G.R. No.
162416 January 31, on the existence of probable cause, the
2006
CHESTER DE JOYA, Petitioner,
vs.
JUDGE PLACIDO C. MARQUEZ, in his
capacity as Presiding Judge of Branch
40, Manila-RTC, PEOPLE OF THE
PHILIPPINES and THE SECRETARY OF
THE DEPARTMENT OF
JUSTICE, Respondents.
DECISION
AZCUNA, J.:
This is a petition for certiorari and
prohibition that seeks the Court to nullify
and set aside the warrant of arrest issued
by respondent judge against petitioner in
Criminal Case No. 03-219952 for violation
of Article 315, par. 2(a) of the Revised
Penal Code in relation to Presidential
Decree (P.D.) No. 1689. Petitioner asserts
that respondent judge erred in finding the
existence of probable cause that justifies
the issuance of a warrant of arrest against
him and his co-accused.
Section 6, Rule 112 of the Revised Rules
of Criminal Procedure provides:
Sec. 6. When warrant of arrest may
issue. – (a) By the Regional Trial
Court. – Within ten (10) days from the
filing of the complaint or information, the
judge shall personally evaluate the
resolution of the prosecutor and its
supporting evidence. He may immediately
dismiss the case if the evidence on record
clearly fails to establish probable cause. If
he finds probable cause, he shall
issue a warrant of arrest, or a
commitment order if the accused has
already been arrested pursuant to a
warrant issued by the judge who
conducted the preliminary
investigation or when the complaint
or information was filed pursuant to
section 7 of this Rule. In case of doubt
Management Corporation as participants
judge may order the prosecutor to present
additional evidence within five (5) days
from notice and the issuance must be
resolved by the court within thirty (30)
days from the filing of the complaint or
information.
x x x1
This Court finds from the records of
Criminal Case No. 03-219952 the
following documents to support the
motion of the prosecution for the issuance
of a warrant of arrest:
1. The report of the National Bureau of
Investigation to Chief State Prosecutor
Jovencito R. Zuño as regards their
investigation on the complaint filed by
private complainant Manuel Dy Awiten
against Mina Tan Hao @ Ma. Gracia Tan
Hao and Victor Ngo y Tan for syndicated
estafa. The report shows that Hao induced
Dy to invest more than a hundred million
pesos in State Resources Development
Management Corporation, but when the
latter’s investments fell due, the checks
issued by Hao in favor of Dy as payment
for his investments were dishonored for
being drawn against insufficient funds or
that the account was closed.2
2. Affidavit-Complaint of private
complainant Manuel Dy Awiten.3
3. Copies of the checks issued by private
complainant in favor of State Resources
Corporation.4
4. Copies of the checks issued to private
complainant representing the supposed
return of his investments in State
Resources.5
5. Demand letter sent by private
complainant to Ma. Gracia Tan Hao.6
6. Supplemental Affidavit of private
complainant to include the incorporators
and members of the board of directors of
State Resources Development
in the conspiracy to commit the crime of
syndicated estafa. Among those included
was petitioner Chester De Joya.7
7. Counter-Affidavits of Chester De Joya
and the other accused, Ma. Gracia Hao
and Danny S. Hao.
Also included in the records are the
resolution issued by State Prosecutor
Benny Nicdao finding probable cause to
indict petitioner and his other co-accused
for syndicated estafa,8 and a copy of the
Articles of Incorporation of State
Resources Development Management
Corporation naming petitioner as
incorporator and director of said
corporation.
This Court finds that these documents
sufficiently establish the existence of
probable cause as required under Section
6, Rule 112 of the Revised Rules of
Criminal Procedure. Probable cause to
issue a warrant of arrest pertains to facts
and circumstances which would lead a
reasonably discreet and prudent person to
believe that an offense has been
committed by the person sought to be
arrested. It bears remembering that "in
determining probable cause, the average
man weighs facts and circumstances
without resorting to the calibrations of our
technical rules of evidence of which his
knowledge is nil. Rather, he relies on the
calculus of common sense of which all
reasonable men have an
abundance."9 Thus, the standard used for
the issuance of a warrant of arrest is less
stringent than that used for establishing
the guilt of the accused. As long as the
evidence presented shows a prima
facie case against the accused, the trial
court judge has sufficient ground to issue
a warrant of arrest against him.
The foregoing documents found in the
records and examined by respondent
judge tend to show that therein private
complainant was enticed to invest a large
sum of money in State Resources
Development Management Corporation;
that he issued several checks amounting
to P114,286,086.14 in favor of the
corporation; that the corporation, in turn,
issued several checks to private
complainant, purportedly representing the
return of his investments; that said
checks were later dishonored for
insufficient funds and closed account; that
petitioner and his co-accused, being
incorporators and directors of the
corporation, had knowledge of its
activities and transactions. These are all
that need to be shown to establish
probable cause for the purpose of issuing
a warrant of arrest. It need not be shown
that the accused are indeed guilty of the
crime charged. That matter should be left
to the trial. It should be emphasized that
before issuing warrants of arrest, judges
merely determine personally the
probability, not the certainty, of guilt of an
accused. Hence, judges do not conduct
a de novo hearing to determine the
existence of probable cause. They just
personally review the initial determination
of the prosecutor finding a probable cause
to see if it is supported by substantial
evidence.10 In case of doubt on the
existence of probable cause, the Rules
allow the judge to order the prosecutor to
present additional evidence. In the
present case, it is notable that the
resolution issued by State Prosecutor
Benny Nicdao thoroughly explains the
bases for his findings that there is
probable cause to charge all the accused
with violation of Article 315, par. 2(a) of
the Revised Penal Code in relation to P.D.
No. 1689.
The general rule is that this Court does
not review the factual findings of the trial
court, which include the determination of
probable cause for the issuance of warrant
of arrest. It is only in exceptional cases
where this Court sets aside the
conclusions of the prosecutor and the trial
judge on the existence of probable cause,
that is, when it is necessary to prevent
the misuse of the strong arm of the law or
to protect the orderly administration of
justice. The facts obtaining in this case do
not warrant the application of the
exception.lavvph!l.ne+
In addition, it may not be amiss to note
that petitioner is not entitled to seek relief
from this Court nor from the trial court as
he continuously refuses to surrender and
submit to the court’s jurisdiction. Justice
Florenz D. Regalado explains the
requisites for the exercise of jurisdiction
and how the court acquires such
jurisdiction, thus:
x x x Requisites for the exercise of
jurisdiction and how the court acquires
such jurisdiction:
a. Jurisdiction over the plaintiff or
petitioner: This is acquired by the filing of
the complaint, petition or initiatory
pleading before the court by the plaintiff
or petitioner.
b. Jurisdiction over the defendant or
respondent: This is acquired by the
voluntary appearance or submission
by the defendant or respondent to the
court or by coercive process issued by
the court to him, generally by the
service of summons.
c. Jurisdiction over the subject
matter: This is conferred by law and,
unlike jurisdiction over the parties, cannot
be conferred on the court by the voluntary
act or agreement of the parties.
d. Jurisdiction over the issues of the case:
This is determined and conferred by the
pleadings filed in the case by the parties,
or by their agreement in a pre-trial order
or stipulation, or, at times by their implied
consent as by the failure of a party to
object to evidence on an issue not covered
by the pleadings, as provided in Sec. 5,
Rule 10.
e. Jurisdiction over the res (or the
property or thing which is the subject of
the litigation). This is acquired by the
actual or constructive seizure by the court
of the thing in question, thus placing it
in custodia legis, as in attachment or
garnishment; or by provision of law which
recognizes in the court the power to deal
with the property or subject matter within
its territorial jurisdiction, as in land
registration proceedings or suits involving
civil status or real property in the
Philippines of a non-resident defendant.
Justice Regalado continues to explain:
In two cases, the court acquires
jurisdiction to try the case, even if it has
not acquired jurisdiction over the person
of a nonresident defendant, as long as it
has jurisdiction over the res, as when the
action involves the personal status of the
plaintiff or property in the Philippines in
which the defendant claims an interest. In
such cases, the service of summons by
publication and notice to the defendant is
merely to comply with due process
requirements. Under Sec. 133 of the
Corporation Code, while a foreign
corporation doing business in the
Philippines without a license cannot sue or
intervene in any action here, it may be
sued or proceeded against before our
courts or administrative tribunals.11
Again, there is no exceptional reason in
this case to allow petitioner to obtain relief
from the courts without submitting to its
jurisdiction. On the contrary, his continued
refusal to submit to the court’s jurisdiction
should give this Court more reason to
uphold the action of the respondent judge.
The purpose of a warrant of arrest is to
place the accused under the custody of
the law to hold him for trial of the charges
against him. His evasive stance shows an
intent to circumvent and frustrate the
object of this legal process. It should be
remembered that he who invokes the
court’s jurisdiction must first submit to its
jurisdiction.
WHEREFORE, the petition
is DISMISSED.
No costs.
SO ORDERED.
G.R. No. 87416 April 8, 1991
CECILIO S. DE VILLA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS,
PEOPLE OF THE PHILIPPINES,
HONORABLE JOB B. MADAYAG, and
ROBERTO Z. LORAYES, respondents.
San Jose Enriquez, Lacas Santos & Borje
for petitioner.
Eduardo R. Robles for private respondent.
PARAS, J.:
This petition for review on certiorari seeks
to reverse and set aside the decision* of
the Court of Appeals promulgated on
February 1, 1989 in CA-G.R. SP No.
16071 entitled "Cecilio S. de Villa vs.
Judge Job B. Madayag, etc. and Roberto
Z. Lorayes," dismissing the petition
for certiorari filed therein.
The factual backdrop of this case, as
found by the Court of Appeals, is as
follows:
On October 5, 1987, petitioner Cecilio S.
de Villa was charged before the Regional
Trial Court of the National Capital Judicial
Region (Makati, Branch 145) with violation
of Batas Pambansa Bilang 22, allegedly
committed as follows:
That on or about the 3rd day of April
1987, in the municipality of Makati, Metro
Manila, Philippines and within the
jurisdiction of this Honorable Court, the
above-named accused, did, then and
there willfully, unlawfully and feloniously
make or draw and issue to ROBERTO Z.
LORAYEZ, to apply on account or for value
a Depositors Trust Company Check No.
3371 antedated March 31, 1987, payable
to herein complainant in the total amount
of U.S. $2,500.00 equivalent to
P50,000.00, said accused well knowing
that at the time of issue he had no
sufficient funds in or credit with drawee
bank for payment of such check in full
upon its presentment which check when
presented to the drawee bank within
ninety (90) days from the date thereof
was subsequently dishonored for the
reason "INSUFFICIENT FUNDS" and
despite receipt of notice of such dishonor
said accused failed to pay said ROBERTO
Z. LORAYEZ the amount of P50,000.00 of
said check or to make arrangement for full
payment of the same within five (5)
banking days after receiving said notice.
After arraignment and after private
respondent had testified on direct
examination, petitioner moved to dismiss
the Information on the following grounds:
(a) Respondent court has no jurisdiction
over the offense charged; and (b) That no
offense was committed since the check
involved was payable in dollars, hence,
the obligation created is null and void
pursuant to Republic Act No. 529 (An Act
to Assure Uniform Value of Philippine Coin
and Currency).
On July 19, 1988, respondent court issued
its first questioned orders stating:
Accused's motion to dismiss dated July 5,
1988, is denied for lack of merit.
Under the Bouncing Checks Law (B.P. Blg.
22), foreign checks, provided they are
either drawn and issued in the Philippines
though payable outside thereof, or made
payable and dishonored in the Philippines
though drawn and issued outside thereof,
are within the coverage of said law. The
law likewise applied to checks drawn
against current accounts in foreign
currency.
Petitioner moved for reconsideration but
his motion was subsequently denied by
respondent court in its order dated
September 6, 1988, and which reads:
Accused's motion for reconsideration,
dated August 9, 1988, which was opposed
by the prosecution, is denied for lack of
merit.1âwphi1
The Bouncing Checks Law is applicable to
checks drawn against current accounts in
foreign currency (Proceedings of the
Batasang Pambansa, February 7, 1979, p.
