 5,945 sq m area – and for the return of Lot No. 4147 to them in
exchange for the same area to be taken from the 5,945 sq m. The heirs declared that
they were willing to withdraw their claim for loss of income and damages, provided that
all interest earned by the escrow account in the PNB amounting to P1,882,627.49 as
of September 1991 be given to them.13
However, the parties did not arrive at a settlement. On February 26, 1992, the
complaint in Civil Case No. 5705 was dismissed without prejudice. 14
The heirs of Vicente S. del Rosario did not refile the complaint. Instead, Pantaleon U.
del Rosario and his son, Vicente B. del Rosario, filed a Complaint on September 24,
1994, and Amended and Second Amended Complaints, against Ceferina Vda. del
Rosario, Carlos U. del Rosario and Manuel U. del Rosario for partition of the estate of
Vicente S. del Rosario, including the "Asinan properties."15 The case was docketed as
Civil Case No. Ceb-17236 and raffled to Branch 5 of the court. On March 30, 1998, the
court issued an Order placing the property under receivership, including the lots where
the abattoir was to be constructed. On July 16, 1998, the RTC granted the motion of
Carlos del Rosario to lease out the Asinan properties for one year.16
On December 10, 1999, Teresita Reyes-de Leon filed a complaint against Vicente B.
del Rosario in the RTC of Cebu City for the nullification of the Contract of Sale dated
January 20, 1985, on the ground, inter alia, that the document of sale in favor of
Vicente B. del Rosario was fraudulent. The case was docketed as Civil Case No.
24698.17 On August 15, 2000, the RTC issued an Order, dismissing the complaint on
the ground that the issue of the ownership of the properties subject matter of the case
should be ventilated in Civil Case No. 17236 which was the partition case. The plaintiff
moved to reconsider the order but the court denied the motion on February 19, 2002.
The plaintiff filed a petition for review the resolution before this Court docketed as G.R.
No. 152862.
On January 21, 2002, Vicente B. del Rosario, as plaintiff, through his father, Pantaleon
del Rosario, as his attorney-in-fact, filed a complaint against the City of Cebu in the
RTC of Cebu for the rescission of the Contract to Buy and Sell, and the Agreement.
The case was docketed as Civil Case No. 27334. The plaintiff amended his complaint,
alleging that he and his grandfather, Vicente S. del Rosario, were co-owners of the
subject property; he filed the complaint as the sole plaintiff because they had an
agreement that the abattoir would be constructed on his (plaintiff’s) property. He
alleged that the City of Cebu had breached the contract and agreement, as follows:
10. That immediately after assuming office as OIC-Mayor of the City of
Cebu, John H. Osmeña publicly announced that the City of Cebu will not
proceed with the construction of the abattoir in plaintiff’s property;
11. That consistent with his foregoing public pronouncement, and
imposing his unilateral will and decision, OIC-Mayor John H. Osmeña
ordered the stoppage of the construction of the abattoir at plaintiff’s
property and in lieu thereof constructed another abattoir in another site
located in the City of Mandaue, Cebu;
 12. That by constructing another abattoir in another place, i.e., in the City
of Mandaue, defendant City of Cebu, through then OIC-Mayor John H.
Osmeña have effectively abandoned its original plan of constructing and
operating an abattoir at the site acquired by defendant City of Cebu from
herein plaintiff and the late Vicente S. del Rosario, thereby breaching the
contract it entered into with the latter;
13. That plaintiff had never intended that his property be used for any
other purpose than as a site for the Cebu City Abattoir only, its use for any
other purpose will never be allowed and, in fact, the civil works on the
abattoir in his property was already in advanced stage and the stoppage
of the contruction and eventual abandonment of the project thereat had
caused irreparable damages consisting of among others, of the
destruction of fishponds and saltworks which deprived and will continue to
deprive plaintiff of income in the amount estimated to be not less
than P250,000.00, or as may be proven during the trial on the merits of
the case;
14. That the excavations for the foundation of the abattoir which rendered
the area unproductive and the presence of the unfinished abattoir which
now constitute a perpetual obstruction will prevent the use of the premises
for the purpose it was used before the buildings were constructed. 18
Vicente prayed for moral damages and unrealized monthly rentals of P75,000.00, or,
in the alternative, that the amount deposited in escrow with the PNB, inclusive of
interests be given to him:
WHEREFORE, foregoing premises considered, it is most respectfully prayed that after
trial on the merits, judgment issue in favor of plaintiff and against defendant:
1. Declaring the RESCISSION of the Contract to Buy and Sell (Annex "A"
hereto) and Agreement (Annex "B" hereto), and all other agreements
related thereto;
2. Ordering the defendant City of Cebu, to:
(a) Remove all improvements introduced in the property of
plaintiff by reason of or as a consequence of the Contract to
Buy and Sell and the Agreement:
(b) Restore the property to plaintiff on the same condition
before defendant City of Cebu took possession thereof and
for defendant to pay the plaintiff monthly rentals of at least
SEVENTY FIVE THOUSAND (Php75,000.00) PESOS; from
August 23, 1985; or in the alternative, the amount deposited
in escrow together with the accrued interest be paid to plaintiff
as rentals.
(c) Pay plaintiff compensatory damages in the amount not
less than P250,000.00;
(d) Pay plaintiff not less than P250,000.00 as moral damages;
P100,000.00 as exemplary damages; P70,000.00 as
attorney’s fees; P30,000.00 as litigation expenses; and
other costs, and;
Such other reliefs and remedies as may be consistent with
law, justice and equity are likewise prayed for.19
In its Answer to the Complaint, the City of Cebu alleged, by way of special and
affirmative defenses, that the plaintiff was not a party to the Contract to Buy and Sell
and Agreement, hence, has no cause of action for rescission. The construction of the
abattoir is not a suspensive condition, and there is no provision in the Contract to Buy
and Sell, or in the Agreement, which states that the failure of the abattoir will entitle
plaintiff to rescind the same. The use of the property for the construction of a modern
abattoir is only an incidental condition which does not affect the efficacy of the
contracts; hence, the plaintiff has no cause of action to rescind the deeds. Neither will
the non-construction of the abattoir constitute performance of a negative resolutory
condition that terminates the contract. The non-construction of the abattoir cannot also
be considered as the cause or consideration of the contract of the "Contract to Buy
and Sell" and the subsequent "Agreement" because the consideration is
theP2,156,040.00 agreed upon by the parties. The City declared that the plaintiff is not
entitled to rescission because in the first place, the clean titles to the lots had not been
delivered. Moreover, plaintiff’s claim for monthly rental ofP75,000.00 is completely
devoid of any factual and contractual basis. The City claimed that the plaintiff should
be compelled to produce the titles for those parcels of land which had not yet been
transferred in its name otherwise the amount deposited in escrow could never be
legally withdrawn.20
In its Second Amended Pre-Trial Brief in Civil Case No. 27334, the plaintiff
enumerated the issues to be litigated by the parties and to be resolved by the court, to
wit:
1) Whether or not defendant City of Cebu culpably violated Art. 1308 of
the New Civil Code of the Philipines?
2) Whether or not defendant violated the principal condition of the
Contract to Buy and Sell when defendant City of Cebu stopped and
abandoned the on-going construction of the Abattoir at plaintiff’s property
and transferred it to another site in Mandaue City?
3) Whether or not defendant City of Cebu can be held liable for the
restoration of the property, pay rentals, damages and attorney’s fees
called in the complaint?21
For its part, the City of Cebu defined the issues as follows:
1) Whether or not the Contract to Buy and Sell entered by the parties may
be validly rescinded? In other words, whether or not the action for
rescission is barred by prescription?
2) Whether or not Vicente B. del Rosario herein represented by his
Attorney-in-Fact Pantaleon U. del Rosario has the legal personality to
solely and single-handedly ask for the rescission of the contract without
taking into consideration the collective decision of the co-heirs of the late
Vicente S. del Rosario? And owing to the alleged claim of the would-be
intervenors who are the heirs of the late Teresita Reyes-de Leon would
bolster the lack of legal personality for Vicente B. del Rosario to ask for
rescission.
3) Whether or not the defendant City could be held liable for damages and
attorney’s fees in view of the complaint for rescission filed by the plaintiff?
22
On February 26, 2003, Isidro de Leon and Michael de Leon filed a Motion for Leave to
Intervene as defendants. They averred that they are husband and son, respectively, of
Teresita Reyes-de Leon, the former owner of the properties subject matter of the
Amended Complaint, and that they had filed a complaint for the declaration of nullity of
the January 20, 1985 Deed of Absolute Sale in the RTC of Cebu City, docketed as
Civil Case No. Ceb-24698. Appended thereto was the Answer-in-Intervention of the
movants as well as a copy of the complaint in Civil Case No. Ceb-24698. 23 Only the
plaintiff opposed the motion contending, inter alia, that the movants had no more
interest over the properties; in any event, their interest may amply be protected in the
cases for partition pending between the parties over the same properties - Civil Case
No. 24698 and Civil Case No. 17236.
However, on July 7, 2003, the court issued an Order denying leave for the movants to
intervene.24
Plaintiff filed a motion for summary judgment contending that, as defined by the City of
Cebu in its Pre-Trial Brief, the only issues are of law, and that all the material facts of
the case are within the court’s judicial knowledge. Appended to the motion was the
Affidavit of Pantaleon U. del Rosario, the attorney-in-fact and father of the plaintiff. 25
The City of Cebu opposed the motion, contending that summary judgment is not
proper because there are several genuine issues which the defendant and the would-
be intervenors have raised in their answer. They insisted that the following issues
could not just be ignored, nor summarily resolved, and should instead be threshed out
in a full-blown trial on the merits:
a) Whether plaintiff has cause of action against defendant?
 b) Whether Pantaleon del Rosario can lawfully and properly represent
VICENTE B. DEL ROSARIO in this case?
c) Whether the action for rescission is barred by prescription or not?
d) Whether the construction of the abattoir is the suspensive or resolutory
condition which affects the efficacy of the contracts which herein plaintiff
sought to be rescinded.
e) Whether plaintiff can rightfully withdraw the deposit in escrow despite
the fact that he has not delivered the clean titles of the properties to the
defendant City of Cebu?
f) Whether plaintiff can legally and rightfully convert the money deposited
in escrow meant for payment of the lots into monthly rentals;
g) Whether judicial novation of contract is allowed?
h) Whether plaintiff is guilty of estoppel and laches?
i) Whether defendants are liable for damages and attorney’s fees?26
On March 17, 2004, the court issued an Order declaring that the case was submitted
for decision only for the interpretation of the contract and not for the claim of damages.
In short, the court declared that the plaintiff should waive his claim for damages,
otherwise, the case cannot be submitted for decision.27 On April 19, 2004, the plaintiff,
through counsel, filed a "Waiver of Claim for Damages" so that the case could be
submitted for decision.28
On May 28, 2004, the trial court rendered judgment in favor of the plaintiff and against
the defendant. The court awarded damages to the plaintiff in the form of unrealized
rentals for the property of P2,156,040.00. The dispositive portion of the decision reads:
WHEREFORE, premises considered, a decision is hereby rendered in favor of plaintiff
and against the defendant, as follows:
1. The rescission prayed for by the plaintiff is granted, consequently the
Contract to Buy and Sell, dated August 23, 1985, which was notarized as
Document No. 883, Page No. 77, Book II, by Notary Public Lorenda E.
Amion, is hereby ordered RESCINDED;
2. Consequently, defendant is directed to pay rentals to plaintiff to be
taken from the whole amount of TWO MILLION ONE HUNDRED FIFTY-
SIX THOUSAND AND FORTY (P2,156,040.00) PESOS deposited by
defendant in escrow with the Philippine National Bank, Cebu Branch, and
to include all the interests it earned up to the present.
3. Defendant is also directed to remove all the improvements it introduced
on the subject lots; and
4. In addition, defendant is ordered to pay plaintiff P50,000.00 attorney’s
fees and P30,000.00 litigation expenses.
IT IS SO ORDERED.29
In an Urgent Manifestation30 filed on June 14, 2004, the plaintiff informed the court that
the defendant had transferred the deposit in escrow to the Land Bank of the
Philippines.
The defendant filed a motion for the reconsideration of the decision, contending that
there was no factual and legal basis for the award for damages in the form of
unearned rentals due to the following reason:
The affidavit by so-called attorney-in-fact Pantaleon del Rosario attached to the motion
for summary judgment did not mention of any claim for damages which warrant the
award rendered by the Court. Furthermore, plaintiff submitted a Waiver of Damages
on April 19, 2004. These matters are judicial admissions or omissions which do not
need any further proof. The award of litigation expenses by the court in favor of the
plaintiff is erroneous and misguided because such award is disallowed, there being no
price for litigation. (Filinvest Corporation vs. IAC, et al., GR No. 65935, Sept. 30, 1988)
However, the court, for reasons which defendant could not fathom nor comprehend
has amazingly awarded damages in the form of rentals to the plaintiff equivalent to the
amount of compensation for property as if plaintiff would be in the right position to
submit clean title of the property to defendant.
The factual basis of said damages in the form of rentals are wanting including the
factual basis for the award of attorney’s fees and litigation costs because no evidence
was ever presented by the plaintiff to that effect. On the contrary, an express waiver
was made renouncing the same.
"Actual damages cannot be awarded in the absence of receipts to support the same,
in line with the rule that actual damages cannot be allowed unless supported by
evidence on record." (PEOPLE vs. (sic) G.R. Nos. 124384-86, 2000 January 28, 1st
Division)
Even the document presented by the plaintiff require that payment of the property shall
only be made when title shall be transferred to the defendant. The same is quoted in
the decision on page 7, however, the same is given nary a consideration. Further, the
payment of rental is never a consequence of rescission.31
The plaintiff opposed the motion, contending that although he waived his claim for
damages, he did not waive his claim for unrealized rentals which are not synonymous
to damages.
On July 8, 2004, Carlos del Rosario, one of the surviving children of Vicente S. del
Rosario and Pantaleon’s brother, filed a motion for leave to intervene as plaintiff. He
averred that Vicente S. del Rosario was the owner of an undivided portion of the
property subject of the Amended Complaint; the plaintiff had no right to the property
because the right, interest and participation of Teresita Reyes-de Leon over the other
half of the property had been acquired by Pantaleon del Rosario, not the plaintiff; the
Contract to Buy and Sell was executed by the defendant, as vendee, and his father,
Vicente S. del Rosario, and Pantaleon del Rosario, as vendors-owners. Thus, only
Vicente S. del Rosario and Pantaleon del Rosario were entitled to the escrow account
in the PNB which represented the purchase price of the property. The movant prayed
that:
WHEREFORE, foregoing premises considered, it is most respectfully prayed that after
trial on the merits, judgment issue in favor of Plaintiff-in-Intervention and against
Defendants-in-Intervention:
1. Declaring the RESCISSION of the Contract to Buy and Sell (ANNEX
"B" hereto) and Agreement (ANNEX ‘C" hereto), and that other
agreements related thereto;
2. Ordering the City of Cebu, to Remove all improvements introduced in
the property of the late Vicente S. del Rosario and Pantaleon U. del
Rosario by reason of or as a consequence of the Contract to Buy and Sell
and the Agreement;
3. Ordering the City of Cebu to Restore the property to the Plaintiff-in-
Intervention/Intervenor and other legal heirs of the late Vicente S. del
Rosario, as well as to co-owner Pantaleon U. del Rosario, to the same
condition when City of Cebu took possession thereof;
4. Ordering the City of Cebu to pay to the Plaintiff-in-
Intervention/Intervenor and the other legal heirs of the late Vicente S. del
Rosario, as well as co-owner Pantaleon U. del Rosario, REASONABLE
RENT in consideration for the almost twenty (20) years of its absolute
possession, control and use of the properties above cited (1985-to date).
5. Declaring that the Plaintiff-in-Intervention Carlos U. del Rosario and
other legal heirs of the late Vicente S. del Rosario is entitled to the one
half (1/2) or fifty (50) percent of the said reasonable rent and other award
of this Court, while the other half (1/2) pertain to the co-owner Pantaleon
U. del Rosario.
6. Award to the Plaintiff-in-Intervention reasonable attorney’s fees,
damages and cost of litigation as may be proven in court.
Such other relief and remedies as may be consistent with law, justice and equity are
likewise prayed for.32
On July 9, 2004, plaintiff filed a Motion33 for a special order for execution, citing the
rulings of this Court in Navarra v. Labrador,34 PVTA v. Lucero, et al.35 The City of Cebu
opposed the motion contending, inter alia, that:
5. For the Court to allow the execution pending appeal of its decision as
prayed for by the Plaintiff would have very serious consequences to the
Defendant. There is a pending case for partition among the heirs of the
late Vicente S. Del Rosario wherein certain parcels of land subject of the
Contract to Buy and Sell are included in the list of the properties of the
decedent. Another claimant may be the heirs of the late Teresita de los
Reyes who are questioning the spurious claim of the Plaintiff to the
decedent’s inherited properties. Their case for certiorari is awaiting
decision from the Supreme Court. To prematurely execute the decision
would pre-empt the right of the Defendant to seek a review of the
questioned decision to a higher court. The Plaintiff’s claim of ownership to
the properties which are subject of the Contract to Buy and Sell is highly
questionable as he does not have any privity of contract with the city
government of Cebu. It is a fact that if judgment is executed and, on
appeal, the same is reversed, although there are provisions for restitution,
often times, damages may arise which cannot be fully compensated. The
city stands to suffer irreparable injury because it is hardly expected that
the Plaintiff shall be able to make complete and full restitution. Public
funds are at stake and should this be released to the wrong person, it is
exposing itself to possible lawsuits from the legal heirs of the late Vicente