1376, cited in Makati RTC Judge (now
Manila City Fiscal) Jesus F. Guerrero's The
Ramifications of the Law on Bouncing
Checks, p. 5). (Rollo, Annex "A", Decision,
pp. 20-22).
A petition for certiorari seeking to declare
the nullity of the aforequoted orders dated
July 19, 1988 and September 6, 1988 was
filed by the petitioner in the Court of
Appeals wherein he contended:
(a) That since the questioned check was
drawn against the dollar account of
petitioner with a foreign bank, respondent
court has no jurisdiction over the same or
with accounts outside the territorial
jurisdiction of the Philippines and that
Batas Pambansa Bilang 22 could have not
contemplated extending its coverage over
dollar accounts;
(b) That assuming that the subject check
was issued in connection with a private
transaction between petitioner and private
respondent, the payment could not be
legally paid in dollars as it would violate
Republic Act No. 529; and
(c) That the obligation arising from the
issuance of the questioned check is null
and void and is not enforceable with the
Philippines either in a civil or criminal suit.
Upon such premises, petitioner concludes
that the dishonor of the questioned check
cannot be said to have violated the
provisions of Batas Pambansa Bilang 22.
(Rollo, Annex "A", Decision, p. 22).
On February 1, 1989, the Court of Appeals
rendered a decision, the decretal portion
of which reads:
WHEREFORE, the petition is hereby
dismissed. Costs against petitioner.
SO ORDERED. (Rollo, Annex "A", Decision,
p. 5)
A motion for reconsideration of the said
decision was filed by the petitioner on
February 7, 1989 (Rollo, Petition, p. 6)
but the same was denied by the Court of
Appeals in its resolution dated March 3,
1989 (Rollo, Annex "B", p. 26).
Hence, this petition.
In its resolution dated November 13,
1989, the Second Division of this Court
gave due course to the petition and
required the parties to submit
simultaneously their respective
memoranda (Rollo, Resolution, p. 81).
The sole issue in this case is whether or
not the Regional Trial Court of Makati has
jurisdiction over the case in question.
The petition is without merit.
Jurisdiction is the power with which courts
are invested for administering justice, that
is, for hearing and deciding cases (Velunta
vs. Philippine Constabulary, 157 SCRA 147
[1988]).
Jurisdiction in general, is either over the
nature of the action, over the subject
matter, over the person of the defendant,
or over the issues framed in the pleadings
(Balais vs. Balais, 159 SCRA 37 [1988]).
Jurisdiction over the subject matter is
determined by the statute in force at the
time of commencement of the action (De
la Cruz vs. Moya, 160 SCRA 538 [1988]).
The trial court's jurisdiction over the case,
subject of this review, can not be
questioned.
Sections 10 and 15(a), Rule 110 of the
Rules of Court specifically provide that:
Sec. 10. Place of the commission of the
offense. The complaint or information is
sufficient if it can be understood therefrom
that the offense was committed or some
of the essential ingredients thereof
occured at some place within the
jurisdiction of the court, unless the
particular place wherein it was committed
constitutes an essential element of the
offense or is necessary for identifying the
offense charged.
Sec. 15. Place where action is to be
instituted. (a) Subject to existing laws, in
all criminal prosecutions the action shall
be instituted and tried in the court of the
municipality or territory where the offense
was committed or any of the essential
ingredients thereof took place.
In the case of People vs. Hon.
Manzanilla (156 SCRA 279 [1987] cited in
the case of Lim vs. Rodrigo, 167 SCRA
487 [1988]), the Supreme Court ruled
"that jurisdiction or venue is determined
by the allegations in the information."
The information under consideration
specifically alleged that the offense was
committed in Makati, Metro Manila and
therefore, the same is controlling and
sufficient to vest jurisdiction upon the
Regional Trial Court of Makati. The Court
acquires jurisdiction over the case and
over the person of the accused upon the
filing of a complaint or information in
court which initiates a criminal action
(Republic vs. Sunga, 162 SCRA 191
[1988]).
Moreover, it has been held in the case of
Que v. People of the Philippines (154
SCRA 160 [1987] cited in the case of
People vs. Grospe, 157 SCRA 154 [1988])
that "the determinative factor (in
determining venue) is the place of the
issuance of the check."
On the matter of venue for violation of
Batas Pambansa Bilang 22, the Ministry of
Justice, citing the case of People vs. Yabut
(76 SCRA 624 [1977], laid down the
following guidelines in Memorandum
Circular No. 4 dated December 15, 1981,
the pertinent portion of which reads:
(1) Venue of the offense lies at the place
where the check was executed and
delivered; (2) the place where the check
was written, signed or dated does not
necessarily fix the place where it was
executed, as what is of decisive
importance is the delivery thereof which is
the final act essential to its consummation
as an obligation; . . . (Res. No. 377, s.
1980, Filtex Mfg. Corp. vs. Manuel Chua,
October 28, 1980)." (See The Law on
Bouncing Checks Analyzed by Judge Jesus
F. Guerrero, Philippine Law Gazette, Vol.
7. Nos. 11 & 12, October-December,
1983, p. 14).
It is undisputed that the check in question
was executed and delivered by the
petitioner to herein private respondent at
Makati, Metro Manila.
However, petitioner argues that the check
in question was drawn against the dollar
account of petitioner with a foreign bank,
and is therefore, not covered by the
Bouncing Checks Law (B.P. Blg. 22).
But it will be noted that the law does not
distinguish the currency involved in the
case. As the trial court correctly ruled in
its order dated July 5, 1988:
Under the Bouncing Checks Law (B.P. Blg.
22), foreign checks, provided they are
either drawn and issued in the Philippines
though payable outside thereof . . . are
within the coverage of said law.
It is a cardinal principle in statutory
construction that where the law does not
distinguish courts should not
distinguish.1âwphi1 Parenthetically, the
rule is that where the law does not make checks. The check may be in French
any exception, courts may not except francs or Japanese yen or deutschunorhs.
something unless compelling reasons exist (sic.) If drawn, then this bill will apply.
to justify it (Phil. British Assurance Co., MR TUPAY. So it include U.S. dollar
Inc. vs. IAC, 150 SCRA 520 [1987]). checks.
More importantly, it is well established MR. MENDOZA. Yes, Mr. Speaker.
that courts may avail themselves of the
actual proceedings of the legislative body
to assist in determining the construction
of a statute of doubtful meaning (Palanca
vs. City of Manila, 41 Phil. 125 [1920]).
Thus, where there is doubts as to what a
provision of a statute means, the meaning
put to the provision during the legislative
deliberation or discussion on the bill may
be adopted (Arenas vs. City of San Carlos,
82 SCRA 318 [1978]).
The records of the Batasan, Vol. III,
unmistakably show that the intention of
the lawmakers is to apply the law to
whatever currency may be the subject
thereof. The discussion on the floor of the
then Batasang Pambansa fully sustains
this view, as follows:
xxx xxx xxx
THE SPEAKER. The Gentleman from
Basilan is recognized.
MR. TUPAY. Parliamentary inquiry, Mr.
Speaker.
THE SPEAKER. The Gentleman may
proceed.
MR. TUPAY. Mr. Speaker, it has been
mentioned by one of the Gentlemen who
interpellated that any check may be
involved, like U.S. dollar checks, etc. We
are talking about checks in our country.
There are U.S. dollar checks, checks, in
our currency, and many others.
THE SPEAKER. The Sponsor may answer
that inquiry.
MR. MENDOZA. The bill refers to any
check, Mr. Speaker, and this check may
be a check in whatever currency. This
would not even be limited to U.S. dollar
G.R. No. 176858 September
15, 2010
HEIRS OF JUANITA PADILLA,
represented by CLAUDIO
PADILLA, Petitioners,
vs.
DOMINADOR MAGDUA, Respondent.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review on
certiorari1 assailing the Orders dated 8
September 20062 and 13 February
20073 of the Regional Trial Court (RTC) of
Tacloban City, Branch 34, in Civil Case No.
2001-10-161.
The Facts
Juanita Padilla (Juanita), the mother of
petitioners, owned a piece of land located
in San Roque, Tanauan, Leyte. After
Juanita’s death on 23 March 1989,
petitioners, as legal heirs of Juanita,
sought to have the land partitioned.
Petitioners sent word to their eldest
brother Ricardo Bahia (Ricardo) regarding
their plans for the partition of the land. In
a letter dated 5 June 1998 written by
Ricardo addressed to them, petitioners
were surprised to find out that Ricardo
had declared the land for himself,
prejudicing their rights as co-heirs. It was
then discovered that Juanita had allegedly
executed a notarized Affidavit of Transfer
of Real Property4 (Affidavit) in favor of
Ricardo on 4 June 1966 making him the
sole owner of the land. The records do not
show that the land was registered under
the Torrens system.
On 26 October 2001, petitioners filed an
action with the RTC of Tacloban City,
Branch 34, for recovery of ownership,
possession, partition and damages.
Petitioners sought to declare void the sale
of the land by Ricardo’s daughters,
Josephine Bahia and Virginia Bahia-Abas,
to respondent Dominador Magdua
(Dominador). The sale was made during
the lifetime of Ricardo.
Petitioners alleged that Ricardo, through
misrepresentation, had the land
transferred in his name without the
consent and knowledge of his co-heirs.
Petitioners also stated that prior to 1966,
Ricardo had a house constructed on the
land. However, when Ricardo and his wife
Zosima separated, Ricardo left for
Inasuyan, Kawayan, Biliran and the house
was leased to third parties.
Petitioners further alleged that the
signature of Juanita in the Affidavit is
highly questionable because on 15 May
1978 Juanita executed a written
instrument stating that she would be
leaving behind to her children the land
which she had inherited from her parents.
Dominador filed a motion to dismiss on
the ground of lack of jurisdiction since the
assessed value of the land was within the
jurisdiction of the Municipal Trial Court of
Tanauan, Leyte.
In an Order dated 20 February 2006,5 the
RTC dismissed the case for lack of
jurisdiction. The RTC explained that the
assessed value of the land in the amount
of ₱590.00 was less than the amount
cognizable by the RTC to acquire
jurisdiction over the case.6
Petitioners filed a motion for
reconsideration. Petitioners argued that
the action was not merely for recovery of
ownership and possession, partition and
damages but also for annulment of deed
of sale. Since actions to annul contracts
are actions beyond pecuniary estimation,
the case was well within the jurisdiction of
the RTC.
Dominador filed another motion to dismiss
on the ground of prescription.
In an Order dated 8 September 2006, the
RTC reconsidered its previous stand and
took cognizance of the case. Nonetheless,
the RTC denied the motion for
reconsideration and dismissed the case on
the ground of prescription pursuant to
Section 1, Rule 9 of the Rules of Court.
The RTC ruled that the case was filed only
in 2001 or more than 30 years since the
Affidavit was executed in 1966. The RTC
explained that while the right of an heir to
his inheritance is imprescriptible, yet
when one of the co-heirs appropriates the
property as his own to the exclusion of all
other heirs, then prescription can set in.
The RTC added that since prescription had
set in to question the transfer of the land
under the Affidavit, it would seem logical
that no action could also be taken against
the deed of sale executed by Ricardo’s
daughters in favor of Dominador. The
dispositive portion of the order states:
WHEREFORE, premises considered, the
order of the Court is reconsidered in so far
as the pronouncement of the Court that it
has no jurisdiction over the nature of the
action. The dismissal of the action,
however, is maintained not by reason of
lack of jurisdiction but by reason of
prescription.
SO ORDERED.7
Petitioners filed another motion for
reconsideration which the RTC denied in
an Order dated 13 February 2007 since
petitioners raised no new issue.
Hence, this petition.
The Issue
The main issue is whether the present
action is already barred by prescription.
The Court’s Ruling
Petitioners submit that the RTC erred in
dismissing the complaint on the ground of
prescription. Petitioners insist that the
Affidavit executed in 1966 does not
conform with the requirement of sufficient
repudiation of co-ownership by Ricardo
against his co-heirs in accordance with
Article 494 of the Civil Code. Petitioners
assert that the Affidavit became part of
public records only because it was kept by
the Provincial Assessor’s office for real
property tax declaration purposes.
However, such cannot be contemplated by
law as a record or registration affecting
real properties. Petitioners insist that the
Affidavit is not an act of appropriation
sufficient to be deemed as constructive
notice to an adverse claim of ownership
absent a clear showing that petitioners, as
co-heirs, were notified or had knowledge
of the Affidavit issued by their mother in
Ricardo’s favor.
Respondent Dominador, on the other
hand, maintains that Juanita, during her
lifetime, never renounced her signature on
the Affidavit or interposed objections to
Ricardo’s possession of the land, which
was open, absolute and in the concept of
an owner. Dominador contends that the
alleged written instrument dated 15 May
1978 executed by Juanita years before
she died was only made known lately and
conveys the possibility of being fabricated.
Dominador adds that the alleged ‘highly
questionable signature’ of Juanita on the
Affidavit was only made an issue after 35
years from the date of the transfer in
1966 until the filing of the case in 2001.
As a buyer in good faith, Dominador
invokes the defense of acquisitive
prescription against petitioners.
At the outset, only questions of law may
be raised in a petition for review on
certiorari under Rule 45 of the Rules of
Court. The factual findings of the lower
courts are final and conclusive and may
not be reviewed on appeal except under
any of the following circumstances: (1)
the conclusion is grounded on
speculations, surmises or conjectures; (2)
the inference is manifestly mistaken,
absurd or impossible; (3) there is grave
abuse of discretion; (4) the judgment is
based on a misapprehension of facts; (5)
the findings of fact are conflicting; (6)
there is no citation of specific evidence on
which the factual findings are based; (7)
the finding of absence of facts is
contradicted by the presence of evidence
on record; (8) the findings of the Court of
Appeals are contrary to those of the trial
court; (9) the Court of Appeals manifestly
overlooked certain relevant and
undisputed facts that, if properly
considered, would justify a different
conclusion; (10) the findings of the Court
of Appeals are beyond the issues of the
case; and (11) such findings are contrary
to the admissions of both parties.8
We find that the conclusion of the RTC in
dismissing the case on the ground of
prescription based solely on the Affidavit
executed by Juanita in favor of Ricardo,
the alleged seller of the property from
whom Dominador asserts his ownership,
is speculative. Thus, a review of the case
is necessary.
Here, the RTC granted the motion to
dismiss filed by Dominador based on
Section 1, Rule 9 of the Rules of Court
which states:
Section 1. Defenses and objections not
pleaded. – Defenses and objections not
pleaded either in a motion to dismiss or in
the answer are deemed waived. However,
when it appears from the pleadings or the
evidence on record that the court has no
jurisdiction over the subject matter, that
there is another action pending between
the same parties for the same cause,
or that the action is barred by a prior
judgment or by statute of limitations,
the court shall dismiss the case.
(Emphasis supplied)
The RTC explained that prescription had
already set in since the Affidavit was
executed on 31 May 1966 and petitioners
filed the present case only on 26 October
2001, a lapse of more than 30 years. No
action could be taken against the deed of
sale made in favor of Dominador without
assailing the Affidavit, and the action to
question the Affidavit had already
prescribed.
After a perusal of the records, we find that
the RTC incorrectly relied on the Affidavit
alone in order to dismiss the case without
considering petitioners’ evidence. The
facts show that the land was sold to
Dominador by Ricardo’s daughters,
namely Josephine Bahia and Virginia
Bahia-Abas, during the lifetime of Ricardo.
However, the alleged deed of sale was not
presented as evidence and neither was it
shown that Ricardo’s daughters had any
authority from Ricardo to dispose of the
land. No cogent evidence was ever
presented that Ricardo gave his consent
to, acquiesced in, or ratified the sale made
by his daughters to Dominador. In its 8
September 2006 Order, the RTC hastily
concluded that Ricardo’s daughters had
legal personality to sell the property:
On the allegation of the plaintiffs
(petitioners) that Josephine Bahia and
Virginia Bahia-Abas had no legal
personality or right to [sell] the subject
property is of no moment in this case. It
should be Ricardo Bahia who has a cause
of action against [his] daughters and not
the herein plaintiffs. After all, Ricardo
Bahia might have already consented to or
ratified the alleged deed of sale.9
Also, aside from the Affidavit, Dominador
did not present any proof to show that
Ricardo’s possession of the land had been
open, continuous and exclusive for more
than 30 years in order to establish
extraordinary acquisitive
prescription.10 Dominador merely
assumed that Ricardo had been in
possession of the land for 30 years based
on the Affidavit submitted to the RTC. The
petitioners, on the other hand, in their
pleading filed with the RTC for recovery of
ownership, possession, partition and
damages, alleged that Ricardo left the
land after he separated from his wife
sometime after 1966 and moved to
another place. The records do not
mention, however, whether Ricardo had
any intention to go back to the land or
whether Ricardo’s family ever lived there.
Further, Dominador failed to show that
Ricardo had the land declared in his name
for taxation purposes from 1966 after the
Affidavit was executed until 2001 when
the case was filed. Although a tax
declaration does not prove ownership, it is
evidence of claim to possession of the
land.
Moreover, Ricardo and petitioners are co-
heirs or co-owners of the land. Co-heirs or
co-owners cannot acquire by acquisitive
prescription the share of the other co-
heirs or co-owners absent a clear
repudiation of the co-ownership, as
expressed in Article 494 of the Civil Code
which states:
Art. 494. x x x No prescription shall run in
favor of a co-owner or co-heir against his
co-owners or co-heirs as long as he
expressly or impliedly recognizes the co-
ownership.
Since possession of co-owners is like that
of a trustee, in order that a co-owner’s
possession may be deemed adverse to
the cestui que trust or other co-owners,
the following requisites must concur: (1)
that he has performed unequivocal acts of
repudiation amounting to an ouster of
the cestui que trust or other co-owners,
(2) that such positive acts of repudiation
have been made known to the cestui que
trust or other co-owners, and (3) that the
evidence thereon must be clear and
convincing.11
In the present case, all three requisites
have been met. After Juanita’s death in
1989, petitioners sought for the partition
of their mother’s land. The heirs, including
Ricardo, were notified about the plan.
Ricardo, through a letter dated 5 June
1998, notified petitioners, as his co-heirs,
that he adjudicated the land solely for
himself. Accordingly, Ricardo’s interest in
the land had now become adverse to the
claim of his co-heirs after repudiating their
claim of entitlement to the land.
In Generosa v. Prangan-Valera,12 we held
that in order that title may prescribe in
favor of one of the co-owners, it must be
clearly shown that he had repudiated the
claims of the others, and that they were
apprised of his claim of adverse and
exclusive ownership, before the
prescriptive period begins to run.
However, in the present case, the
prescriptive period began to run only from
5 June 1998, the date petitioners received
notice of Ricardo’s repudiation of their
claims to the land. Since petitioners filed
an action for recovery of ownership and
possession, partition and damages with
the RTC on 26 October 2001, only a mere
three years had lapsed. This three-year
period falls short of the 10-year or 30-
year acquisitive prescription period
required by law in order to be entitled to
claim legal ownership over the land. Thus,
Dominador cannot invoke acquisitive
prescription.
Further, Dominador’s argument that
prescription began to commence in 1966,
after the Affidavit was executed, is
erroneous. Dominador merely relied on
the Affidavit submitted to the RTC that
Ricardo had been in possession of the land
for more than 30 years. Dominador did
not submit any other corroborative
evidence to establish Ricardo’s alleged
possession since 1966. In Heirs of
Maningding v. Court of Appeals,13 we held
that the evidence relative to the
possession, as a fact, upon which the
alleged prescription is based, must be
clear, complete and conclusive in order to
establish the prescription. Here,
Dominador failed to present any other
competent evidence to prove the alleged
extraordinary acquisitive prescription of
Ricardo over the land. Since the property
is an unregistered land, Dominador
bought the land at his own risk, being
aware as buyer that no title had been
issued over the land. As a consequence,
Dominador is not afforded protection
unless he can manifestly prove his legal
entitlement to his claim.
With regard to the issue of the jurisdiction
of the RTC, we hold that the RTC did not
err in taking cognizance of the case.
Under Section 1 of Republic Act No. 7691
(RA 7691),14 amending Batas Pambansa
Blg. 129, the RTC shall exercise exclusive
jurisdiction on the following actions:
Section 1. Section 19 of Batas Pambansa
Blg. 129, otherwise known as the
"Judiciary Reorganization Act of 1980", is
hereby amended to read as follows:
"Sec. 19. Jurisdiction in civil cases. –
Regional Trial Courts shall exercise
exclusive original jurisdiction.
"(1) In all civil actions in which the subject
of the litigation is incapable of pecuniary
estimation;
"(2) In all civil actions which involve the
title to, or possession of, real property, or
any interest therein, where the assessed
value of the property involved exceeds
Twenty Thousand Pesos (₱20,000.00) or,
for civil actions in Metro Manila, where
such value exceeds Fifty Thousand Pesos
(₱50,000.00) except actions for forcible
entry into and unlawful detainer of lands
or buildings, original jurisdiction over
which is conferred upon the Metropolitan
Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts; x x x
On the other hand, Section 3 of RA 7691
expanded the jurisdiction of the
Metropolitan Trial Courts, Municipal Trial
Courts and Municipal Circuit Trial Courts
over all civil actions which involve title to
or possession of real property, or any
interest, outside Metro Manila where the
assessed value does not exceed Twenty
thousand pesos (₱20,000.00). The
provision states:
Section 3. Section 33 of the same law is
hereby amended to read as follows:
"Sec. 33. Jurisdiction of Metropolitan Trial
Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Civil
Cases. - Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Trial
Circuit Trial Courts shall exercise:
xxx
"(3) Exclusive original jurisdiction in all
civil actions which involve title to, or
possession of, real property, or any
interest therein where the assessed value
of the property or interest therein does
not exceed Twenty thousand pesos
(₱20,000.00) or, in civil actions in Metro
Manila, where such assessed value does
not exceed Fifty thousand pesos
(₱50,000.00) exclusive of interest,
damages of whatever kind, attorney’s
fees, litigation expenses and costs:
Provided, That in cases of land not
declared for taxation purposes, the value
of such property shall be determined by
the assessed value of the adjacent lots."
In the present case, the records show that
the assessed value of the land was
₱590.00 according to the Declaration of
Property as of 23 March 2000 filed with
the RTC. Based on the value alone, being
way below ₱20,000.00, the MTC has
jurisdiction over the case. However,
petitioners argued that the action was not
merely for recovery of ownership and
possession, partition and damages but
also for annulment of deed of sale. Since
annulment of contracts are actions
incapable of pecuniary estimation, the
RTC has jurisdiction over the
case.151avvphi1
Petitioners are correct. In Singson v.
Isabela Sawmill,16 we held that:
In determining whether an action is one
the subject matter of which is not capable
of pecuniary estimation this Court has
adopted the criterion of first ascertaining
the nature of the principal action or
remedy sought. If it is primarily for the
recovery of a sum of money, the claim is
considered capable of pecuniary
estimation, and whether jurisdiction is in
the municipal courts or in the courts of
first instance would depend on the
amount of the claim. However, where the
basic issue is something other than the
right to recover a sum of money, where
the money claim is purely incidental to, or
a consequence of, the principal relief
sought, this Court has considered such
actions as cases where the subject of the
litigation may not be estimated in terms of
money, and are cognizable by courts of
first instance (now Regional Trial Courts).