S. del Rosario;
6. Why the obvious haste as clearly displayed by the attorney-in-fact of
the Plaintiff and his counsel? There are still two (2) pending incidents left
unresolved by the Court – the motion for reconsideration filed by the
Defendant and the Motion for Intervention filed by Mr. Carlos U. del
Rosario. It would seem that the attorney-in-fact, who is just one of the co-
heirs of the late Vicente S. del Rosario through some maneuverings,
would want to deprive his siblings their rights, by claiming the proceeds on
the pretext that all these are his son’s sole and rightful share.
7. To consider the mere posting of a bond a "good reason" would
precisely make immediate execution of a judgment pending appeal
routinary, the rule rather than the exception. To follow such line of
reasoning would mean that judgments would be executed immediately, as
a matter of course, once rendered, if all that the prevailing party needed to
do was to post bond to answer for damages that might result therefrom.
This is a situation, to repeat, neither contemplated nor intended by law.
(David vs. Court of Appeals, 342 Phil. 387, 391). 36
The plaintiff likewise opposed the motion of Carlos del Rosario for leave to intervene
on the ground that his interests over the property and on the purchase price thereof
may be adequately protected in Civil Case No. 17236.
On July 26, 2004, the Court rendered judgment in G.R. No. 152862, dismissing
Teresita de Leon’s petition for review. The Court ruled that the issue of ownership of
the properties subject of Civil Case No. 24698 should be resolved in the partition case,
Civil Case No. 17236.
37
On August 9, 2004, the RTC issued an Order  denying plaintiff’s motion for execution
for being premature and the motion for reconsideration of the defendant for lack of
merit. The defendant forthwith filed its notice of appeal. 38
On August 17, 2004, plaintiff filed a "Motion for Execution" 39 on the same grounds.
The plaintiff informed the court via an Addendum that the deposit in escrow with the
Land Bank of the Philippines, inclusive of interests, amounted to P9,846,760.00. On
August 20, 2004, the court issued an Order40 directing the Branch Clerk to transmit the
records, as well as the transcripts and exhibits, to the Court of Appeals. The defendant
reiterated its opposition to the motion, and averred that the court had already lost
jurisdiction over the case after it directed the elevation of the records, inclusive of the
transcripts and exhibits.41
On September 6, 2004, the RTC issued an Order granting the motion for execution of
the plaintiff. It declared that there were good reasons for execution pending appeal:
In the decision dated May 28, 2004, the court considered the fact that the subject real
properties, consisting of eight (8) lots with a total area of 21,000 square meters or
more than two hectares, are in the absolute possession and control of defendants
since January 6, 1986 up to the present on the basis of a stipulation in the contract of
buy and sell between herein parties that defendant would pay them in the amount
of P2,156,040.00 placed in escrow deposit with the Philippine National Bank, Cebu
City. Until now or for a period of eighteen (18) years, the defendant has not paid a
single centavo to the plaintiff. So the court believes the defendant should pay
reasonable rentals to the plaintiff in keeping with the law against unjust enrichment,
although the plaintiff made an express waiver of its claim for damages.
In short, the foregoing facts are the "good reason" that the court considers in granting
the execution pending appeal. Moreover, it could not be disputed that the eight (8) lots
subject matter of the contract between the plaintiff and defendant City of Cebu are
located within the city proper of Cebu City, so the yearly rental of P547,042.237, which
is only P45,586.85 a month , appears just and reasonable under the circumstances.
Thus, the original amount in escrow deposit with PNB, Cebu City, has now
accumulated to P9,846,760.27 (as per addendum) to include the increments, which
amount was already transferred already to the Land Bank of the Philippines, Banilad
Branch, Cebu City. The rentals should be taken from the aforesaid amount.42
Plaintiff moved for the reconsideration of the Order, asking for the reduction of the
surety bond. On the part of the City of Cebu, it averred that the court no longer had
jurisdiction to grant the motion for execution pending appeal because it already
ordered the transmittal of the records to the CA. Besides, there is no good reason to
support the granting of the motion for execution pending appeal.
On October 26, 2004, the court issued an Order denying the motion of the City of
Cebu, and declared that the appeal filed by the defendant was dilatory:
On the FIRST REASON, the court believes it still has jurisdiction to grant the Motion
for Execution Pending Appeal because the records of the case are still in its
possession and it has not yet transmitted them to the Court of Appeals.
On the SECOND REASON, the court does not doubt there is a good reason to support
the execution pending appeal, as may be stated as follows:
1. On August 23, 1985, defendant City of Cebu, through then City Mayor
Ronald Duterte, entered into a Contract to Buy and Sell with the plaintiff
on the latter’s Lots 8401, 8403, 8404, 8405, 3113, 3114, 3147 and 3148,
with a total area of 21,000 square meters to be used as a City Abattoir.
The stipulated purchase price for the eight (8) lots is P2,156,040.00,
which defendant deposited in escrow with the Land Bank of the
Philippines, Banilad Branch, Cebu City.
2. After the EDSA People Power, when John H. Osmena became the
OIC-Mayor of Cebu City he unilaterally stopped the on-going construction
of the abattoir on the plaintiff’s lots and transferred the same to Mabolo,
Cebu City where it is now located. For nineteen (19) continuous years and
until now, defendant is in actual possession of subject lots, to the damage
and prejudice of the plaintiff who has not received a single centavo by way
of income or considerable payment thereof. With these facts, the court
believes the present appeal interposed by defendant is patently dilatory. 43
On October 29, 2004, the court issued an Amended Order for Execution, the
dispositive portion of which reads:
WHEREFORE, you are commanded to serve a copy of this Writ upon the Land Bank
of the Philippines, Plaza Independencia Branch, Cebu City and direct them to release
to the plaintiff the amount of P9,846,760.27, representing the principal and interest
under account Nos. 1451, 1024–58 and 1451 1024-66, respectively, and deliver the
same to the plaintiff, plus the lawful fees for the service of this writ after the
commission due thereon shall have been paid to the Ex-Officio Sheriff’s Official
Cashier for which an official receipt shall be issued therefore, and thereafter return this
Writ to this court with your proceedings endorsed thereon, in accordance with Sec. 14,
Rule 39 of the Rules of Court, as amended.
You are further commanded to comply with the directives provided for in par. No. 4 of
the Administrative Circular No. 12 as approved by the Supreme Court of the
Philippines, en banc, on October 1, 1985, by submitting to the Honorable IRENEO
LEE GAKO, JR., Presiding Judge of this court, a report of the action you have taken
on this writ within ten (10) days from your receipt hereof. 44
The plaintiff posted a surety bond issued by the Utility Assurance Corporation for the
amount of P9,846,760.00 which was approved by the court. The court issued the Writ
of Execution45 on October 29, 2004 which was however amended 46 on the same day.
A notice of garnishment47 was subsequently issued.
Aggrieved, the City of Cebu filed a petition for certiorari under Rule 65 with prayer for
temporary restraining order (TRO) and/or writ of preliminary injunction before the CA,
Cebu City, seeking to nullify the following: (1) the Order dated September 8, 2004
granting the motion for execution pending appeal; (2) the Order dated October 26,
2004 denying the motion for reconsideration of the earlier order; (3) the writ of
execution dated October 29, 2004; and (4) the Notice of Garnishment dated October
3, 2004.
On November 11, 2004, the appellate court issued a TRO.48 On January 27, 2005, the
CA issued a Resolution49granting the plea for a writ of preliminary injunction.
On April 8, 2005, the CA rendered judgment dismissing the petition for certiorari. 50 The
fallo reads:
WHEREFORE, foregoing premises considered, the petition is hereby dismissed. The
writ of preliminary injunction issued by this court on January 27, 2005 is hereby lifted.
The assailed Orders and other issuances of the lower court are hereby affirmed and
reinstated.
The appellate court affirmed the findings of the trial court and declared that
The trial court ordered on September 8, 2004 an execution of its decision pending
appeal, as follows:
In the decision, dated May 28, 2004, the court considered the fact that the subject real
properties, consisting of eight (8) lots with a total area of 21,000 square meters or
more than two hectares, are in the absolute possession and control of defendants
since January 6, 1986 to the present on the basis of a stipulation in the contract to buy
and sell between the herein parties that defendant would pay them the amount
of P2,156,040.00 placed in escrow deposit with the Philippine National Bank, Cebu
City. Until now or for a period of more than eighteen (18) years, the defendant has not
paid a single centavo to the plaintiff. So the court believes that defendant should pay
reasonable rentals to the plaintiff in keeping with the law against unjust enrichment,
although the plaintiff made an express waiver with respect to its claim for damages.
In short, the foregoing facts are the "good reason" that the court considers in granting
the motion for execution pending appeal.
From the foregoing, the public respondent clearly and concisely elucidated the
superior circumstances and indeed, the very "good reason" for its granting private
respondent’s motion for execution pending appeal. With the above cited good reason
as the basis for the execution pending appeal prayed for, the public respondent further
buttressed the same by ordering private respondent to post a bond in an amount equal
the value sought to be enforced in the amount of P9,846,760.27, so as to protect the
interest of petitioner, City of Cebu. Indeed, the bond which has been properly posted
through a bonding company amply guarantees and safeguards the rights of the
petitioner.
The "combination of circumstances is the dominant consideration which impels the
grant of immediate execution, the requirement of a bond is imposed merely as an
additional factor, no doubt for the protection of the defendant’s creditor."
The ascertainment of good reasons for execution pending appeal lies within the sound
discretion of the trial court, and the appellate court will not normally disturb such
finding. Intervention by the latter may be proper, if it is shown that there has been an
abuse of discretion. Normally, the trial court is not allowed to assess its own judgment
and to hold that an appeal may not prosper, or that it would merely be dilatory. In the
present case, however, there are circumstances that undisputedly serve as cogent
bases for arriving at such a conclusion. In the light of the former, there is hardly any
question that private respondent’s Motion for Execution Pending Appeal is
meritorious.51
xxxx
Even assuming ex gratia argumenti that there indeed existed certain legal infirmities in
connection with the assailed Orders of Judge Gako, still, considering the totality of
circumstances of this case, the nullification of the contested orders would be
iniquitous. As rightly averred by public respondent that "until now for a period of
eighteen (18) years, the petitioner has not paid a single centavo to the respondent. So
the court believes the defendant should pay reasonable rentals to the plaintiff in
keeping with the law against unjust enrichment x x x. Moreover, it could not be
disputed that the eight (8) lots subject matter of the contract between the plaintiff and
the defendant City of Cebu are located within the city proper of Cebu City, so a yearly
rental of P547,042.237, which is only P45,586.85 a month, appears just and
reasonable under the circumstances. Thus, the original amount deposited in escrow
with PNB, Cebu City, [which] has now accumulated to P9,846,760.27 (as per
addendum) to include the increments should be granted to private respondent in the
equitable form of rentals for the past 18 years.
All told, private respondent having been deprived of the use, possession and
enjoyment of his property for 18 long years, starting 1986, when the edifice for the
abattoir was constructed on the site or property in controversy, up to the present, is
entitled to the amount garnished by way of rentals in keeping with the age old principle
of justice and equity. To rule otherwise would result in the unjust enrichment of the
petitioner at the expense of private respondent.
The Civil Code provision on human relations states:
Art. 19. 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.
Following the applicable provision of law and hearkening to the dictates of equity, that
no one, not even the government, shall unjustly enrich himself at the expense of
another. At any rate, of paramount importance to us is that justice has been served.
No right of the public was violated and public interest was preserved. This Court will
not condone the repudiation of just obligations contracted by municipal corporations.
On the contrary, we will extend our aid and every judicial facility to any citizen in the
enforcement of just and valid claims against abusive local government units.52
The appellate court likewise ruled that the petitioner was guilty of forum shopping
because it filed a petition for certiorari while its appeal from the decision of the RTC
was pending in the CA.
Meantime, per Report53 of Sheriff Rogelio T. Pinar dated September 22, 2005, he
received from LBP, Plaza Independencia Branch, Manager’s Check No. 0000002931
in the amount of P9,846,760.27 payable to Vicente B. del Rosario, represented by
Pantaleon U. del Rosario for the partial satisfaction of the writ of execution. On
November 18, 2005, respondent (plaintiff therein) filed an ex-Parte Motion to Release
the Remaining Garnished Amount.54 The RTC, in its Order55 dated January 27, 2006,
granted the same and held that since the plaintiff (respondent herein) is entitled to all
interests that the deposit earned up to the present, and as the decision of the court
was executed only on September 19, 2005, the former is entitled to all interests not
covered by the earlier manager’s check. Defendant’s motion for reconsideration was
denied on March 10, 2006.56 The Bank remitted the amount to the plaintiff. Several
orders were likewise issued by the RTC directing the LBP to inform it of the actual
remaining interests of the escrow deposit, 57 to submit a ledger of the garnished
amount,58 as well as to comply with the order of the court by releasing the remaining
garnished amount.59
The Present Petition
The City of Cebu filed the instant petition for certiorari, contending that:
I
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION
OF THE LOWER COURT HOLDING THAT THE PRIVATE RESPONDENT IS
ENTITLED TO AN EXECUTION PENDING APPEAL BY POSTING A
PERFORMANCE BOND IN THE AMOUNT OF P9,846,760.27. THE GRANT OF
EXECUTION PENDING APPEAL BY THE LOWER COURT CITING IT HAS GOOD
REASON, IS WITHOUT ANY URGENT BASIS AND WOULD ONLY PRE-EMPT THE
REVIEW OF THE DECISION OF THE CASE WHICH WAS TIMELY RAISED ON
APPEAL;
II
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT FORUM
SHOPPING WAS COMMITTED BY THE PETITIONER.60
Petitioner avers that the RTC committed grave abuse of discretion amounting to
excess or lack of jurisdiction when it issued the assailed Orders, Writ and Amended
Writ of Execution and Notice of Garnishment and that the appellate court erred in
affirming the same. Petitioner maintains that respondent failed to establish "good
reasons" for execution pending appeal. The bare fact that petitioner had been in actual
possession of the property for 18 years and that the purchase price, inclusive of
interests, had been deposited in escrow with the PNB, later with the LBP, are not good
reasons to allow execution pending appeal. After all, if respondent would prevail in
petitioner’s appeal from the RTC decision, respondent would be entitled to the amount
deposited in escrow, including the interests already earned by the account. The fact of
the matter is that, even if the property had been placed in its possession, it has not
been able to use nor profit from it, since it is part of the property which had been
placed under receivership in Civil Case No. 17236 (for partition) between the heirs of
Vicente S. del Rosario. Petitioner further points out that one of his heirs even leased a
portion of the property from which he earned income.
Petitioner further contends that the delivery of the deposit in escrow which is a public
fund cannot be delivered to respondent without prior authorization from the COA,
considering further that the titles to the property had not been issued under its name.
Petitioner insists that the delivery of the proceeds of the escrow account to respondent
is illegal, and a violation of the provisions of the Contract to Buy and Sell, as well as
the Agreement. In fact, it had paid P167,353.00 to Vicente S. del Rosario on February
10, 1986 after the titles to two of the lots were delivered to petitioner.
Petitioner points out that, if the decision of the RTC declaring the rescission of the
Contract to Buy and Sell and Agreement is sustained by the appellate court and this
Court, and respondent would be ordered to withdraw the amount deposited with the
Land Bank of the Philippines, petitioner would find it difficult to collect the amount from
respondent. The bare fact that respondent posted a surety bond is not a good reason
for execution pending appeal. It was justified in opposing the execution pending
appeal because respondent’s right to a rescission of the said contract is the subject of
its appeal from the decision of the RTC. Contrary to the ruling of the appellate court,
petitioner was not guilty of forum shopping when it filed its petition for certiorari before
it.
The threshold issues for resolution are the following: (1) whether the RTC has
jurisdiction to issue orders after the transmittal of the records of the case to the CA; (2)
whether petitioner is guilty of forum shopping; and, (3) whether "good reasons" exist to
justify the grant of execution pending appeal in this case.
The Ruling of the Court
On the first issue, we hold that the RTC has jurisdiction to take cognizance
respondent’s motion for execution pending appeal. We quote, with approval, the
following ruling of the appellate court:
Trial Court’s Residual Jurisdiction despite the loss of its jurisdiction as a result of the
appeal, the Court before the transmission of the original record or the record on appeal
may issue orders: (a) for the protection and preservation of the rights of the parties
which do not involve any matter litigated by the appeal; (b) approved compromises; (c)
permit appeal of indigent litigants; and (d) order execution pending appeal (Section 9,
Rule 41 of the Revised Rules of Court).
After perfection of the appeal by either mode, the trial court loses jurisdiction over the
case or the subject matter involved in the appeal, as the case may be. In either
instance, and before the transmittal to the appellate court of the original record or the
record on appeal, the trial court still retains its so called residual jurisdiction to issue
protective orders, approve compromises, permit appeals of indigent litigants and as
has been added by amendment of this section (Section 9 of Rule 41) to order
discretionary execution and to allow withdrawal of the appeal.