When petitioners filed the action with the
RTC they sought to recover ownership and
possession of the land by questioning (1)
the due execution and authenticity of the
Affidavit executed by Juanita in favor of
Ricardo which caused Ricardo to be the
sole owner of the land to the exclusion of
petitioners who also claim to be legal heirs
and entitled to the land, and (2) the
validity of the deed of sale executed
between Ricardo’s daughters and
Dominador. Since the principal action
sought here is something other than the
recovery of a sum of money, the action is
incapable of pecuniary estimation and
thus cognizable by the RTC. Well-
entrenched is the rule that jurisdiction
over the subject matter of a case is
conferred by law and is determined by the
allegations in the complaint and the
character of the relief sought, irrespective
of whether the party is entitled to all or
some of the claims asserted.17
In sum, we find that the Affidavit, as the
principal evidence relied upon by the RTC
to dismiss the case on the ground of
prescription, insufficiently established
Dominador’s rightful claim of ownership to
the land. Thus, we direct the RTC to try
the case on the merits to determine who
among the parties are legally entitled to
the land.
WHEREFORE, we GRANT the petition.
We REVERSE AND SET ASIDE the
Orders dated 8 September 2006 and 13
February 2007 of the Regional Trial Court
of Tacloban City, Branch 34 in Civil Case
No. 2001-10-161.
SO ORDERED.
G.R. No. L-25547 November 27,
1967
JUAN M. SERRANO and SILVER
LINERS, INC., plaintiffs-appellants,
vs.
MUÑOZ (HI) MOTORS INC., DM
TRANSIT CORPORATION, BENITO
MACROHON, as Sheriff of Quezon City,
and ENRIQUE MEDINA, as Public
Service Commissioner, defendants-
appellees.
Ramon C. Fernandez for plaintiff-
appellant.
Barin, Tanay and Medina for defendants
Muñoz (Hi) Motors, Inc. and DM Transit
Corporation.
CASTRO, J.:
The fundamental issue in this appeal is
whether the Court of First Instance of
Quezon City has jurisdiction over civil case
8835 before it. Disavowing jurisdiction,
the court, in two separate orders on July
19 and September 21, 1965, dismissed
the complaint against all the defendants.
(Enrique Medina of the Public Service
Commission, Muñoz (Hi) Motors, Inc., DM
Transit Corporation, and Benito Macrohon
as Sheriff of Quezon City), with costs
against the plaintiffs Juan M. Serrano and
the Silver Liners, Inc.
According to the allegations of the
complaint, Juan M. Serrano was granted
by the Public Service Commission (PSC) in
case 83104 a certificate of public
convenience to operate in Manila and
Quezon City eight1 auto-trucks for
passengers and freight. On August 22,
1963 Serrano mortgaged this certificate to
Muñoz (Hi) Motors, Inc. (hereinafter
referred to as the MHMI),
as additional collateral to secure an
indebtedness on account of the purchase
of four buses. The parties to this chattel
mortgage thereafter applied to the PSC for
approval thereof. At the instance of the
MHMI, the sheriff of Quezon City
foreclosed the chattel mortgage of
October 24, 19612 and that of August 22,
1963, and, on October 31, 1964. executed
a certificate of sale in favor of the MHMI
as the highest bidder.
On January 7, 1965 the MHMI sold some
units and certificates of public
convenience, among them, the certificate
granted to Serrano in PSC case 83104, to
the DM Transit Corporation (hereinafter
referred to as the DMTC). Acting on the
petition filed jointly by the MHMI and the
DMTC on January 22, 1965, the PSC, thru
Commissioner Medina, in an order issued
March 4, 1965, provisionally approved the
said sale, and authorized the DMTC to
operate "under the provisional authority
here granted." Serrano moved to have
this order set aside.
On March 26, 1965 Serrano sold to the
Silver Liners, Inc. (hereinafter referred to
as the SLI) the line he was authorized to
operate by virtue of the certificate of
public convenience issued in PSC case
83104, and authorized the latter to file
with the PSC the corresponding
application for approval of the said sale.
On April 5, 1965 Commissioner Medina
issued an order in the following tenor:
[t]he certificate of sale clearly mentions
the units operated, by the judgment-
debtor but does not mention that the
franchise or certificates of public
convenience for the operation of said units
are also included in the sale. In view,
however, of the manifestation of counsel
for DM Transit and Muñoz (Hi) Motors,
Inc., to the effect that the certificate of
public convenience was included in the
notice of sale and that it was the intention
of the Sheriff (who is now present in open
Court), to sell also the franchise, the
Commission believes that in fairness to
all, the hearing of this case should be
postponed until JUNE 15, 1965, at 9.00
a.m., to give all the parties sufficient and
ample opportunity to present their
evidence, pro and con, in support of their
respective allegations, and for the Sheriff,
if necessary, to make the corrections if
any error has been committed.
At the instance of the MHMI the sheriff of
Quezon City "once more announced the
foreclosure of the chattel mortgages dated
October 24, 1961 and August 22, 1963,"
and the sale of, among others, "the
certificate of public convenience issued in
PSC Case No. 83104," to be held on June
14, 1965.
In view of this development, Serrano and
the SLI on June 9, 1965, filed the present
complaint the pertinent and important
portions of which read:
6. That the plaintiff, Juan M. Serrano, and
the defendant, Muñoz (HI) Motors, Inc.,
filed the corresponding application for the
approval of the chattel mortgage of said
certificate with the Public Service
Commission. However, before the Public
Service Commission could decide the
application, the plaintiff, Juan, M. Serrano,
filed a motion withdrawing the same on
the ground that the mortgagee, Defendant
Muñoz (HI) Motors, Inc., had violated
their agreement. Until now the Public
Service Commission has not acted on the
application for approval of the chattel
mortgage of the certificate of public
convenience. Neither has it acted on the
motion of Juan M. Serrano to withdraw
the application.
xxx xxx xxx
11. That the issuance of the provisional
approval, Exhibit "C", presupposes the
existence of a sale and transfer of the
certificate of public convenience issued in
Case No. 83104 by the Sheriff of Quezon
City to Muñoz (HI) Motors, Inc., which is
not a fact. Hence the defendant, Enrique
Medina, is liable for damages for the
issuance of the provisional approval,
Exhibit "C", under Art. 32 of the Civil Code
of the Philippines because the plaintiff,
Juan M. Serrano, was deprived of his
property without due process of law.
xxx xxx xxx
14. That the announced sale on June 14,
1965 is at once illegal and violative of the
rights of the plaintiffs. Unless immediately
restrained by this Honorable Court with
the issuance ex parte of a writ of
preliminary injunction, the plaintiff will
suffer great and irreparable injury in
addition to what they, especially Juan M.
Serrano, have already suffered by reason
of the acts above complained of.
15. That as a consequence of the issuance
of the provisional approval, Exhibit "C", on
March 4, 1965 the plaintiffs have been
unable to operate the eight (8) units
attached to the certificate of public
convenience issued in Case No. 83104 and
the plaintiff, Juan M. Serrano, has been
unable to substitute four (4) of said units
as shown by the order of the Public
Service Commission in Case No. 65-2654,
a certified copy of which being attached as
Exhibit "F".
xxx xxx xxx
WHEREFORE, it is respectfully prayed that
judgment be rendered in favor of the
plaintiffs and against the defendants by
restraining permanently the defendant,
Sheriff of Quezon City and his deputies
from again foreclosing the chattel
mortgages of October 24, 1561 and
August 22, 1963 and selling at public
auction the chattels mortgaged, especially
the certificate of public convenience
issued in Case No. 83104, and ordering
the defendants, to pay jointly and
severally, the plaintiffs the following:
(a) Actual damages in the amount of
P50,390.00 as of June 8, 1965 and daily
thereafter at the rate of P560.00;
(b) Moral damages to Juan M. Serrano in
the amount of P10,000.00;
(c) Exemplary damages in such amount as
may be fixed by the Honorable Court;
(d) Attorney's fees in the amount of
P10,000.00; and the costs.
It is further prayed that there be issued ex
parte immediately a writ of preliminary
injunction restraining the defendant,
Sheriff of Quezon City and his deputies,
from proceeding with the announced sale
on June 14, 1965 of the chattels
enumerated in Exhibit "E".
Acting on the complaint and on an urgent
motion subsequently filed by the plaintiffs
for the issuance of an ex parte writ of
preliminary injunction, the court directed
the parties to maintain the status
quo upon the filing by the plaintiffs of a
P5,000 bond, and set the motion for
hearing on June 26, 1965. The defendants
opposed the motion.
Commissioner Medina, on June 22, 1965,
moved for the dismissal of the complaint
against him on three grounds: that the
CFI has no jurisdiction over not only the
subject matter of the action but as well
his person as Public Service
Commissioner; that the complaint states
no cause of action against him; and that
"Article 32 of the Civil Code is not
applicable to judicial orders."
The rest of the defendants, on the
following day, June 23, filed their answer,
in which they alleged, among other things,
that the certificate of public convenience
issued in PSC case 83104 is included in
the chattel mortgage of August 22, 1963;
that the PSC had in fact approved the said
mortgage; that the said certificate was
actually included in the foreclosure sale
conducted by the sheriff of Quezon City,
although the latter, through inadvertence,
failed to mention it in the certificate of
sale of October 31, 1964; and that the
MHMI has requested the sheriff "to
conduct another foreclosure sale in order
to supplement and correct the first one."
They further alleged that the complaint
states no cause of action, and that the
plaintiffs are in estoppel and guilty of
laches. They accordingly prayed that the
complaint be dismissed as against them,
and that the sheriff of Quezon City be
ordered to proceed with the foreclosure
sale. The plaintiffs, on July 8, 1965,
opposed the motion to dismiss filed by
Commissioner Medina.
By its order of July 19, 1965 the CFI
dismissed the complaint as against
Commissioner Medina. The plaintiffs
moved to have this order set aside or
clarified, because it did not specify any
ground for the dismissal. Per its order of
August 23, 1965 the CFI held in abeyance
consideration of the plaintiffs' prayer for
preliminary injunction, to afford the
plaintiffs opportunity to file a motion for
reconsideration of the order of July 19,
and to give the rest of the defendants
equal opportunity to file motions to
dismiss, "so that the court can make a
clear cut ruling on the question of
jurisdiction over the instant case."
On August 24, 1965 the MHMI and the
DMTC moved to dismiss the complaint on
the ground that the court has no
jurisdiction over the subject- matter of the
action. The plaintiffs thereafter filed their
opposition.
On September 21, 1965 the CFI dismissed
the complaint for lack of jurisdiction over
the subject-matter thereof; on the
following October 16, it denied the
plaintiffs' motion to set aside the order.
Hence the present recourse.
In Perez Cardenas vs. Camus,3 we held
that jurisdiction over the subject-matter is
determined by the allegations of the
complaint, irrespective of whether or not
the plaintiff is entitled to recover upon all
or some of the claims asserted therein —
a matter that can be resolved only after
and as a result of the trial. Nor may the
jurisdiction of the court be made to
depend upon the defenses set up in the
answer or upon the motion to dismiss, for,
were we to be governed by such rule, the
question of jurisdiction would depend
almost entirely upon the defendant.
As can be gleaned from the portions of the
complaint hereinbefore quoted, namely,
paragraph 11 in relation to paragraph 15,
and paragraph 6 in relation to paragraph
14, three distinct issues present
themselves for resolution.
1. Paragraphs 11 and 15 squarely assail
the PSC order of March 4, 1965. According
to the appellants, this order "presupposes
the existence of a sale and transfer of the
certificate of public convenience issued in
Case No. 83104 by the Sheriff of Quezon
City to Muñoz (Hi) Motors, Inc., which is
not a fact", because the said certificate of
public convenience was not mentioned in
the sheriff's certificate of sale of October
31, 1964; the PSC order approving
provisionally the sale by the MHMI in favor
of the DMTC, of, among others, the said
certificate, and authorizing the latter to
operate the line covered thereby, thus
deprived Serrano of his property "without
due process of law", and prevented the
appellants from operating the eight units
attached to the said certificate and
Serrano from substituting four of the said
units.
In sum, therefore, paragraphs 11 and 15
assail the PSC order on March 4, 1965 as
erroneous because the MHMI could not
have legally transferred the certificate of
public convenience in question to the
DMTC for the reason that the sheriff's
certificate of sale of October 31, 1964 did
not include the said certificate of public
convenience among the properties sold to
the MHMI in the foreclosure sale.