The records of this petition does not show nor has petitioner duly established that on
August 20, 2004 the public respondent indeed had ordered and transferred the
records of the case as well as its complete transcript of stenographic notes to the
Court of Appeals. All we have before us is a mere allegation which we cannot give due
credit.61
On the second issue, however, we agree with petitioner’s contention that it did not
indulge in nor commit forum shopping by filing its petition for certiorari assailing the
Orders of the RTC granting execution pending appeal, and questioning the writ of
execution and garnishment while the appeal of the decision of the RTC was pending in
the appellate court.
Forum shopping exists when, as a result of an adverse opinion in one forum, a party
seeks a favorable opinion (other than by appeal or certiorari), in another, or when he
institutes two or more actions or proceedings grounded on the same cause, on the
gamble that one or the other court would make a favorable disposition.62 The test for
determining whether a party violates the rule against forum shopping is where a final
judgment in one case will amount to res judicata in the action under consideration or
where the elements of litis pendentia are present.63What is truly important to consider
in determining whether forum shopping exists or not is the vexation caused the courts
and parties-litigants by a party who asks different courts or administrative agencies to
rule on the same or related causes or grant the same or substantially the same reliefs,
in the process creating the possibility of conflicting decisions being rendered by the
different fora upon the same issues.64
In the present case, petitioner interposed an appeal before the CA of the decision of
the RTC dated May 28, 2004 declaring the contract to buy and sell rescinded and
finding petitioner liable for the payment of rentals, attorney’s fees and litigation
expenses. Petitioner, likewise, filed a petition for certiorari before the same tribunal
which sought to nullify the orders of the RTC granting execution pending appeal, as
well as the writ of execution and the notice of garnishment, where it was alleged that
the trial court committed grave abuse of discretion amounting to excess or lack of
jurisdiction and that it had no appeal, nor any plain, speedy or adequate remedy in the
ordinary course of law to nullify such orders.
This issue had already been settled by the Court in Marcopper Mining Corporation v.
Solidbank Corporation65 and International School, Inc. (Manila) v. Court of
Appeals.66 There can be no forum shopping when in one petition a party questions the
order granting the motion for execution pending appeal, as in the case at bar, and, in a
regular appeal before the appellate court, the party questions the decision on the
merits. After all, the merits of the main case are not to be determined in a petition
questioning execution pending appeal and vice-versa. Hence, the CA erred in finding
that petitioner is guilty of forum shopping.
On the third issue, we agree with petitioner’s contention that respondent failed to
establish any "good reason" to justify execution of the trial court’s decision pending
appeal. We likewise agree with petitioner’s contention that the RTC committed grave
abuse of its discretion amounting to excess or lack of jurisdiction when it granted
respondent’s motion for execution pending petitioner’s appeal of the RTC decision. It
must be stressed that by granting execution pending appeal, the RTC prejudged the
merits of petitioner’s appeal. The well-established rule is that it is not for the trial court
to determine the merits of the decision it rendered and use the same as basis for an
order allowing execution of its decision pending appeal. The determination of the
merits of the trial court’s decision is lodged in the appellate court. To reiterate, the trial
court cannot preempt the decision of the appellate court or the merits of petitioner’s
appeal of the trial court’s decision and use it as basis for affirming the trial court’s order
of execution pending appeal.67 Neither is the finding of the trial court that the appeal is
dilatory a good reason for granting execution pending appeal (if the appellate court
cannot appreciate the dilatory intent of an appeal).68
As gleaned from the assailed Orders, the RTC granted execution pending appeal on
its finding that petitioner enriched itself at the expense of the respondent because it
had been in possession of the property for 18 years but respondent had not been able
to use the deposit in escrow nor was paid compensation by petitioner; it also held and
that respondent was entitled to the amount of P2,156,400.00 and interests, or the total
amount ofP9,846,760.27. The RTC used these findings and rulings in its decision as
the "good reasons" for execution pending appeal.
Petitioner assailed the trial court’s findings and its rulings on the legal issues.
Petitioner pointed out that it had actual possession of the eight parcels of land since
January 7, 1986 up to March 30, 1998 when the RTC placed the property under
receivership. Be it remembered however, that petitioner acquired possession of the
properties only on January 7, 1986 after it had deposited in escrow the purchase price
of the property as agreed upon by the parties under the Contract to Buy and Sell and
Agreement. Petitioner commenced the construction of the modern abattoir which was
about 40% complete, until the 1986 EDSA revolution took place.
Petitioner maintained that while it is true that the vendors had not received the
purchase price of the properties in the interim, except for the torrens titles for two (2) of
the eight parcels of land, the titles for the six other lots had not been transferred nor
delivered to it. Under the Contract to Buy and Sell executed by petitioner and the
vendor Vicente S. del Rosario and his son, Pantaleon U. del Rosario, the vendees
were entitled to the purchase price only after the titles to the lots shall have been
registered in the name of petitioner, and pursuant to COA regulations. Under the
Agreement dated January 7, 1986, the vendors may not withdraw any amount from
the deposit with the PNB until the vendors shall have delivered to petitioner, as
vendee, clean titles to the properties. Petitioner is mandated to facilitate the release of
the deposit only as soon as the clean titles under its name shall have been delivered
to it.
Indeed, the vendor, Vicente S. del Rosario, was able to deliver to petitioner only two
clean titles over two of the eight parcels of land covered by said Contract of Buy and
Sell, namely TCT No. 55557 and TCT No. 40590. Petitioner remitted to the spouses
Vicente S. del Rosario and Ceferina del Rosario the amount of P167,353.00 for said
lots. Being the registered owner of the two lots, petitioner is entitled to the possession
thereof. Petitioner asserted that, from January 7, 1986 to July 2, 1986, the vendors
failed to deliver clean titles to the six parcels of land. Had the vendors delivered clean
titles to petitioner over the six parcels of land on or before July 2, 1986, they could
have been paid the balance of the purchase price of the properties.
Admittedly, a rather complex controversy ensued between the vendors and petitioner
when John Osemeña proposed, on July 3, 1986, that the property be used as
relocation site for squatters instead of for the construction of a modern abattoir; and for
the renegotiation of the purchase price which Vicente S. del Rosario rejected even as
John Osmeña requested the vendors to deliver clean titles to the City. It appears that
petitioner had decided to construct a modern abattoir at the reclamation area instead
of on the eight (8) parcels of land subject of the Contract of Buy and Sell. Even during
the pendency of Civil Case No. 5705, filed by Vicente S. del Rosario against petitioner
in the RTC of Cebu City, he agreed to petitioner’s proposal, through City Mayor Tomas
Osmeña, for the reduction of the area of the property sold to petitioner from 10,000 sq
m to only 5,945 sq m; for petitioner to return to the vendors Lot 4147, to be taken from
the 5,945 sq m; and petitioner to remit to the vendors the interests of the PNB escrow
account as of September. However, the parties did not arrive at any settlement. Even
as the complaint of Vicente S. del Rosario was dismissed on February 26, 1992
following the death of Vicente S. del Rosario on October 16, 1991, the parties failed to
compromise.
If there was a delay, the same was occasioned in part by the earnest efforts of the
parties to settle the matter amicably. As gleaned from the records, petitioner had not
used the six parcels of land after the construction of the abattoir was stopped in 1986.
On the other hand, respondent had not denied the claim of the heirs of Vicente S. del
Rosario in Civil Case Ceb-17236 that the property had been placed under receivership
by order of the court on March 30, 1998; and that Carlos del Rosario, one of the
surviving children of Vicente S. del Rosario, was able to lease the Asinan property on
July 16, 1998. Petitioner argued that it could not be liable for rentals since the property
was under receivership.
While admittedly, the vendors failed to use the deposit, in the interim, neither was the
petitioner able to use the money.
The trial court declared in its decision that it was respondent, not the heirs of Vicente
S. del Rosario, who is entitled to reasonable rentals for the property and to rescind the
Contract to Buy and Sell and Agreement because of the letter-agreement between
Vicente S. del Rosario and his son Pantaleon U. del Rosario dated August 25,
1985,69 that the sale subject of the said contract and agreement shall be taken only
from the ½ share of Teresita de Leon per the January 20, 1985 deed of absolute sale
between her and the plaintiff; and that the proceeds in connection with the sale of said
properties "shall accrue in your (Pantaleon U. del Rosario) favor only." The letter
referred to by the RTC is that sent by Vicente S. del Rosario to his son, Pantaleon U.
del Rosario which bears the conformity of the latter, and not of the respondent. 70 The
RTC ruled that the heirs of Vicente S. del Rosario are bound by the aforesaid letter-
agreement entered into by their father, Vicente S. del Rosario, and that his heirs have
no business or interest in the Contract to Buy and Sell since they are not parties
thereto. Moreover, the heirs, as of May 28, 2004, had not intervened in the case. The
RTC ruled that being the owner of the property sold to petitioner, respondent was
deprived not only of the use of the properties covered by the Contract to Buy and Sell
but also the income that could have been derived therefrom, including rentals for the
use, by the petitioner, of the properties for 19 years. It concluded that the deposit with
the PNB in escrow including earned interests amounting to P2,156,040.00, including
interests as of May 28, 2004, should be paid to respondent as rentals, based on the
law against unjust enrichment. In fine, the RTC relied solely on the findings and
conclusions in its own decision, and ordered execution pending appeal.
Petitioner opposed respondent’s motion for execution pending appeal and appealed
the decision of the trial court. It pointed out that the respondent had no cause of action
for rescission of the Contract to Buy and Sell and Agreement, and for damages
including claims for rentals for the properties for the reason that the respondent is not
a party to the said Contract and Agreement. The parties to the contract, as owners-
vendors of the properties, were Vicente S. del Rosario, and his son, Pantaleon U. del
Rosario, the grandfather and father, respectively, of respondent. Vicente S. del
Rosario, was the co-owner of an undivided one-half portion of the lots sold to petitioner
until Pantaleon U. del Rosario became the owner of the other half under the December
13, 1985 Contract of Sale executed by Teresita de Leon.
Based on the records, upon the death of Vicente S. del Rosario on May 9, 1987, his
compulsory heirs were his children, including Pantaleon U. del Rosario, Carlos and
Manuel del Rosario, and his surviving spouse, Ceferina del Rosario. Although Teresita
executed the deed of absolute sale over her ½ share of the parcels of land to
respondent on January 20, 1985, Teresita had earlier executed, on December 23,
1987, the said Contract of Sale over said rights in favor of Pantaleon U. del Rosario.
The January 20, 1985 deed of sale executed by Teresita and respondent was entered
into subsequent to the Contract to Buy and Sell executed by Pantaleon U. del Rosario
and Vicente S. del Rosario on August 24, 1984.
Significantly, Vicente S. del Rosario and Pantaleon U. del Rosario agreed in the
aforesaid letter-agreement that all the proceeds of the sale of the property to the
petitioner shall accrue in favor of Pantaleon U. del Rosario only and not to the
respondent.
1. THAT the areas sold to the City of Cebu for its abattoir project, the
subject of the above contract, will be entirely taken from the share of
Teresita R. Reyes de Leon bought by your son Vicente B. del Rosario per
Deed of Absolute Sale dated January 20, 1985, entered as Doc. 490,
page 98, Book 52, series of 1985 of the Notarial Registry of Notary Public
Carlito P. Valente;
2. THAT all proceeds in connection with the sale of the above mentioned
properties shall accrue in your favor only;71
Not to be brushed aside is the fact that from January 7, 1986 up to January 21, 2002,
or for a period of 16 years, respondent did not assail the Contract to Buy and Sell and
Agreement, nor demand the receivership thereof and for petitioner to pay rentals. In
the negotiations for the settlement of the controversy relative to said deeds, Vicente S.
del Rosario and the respondent negotiated with the petitioner. It was Vicente S. del
Rosario, not the respondent, who wrote John Osmeña, on July 8, 1986, rejecting the
latter’s proposal. It was Vicente S. del Rosario, not the respondent, who filed the
complaint against petitioner on January 22, 1987, for specific performance and/or
receivership of contract and agreement, docketed as Civil Case No. 7705. On October
16, 1991, it was Pantaleon U. del Rosario, not the respondent, who, acting as
attorney-in-fact of the heirs of Vicente S. del Rosario, who represented them before
the Office of City Mayor Tomas Osmeña for amicable settlement. There is no showing
in the records that petitioner ever recognized respondent to be the owner of the
properties subject of the Contract to Buy and Sell and the Agreement.
Moreover, the issue of who are the lawful owners of the property had yet to be
resolved with finality by the RTC in Civil Case No. 17230. We are not saying that the
Summary Judgment of the trial court is erroneous and that the petitioner’s appeal from
the decision of the trial court is correct. What we do rule and so declare is that the
RTC committed grave abuse of its discretion when it ordered execution pending
appeal based on the merits of its decision despite petitioner’s appeal, and considering
the contentions, factual and legal issues involved therein.
The trial court granted execution thereof pending appeal from the decision and
ordered the payment, by petitioner, of rentals for the property from January 7, 1986 up
to May 28, 2004 equivalent to the deposit in escrow including the interests earned, or
in the total amount of P7,858,073.27. The relevant portion of the RTC decision reads:
The court also believes that the payment of rentals is in keeping with the law against
unjust enrichment. It has noted that the defendant has been in possession and control
of subject lots for nineteen (19) years, thereby depriving the plaintiff not only of the use
of subject lots but also the income that could be derived therefrom. In addition,
defendant had destroyed the fishponds and salt beds when it constructed the buildings
and other civil works on subject lots. To compensate the plaintiff, the court believes
that the amount deposited by defendant in escrow with the Philippine National Bank
intended as purchase considerations of subject lots should be paid to the plaintiff as
rentals to include the interest earned from said deposit.72
Petitioner objected to respondent’s motion for execution on the ground that respondent
failed to present a shred of evidence to prove that the reasonable compensation by
way of rentals for the property from January 7, 1986 up to May 28, 2004,
was P2,156,040.00 plus interests of P7,858,073.27. Petitioner posited that there is no
showing in the decision how the trial court computed and arrived at the reasonable
compensation for the property. It was only in the September 6, 2004 Order of the RTC
granting the motion of respondent for execution pending appeal that the RTC
declared, for the first time, that the monthly rental of P45,786.85 or in the total amount IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the
of P9,846,760.27 was reasonable simply because the property is located in Cebu City. Court of Appeals is REVERSED and SET ASIDE. The assailed Orders of the Regional
Trial Court of Cebu City, Branch V, dated September 6, 2004 and October 26, 2004
denying petitioner’s Motion for Reconsideration, the Writ of Execution, the Amended
In the Decision, dated May 28, 2004, the court considered the fact that the subject real
Writ of Execution, and the Notice of Garnishment issued by the RTC, are SET ASIDE.
properties, consisting of eight (8) lots with a total area of 21,000 square meters or
Respondent Vicente B. Del Rosario is ORDERED to return to the Land Bank of the
more than two hectares, are in the absolute possession and control of defendants
Philippines, Independencia Branch, the amount of P9,864,760.27 and all other
since January 6, 1986 to the present on the basis of a stipulation in the contract of buy
amounts remitted to respondent by the LBP based on the Orders of the RTC within ten
and sell between herein parties that defendant would pay them in the amount of
(10) days from the finality of this Decision.
P2,156,040.00 placed in escrow deposit with the Philippine National Bank, Cebu City.
Until now or for a period of eighteen (18) years, the defendant has not paid a single
centavo to the plaintiff. So the court believes the defendant should pay reasonable SO ORDERED.
rentals to the plaintiff in keeping with the law against unjust enrichment, although the
plaintiff made an express waiver of its claim for damages.
ROMEO J. CALLEJO, SR.
Associate justice
In short, the forgoing facts are the "good reason" that the court considers in granting
the execution pending appeal.1âwphi1 Moreover, it could not be disputed that the
WE CONCUR:
eight (8) lots subject matter of the contract between the plaintiff and defendant City of
Cebu are located with the city proper of Cebu City, so the yearly rental
ofP547,042.237 which is only P45,586.85 a month, appears just and reasonable under ARTEMIO V. PANGANIBAN
the circumstances. Thus, the original amount in escrow deposit with PNB, Cebu City, Chief Justice
has now accumulated to P9,846,760.27 (as per addendum) to include the increments, Chairperson
which amount was already transferred to Land Bank of the Philippines, Banilad
Branch, Cebu City. The rentals should be taken from the aforesaid amount. 73
CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice Associate Justice
74
In Badillo v. Tayag,  the Court ruled that the fair rental value is the reasonable
compensation for the use and compensation of property. There is no hard and fast rule
in determining the reasonableness of rental for a property. However, the court ruled MINITA V. CHICO-NAZARIO
that a court may fix the reasonable rental but must still base its action on the evidence Associate Justice
adduced by the parties. It behooved respondent to prove his claim for entitlement to
reasonable rentals for the property. As the Court ruled in Josefa v. San CERTIFICATION
Buenaventura:75

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
In Asian Transmission Corporation v. Canlubang Sugar Estates, the Court ruled that conclusions in the above decision were reached in consultation before the case was
the reasonable compensation contemplated under said Rule partakes of the nature of assigned to the writer of the opinion of the Court’s Division.
actual damages. While the trial court may fix the reasonable amount of rent, it must
base its action on the evidence adduced by the parties. The Court also ruled that "fair
rental value is defined as the amount at which a willing lessee would pay and a willing ARTEMIO V. PANGANIBAN
lessor would receive for the use of a certain property, neither being under compulsion Chief Justice
and both parties having a reasonable knowledge of all facts, such as the extent,
character and utility of the property, sales and holding prices of similar land and the ***********************************
highest and best use of the property. The Court further held that the rental value refers
to "the value as ascertained by proof of what the property would rent or by evidence of
other facts from which the fair rental value may be determined."76 THIRD DIVISION
 
 
While location of the property may be considered in determining the reasonableness of MARIA SHEILA ALMIRA T. VIESCA,   G.R. No.  171698
rentals, other factors must be considered, such as (a) the prevailing rates in the                               Petitioner,  
vicinity; (b) use of the property; (c) inflation rate; and (d) testimonial evidence. 77   Present:
   
Petitioner maintained that, since respondent failed to adduce evidence to prove the fair   YNARES-SANTIAGO, J.,
rental as compensation for the property from 1986 to 2004, the RTC committed grave           Chairperson,
abuse of its discretion in granting execution pending appeal. -  versus  - AUSTRIA-MARTINEZ,
  CHICO-NAZARIO, and
  NACHURA, JJ.
Petitioner’s escrow account with the LBP was for the payment of the purchase price of    
the property, and under Contract to Buy and Sell and the Agreement, the said account    
would be remitted to the vendors only after delivery of clean titles over the property to DAVID GILINSKY,* Promulgated:
petitioner and only after compliance with COA regulations. However, the RTC ordered                               Respondent.  
that the proceeds of the escrow account be remitted to respondent as reasonable July 4, 2007
rentals for the property, and even without compliance with COA regulations. As x- - - - - - - - - - - - - - - - - - - - - - - - - - - - -  - - - - - - - - - - - - - - - - - - - - - -x
pointed out by petitioner, this is contrary to the terms and conditions of the Contract to  
Buy and Sell and Agreement. Even before the appeal of its decision had been  
resolved by the CA, the RTC already authorized the use of the deposit for a purpose
other than that intended by the parties to the deed.
DECISION
 