It is our view that the resolution of this
aspect of the case falls within the
exclusive province of the PSC.
Under section 20(g) of the Public Service
Law,4 the PSC is the body invested with
the power and authority to approve a sale
or transfer of a certificate of public
convenience. And we emphasized
in Garcia vs. Bonifacio, et al.,5 that
[i]f as appellant represents,
the certificate sold to
him was later illegally transferred to Peña,
who now holds the commission's approval
and certificate, there is no better place
than the commission itself to thresh out
the respective rights of the parties,
bearing in mind that said Commission is
the only entity empowered to withdraw
the certificate from Pena and to transfer it
to herein plaintiff or grant him a new
certificate.
We have indeed sustained the power and
authority of the PSC (a) to approve
provisionally the transfer of a certificate of
public convenience where the conditions
laid down by section 20(g) are
satisfied,6 and (b) to grant provisional
authority to a vendee to operate a
franchise pending determination of the
legality of the sale.7
Entirely apart from the above
considerations, we note from the order of
March 4, 1965 that Serrano has filed an
"urgent motion to set (it) aside". Orderly
procedure demands that the PSC pass
upon this phase of the controversy; from
an adverse resolution thereon, the
appellants may yet appeal to this Court.8
[t]he commission having jurisdiction to
determine whether a corporation has the
right to do or not to do a thing for which
the commission's approval is sought,
orderly procedure requires that the
commission pass upon that phase of the
controversy before the court adjudge it.
The obvious reason for this is stated in St.
Clair Borough v. Tomaqua & Pottsville
Elec. Ry. Co., 259 Pa. 462, 103 A. 287,
289, 5 A.L.R. 20: "Otherwise different
phases of the same case might be pending
before the commission and the courts at
one time, which would cause endless
confusion."9
The order of the PSC did not deprive
Serrano of his property10 "without due
process of law". The order is provisional in
nature, "may be modified or revoked by
the Commission at any time",11 is "subject
to whatever action that may be taken on
the basic application" for the sale and
transfer filed by the MHMI in favor of the
DMTC, and is "valid only during the
pendency of said application" but not
beyond SIX (6) MONTHS from the date
hereon (March 4, 1965)," which period, by
the way, has already expired. Neither
were the appellants deprived of their day
in court. For, the PSC, in its order of April
5, 1965, clearly stated that "in fairness to
all" and "to give all the parties sufficient
and ample opportunity to present their
evidence, pro and con, in support of their
respective allegations", "the hearing of
this case should be postponed until June
15, 1965, at 9:00 a.m."
2. The CFI likewise did not err in
dismissing the complaint, even if it prayed
for damages against Commissioner
Medina, for failure to state a sufficient at once illegal and violative of the rights of
cause of action. Article 32 of the Civil the plaintiffs", and that if the sheriff of
Code, relied upon by the appellants in Quezon City be not immediately
support of their claim for damages, restrained from proceeding with the
provides in its last paragraph that the intended foreclosure and sale of the said
responsibility for damages "herein set certificate, they "will suffer great and
forth is not demandable from a judge irreparable injury". These averments are
unless his act or omission constitutes a altogether too imprecise and therefore
violation of the Penal Code or other penal cannot be dignified as constituting a
statute." We do not now decide — as we legally sufficient statement of the
believe we are not called upon to do so — "ultimate facts" required in the
whether article 32 of the Civil Code may formulation of a cause of action; they are
be utilized as the legal basis of an action at best mere conclusions of law which,
for damages against a PSC commissioner. obviously, cannot take the place of
But assuming that the said provision of "ultimate facts."15
law does authorize recovery of damages ACCORDINGLY, the orders of July 19 and
from a member of the PSC in proper September 21, 1965, dismissing the
cases, the dismissal must yet be complaint, are affirmed, at plaintiffs-
sustained. Nowhere does the complaint appellants' cost.
allege that, in issuing the order of March
4, 1965, Commissioner Medina did so in
violation of the Revised Penal Code or any
other penal statute. It does not charge
him with knowingly rendering an unjust
judgment,12 or rendering an unjust
judgment by reason of inexcusable
negligence or ignorance,13 or knowingly
rendering an unjust interlocutory order or
decree,14 or transgressing any other penal
law.
3. Finally, the CFI did not err in dismissing
the complaint against the rest of the
defendants. The complaint does not state
a cause of action against them. Paragraph
6 thereof alleges that Serrano filed a
motion with the PSC withdrawing the
application filed by him and the MHMI for
approval of the chattel mortgage over the
certificate of public convenience in
question, "on the ground that the
mortgagee, Defendant Muñoz (HI) Motors,
Inc., had violated their agreement", and,
on that basis, paragraph 14 asserts that
"the announced sale on June 14, 1965 is
SECOND DIVISION
G.R. No. 206788, February 14, 2018
CHAILESE DEVELOPMENT COMPANY,
INC., REPRESENTED BY MA. TERESA
M. CHUNG, Petitioner, v. MONICO
DIZON, JIMMY V. CRUZ, JESUS A.
CRUZ, RONALD V. DE GUZMAN, JARDO
M. ENRIQUEZ, NENITA B. LUSUNG,
EDGAR F. NICDAO, RAFAEL L. DIZON,
SOTERO J. SANCHEZ, FERNANDO N.
LEONARDO, MARILYN L. VALENZUELA,
JOE F. VALENZUELA, RAMON L.
MANALASTAS, NESTOR D. REYES,
BRIGIDO S. CALMA, ANABELLA C.
VALLEJO, FERNANDO M. DIZON,
JUANITO D. SERRANO, LOURDES V.
LAPID, FERDINAND L. UNCIANO,
ALFREDO L. DIZON, MARIO A.
TONGOL, ROSSANA D. LEONES,
RUFINO L. DIZON, ADELMO V.
GARCIA, NORMAN G. SUNDIAM,
ORLANDO D. CRUZ, JERRY C. ESPINO,
ESTRELLITA S. CRUZ, ORLANDO B.
CRUZ, SUSANA C. AZARCON,
FERNANDO MANDAP, RUBEN I. SUSI,
MARIO M. PAULE, ANGELITO G. PECO,
LAURO R. MAQUESIAS, MAYLINDA A.
DAGAL, ABELARDO I. SUSI, MARIA C.
MAQUESIAS, ISAGANI A. TONGOL,
JOSEFA L. UNCIANO, ORLANDO A.
SERRANO, SR., GONZALO C.
MAQUESIAS, CONSOLACION M.
VALENZUELA, REYNALDO A. CRUZ,
RESTITUTO D. DABU, LEONARDO A.
CRUZ, PABLO M. DIZON, DOMINADOR
V. CRUZ, RENATO DONATO, SR.,
EDUARDO L. BUNAG, SR., CARMELITA
C. LAQUINDANUM, JUAN O.
MACABULOS, LIGAYA L. ECLARINAL,
ANGEL D. VALENZUELA, JR.,
HERNANDO D. CRUZ, ROSALINDA D.
CRUZ, BERNARD B. MENDOZA,
RODALINO M. MEDINA, FERNANDO L.
MANANSALA, CORAZON C. SANTOS,
JOSELITO C. NICDAO, ROSARIO R.
LOPEZ, MARY GRACE D. SAMONTE
AND TERESITA R.
MAQUESIAS, Respondents.
DECISION
REYES, JR., J.:
This is a petition for review
on certiorari1 under Rule 45 of the Rules
of Court seeking to annul and set aside
the Decision2 dated October 29, 2012, and
Resolution3 dated March 15, 2013 issued
by the Court of Appeals (CA) in CA-G.R.
SP No. 122519.
Petitioner Chailese Development
Company, Inc. (hereinafter referred to as
petitioner) filed a complaint4 for recovery
of possession and damages before the
Regional Trial Court (RTC) of Guagua,
Pampanga, against fifty-one (51)
defendants, eight (8) of whom are
respondents herein.
In its Complaint, petitioner alleged that it
is a corporation duly organized under
Philippine laws and is the registered owner
of parcels of lot covered by Transfer
Certificates of Title (TCT) Nos. 365770,
365771, 365772, 365773, 365774,
365775, 365776, 365777, 365778, and
365351, all situated at Barangay Malabo,
Floridablanca, Pampanga with an
aggregate area of 148 hectares more or
less (hereinafter referred to as subject
landholdings). The subject landholdings
are then allegedly being illegally occupied
by the defendants.5
On January 7, 2001, then Department of
Agrarian Reform (DAR) Secretary Horacio
Morales, Jr. issued a Resolution ordering
that the subject landholdings be converted
for commercial and light industrial uses.
Petitioner averred that it is, however,
unable to introduce developments into the
properties as a portion of the lots were
being illegally occupied by respondents
Monico Dizon, Jimmy Cruz, Jesus Cruz,
Ronald De Guzman, Jardo Enriquez, et
al. (hereinafter referred to as
respondents), who refused to vacate the
premises despite repeated demands.6
In their Answer with
Counterclaim,7 respondents submitted in
the main that the lower court has no
jurisdiction over the case as the
allegations of the complaint involve the
application of the Agrarian Reform
Law.8 According to the respondents, prior
to being transferred in the name of the
petitioner, they are tenants of the subject
landholdings which are then a hacienda
devoted to agricultural production. That
without their knowledge and consent, the
property was transferred to the petitioner,
who in order to avoid the compulsory
distribution of the subject landholdings
under the Comprehensive Agrarian
Reform Law (CARL), filed a "bogus"
petition for conversion. The petition was
initially denied in 1998, but granted on
reconsideration.9
After hearing the respondents' affirmative
defenses, the lower court issued an
Order10 on November 15, 2006,
dismissing the Complaint for lack of
jurisdiction, in this wise:
WHEREFORE, this court hereby dismisses
the case without prejudice.
SO ORDERED.11
The lower court in its Order ratiocinated
that the issue of possession involved in
the case is intertwined with the propriety
of conversion and compliance with the
agreement on disturbance compensation,
issues that are yet to be resolved with
finality by the DAR. Thus, affirming the
primacy of DAR's jurisdiction over agrarian
disputes, the lower court resolved to
dismiss the case pending resolution of the
said issues.12
Petitioner filed a Motion for
Reconsideration of the Order, which was
initially granted by the lower court on
March 6, 2007;13 but eventually reversed
on motion14 by the respondents by the
lower court via its Order15 dated
September 18, 2007.
Petitioner filed a Motion for
Reconsideration anew on October 10,
2007. Despite respondents' opposition,
the lower court issued an Order16 on
December 20, 2007 granting petitioner's
motion and setting the case for pre-trial.
Thereafter, the trial proceeded with the
presentation of petitioner's evidence.
Meanwhile, on July 1, 2009, Republic Act
(R.A.) No. 9700 took effect. The Act
aimed to strengthen the CARL of 1988
through the institution of necessary
reforms. Among the amendments
introduced by R.A. 9700 is the addition of
Section 50-A which vests upon the DAR
the exclusive jurisdiction to take
cognizance upon cases involving the
implementation of the Comprehensive
Agrarian Reform Program (CARP) and
mandates the automatic referral of cases
to the DAR by the judge or prosecutor
upon allegation of any of the parties that
the controversy is an agrarian dispute.17
On June 6, 2011, the respondents filed a
motion18 seeking the referral of the case
to the DAR pursuant to Section 19 of R.A.
No. 9700.
The lower court issued on July 19, 2011
an Order19 denying the motion for lack of
merit.
Therein, the lower court noted that it took
cognizance of the case prior to the
effectivity of R.A. No. 9700 and that the
referral of the case to the DAR would
cause further delay in the disposition of
the case. Respondents filed a motion for
reconsideration,20 but the same was
denied by the lower court in its Order
dated October 24, 2011, the dispositive
portion of which reads:
Wherefore, finding no cogent reason to
disturb the earlier Order of the Court
dated July 19, 2011, the instant motion
for reconsideration is hereby denied.
The presentation of defendants' evidence
set on October 25, 2011 at 9:00 in the
morning is maintained.