We note that in its Order dated March 17, 2004, the RTC declared that the case was  
submitted for decision only for the interpretation of the contract to buy and sell and not CHICO-NAZARIO, J.:
for damages, presumably because such claim must be supported by evidence.  
Indeed, the RTC declared that the case could not be submitted for summary judgment           This is a Petition for Review on Certiorari of the Decision[1] of the Court of
unless the respondent waived his claim for damages, 78 and the latter did waive his Appeals promulgated on 19 October 2005 in CA-G.R. SP No. 90285 which affirmed,
claim therefor and submitted the case for decision.79 Nevertheless, the trial court with modification, the Order dated 16 June 2005 rendered by the Regional Trial Court,
granted respondent’s claim for damages by way of rentals of the property and worse, Branch 136, Makati City, in Civil Case SP Proc. Case No. M-5785.
allowed execution pending appeal. It bears stressing that reasonable compensation or  
rental partakes of the nature of actual damages, and for a party to be entitled to actual           The facts of the case are as follows:
damages, he must adduce the best evidence obtainable.80  
          Petitioner and respondent, a Canadian citizen, met sometime in January 1999
at the Makati Shangri-La Hotel where the former worked as a hotel manager.  After a
few months, a relationship blossomed between the two.  On 22 October 2001, their
son Louis Maxwell was born.[2]  On 30 October 2001, respondent executed an Affidavit
of Acknowledgment/Admission of Paternity [3] of the child.  Subsequently, the Civil
Registrar of Makati City issued a Certification granting the change of Louis Maxwell’s
surname from “Viesca” to “Gilinsky.”[4]
          Unfortunately, the relationship between petitioner and respondent soured and
they parted ways during the early part of 2003.
 
          On 6 February 2004, respondent filed a Petition praying that he be entitled to
the company of Louis Maxwell at any time of any given day; he be entitled to enjoy the
company of Louis Maxwell during weekends and on such occasions the child shall be
allowed to spend the night with his father; and he be entitled to enjoy a yearly three-
week vacation in any destination with his child. [5]The case was raffled off to public
respondent’s sala and was docketed as SP Proc. Case No. No 5785.
          During the pendency of respondent’s petition, the parties arrived at a
compromise agreement.  This compromise agreement was submitted before the trial
court and became the basis of the Compromise Judgment issued on 12 May 2004.
[6]
  We reproduce the Compromise Judgment below–
 
COMPROMISE JUDGMENT
 
Acting on the joint motion to render judgment
based on Compromise Agreement and finding the allegations
therein to be of merit, same is hereby given due course.
            Judgment is therefore rendered based on the
compromise agreement which is quoted hereunder.
 
“COMPROMISE AGREEMENT
 
KNOW ALL MEN BY THESE PRESENTS:
 
            This Agreement entered this 22nd day of
April 2004 by and between:
DAVID GILINSKY, of legal age, single and residing at Suite 2828, Makati Shang-rila
Hotel, Ayala Avenue corner Makati Avenue,Makati City, hereinafter referred to as the
“FATHER”
 -and-
SHEILA T. VIESCA, of legal age, single and a resident of Lot 2, Block 39, Phase
5, Fort Bonifacio, Taguig, Metro Manila, hereinafter referred to as the “MOTHER”.
 
WITNESSETH:
 
WHEREAS, the parties are the biological parents
of minor LOUIS MAXWELL (the “CHILD”) born on 22 October
2001;
WHEREAS, as a result of disputes and
differences, the parties are now living separately and apart;
 
WHEREAS, the parties desire to provide for a
complete settlement of the issues pertaining to the custody,
visitorial rights, support and maintenance of the child;
 
WHEREAS, each party acknowledges his or her
personal obligations as parent of the child and, by these
presents, each hereby undertakes to render the performance
of these obligations to the child and comply with his or her
duties as a parent;
NOW, THEREFORE, for and in consideration of
the promises and dispositions made in this agreement, the
parties hereto have agreed as follows:
 
I.                    CUSTODY OF THE CHILD
 
The mother shall continue to have custody over
LOUIS MAXWELL while the father shall exercise visitorial
rights as hereunder stated.
Both parties, by these presents, undertake to
take every measure necessary, desirable and proper, to
consider the best interest of the child at all times, whether
with them or away from them.  Any act, word or manipulative
scheme that may cause the alienation of feelings or loss of
respect or that either one or both of them, from either one of
the parties, shall never be tolerated.
II.                 VISITATION RIGHTS
 
As the child will continue to be in the custody of
the mother, the father, as the non-custodial parent shall be
entitled to the following supervised visitation rights, to wit:
 
a. He shall be entitled to the company of the child every Saturday and/or
Sunday afternoon;
b.    b.  The child shall be allowed to spend the night with the father once a
week;
 c.         Nothing herein shall prevent the father from visiting the child during
reasonable hour in the afternoon of any day of the week at the mother’s residence in
the presence of the mother or her duly designated representative, and with prior notice
to the mother.
 One year after the signing of this agreement, the parties shall meet to discuss and
resolve the matter pertaining to the entitlement of the father to enjoy a yearly, three-
week vacation in any destination with the child.
In the exercise and/or enjoyment of the above
rights, the mother shall have the right to designate any person
of suitable age to accompany the child.
 
III.               SUPPORT
 a.                   The father shall give monthly financial support of US Dollars Five
Hundred (US$500.00) or its Peso equivalent within the first five days of the month
effective upon the signing of this agreement.  The amount shall be subject to such
yearly adjustment of such rate equal to the inflation rate determined by the appropriate
government agency.
 b.         On top of the said monthly financial support, the Father shall provide:
 i.          full medical and dental expenses and/or insurance coverage for the child;
 ii.            full education for the child at Colegio San Agustin, Makati or any other
suitable school;
 iii.                  college Education Insurance for the child;
iv.                 monthly car amortization of Ten Thousand Pesos (P10,000.00) or One
Fourth (1/4) of the current amortization whichever is lower;
 v.                   Monthly amortization due as of the date of this Agreement for the
Rockwell-Manansala Condominium unit until its full payment and transfer of title,
including its association dues and charges.  The mother here affirms/confirms she is
holding title to the condominium in trust for the child.
 The mother shall ensure that all arrears and/or outstanding obligations prior to the
execution of this agreement shall have been settled and paid.  As soon as the above
have been fully complied with, the father shall pay the ensuing monthly amortization.
IV.              COURT APPROVAL OF AGREEMENT
This agreement shall be governed by and
construed in accordance with the laws of the Republic of
the Philippines.  The parties hereto shall, in good faith, strictly
abide by the terms hereof.
 
The parties agree to submit this written
agreement for the court’s approval.
 
V.                 JUDICIAL RELIEF
 Should either one of the parties fail to comply
with the terms and conditions of this Agreement, the
aggrieved party may seek judicial relief against the erring
party and apply with the proper court for a writ of execution
against said erring party to enforce his or her obligations
imposed in this Agreement.  The offending party shall pay for
the cost of litigation, attorney’s fees, other expenses, and
interest incurred in such application for a writ of execution.
 
IN WITNESS WHEREOF, we have hereunto
affixed our respective signatures on the date and place
hereinabove mentioned.
 
 (SGD)  DAVID GILINSKY                            (SGD) SHEILA T.
VIESCA[7]
               Father                                                          Mother
 
 
          On 5 April 2005, respondent filed an “Urgent Motion for Issuance of Writ of
Execution.” It was alleged in said motion that petitioner had repeatedly refused to
abide by the terms of the compromise judgment, particularly the provision allowing
Louis Maxwell to spend a night with him at any day of the week. Respondent likewise
stated in his motion that he had already filed a Petition to cite petitioner in contempt
which was raffled off to the Regional Trial Court, Branch 59 of Makati City.[8]
 
          Respondent’s Urgent Motion for Issuance of Writ of Execution was scheduled to
be heard on 8 April 2005.  Notice thereof was received by petitioner’s counsel on 5
April 2005.[9]  On 7 April 2005, petitioner’s counsel filed a Manifestation [10] requesting
that the hearing on said motion be reset, as he had to be in Balanga, Bataan on the
date and time of the scheduled hearing.  He also prayed that he be given a period of
seven days within which to file his Comment/Opposition to respondent’s Urgent Motion
for Issuance of Writ of Execution.
 
          Despite petitioner’s Manifestation, the trial court still proceeded to hear
respondent’s urgent motion on 8 April 2005 and issued the Writ of Execution prayed
for by respondent.[11]
 
          On 9 April 2005, the court sheriff together with respondent tried to serve the Writ
of Execution upon petitioner at her residence in Taguig City.  Petitioner’s mother
informed the sheriff and respondent that petitioner was then at her office.  The sheriff
then asked petitioner’s mother to inform petitioner about the service of the Writ of
Execution.  After about half an hour, petitioner, her father, and her lawyer Atty. Jorge
Manuel arrived.  Atty. Manuel received the copy of the Writ of Execution but informed
the court sheriff that they would not comply with the court’s order and would challenge
the writ.[12]
 
          As expected, petitioner filed a Motion to Quash Writ of Execution [13] insisting that
said writ was issued with “indecent haste” violative of her right to due process, and that
the writ varied the terms of the Compromise Agreement since it failed to take into
consideration the parties’ understanding that in the enjoyment of respondent’s visitorial
rights, petitioner “shall have the right to designate any person of suitable age to
accompany the child.”[14]
          On 15 April 2005, petitioner’s Motion to Quash Writ of Execution was
heard.  What transpired during the hearing was summarized by the trial court in its
Order given in open court as follows:
 
The Court heard the arguments raised by the counsel for the
[herein petitioner] and the reply/comment thereto made by the
counsel for the [herein respondent].  The [herein petitioner]
thru counsel imposed certain conditions if ever the visitorial
rights of the [herein respondent] would be granted. Though
[herein petitioners] wished that those conditions be contained
in an affidavit, which to the mind of the court would only delay
the  resolution of the motion, the court thereupon ordered that
the statement of the petitioner be made orally but under oath,
thus, [herein respondent] was placed in the witness stand.
            Thereafter, the court ruled to deny the motion to
quash the writ of execution filed by [herein petitioner] thru
counsel for lack of merit and grant the prayer of the [herein
respondent] that he be allowed to exercise his visitorial rights
over the minor LUIS MAXWELL VIESCA today under the
conditions imposed by the [herein petitioner], some of which
are contained in the compromise agreement to which [herein
respondent] promised under oath to obey the same (sic).
            WHEREFORE, let the [herein respondent] DAVID
GILINSKY exercise his visitorial rights over the minor LUIS
MAXWELL VIESCA on the following conditions, to wit:
 
            1.         [Herein respondent] shall surrender to the
court his passport everytime he is with his child; and
 
            2.         [Herein respondent] shall not secure/apply
another passport (sic) for his son LUIS MAXWELL; and
            3.         [Herein petitioner] shall exercise her right to
designate any person of suitable age to accompany the child
whenever [herein respondent] would exercise his visitorial
right.
 
            [Herein Petitioner] is commanded to bring the minor
child LUIS MAXWELL VIESCA to court not later than 3:00
o’clock this afternoon, to be pick-up (sic) by the [herein
private respondent], upon the service of his order to the
[herein petitioner] by the sheriff of this court.
 
            Failure of the [herein petitioner] to comply with this
order shall be a ground for contempt of this court AND SHALL
BE DEALTH WITH SEVERELY.[15]
 
          In addition, petitioner alleges that in the course of argument between the parties
during this hearing, Judge Rebecca Mariano was not able to contain her bias against
petitioner when she reproved the latter’s “stubborn refusal” [16] to comply with the
Compromise Judgment.  Believing that Judge Mariano had shown her partiality in
favor of respondent, petitioner’s counsel moved in open court for her inhibition. [17]  To
this, Judge Mariano remarked:
 
  
COURT
 
ALRIGHT, before I inhibit myself, the MOTION TO QUASH is
DENIED and my position granting visitorial rights of the child
is GRANTED.[18]
 
          Subsequently, respondent filed a Manifestation with Motion to Withdraw Motion
for Temporary Relief of Support dated 25 April 2005[19]  to which petitioner filed her
Comment[20] as ordered by the trial court.  In their pleadings, the parties presented
disparate accounts of what transpired after the hearing on 15 April 2005.
 
          According to respondent –
 
             3.         At 3:00 o’clock p.m. of said afternoon, [herein
respondent], together with undersigned counsel, promptly went
to the court to await the arrival of his son, Louis Maxwell.
 
             4.         At or about 4:00 o’clock, This Court’s sheriff
informed undersigned counsel that he had just served a copy
of the order upon the adverse counsel.
             5.         Undersigned counsel immediately conferred
with Atty. E. Perez, [herein petitioner’s] counsel, to arrange the
implementation of the above-quoted Order.   Atty. Perez
informed undersigned of his client’s inability to comply with
the 3:00 o’clock mandate given that the Order was served to
her only at 3:25 p.m., to which the undersigned counsel
responded by saying that [herein petitioner] could still have
Louis Maxwell brought to court even after the designated time.
 
             6.         Despite the clear and unequivocal tenor of This
Court’s Order, Atty. Perez informed the undersigned counsel
that since [herein petitioner] was still at work, his client could
only bring the child at the lobby of Shangri-la hotel, Makati, at
around 8:00 o’clock p.m. of that day.
             Undersigned counsel immediately rejected the
proposed arrangement for the same does not only run counter
to the express mandate of This Court’s Order but more
importantly would deprive [respondent] of spending quality time
with his son – the raisaon d’etre of the stipulation in the
Compromise Agreement providing an overnight
stay.  Undersigned counsel, moreover, explained that 8:00
o’clock p.m. is unreasonable and oppressive, not for [herein
 respondent] but more for the child, as the proposed time is the
expected bedtime of three-year olds.
 
             The adverse counsel, however, remained insistent that
the child could only be brought by the [herein petitioner] at 8:00
o’clock p.m. and intimated that since the court order came as a
“surprise” and was served at past 3:00 p.m., [herein
respondent] should not expect [herein petitioner] to alter her
schedule at such short notice.
 
             The undersigned counsel finally relented to the 8:00
o’clock arrangement as it was clear that the adverse counsel
and [herein petitioner]
 was (sic) unaffected by [herein respondent’s] earnest desire to
spend quality time with his son.
 
             7.         Albeit the representation [herein petitioner’s]
counsel that his client committed to bring the child at 8:00
o’clock at Shangri-la, Makati, [herein petitioner] arrived at
past 9:00 o’clock p.m.  [Herein petitioner] not only brought the
child but likewise brought with her the child’s grandmother
(herein petitioner’s mother) and several of her friends.  And
instead of allowing only one person to act as guardian over
Louis Maxwell, [herein petitioner] insisted on having both
herself and her mother accompany Louis during his overnight
stay with [herein respondent].  [Herein respondent] had no
choice but to accede to such demand lest he be deprived once
more of the enjoyment of his right.
             x x x x
 
             10.       Furthermore, [herein petitioner] arrived at past
9 o’clock p.m. despite her undertaking that she will bring the
child to [herein respondent] at 8 o’clock p.m.; [herein petitioner]
also imposed on two guardians: herself and her mother,
instead of only one guardian, as provided in the Compromise
Judgment; The child was not allowed by [herein petitioner] to
sleep in [herein respondent’s] room and was made to sleep in
her separate room with her mother; finally, on the argument
that overnight stay simply means sleeping over, [herein
petitioner] left with Louis and her mother at 6 o’clock in the
morning of 16 April 2005.[21]
                   
          On the other hand, petitioner countered –
“4.        It is clear therefore that there was nothing in the oral
argument nor in the Order given in open court that the child
was supposed to be brought to Court at 3:00 p.m. that same
day to accommodate [herein respondent’s] request for
visitorial rights.  Neither is there mention of the specific time in
the Compromise Judgment.  It appears that it was [herein
respondent] who had prior notice or advanced information as
to the contents of the Order from his Manifestation that –
            “3. At 3:00 o’clock p.m. of
said afternoon, [herein respondent],
together with undersigned counsel,
promptly went to the court to await
the arrival of his son, Louis Maxwell.”
 
            “5.  Undersigned counsel received a copy of the Order
dated 15 April 2005 only at 4:15 p.m. of that same day,
hence, it was impossible for [herein petitioner] to comply with
Order commanding her to bring the child “to court not later
than 3:00 o’clock this afternoon.” Be that as it may, counsel
immediately got in touch with [herein petitioner] to advise her
to comply with the Order but [herein petitioner] stated she
could not leave her office immediately because of prior
commitment and instead suggested that she would bring the
child to [herein respondent] Shangrila Hotel resident in the
evening.  Hereon counsel relayed the information/suggestion
to [herein respondent’s] counsel and after a series of calls, an
arrangement was made for the evening.  What actually
happened that evening, the parties had different accounts.
 
6.                   [Herein petitioner]
maintains that –
a.         She arrived late at little past 9:00 o’clock because of
heavy traffic.  It was a Friday, pay day and last day for income
tax payment.
 
b.         [Herein respondent] conveniently failed to mention
that when [herein petitioner] arrived with the child Louis
Maxwell at the hotel lobby, they were met by [herein
respondent] together with three (3) Manulife insurance agents
and a physician.  [Herein respondent] and the insurance men
tried almost to coercion to convince [herein petitioner] to
agree that the child be subjected to medical examination that
night so that [herein respondent] could secure a multimillion
insurance policy for the child with David Gilinsky as the sole
beneficiary.  [Herein petitioner] naturally did not
agree. [Herein petitioner] does not want to speculate but the
circumstances, time and manner of taking the policy appears
to be dubious.  The fact remains that whatever desire of
[herein respondent] to spend quality time with the child was
clouded when he allowed these insurance men to get in the
way when they should not be there in the first place.[22]
 
 
          On 26 April 2005, petitioner filed an “Ex-Parte Reiterative Motion to Inhibit”
claiming that Judge Mariano could no longer handle the case “with the cold neutrality
of an impartial judge”[23] because of her statement pertaining to petitioner’s failure to
abide by the Compromise Judgment. Respondent filed his opposition thereto, arguing
that Judge Mariano’s remark was merely based on her observation of petitioner’s
behavior and attitude during the proceedings of this case.[24]
          On 17 May 2005, respondent once more filed a Motion for the Issuance of a
Writ of Execution, contending that petitioner had repeatedly failed to comply with their
agreement as regards his visitorial rights over Louis Maxwell.  Respondent claimed
that petitioner relied on the fact that as the Compromise Judgment did not state the
time when Louis Maxwell should be in his company, she had insisted on an 8:00
o’clock p.m. to 6:00 o’clock a.m. schedule.  Respondent also lamented petitioner’s
habit of reneging, at the last minute, on their agreements over Louis Maxwell’s
weekend visits with him and petitioner’s insistence that two guardians accompany
Louis Maxwell during his overnight stays.[25]  Thus, respondent prayed for the following:
 
a.                   To command [herein petitioner] to
bring the child to either This Court or to the [herein
respondent’s] residence not later than 3:00 p.m. of 20 May
2005 and for the child to be allowed to leave the company of
the [herein respondent] at 4:00 p.m. of 21 May 2005; and
b.                   To direct the [herein petitioner] pay
(sic) the amount of P295,000.00, as and by way of attorney’s
fees.
 
 
Other relief just and equitable under the
circumstances are likewise  prayed for.[26]
 
          In her Comment,[27] petitioner asserted that Judge Mariano should no longer rule
on respondent’s motion, since there was a pending motion for her to inhibit.  She
likewise took the opportunity to refute respondent’s allegations with regard to her
purported failure to observe the terms of the Compromise Judgment.  Petitioner
claimed that on 14 May 2005, Louis Maxwell fell sick and so she was unable to bring
him to private respondent.  In fact, petitioner’s counsel even sent a letter dated 16 May
2005 to respondent’s lawyer explaining her “version of the story.” [28]   She also posed
objection to respondent’s plea that Louis Maxwell be brought either to the trial court or
to him since the child was still sick, and taking him out of the house would only worsen
his condition. Moreover, petitioner argued that to grant respondent’s prayer would
contravene the provisions of the Compromise Judgment under which his entitlement to
the company of his son every weekend is a separate and distinct term from his right to
spend a night with the child.  She also claimed that as agreed upon, respondent
should be the one to pick up the child and to return him to her.  Finally, petitioner
assailed respondent’s prayer for attorney’s fees for lack of basis.
         
          Meanwhile, Judge Mariano issued an Order dated 16 May 2005, directing the
parties to attend an in-chamber conference on 20 May 2005 relative to respondent’s
Motion to Withdraw Support and petitioner’s Ex-Parte Reiterative Motion to Inhibit. [29]
 
          In respondent’s Comment to the present Petition, it is claimed that the following
terms were agreed upon by the parties during the in-chamber conference held on 20
May 2005:
 a.                  The respective counsels of each party will meet
on 26 May 2005 to agree on the time frame for
the sleepover provision;
 
b.                 Pending the conclusion of the agreement, the
child will be fetched from the Petitioner’s
residence at 6 o’clock p.m. and will be brought
back at 9 o’clock a.m. the following day, effective
May 20-21 and May 27-28.
c.                  Private Respondent is to surrender his passport
during these visits.
 
d.                 Petitioner’s mother will act as the designated
guardian; and
 
e.                  The withdrawal of the parties’ respective
motions, i.e., Petitioner’s Reiterative Motion to
Inhibit and Motion to Withdraw Support.[30]
 
The 20-21 May 2005 sleepover proceeded as scheduled.[31]  However,
discord between the parties resurfaced when respondent was unable to spend time
with Louis Maxwell on 27-28 May 2005.  It appears that petitioner’s mother, who was
the designated accompanying guardian, got sick and because of this, respondent did
not enjoy the company of his son.  Once more, respondent sought the trial court’s
intervention through his Very Urgent Motion to Enforce and Enjoy Visitorial Rights
dated 30 May 2005.[32]  Respondent averred therein that on 27 May 2005, he sent his
driver to fetch Louis Maxwell and his maternal grandmother pursuant to the agreement
forged on 20 May 2005.  When his driver reached petitioner’s residence, he was
informed that Louis Maxwell and his grandmother could not go with him, as the
grandmother was allegedly sick.  Respondent claimed that Louis Maxwell’s
grandmother was merely feigning sickness since she refused his offer to get medical
help.  Besides, had petitioner really intended to abide by their agreement, respondent
argued that she could have appointed one of her brothers or her sister to accompany
Louis Maxwell during his sleepover.  Thus, respondent concluded that the totality of
petitioner's conduct unmasked her lack of interest in observing the Compromise
Judgment, particularly Clause II thereof.  He therefore prayed for the following reliefs:
 
a)          To allow (him) to have the company of his son
on Wednesday, June 1, 2005, beginning 6:00
p.m. up to 9:00 a.m. of the following day.  For this
purpose, for this Court to further allow (him) to
fetch his son at [herein petitioner’s] residence and
bring him back at [herein petitioner’s] abode not
later than 9:00 a.m. of the following day.
b)          To designate the hours of 6:00 p.m. of any given
Friday to 9:00 a.m. of the following day, as the
regular day and hours at which the [herein
respondent] can enjoy the company of his son
pursuant to Clause II of the Compromise
Judgment dated May 12, 2004.
c)          To designate the Court Sheriff and/or any other court
officer to act as the accompanying guardian of
Louis Maxwell Viesca Gilinsky during the
implementation of the prayed for relief under
paragraph (a) hereof and of the sleep-over
provision mentioned in Clause II of the
Compromise Judgment.
d)          To command [herein petitioner] to pay the amount of
Thirty Thousand Pesos (P30,000.00), as and by
way of cost of litigation, attorney’s fees and other
expenses pursuant to Clause V of the
Compromise Judgment.
 
Just and equitable reliefs prayed for under the circumstances.
[33]
 
          Respondent requested that his Very Urgent Motion to Enforce and Enjoy
Visitorial Rights be heard on 1 June 2005 notwithstanding the three-day notice rule
required under the Revised Rules of Civil Procedure, as he was about to go on a two-
week business trip on 3 June 2005.
 
          Petitioner posed her objection to respondent’s motion, as it violated the three-
day notice rule.  She also denied that the 27 May 2005 incident was her fault as her
mother was really not feeling well that day.  She denounced respondent’s fixation over
the cancellation of Louis Maxwell’s sleepover that night, in total disregard of the fact
that the 20 May 2005 scheduled sleepover pushed through as agreed upon.  She
claimed that she did not have any reason to deprive respondent of his rights under the
Compromise Judgment, and so there was no need for respondent to file his Very
Urgent Motion to Enforce and Enjoy Visitorial Rights. [34]
 
          On 1 June 2005, Judge Mariano rendered the following Order:
 
ORDER
            Set for today’s hearing is the Very Urgent Motion to
Enforce and Enjoy Visitorial Rights filed by the [herein
respondent] and the Comment thereto filed by the [herein
petitioner].  The Court heard the arguments between the
parties accusing each other of violation of the compromise
agreement.
 