SO ORDERED.22
Aggrieved, respondents elevated the
matter to the CA via petition
for certiorari and prohibition under Rule
65 of the Rules of Court.23
On October 29, 2012, the CA rendered its
Decision24 finding merit in the petition
thus ordering the referral of the case to
the DAR. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, the
instant petition is GRANTED. The [RTC] of
Branch 53, Guagua, Pampanga is hereby
DIRECTED to refer Civil Case No. G-4297
to the [DAR] for the necessary
determination and certification pursuant
to Section 50-A of [R.A.] No. 6657, as
amended by [R.A.] No. 9700. No costs.
SO ORDERED.25
In its decision, the CA ruled that with the
addition of R.A. No. 9700 of Section 50-A,
"the only condition for automatic referral
by the court to the DAR is when there is
an allegation from any of the parties that
the case is agrarian in nature and one of
the parties is a farmer, farmworker, or
tenant."26 In this controversy, the CA held
that "there are more than sufficient
allegations in the pleadings of the parties
that the case is agrarian in nature and
that the petitioners are bona fide tillers
and occupants of the subject property."27
Moreover, the CA found the existence of
agrarian dispute, finding that the issue of
petitioner's possession is intertwined with
the issue of whether the respondents
are bona fide tillers and occupants entitled
to disturbance compensation.28
Petitioner filed a motion29 seeking
reconsideration of the Decision dated
October 29, 2012, the same was however
denied by the CA in its Resolution dated
March 15, 2013, whereby it found:
Thus, finding no new matter of substance
which would warrant the modification
much less the reversal of this Court's
October 29, 2012 Decision, the Motion for
Reconsideration filed by private
respondent Chailese is hereby DENIED for
lack of merit.
SO ORDERED.30
Hence, this petition for review
on certiorari, whereby petitioner calls us
to resolve two issues:
ISSUES
I. WHETHER OR NOT THE CA
GRAVELY ERRED IN CONCLUDING
THAT THE RESPONDENTS
WERE BONA FIDE TILLERS AND
OCCUPANTS OF THE SUBJECT LOT;
and
II. WHETHER OR NOT THE CA
COMMITTED A GRAVE REVERSIBLE
ERROR IN CONCLUDING THAT THE
CIVIL CASE NO. G-4297 BE
REFERRED TO THE DAR FOR THE
NECESSARY DETERMINATION AND
CLASSIFICATION AS TO WHETHER
AN AGRARIAN DISPUTE EXISTS
BETWEEN THE PETITIONER AND
THE RESPONDENT PURSUANT TO
SECTION 19 OF R.A. NO. 9700
AND OCA CIRCULAR 62-2010.31
Petitioner submits that the regular courts
has jurisdiction over the case considering
that the nature of the controversy is one
for recovery of possession.32 Further,
petitioner noted that it filed its complaint
on July 30, 2004, while R.A. No. 9700
took effect in 2009, therefore, it argues
that the matter of jurisdiction should be
determined not by R.A. No. 9700 but by
R.A. No. 7691 which vests upon the RFC
the exclusive original jurisdiction over "all
civil actions which involve title to, or
possession of, real property, or any
interest therein" the assessed value of
which exceeds P20,000.33
In their Comment, respondents allege that
the errors raised by the petitioners involve
the determination of questions of fact that
are beyond the province of this Court in a
petition for review under Rule 45.34
Ruling of the Court
The petition is meritorious.
It is a basic rule in procedure that the
jurisdiction of the Court over the subject
matter as well as the concomitant nature
of an action is determined by law and the
allegations of the complaint, and is
unaffected by the pleas or theories raised
by the defendant in his answer or motion
to dismiss.35
The jurisdiction of the DAR is laid down in
Section 50 of R.A. No. 6657, otherwise
known as the CARL, which provides:
Section 50. Quasi-Judicial Powers of
the DAR. — The DAR is hereby vested
with the primary jurisdiction to determine
and adjudicate agrarian reform matters
and shall have exclusive original
jurisdiction over all matters involving the
implementation of agrarian reform except
those falling under the exclusive
jurisdiction of the Department of
Agriculture (DA) and the Department of
Environment and Natural Resources
(DENR). x x x.
By virtue of Executive Order No. 129-A,
the DAR Adjudication Board (DARAB) was
designated to assume the powers and
functions of the DAR with respect to the
adjudication of agrarian reform cases, and
matters relating to the implementation of
the CARP and other agrarian laws.36
The exclusive jurisdiction of the DAR over
agrarian cases was further amplified by
the amendment introduced by Section 19
of R.A. 9700 to Section 50. The provision
reads:
Section 19. Section 50 of Republic Act
No. 6657, as amended, is hereby further
amended by adding Section 50-A to read
as follows:
SEC. 50-A. Exclusive Jurisdiction on
Agrarian Dispute. - No court or
prosecutor's office shall take cognizance of
cases pertaining to the implementation of
the CARP except those provided under
Section 57 of Republic Act No. 6657, as
amended. If there is an allegation from
any of the parties that the case is agrarian
in nature and one of the parties is a
farmer, farmworker, or tenant, the case
shall be automatically referred by the
judge or the prosecutor to the DAR which
shall determine and certify within fifteen
(15) days from referral whether an
agrarian dispute exists: Provided, that
from the determination of the DAR, an
aggrieved party shall have judicial
recourse. In cases referred by the
municipal trial court and the prosecutor's
office, the appeal shall be with the proper
regional trial court, and in cases referred
by the regional trial court, the appeal shall
be to the Court of Appeals.
In cases where regular courts or quasi-
judicial bodies have competent
jurisdiction, agrarian reform beneficiaries
or identified beneficiaries and/or their
associations shall have legal standing and
interest to intervene concerning their
individual or collective rights and/or
interests under the CARP.
The fact of non-registration of such
associations with the Securities and
Exchange Commission, or Cooperative
Development Authority, or any concerned
government agency shall not be used
against them to deny the existence of
their legal standing and interest in a case
filed before such courts and quasi-judicial
bodies.
In this regard, it must be said that there is
no merit in the contention of petitioner
that the amendment introduced by R.A.
No. 9700 cannot be applied retroactively
in the case at bar. Primarily, a cursory
reading of the provision readily reveals
that Section 19 of R.A. No. 9700 merely
highlighted the exclusive jurisdiction of
the DAR to rule on agrarian cases by
adding a clause which mandates the
automatic referral of cases upon the
existence of the requisites therein stated.
Simply, R.A. No. 9700 does not deviate
but merely reinforced the jurisdiction of
the DAR set forth under Section 50 of R.A.
No. 6657. Moreover, in the absence of any
stipulation to the contrary, as the
amendment is essentially procedural in
nature it is deemed to apply to all actions
pending and undetermined at the time of
its passage.37
Thence, having settled that Section 19 of
R.A. No. 9700 is applicable in this
controversy, the Court now proceeds with
the examination of such amendment.
Based on the said provision, the judge or
prosecutor is obligated to automatically
refer the cases pending before it to the
DAR when the following requisites are
present:
a. There is an allegation from any one or
both of the parties that the case is
agrarian in nature; and
b. One of the parties is a farmer,
farmworker, or tenant.
In this case, the presence of the first
requisite is satisfied by the allegations
made by the respondents in their Answer
with Counterclaim.38
The allegations in petitioner's complaint
make a case for recovery of possession,
over which the regular courts have
jurisdiction. However, in response thereto,
the respondents filed their Answer with
Counterclaim, assailing the jurisdiction of
the regular court to rule on the matter on
the ground that it is agrarian in nature,
which thus complies with the first
requisite, viz.:
BY WAY OF SPECIAL/AFFIRMATIVE
DEFENSES, defendants further state that:
5. The Court has no jurisdiction over the
subject matter and the nature of the
action. Verily, the allegations of the
complaint would show that this involves
the implementation of Agrarian Reform
law hence beyond the pale of jurisdiction
of this Court.39
Anent the second requisite, the Court
finds that the respondents failed to prove
that they are farmers, farmworkers, or are
agricultural tenants.
Section 3 of R.A. No. 6657 defines
farmers and farmworkers as follows:
(f) Farmer refers to a natural person
whose primary livelihood is cultivation of
land or the production of agricultural
crops, either by himself, or primarily with
the assistance of his immediate farm
household, whether the land is owned by
him, or by another person under a
leasehold or share tenancy agreement or
arrangement with the owner thereof.
(g) Farmworker is a natural person who
renders service for value as an employee
or laborer in an agricultural enterprise or
farm regardless of whether his
compensation is paid on a daily, weekly,
monthly or "pakyaw" basis. The term
includes an individual whose work has
ceased as a consequence of, or in
connection with, a pending agrarian
dispute and who has not obtained a
substantially equivalent and regular farm
employment.
An agricultural tenancy relation, on the
other hand, is established by the
concurrence of the following elements
enunciated by this Court in the case
of Chico v. CA,40
(1) that the parties are the landowner and
the tenant or agricultural lessee; (2) that
the subject matter of the relationship is an
agricultural land; (3) that there is consent
between the parties to the relationship;
(4) that the purpose of the relationship is
to bring about agricultural production; (5)
that there is personal cultivation on the
part of the tenant or agricultural lessee;
and (6) that the harvest is shared
between the landowner and the tenant or
agricultural lessee.41
Contrary to the CA's conclusion and as
opposed to the first requisite, mere
allegation would not suffice to establish
the existence of the second requirement.
Proof must be adduced by the person
making the allegation as to his or her
status as a farmer, farmworker, or tenant.
The pertinent portion of Section 19 of R.A.
No. 9700 reads:
If there is an allegation from any of the
parties that the case is agrarian in nature
and one of the parties is a farmer,
farmworker, or tenant, the case shall be
automatically referred by the judge or the
prosecutor to the DAR xxx.
The use of the word "an" prior to
"allegation" indicate that the latter
qualifies only the immediately subsequent
statement, i.e., that the case is agrarian
in .nature. Otherwise stated, an allegation
would suffice only insofar as the
characterization of the nature of the
action.
Had it been the intention that compliance
with the second element would likewise be
sufficient by a mere allegation from one of
the parties that he or she is a farmer,
farm worker, or tenant, the legislature
should have used the plural form when
referring to "allegation" as the
concurrence of both requisites is
mandatory for the automatic referral
clause to operate.
Further instructive is this Court's ruling in
the previously cited case of Chico.
Therein, the Court held that for the
purpose of divesting regular courts of its
jurisdiction in the proceedings lawfully
began before it and in order for the
DARAB to acquire jurisdiction, the
elements of a tenancy relationship must
be shown by adequate proof. It is not
enough that the elements are alleged.
Likewise, self-serving statements in the
pleadings are inadequate.42
Hence, in light of the absence of evidence
to show any tenancy agreement that
would establish the relationship of the
parties therein, the Court in Chico granted
the petition and reinstated the
proceedings before the RTC of Malolos,
Bulacan.
Applying these principles in the matter on
hand, in here, respondents merely alleged
in their Answer with Counterclaim that
they are previous tenants in the subject
landholdings implying that a tenancy
relationship exists between them and
petitioner's predecessor-in-interest, in this
wise:
9. That defendants are actually tenants of
the land long before the same was illegally
transferred in the name of the plaintiff;
10. That the lot subject matter of this
case is formerly a hacienda devoted to
agricultural production;
11. That since the land is within the
coverage of the [CARL], the defendants,
are by law, the qualified farm-
beneficiaries who should be entitled to the
compulsory acquisition and distribution of
the same;
12. That without the knowledge of the
said defendants, the property was
transferred to herein plaintiff who in order
to avoid the compulsory acquisition and
distribution of the said land, filed a
"bogus" petition for conversion, x x x.43
Apart from these statements however,
respondents failed to elaborate much less
prove the details of such tenancy
agreement and the peculiarities of the
subject landholding's previous ownership.
There was no evidence adduced of the
existence of any tenancy agreement
between respondents and the petitioner's
predecessor-in-interest. This, as
discussed, precludes the application of
Section 50-A of R.A. No. 6657, as
amended by R.A. No. 9700, for failure to
satisfy the second requisite.
WHEREFORE, in view of the foregoing
disquisitions, the petition for review
on certiorari is hereby GRANTED. The
Decision dated October 29, 2012 and
Resolution dated March 15, 2013 issued
by the Court of Appeals in CA-G.R. SP No.
122519 are hereby REVERSED AND SET
ASIDE. Accordingly, the Complaint dated
July 28, 2004 is hereby ordered reinstated
and the case remanded for further
proceedings. The Regional Trial Court of
Guagua, Pampanga, Branch 52 is ordered
to resolve the case with utmost dispatch.
No costs.
SO ORDERED.
THIRD DIVISION
G.R. No. 225035, February 08, 2017
CARSON REALTY & MANAGEMENT
CORPORATION, Petitioner, v. RED
ROBIN SECURITY AGENCY AND
MONINA C. SANTOS, Respondents.
DECISION
VELASCO JR., J.:
Nature of the Case
This is a petition for review under Rule 45
of the Rules of Court, which seeks to
reverse and set aside the August 20, 2015
Decision1 and June 8, 2016 Resolution2 of
the Court of Appeals (CA) in CA-G.R. SP
No. 121983.chanroblesvirtuallawlibrary
Factual Antecedents
The facts according to the CA are as
follows:
On March 23, 2007, respondent Monina C.
Santos (Santos) filed a Complaint for Sum
of Money and Damages against petitioner
Carson Realty & Management Corp.
(Carson) with the Quezon City Regional
Trial Court (RTC), Branch 216. As per the
Officer's Return dated April 12, 2007 of
Process Server Jechonias F. Pajila, Jr.
(Process Server Pajila), a copy of the
Summons dated April 11, 2007, together
with the Complaint and its annexes, was
served upon Carson at its business
address at Unit 601 Prestige Tower
Condominium, Emerald Avenue, Ortigas
Center, Pasig City, through its "corporate
secretary," Precilla S. Serrano.3
Thereafter, the appointed Corporate
Secretary and legal counsel of Carson,
Atty. Tomas Z. Roxas, Jr. (Atty. Roxas),
filed an Appearance and Motion dated
April 25, 2007 with the court wherein the
latter entered his appearance and
acknowledged that the Summons was
served and received by one of the staff
assistants of Carson. Atty. Roxas prayed
for an extension of fifteen (15) days from
April 27, 2007 within which to file a
responsive pleading. The RTC, in its Order
dated May 3, 2007, noted the appearance
of Atty. Roxas as counsel for Carson and
granted his request for extension of time
to file a responsive pleading.4
Instead of filing a responsive pleading,
Atty. Roxas moved to dismiss the
complaint, alleging that the Summons
dated April 11, 2007 was not served on
any of the officers and personnel
authorized to receive summons under the
Rules of Court.5
In her Comment, Santos countered that
while the Summons was initially received
by Serrano, who as it turned out was a
staff assistant and not the corporate
secretary of Carson, the corporation
acknowledged receipt of the Summons
when Atty. Roxas alleged in his
Appearance and Motion that he may not
be able to comply with the 15-day
prescribed period stated in the Summons
within which to file a responsive pleading.
Thus, when Carson sought for an
affirmative relief of a 15-day extension
from April 27, 2007 to file its pleading, it
already voluntarily submitted itself to the
jurisdiction of the RTC.6
The RTC denied Carson's Motion to
Dismiss and directed the issuance of an
alias summons to be served anew upon
the corporation. On November 9, 2007,
Process Server Pajila submitted his
Officer's Report stating in essence that he
attempted to serve the alias Summons
dated September 24, 2007 on the
President and General Manager of Carson,
as well as on the Board of Directors and
Corporate Secretary, but they were not
around. Hence, he was advised by a
certain Lorie Fernandez, the '"secretary"
of the company, to bring the alias
Summons to the law office of Atty. Roxas.
Process Server Pajila attempted to serve
the alias Summons at the law office of
Atty. Roxas twice, but to no avail. This
prompted him to resort to substituted
service of the alias Summons by leaving a
copy thereof with a certain Mr. JR
Taganila, but the latter also refused to
acknowledge receipt of the alias
Summons.7
Atty. Roxas filed a Manifestation stating
that the alias Summons was again
improperly and invalidly served as his law
office was not empowered to receive
summons on behalf of Carson. In relation
thereto, Atty. Roxas maintained that
substituted service is not allowed if the
party defendant is a corporation. Thus,
Atty. Roxas manifested his intention of
returning the alias Summons to the RTC.
On December 10, 2007, Santos filed a
Motion to Declare Defendant in Default.
Finding that there was an improper
service of summons on Carson, the RTC
denied the motion.
Thereafter, Santos requested the RTC for
the issuance of another alias Summons.
The RTC granted this request and issued
an alias Summons dated September 9,
2008. Process Server Pajila submitted his
Officer's Return dated October 28, 2008
on the services of the alias Summons,
quoted hereunder in full:
chanRoblesvirtualLawlibrary
THIS IS TO CERTIFY that on October 2,
2008 at around 12:51 in the afternoon,
when a copy of Alias Summons dated
September 9, 2008 issued in the above-
entitled case together with a copy of the
complaint and annexes attached thereto
was brought for service to the
President/General Manager of CARSON
REALTY & MANAGEMENT CORP., in the
person of Marcial M. Samson and/or Nieva
A Cabrera at its office address at Unit 601
Prestige Tower Condominium, Emerald
Avenue, Ortigas Center, 1605 Pasig City,
undersigned was informed by the
secretary of the company in the person of
Ms. Vina Azonza that the abovementioned
persons were not around and there was
no one in the company authorized to
receive the aforesaid summons. That the
undersigned went back to the said office
on October 16, 2008 at around 3:08 in the
afternoon and was entered by Ms. Lorie
Fernandez, also an employee of the
company who is authorized to receive the
said process. On October 27, 2008, at
around 2:23 in the afternoon, undersigned
tried again to serve the same process to
the President/General Manager of Carson
Realty & Management Corp. but with the
same result.
Finally, on October 28, 2008 at around
1:03 in the afternoon, the undersigned
went back to the said company to
personally serve the Alias Summons
together with the other pertinent
documents, just the same, the
President/General Manager of the
company was not around, hence,
substituted service of summons was
resorted to by leaving the copy of the
Alias Summons at the company's office
through its employee, MS. LORIE
FERNANDEZ, however, she refused to
acknowledge receipt of the
process.ChanRoblesVirtualawlibrary
Loreta M. Fernandez (Fernandez), the
receptionist who received the September
9, 2008 alias Summons, filed a
Manifestation before the RTC signifying
her intention of returning the alias
Summons, together with the Complaint.
Fernandez posited that, as a mere
receptionist, she had no authority to
receive the said documents and that there
was an improper service of summons.
Santos filed a second Motion to Declare
Defendant in Default in January 2009. The
RTC granted the motion and allowed her
to present her evidence ex-parte in its
Order dated June 29, 2009.8
On August 27, 2009, Carson filed an
Urgent Motion to Set Aside Order of
Default9 alleging that the RTC has yet to
acquire jurisdiction over its person due to
improper service of summons. The RTC
denied the same in its December 4, 2009
Order.10
Carson filed an Urgent Motion for
Reconsideration and for Leave of Court to
Admit Responsive Pleading on March 17,
2010, appending thereto its Answer with
Counterclaims. This was opposed by
Santos in her Comment/Opposition. In the
meantime, Santos filed an Ex-Parte
Motion to Set for Hearing and for
Reception of Evidence Before the Branch
Clerk of Court.11 On November 22, 2010,
the RTC rendered an Order12 denying
Carson's Urgent Motion for
Reconsideration and granting Santos' Ex-
Parte Motion to Set Case for Hearing and
for Reception of Evidence Before the
Branch Clerk.13
Carson filed a Motion for Clarification and
prayed for the annulment of the Orders
dated June 29, 2009, December 4, 2009,
and November 22, 2010. The RTC,
however, maintained its stance and
denied the motion in its Order14 dated
September 9, 2011.
Thus, Carson filed a Petition for
Certiorari15 dated November 9, 2011
under Rule 65 of the Rules of Court with
the CA, imputing grave abuse of discretion
amounting to lack or excess of jurisdiction
to the RTC for issuing the Orders dated
June 29, 2009, December 4, 2009,
November 22, 2010, and September 9,
2011. Carson essentially questioned the
validity of the service of the second alias
Summons dated September 9, 2008,
received by Fernandez, who is a
receptionist assigned at its office in
Ortigas.chanroblesvirtuallawlibrary
Ruling of the Court of Appeals
The CA denied the petition and ruled that
the RTC had properly acquired jurisdiction
over Carson due to its voluntary
appearance in court. In ruling thus, the
CA considered Carson's act of requesting
additional time to file its responsive
pleading as voluntary submission to the
jurisdiction of the trial court.
Even on the assumption that Carson did
not voluntarily submit to the RTC's
jurisdiction, the CA maintained that the
RTC still acquired jurisdiction over it due
to the substituted service of the alias
Summons dated September 9, 2008. The
appellate court reasoned that Fernandez is
a competent person charged with
authority to receive court documents on
behalf of the corporation.16 Consequently,
the CA upheld the Order dated June 29,
2009 declaring Carson in default.
Carson moved for reconsideration but was
denied by the CA in its Resolution dated
June 8, 2016. Hence, this petition.
Carson, in the main, argues that the trial
court did not acquire jurisdiction over its
person because the summons was not
properly served upon its officers as
mandated under Section 11,17 Rule 14 of
the Rules of Court. Thus, Carson posits,
the RTC improperly declared it in default
and should not have allowed Santos to
present her evidence ex-
parte.chanroblesvirtuallawlibrary
Issues
The pertinent issues for the resolution of
this Court can be summarized, as follows:
(1) Whether the RTC acquired jurisdiction
over Carson.
(2) Whether Carson was properly declared
in default.chanroblesvirtuallawlibrary
Our Ruling
The petition is bereft of merit.
In actions in personam, such as the
present case, the court acquires
jurisdiction over the person of the
defendant through personal or substituted
service of summons. However, because
substituted service is in derogation of the
usual method of service and personal
service of summons is preferred over
substituted service, parties do not have
unbridled right to resort to substituted
service of summons. Before substituted
service of summons is resorted to, the
parties must: (a) indicate the impossibility
of personal service of summons within a
reasonable time; (b) specify the efforts
exerted to locate the defendant; and (c)
state that the summons was served upon
a person of sufficient age and discretion
who is residing in the address, or who is in
charge of the office or regular place of
business of the defendant.18
In relation to the foregoing, Manotoc v.
Court of Appeals119 provides an
exhaustive discussion on what constitutes
valid resort to substituted service of
summons:
chanRoblesvirtualLawlibrary
(1) Impossibility of Prompt Personal
Service
The party relying on substituted service or
the sheriff must show that defendant
cannot be served promptly or there is
impossibility of prompt service. Section 8,
Rule 14 provides that the plaintiff or the
sheriff is given a "reasonable time" to
serve the summons to the defendant in
person, but no specific time frame is
mentioned. "Reasonable time" is defined
as "so much time as is necessary under
the circumstances for a reasonably
prudent and diligent man to do,
conveniently, what the contract or duty
requires that should be done, having a
regard for the rights and possibility of
loss, if any, to the other party." Under the
Rules, the service of summons has no set
period.
However, when the court, clerk of court,
or the plaintiff asks the sheriff to make
the return of the summons and the latter
submits the return of summons, then the
validity of the summons lapses. The
plaintiff may then ask for an alias
summons if the service of summons has
failed. What then is a reasonable time for
the sheriff to effect a personal service in
order to demonstrate impossibility of
prompt service? To the plaintiff,
"reasonable time" means no more than
seven (7) days since an expeditious
processing of a complaint is what a
plaintiff wants. To the sheriff: "reasonable
time" means 15 to 30 days because at the
end of the month, it is a practice for the
branch clerk of court to require the sheriff
to submit a return of the summons
assigned to the sheriff for service. The
Sheriffs Return provides data to the Clerk
of Court, which the clerk uses in the
Monthly Report of Cases to be submitted
to the Office of the Court Administrator
within the first ten (10) days of the
succeeding month. Thus, one month from
the issuance of summons can be
considered "reasonable time" with regard
to personal service on the defendant.