The [herein respondent] wanted to present
testimonial evidence to prove his allegation in the motion but
which was denied by the Court for lack of material time.
 
The Court likewise reminded the parties the fact
that the [herein respondent] surrenders his passport
everytime he exercises his visitorial right was voluntary on his
part and not as part of the compromise agreement.
 
WHEREFORE, the court ruled that the [herein
respondent] can exercise his visitorial right today at 6:00
o’clock in the evening to be accompanied by the sheriff of this
court.  If the [herein petitioner] is not available nor the
grandmother to accompany the minor child, the court
instructed the [herein petitioner] to appoint another person
who can accompany the child so as not to avoid any delay in
fetching the minor child. Likewise the motion was reset to July
1, 2005, at 10:30 o’clock in the morning.
 
Considering that the very urgent motion filed by
the [herein respondent] was commented or objected to by the
[herein petitioner’s] counsel, let the [herein respondent], thru
counsel file a reply within five (5) days from receipt of this
Order and the [herein petitioner] is given the same period of
time from receipt of the reply within which to file a rejoinder, if
she so desires.
 
SO ORDERED.
Given in open court, this 1st day of June 2005,
at Makati City.
 
 
 REBECCA R. MARIANO
           Judge[35]
 
          On 16 June 2005, Judge Mariano proceeded to resolve respondent’s very
urgent motion in the following manner:
  
ORDER
            Before the Court is the Very Urgent Motion to Enforce
and Enjoy Visitorial Rights filed by the [herein respondent]
thru counsel, alleging among others, that [herein petitioner]
had once again proven herself to be unfaithful to her
promises and representations, citing the incident which
happened on 27 May 2005, the scheduled meeting of the
[herein respondent] and his son.  On the said date, [herein
petitioner’s] grandmother (sic) became sick, however, the
latter refused the offer of the petitioner to get medical
help.  Said alleged illness became more doubtful when the
grandmother insisted on being well enough to push through
with the visitation but at 9:00 o’clock in the evening instead
of 6:00 o’clock  in the evening, as previously agreed upon by
the parties.
 
On the Comment filed by the [herein petitioner],
she stated that the present motion should be denied because
 it violates the three-day notice rule and there is no good
cause to set the hearing on shorter notice.
 
We shall now rule on the motion.
 
Under Section 4, Rule 15 of the Revised Rules of
Court and following the pronouncements by the High Court in
the cases of Cledera, et al. vs. Sarmiento, et al 39 SCRA 552;
Estipora vs. Navarro, 69 SCRA 285, the motion under
consideration should have been dismissed ourtright, however,
the above-cited provision or the so-called three-day notice
rule is not absolute.  Like any other rule, it admits of
exception, i.e. urgent motions (Remedial Law Compendium,
Vol. 1, Regalado).  Moreover, in the interest of substantial
justice, this Court finds it imperative and necessary to brush-
aside any technicality since the issue involved herein is
basically the natural right of a father to enjoy the company
and presence of his beloved son.  To the mind of the Court,
the best and most applicable law in cases of this nature is the
conscience of untroubled and unprejudiced majesty.  Finally,
the right of custody accorded to parents’ springs from the
exercise of parental authority (Santos Sr. vs. Court of
Appeals, 242 SCRA 407).  Hence, the motion under
consideration is hereby given due course.
 
Accordingly, [herein petitioner] is ordered to
perform the following, to wit:
 
1.                  Allow [herein respondent] to enjoy the company
of Louis Maxwell on 24 June 2005 and on every
Friday of each week starting from 6:00 pm to
9:00 am of the following day, pursuant to Clause
II of the compromise Judgment dated 12 May
2004;
2.                 The Deputy Sheriff of this court is hereby
designated to act as the accompanying guardian
of Louis Maxwell Viesca Gilinsky during the
implementation of the prayed for relief under
paragraph 1 hereof;
 
3.                 Pay the [herein respondent] the amount of
Thirty-Thousand Pesos         (Php 30,000.00), as and by way
of cost of litigation, attorney’s fees            and other
expenses pursuant to Clause V of the
Compromise    Agreement.
As regards the prayer under paragraph (a) of the
motion, the same is denied for being moot and academic.
 
SO ORDERED.
 
Given in Chambers this 16th June
2005, Makati City.
 
REBECCA R. MARIANO    already commenced.[44]  A compromise agreement that is intended to resolve a matter
  Judge[36]
 
 
          During the hearing on 1 July 2005, it was clarified that the Deputy Sheriff would
act as accompanying guardian of Louis Maxwell only in case of the unavailability of
petitioner or her failure to designate the child’s overnight companion. [37]
 
          Aggrieved, petitioner elevated the case via Petition for Certiorari and
Prohibition  before the Court of Appeals seeking the reversal and setting aside of the
16 June 2005 Order of the trial court as well as its Orders dated 1 June 2005 and 8
April 2005.[38]
 
          In her petition with the Court of Appeals, petitioner contended that the assailed
Order dated 16 June 2005 altered or amended the Compromise Judgment.  She
asserted that by approving respondent’s prayer that he be given the right to enjoy
Louis Maxwell’s company “every Friday of each week starting from 6:00 p.m. to 9:00
a.m. of the following day,” Judge Mariano altered Clause II(b) of the Compromise
Judgment which states that “(t)he child shall be allowed to spend the night with the
father once a week.” As the Compromise Judgment did not specifically provide for the
day and time of the week when Louis Maxwell should be in the company of
respondent, the trial court exceeded its jurisdiction when it rendered its 16 June
2005 Order.  In addition, she contends that by designating the Deputy Sheriff of the
court to act as the accompanying guardian of the child during the latter’s sleepovers,
the trial court again disregarded the terms of the Compromise Judgment with respect
to the appointment of Louis Maxwell’s guardian whenever he visits with
respondent.  These alterations, petitioner argues, should not be permitted since a
compromise agreement, once it was approved by the court, has the force of res
judicata  between the parties and should not be disturbed except for vices of consent
or forgery.[39]  The court is not allowed to impose a judgment different from the terms of
the agreement.[40]
 
Petitioner also insisted that Judge Mariano should desist from further
hearing the case below.
 
          On 19 October 2005, the Court of Appeals partially granted the petition by
deleting the award of P30,000.00 that the trial court awarded to private respondent in
its Order of 16 June 2005. The dispositive portion of the Decision of the Court of
Appeals states:
 
            WHEREFORE, the petition is PARTIALLY GRANTED
in that the Order dated June 16, 2005 is MODIFIED.  The
award of Thirty Thousand Pesos (Php30,000.00), as and by
way of litigation cost, attorney’s fees and other expenses
pursuant to clause V of the Compromise Judgment in favor of
private respondent is DELETED.[41]
 
           
          Petitioner’s Motion for Reconsideration was denied in the Resolution
promulgated on 24 February 2006.[42]
 
          Hence, the present recourse raising the following issues for our consideration:
WITH ALL DUE RESPECT, THE COURT OF APPEALS
ERRED IN DECIDING A QUESTION  OF LAW, NOT
THERETOFORE DETERMINED BY THIS HONORABLE
COURT, AND/OR DECIDING IT IN A WAY NOT IN ACCORD
WITH LAW OR WITH APPLICABLE DECISIONS OF THIS
HONORABLE COURT CONSIDERING THAT-
 
A.                 THE TRIAL COURT AMENDED OR ALTERED THE TERMS OF THE
COMPROMISE JUDGMENT WITHOUT THE CONCURRENCE OF BOTH PARTIES
THERETO.
B.                  RESPONDENT JUDGE ISSUED THE ASSAILED ORDER AMENDING
THE COMPROMISE JUDGMENT IN HASTE AND WITHOUT EVIDENTIARY
SUPPORT AS IT WAS ISSUED WITHOUT WAITING FOR THE SCHEDULED
HEARING OF THE MOTION FILED BY PRIVATE RESPONDENT AND DESPITE
THE PENDING MOTION TO INHIBIT.[43]
 The petition is partly meritorious.
A compromise agreement has been described as a contract whereby the
parties, by making reciprocal concessions, avoid a litigation or put an end to one
already under litigation is normally called a judicial compromise.  Once it is stamped
with judicial imprimatur, it becomes more than a mere contract binding upon the
parties. Having the sanction of the court and entered as its determination of the
controversy, it has the force and effect of any other judgment. [45] Such agreement has
the force of law and is conclusive between the parties.  It transcends its identity as a
mere contract binding only upon the parties thereto, for it becomes a judgment that is
subject to execution in accordance with the Rules. [46]  Thus, a compromise agreement
that has been made and duly approved by the court attains the effect and authority
of res judicata, although no execution may be issued unless the agreement receives
the approval of the court where the litigation is pending and compliance with the terms
of the agreement is decreed.[47]
 
The settlement of disputes brought before the courts is encouraged.  In
fact, in the Civil Code and in the Revised Rules of Court, courts are directed to
persuade the litigants in civil cases to agree upon some fair compromise.[48] 
 
Unfortunately in the case before us, the compromise agreement entered
into between the parties fell way short of its objective of finally putting an end to their
dispute.  The sheer number of incidents which cropped up shortly after the trial court’s
approval of the compromise agreement reveals that the compromise judgment failed
to bring peace to the parties.  Interestingly enough, the only points of disagreement
are Clause II(b) of the Compromise Judgment which pertains to the overnight visits
of  Louis Maxwell with respondent and the last paragraph of the same clause
regarding the appointment of the child’s accompanying guardian.
 
Clause II(b) states that “(t)he child shall be allowed to spend the night with
the father once a week.”  The sentence seems simple enough to be understood by a
layman.  Petitioner claims that the parties did not specify the day and time of the week
when private respondent could enjoy the overnight company of Louis Maxwell in order
to give the parties “some flexibility” and to give them the opportunity to arrange the
schedule themselves.[49]  But the parties have overstretched the indeterminate
language of said provision.  Indeed, the parties have been at odds over the
interpretation and implementation of this plain provision of the Compromise Judgment
and this could have caused much confusion in the mind of the young Louis Maxwell
who had to be brought from one place to another at such unholy hours of the night
only to be awakened from deep slumber in the early hours of the morning to be taken
to another place.  And yet, all of these could have been avoided had the parties opted
to be more specific in their agreement.  The question thus becomes:  can the trial
court modify, by motion of one of the parties, a Compromise Judgment? We hold in
the negative.
 
To reiterate, a compromise judgment has the force of res
judicata  between the parties and should not be disturbed except for vices of consent
or forgery[50] which private respondent does not allege in this case.
 
More importantly and as correctly pointed out by petitioner, it is settled
that neither the courts nor quasi-judicial bodies can impose upon the parties a
judgment different from their compromise agreement or against the very terms and
conditions of their agreement [51] without contravening the universally established
principle that a contract is the law between the parties. [52]  The courts can only approve
the agreement of parties.  They can not make a contract for them.[53]
 
Nevertheless, we cannot totally blame the trial court for having granted
respondent’s Very Urgent Motion to Enforce and Enjoy Visitorial Rights.  Perhaps, in
its desire to finally put to rest the bothersome issue concerning Clause II(b) of the
Compromise Judgment and to prevent future disagreements between the parties, the
trial court saw the wisdom, as this Court does, in providing the specifics in the said
indefinite portion of the Compromise Judgment.  As we previously held in the case
of Hernandez v. Colayco[54] –
 
            This is not the first unfortunate instance that a
compromise judgment of a trial court has given rise to
subsequent prolonged controversy, only because the trial
judge failed to exercise the required degree of care in seeing
to it that neither ambiguity nor incompleteness of details
should characterize the agreement, much less the judgment
rendered on the basis thereof.  The expressed desire of the
parties to end their judicial travails by submitting to a
compromise deserves the utmost attention from the court,
and no effort should be spared in helping them arrive at a
definite and unequivocal termination of their problems and
differences.  It is high time that the matter-of-fact treatment
usually accorded by trial courts to motions to approve
compromises were abandoned in favor of the more positive
activist attitude the situation demands.  In acting in such a
situation, the judge should bear in mind that the objective is to
end the disagreement between the parties, not to begin a new
one.  Thus, if the parties and their counsel are unable to do it,
the judge is expected to assist them in attaining precision and
accuracy of language that would more or less make it certain
that any disputes as to the matters being settled would not
recur, much less give rise to a new controversy.  (Emphasis
supplied.)
          Resultantly, a remand of this case is necessary to allow the parties themselves
to resolve the matter regarding the implementation of Clause II(b) of the Compromise
Judgment.  In this regard, the rule on immutability for purposes of execution does not
attach to a judgment that is materially equivocal or which suffers from either patent or
latent ambiguity.[55]  To obviate further discord between them and to preclude their
recourse to the trial court every time one of them perceives a violation committed by
the other of Clause II(b) of the Compromise Judgment, we direct the trial court to be
on guard and ensure that the parties would lay out in concrete, specific details the
terms of their agreement as to this specific matter as well of the appointment of Louis
Maxwell’s accompanying guardian.
          Turning now to the question of whether Judge Mariano should inhibit herself
from the case, we rule in favor of respondent. 
           The pertinent provision of Rule 137, Section 1, of the Revised Rules of Court
states:
 
            SECTION 1.  Disqualification of judges. – No judge or
judicial officer shall sit in any case in which he, or his wife or
child, is pecuniarily interested as heir, legatee, creditor or
otherwise, or in which he is related to either party within the
sixth degree of consanguinity or affinity, or to counsel within
the fourth degree, computed according to the rules of the civil
law, or in which he has been executor, administrator,
guardian, trustee or counsel, or in which he has presided in
any inferior court when his ruling or decision is the subject of
review, without the written consent of all parties in interest,
signed by them and entered upon the record.
 
            A judge may, in the exercise of his sound discretion
disqualify himself from sitting in a case, for just or valid
reasons other than those mentioned above. (Emphasis
supplied).
 
          This Court has ruled that to disqualify or not to disqualify is a matter of
conscience and is addressed primarily to the sense of fairness and justice of the judge
concerned.[56]  Said discretion is granted to judges, since they are in the better position
to determine the issue of voluntary inhibition, as they are the ones who directly deal
with the parties in their courtrooms. [57]  The test that must be applied in questions
involving the propriety of the denial of a motion to inhibit is whether the movant was
deprived of a fair and impartial trial.[58]  In this case, we hold that petitioner was not
deprived of her day in court, for she was able to file her comments on and/or
objections to the motions filed by private respondent.  She, therefore, was able to
ventilate her positions on the issues brought before the trial court.
 
          As regards Judge Mariano’s remark regarding petitioner’s obstinacy, we agree
with private respondent that the same is not a sufficient ground for public respondent
to inhibit herself.  Indeed, “(o)pinions formed in the course of judicial proceedings, as
long as they are based on the evidence presented and conduct observed by the
judge, even if found later on to be erroneous, do not prove personal bias or prejudice
on the part of the judge.” [59]  Moreover, a single comment uttered by the public
respondent in the course of the proceedings should not be taken to be generally
illustrative of her conduct in hearing and determining the outcome of the entire case.
Such isolated remark should not be taken to mean that public respondent has crossed
the line separating cold impartiality from unbridled bias.
 
          WHEREFORE, premises considered, the present Petition is PARTIALLY
GRANTED.  The Decision of the Court of Appeals in CA-G.R. SP No. 90285 dated 19
October 2005, is hereby REVERSED and SET ASIDE insofar as it affirmed the Order
dated 16 June 2005 of the RTC, Branch 136, Makati City in SP Proc. Case No. M-
5785, amending Clause II(b) of the Compromise Judgment and the last paragraph of
Clause II.  Petitioner’s prayer, however, that Judge Rebecca Mariano of the RTC,
Branch 136, Makati City, be directed to inhibit herself from hearing said case
is DENIED. 
 
          Judge Mariano is ordered to hold further proceedings to allow the parties to
agree SPECIFICALLY and DEFINITIVELYon how the overnight visits of Louis
Maxwell with respondent and the appointment of said child’s accompanying guardian
would be implemented within ten (10) days from receipt hereof.  No costs.
 
          SO ORDERED.
 
 
  MINITA V. CHICO-NAZARIO
Associate Justice
 
 
 
WE CONCUR:
 
 
CONSUELO YNARES-SANTIAGO
Associate Justice    
Chairperson
 
 
      MA. ALICIA AUSTRIA-MARTINEZ      ANTONIO EDUARDO B. NACHURA
                  Associate Justice                                         Associate Justice  
                                                                                                                                         
ATTESTATION
          I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s Division.
 
                                                            CONSUELO YNARES-SANTIAGO
                                                                              Associate Justice
                                                                     Chairperson, Third Division
 
 
 
CERTIFICATION
 
          Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairperson’s Attestation, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
 
 
 
REYNATO S. PUNO
                                                                                  Chief
Justice                                        respondent Planters Products, Inc. whereby he agreed to purchase, in cash or credit,
*              In the Petition for Review as filed before this Court on 17 March 2006,
petitioner impleaded Judge Rebecca R. Mariano of the Regional Trial
Court, Branch 136, Makati City.  Such should not have been the case
since Section 4 of Rule 45 of the Revised Rules of Court provides:
                                SEC. 4. – Contents of  petition. – The petition shall be filed in
eighteen (18) copies, with the original copy intended for the court being
indicated as such by the petitioner, and shall (a) state the full name of the
appealing party as the petitioner and the adverse party as
respondent, without impleading the lower courts or judges thereof either
as petitioners or respondents; (b) indicate the material dates showing
when notice of the judgment or final order or resolution subject thereof
was received, when a motion for new trial or reconsideration, if any, was
filed and when notice of the denial thereof was received; (c) set forth
concisely a statement of the matters involved, and the reasons or
arguments relied on for the allowance of the petition; (d) be accompanied
by a clearly legible duplicate original, or a certified true copy of the
judgment or final order or resolution certified by the clerk of court of the
court a quo and the requisite number of plain copies thereof, and such
material portions of the record as would support the petition; and (e)
contain a sworn certification against forum shopping as provided in the
             Rollo,  p. 265 citing Articles 2037 and 2038 of the Civil Code which
[39]
respectively provide:
Art. 2037.  A compromise has upon the parties the effect and
authority of res judicata; but there shall be no execution except in
compliance with a judicial compromise.         
Art. 2038.  A compromise in which there is mistake, fraud,
violence, intimidation, undue influence, or falsity of documents, is subject
to the provisions of article 1330 of this Code.
However, one of the parties cannot set up a mistake of fact as
against the other if the latter, by virtue of the compromise, has withdrawn
from a litigation already commenced.
[48]
             Art. 2029, Civil Code:
                                The Court shall endeavor to persuade the litigants in a civil case
to agree upon some fair compromise.
                 Rule 18, Section 2(a) of the Revised Rules of Court:
                 Sec. 2.    Nature and purpose. – xxx.
(a)  The possibility of an amicable settlement or of a
submission to alternative modes
of               dispute  resolutions.  (Emphasis supplied)
**********************8
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 149053             March 7, 2007
CENTRAL SURETY AND INSURANCE COMPANY, Petitioner, 
vs.
PLANTERS PRODUCTS, INC., Respondent.
DECISION
CORONA, J.:
This appeal on certiorari under Rule 45 of the Rules of Court hinges on a pure
question of law, that is, whether execution of judgment can be ordered by mere motion
despite the lapse of five years from entry of judgment.
The antecedent facts follow.
Sometime in 1977, Ernesto Olson entered into a dealership agreement with
fertilizers and agricultural chemicals from respondent for resale. To secure Olson’s
faithful compliance of his obligations, Vista Surety and Insurance, Co. (Vista
Insurance) and petitioner executed a surety undertaking in favor of respondent.
After several deliveries, Olson failed to pay respondent prompting the latter to claim
the amount due from petitioner and Vista Insurance. However, both refused to settle
their liabilities to respondent as Olson’s sureties.
On June 25, 1979, respondent filed an action for collection of sum of money 1 against
Olson, Vista Insurance and petitioner in the Regional Trial Court (RTC) of Makati,
Branch 58. Summons were accordingly served (except as to Olson whose address
could not be located).
In a decision2 dated November 6, 1991, the trial court found petitioner and Vista
Insurance liable to respondent. They were ordered to pay the following: (1) P372,502
representing the unpaid principal amount plus interest; (2) 25% of the total amount
recoverable as attorney’s fees and (3) cost of suit.
Petitioner alone appealed to the Court of Appeals (CA). On December 7, 1992, the CA
dismissed petitioner’s appeal for failure to pay the required docket fees. 3 On March 12,
1993, the dismissal of petitioner’s appeal became final and executory; entry of
judgment followed on May 27, 1993.4
On October 12, 1993, respondent filed in the RTC a motion for execution of judgment
following the CA’s dismissal of petitioner’s appeal.5 The RTC issued the writ on
October 21, 1993.6 The writ, however, was not implemented so respondent filed an ex
parte motion for the issuance of an alias writ of execution which the trial court granted
on February 24, 1994.
In the CA, petitioner filed a "Very Urgent Motion to Set Aside the CA Resolution of
December 7, 1992 and to Re-Open Appeal with Prayer for Preliminary
Injunction/Temporary Restraining Order."7 On March 3, 1994, the appellate court
issued a resolution restraining the RTC judge and the deputy sheriff from enforcing the
writ but, on motion of respondent, the CA lifted the TRO and dismissed petitioner’s
urgent motion on March 24, 1994.8
Through a petition for certiorari under Rule 65 of the Rules of Court, petitioner
elevated the CA’s dismissal of its urgent motion to this Court. In its petition, petitioner
argued that it failed to pay the docket fees only because the CA’s judicial records
division did not "re-send" the notice for it to pay said fees. On July 11, 1994, we
dismissed the petition9 and this dismissal became final on September 14, 1994.10
On June 18, 1999 or 6 years from the entry of judgment of the RTC’s
decision,11 respondent filed another motion for issuance of alias writ of execution in the
trial court.12 On August 20, 1999, the trial court issued an order granting the writ.
Petitioner filed an MR of said order but the RTC denied it.
Triple costs against petitioner whose counsel is hereby warned of severe disciplinary
sanctions for any further attempt to delay the final disposition of this case.
SO ORDERED.

Petitioner thereafter went to the CA via a special civil action for certiorari under Rule
RENATO C. CORONA
65 of the Rules ascribing grave abuse of discretion on the part of the RTC judge for
Associate Justice
issuing the writ despite the fact that more than five years had elapsed since the RTC’s
decision of November 6, 1991 became final and executory. Invoking Rule 39, Section
6 of the Rules, petitioner insisted that the RTC decision could no longer be enforced WE CONCUR:
by mere motion but only by court action.
REYNATO S. PUNO
The CA dismissed the petition for patent lack of merit.13 It held that: Chief Justice
Chairperson
While it is true that the judgment sought to be executed became final and executory on
March 12, 1993, it bears stressing that the delay was caused by petitioner’s dilatory ANGELINA SANDOVAL-GUTIERREZ ADOLFO S. AZCUNA
maneuvers filed in this Court and all the way to the Supreme Court, viz: the Very Associate Justice Asscociate Justice
Urgent Motion to Set Aside Resolution of December 7, 1992 and to Re-Open the
Appeal with Prayer for Preliminary Injunction/Temporary Restraining Order which
resulted in the issuance of the Court of Appeals Resolution dated March 3, 1994 CANCIO C. GARCIA
enjoining respondents from enforcing the subject decision; the Motion for Associate Justice
Reconsideration of [the] Court of Appeals Resolution dated March 24, 1994; and
Petition for Certiorari before the Supreme Court which was ultimately dismissed by the CERTIFICATION
High Court on July 11, 1994.

xxx xxx xxx
WHEREFORE, for patent lack of merit, the petition is DISMISSED pursuant to Rule
65, [S]ec. 8[,] 2nd par.[,] Rules of Civil Procedure.
Petitioner filed an MR but this was likewise denied by the CA.14 Hence, this petition.
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in
the above decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice

The only relevant issue for our resolution is whether the execution of a final judgment
15
 SEC. 6. Execution by mere motion or by independent action. ― A final and
may be made by mere motion despite the lapse of five years. executory judgment or order may be executed on motion within five (5) years from the
date of its entry. After the lapse of such time, and before it is barred by the statute of
limitations, a judgment may be enforced by action. The revived judgment may also be
In this case, we answer in the affirmative. enforced by motion within five (5) years from the date of its entry and thereafter by
action before it is barred by the statute of limitations.
Under Rule 39, Section 6,15 the rule is that a final judgment may be executed by mere
motion within five years from the date of entry of judgment. However, the rule is not
absolute and admits one notable exception and that is when the delay in enforcing the
judgment is caused by the party assailing the filing of the motion.

In Republic v. Court of Appeals,16 we declared that, on meritorious grounds, execution

of final judgment by mere motion may be allowed even after the lapse of five years
when delay in the execution is caused or occasioned by the actions of the judgment xxxxxccbg
debtor and/or is incurred for his benefit.

Similarly, in Camacho v. Court of Appeals,17 we ruled that the five-year period allowed
for enforcement of judgment by mere action is deemed effectively interrupted or
suspended when the delay in the execution is occasioned by the oppositor’s own
initiatives in order to gain an undue advantage.

Based on the attendant facts, the present case falls within the exception. Petitioner
triggered the series of delays in the execution of the RTC’s final decision by filing
numerous motions and appeals in the appellate courts, even causing the CA’s
issuance of the TRO enjoining the enforcement of said decision. It cannot now debunk
the filing of the motion just so it can delay once more the payment of its obligation to
respondent. It is obvious that petitioner is merely resorting to dilatory maneuvers to
skirt its legal obligation.

Lastly, in Republic  and Camacho, we ruled that the purpose of the law in prescribing
time limitations for enforcing a judgment or action is to prevent a party from sleeping
on his rights. Far from sleeping on its rights, respondent pursued its claim by
persistently seeking the execution of the RTC’s final judgment of November 6, 1991. It
would be unjust to frustrate respondent’s effort to collect payment from petitioner on
sheer technicality. While strict compliance to the rules of procedure is desired, liberal
interpretation is warranted in cases where a strict enforcement of the rules will not
serve the ends of justice.

WHEREFORE, the petition is hereby DENIED.