Sheriffs are asked to discharge their
duties on the service of summons with
due care, utmost diligence, and
reasonable promptness and speed so as
not to prejudice the expeditious
dispensation of justice. Thus, they are
enjoined to try their best efforts to
accomplish personal service on defendant.
On the other hand, since the defendant is
expected to try to avoid and evade service
of summons, the sheriff must be
resourceful, persevering, canny, and
diligent in serving the process on the
defendant. For substituted service of
summons to be available, there must be
several attempts by the sheriff to
personally serve the summons within a
reasonable period [of one month] which
eventually resulted in failure to prove
impossibility of prompt service. "Several
attempts" means at least three (3) tries,
preferably on at least two different dates.
In addition, the sheriff must cite why such
efforts were unsuccessful. It is only then
that impossibility of service can be
confirmed or accepted.
(2) Specific Details in the Return
The sheriff must describe in the Return of
Summons the facts and circumstances
surrounding the attempted personal
service. The efforts made to find the
defendant and the reasons behind the
failure must be clearly narrated in detail in
the Return. The date and time of the
attempts on personal service, the inquiries
made to locate the defendant, the name/s
of the occupants of the alleged residence
or house of defendant and all other acts
done, though futile, to serve the summons
on defendant must be specified in the
Return to justify substituted service. The
form on Sheriffs Return of Summons on
Substituted Service prescribed in the
Handbook for Sheriffs published by the
Philippine Judicial Academy requires a
narration of the efforts made to find the
defendant personally and the fact of
failure. Supreme Court Administrative
Circular No. 5 dated November 9, 1989
requires that "impossibility of prompt
service should be shown by stating the
efforts made to find the defendant
personally and the failure of such efforts,"
which should be made in the proof of
service.
(3) A Person of Suitable Age and
Discretion
If the substituted service will be effected
at defendant's house or residence, it
should be left with a person of "suitable
age and discretion then residing therein."
A person of suitable age and discretion is
one who has attained the age of full legal
capacity (18 years old) and is considered
to have enough discernment to
understand the importance of a summons.
"Discretion" is defined as "the ability to
make decisions which represent a
responsible choice and for which an
understanding of what is lawful, right or
wise may be presupposed". Thus, to be of
sufficient discretion, such person must
know how to read and understand English
to comprehend the import of the
summons, and fully realize the need to
deliver the summons and complaint to the
defendant at the earliest possible time for
the person to take appropriate action.
Thus, the person must have the "relation
of confidence" to the defendant, ensuring
that the latter would receive or at least be
notified of the receipt of the summons.
The sheriff must therefore determine if
the person found in the alleged dwelling
or residence of defendant is of legal age,
what the recipient's relationship with the
defendant is, and whether said person
comprehends the significance of the
receipt of the summons and his duty to
immediately deliver it to the defendant or
at least notify the defendant of said
receipt of summons. These matters must
be clearly and specifically described in the
Return of Summons.
(4) A Competent Person in Charge
If the substituted service will be done at
defendant's office or regular place of
business, then it should be served on a
competent person in charge of the place.
Thus, the person on whom the substituted
service will be made must be the one
managing the office or business of
defendant, such as the president or
manager; and such individual must have
sufficient knowledge to understand the
obligation of the defendant in the
summons, its importance, and the
prejudicial effects arising from inaction on
the summons. Again, these details must
be contained in the
Return.ChanRoblesVirtualawlibrary
The substituted service of summons
is valid
While Our pronouncement in Manotoc has
been strictly applied to several succeeding
cases, We do not cling to such strictness
in instances where the circumstances
justify substantial compliance with the
requirements laid down therein. It is the
spirit of the procedural rules, not their
letter, that governs.20
In Sagana v. Francisco,21 the substituted
service of summons was questioned for
non-compliance with the Rules, since the
summons was not allegedly served at
defendant's residence or left with any
person who was authorized to receive it
on behalf of the defendant. We upheld the
validity of the substituted service of
summons due to the defendant's evident
avoidance to receive the summons
personally despite the process server's
diligent efforts to effect personal service
upon him. We explained:
chanRoblesvirtualLawlibrary
We do not intend this ruling to overturn
jurisprudence to the effect that statutory
requirements of substituted service must
be followed strictly, faithfully, and fully,
and that any substituted service other
than that authorized by the Rules is
considered ineffective. However, an overly
strict application of the Rules is not
warranted in this case, as it would clearly
frustrate the spirit of the law as well as do
injustice to the parties, who have been
waiting for almost 15 years for a
resolution of this case. We are not
heedless of the widespread and flagrant
practice whereby defendants actively
attempt to frustrate the proper service of
summons by refusing to give their names,
rebuffing requests to sign for or receive
documents, or eluding officers of the
court. Of course it is to be expected that
defendants try to avoid service of
summons, prompting this Court to declare
that, "the sheriff must be resourceful,
persevering, canny, and diligent in serving
the process on the defendant." However,
sheriffs are not expected to be sleuths,
and cannot be t1mlted where the
defendants themselves engage in
deception to thwart the orderly
administration of
justice.ChanRoblesVirtualawlibrary
Similarly, given the circumstances in the
case at bench, We find that resort to
substituted service was warranted since
the impossibility of personal service is
clearly apparent.
A perusal of the Officer's Return dated
October 28, 2008 detailing the
circumstances surrounding the service of
the second alias Summons dated
September 9, 2008 shows that the
foregoing requirements for a valid
substituted service of summons were
substantially complied with.
Indeed, the Return established the
impossibility of personal service to
Carson's officers, as shown by the efforts
made by Process Server Pajila to serve
the September 8, 2008 alias Summons on
Carson's President/General Manager. In
particular, several attempts to serve the
summons on these officers were made on
four separate occasions: October 2, 2008,
October 16, 2008, October 27, 2008, and
October 28, 2008, but to no avail.
On his fourth and final attempt, Process
Server Pajila served the summons on
Fernandez, Carson's receptionist, due to
the unavailability and difficulty to locate
the company's corporate officers. The
pertinent portion of the Return states:
chanRoblesvirtualLawlibrary
[S]ubstituted service of summons was
resorted to by leaving the copy of the
Alias Summons at the company's office
through its employee, MS. LORIE
FERNANDEZ, however, she refused to
acknowledge receipt of the
process.ChanRoblesVirtualawlibrary
Based on the facts, there was a deliberate
plan of Carson's for its officers not to
receive the Summons. It is a legal
maneuver that is in derogation of the
rules on Summons. We cannot tolerate
that.
The facts now show that the responsible
officers did not intend to receive the alias
Summons through substituted service.
The Summons is considered validly
served.
The RTC acquired jurisdiction over
Carson
In any event, even if We concede the
invalidity of the substituted service, such
is of little significance in view of the fact
that the RTC had already acquired
jurisdiction over Carson early on due to its
voluntary submission to the jurisdiction of
the court.
Courts acquire jurisdiction over the
plaintiffs upon the filing of the complaint.
On the other hand, jurisdiction over the
defendants in a civil case is acquired
either through the service of summons
upon them or through their voluntary
appearance in court and their submission
to its authority,22 as provided in Section
20,23 Rule 14 of the Rules of Court.
On this score, Philippine Commercial
International Bank v. Spouses
Day24 instructs that:
chanRoblesvirtualLawlibrary
As a general proposition, one who seeks
an affirmative relief is deemed to have
submitted to the jurisdiction of the court.
It is by reason of this rule that we have
had occasion to declare that the filing of
motions to admit answer, for additional
time to file answer, for reconsideration of
a default judgment, and to lift order of
default with motion for reconsideration, is
considered voluntary submission to the
court's jurisdiction. This, however, is
tempered only by the concept of
conditional appearance, such that a party
who makes a special appearance to
challenge, among others, the court's
jurisdiction over his person cannot be
considered to have submitted to its
authority. Prescinding from the foregoing,
it is thus clear that:
(1) Special appearance operates as an
exception to the general rule on voluntary
appearance;chanrobleslaw
(2) Accordingly, objections to the
jurisdiction of the court over the person of
the defendant must be explicitly made,
i.e., set forth in an unequivocal manner;
and
(3) Failure to do so constitutes voluntary
submission to the jurisdiction of the court,
especially in instances where a pleading or
motion seeking affirmative relief is filed
and submitted to the court for resolution.
(underscoring
supplied)ChanRoblesVirtualawlibrary
We have, time and again, held that the
filing of a motion for additional time to file
answer is considered voluntary submission
to the jurisdiction of the
court.25cralawred If the defendant
knowingly does an act inconsistent with
the right to object to the lack of personal
jurisdiction as to him, like voluntarily
appearing in the action, he is deemed to
have submitted himself to the jurisdiction
of the court.26 Seeking an affirmative
relief is inconsistent with the position that
no voluntary appearance had been made,
and to ask for such relief, without the
proper objection, necessitates submission
to the Court's jurisdiction.27
Carson voluntarily submitted to the
jurisdiction of the RTC when it filed,
through Atty. Roxas, the Appearance and
Motion dated April 25, 2007
acknowledging Carson's receipt of the
Summons dated April 11, 2007 and
seeking additional time to file its
responsive pleading. As noted by the CA,
Carson failed to indicate therein that the
Appearance and Motion was being filed by
way of a conditional appearance to
question the regularity of the service of
summons. Thus, by securing the
affirmative relief of additional time to file
its responsive pleading, Carson effectively
voluntarily submitted to the jurisdiction of
the RTC.
Carson was properly declared in
default
Section 3, Rule 9 of the Rules of Court
states when a party may be properly
declared in default and the remedy
available in such case:
chanRoblesvirtualLawlibrary
SEC. 3. Default; declaration of. - If the
defending party fails to answer within the
time allowed therefor, the court shall,
upon motion of the claiming party with
notice to the defending party, and proof of
such failure, declare the defending party
in default. Thereupon, the court shall
proceed to render judgment granting the
claimant such relief as his pleading may
warrant, unless the court in its discretion
requires the claimant to submit evidence.
Such reception of evidence may be
delegated to the clerk of court.
(a) Effect of order of default. - A party in
default shall be entitled to notice of
subsequent proceedings but not to take
part in the trial.
(b) Relief from order of default. - A party
declared in default may at any time after
notice thereof and before judgment file a
motion under oath to set aside the order
of default upon proper showing that his
failure to answer was due to fraud,
accident, mistake or excusable negligence
and that he has a meritorious defense. In
such case, the order of default may be set
aside on such terms and conditions as the
judge may impose in the interest of
justice. (emphasis
supplied)ChanRoblesVirtualawlibrary
Carson moved to dismiss the complaint
instead of submitting a responsive
pleading within fifteen (15) days from
April 27, 2007 as prayed for in its
Appearance and Motion. Clearly, Carson
failed to answer within the time allowed
for by the RTC. At this point, Carson could
have already been validly declared in
default. However, believing that it has yet
to acquire jurisdiction over Carson, the
RTC issued the September 24, 2007 and
September 9, 2008 alias Summons. This
culminated in the issuance of the assailed
June 29, 2009 Order declaring Carson in
default on the basis of the substituted
service of the September 9, 2008 alias
Summons. While Carson filed its Urgent
Motion to Lift Order of Default, the CA
found that the same failed to comply with
the requirement under Sec. 3(b) that the
motion be under oath.
It bears noting that the propriety of the
default order stems from Carson's failure
to file its responsive pleading despite its
voluntary submission to the jurisdiction of
the trial court reckoned from its filing of
the Appearance and Motion, and not due
to its failure to file its answer to the
September 8, 2008 alias Summons. This
conclusion finds support in Atiko Trans,
Inc. and Cheng Lie Navigation Co., Ltd v.
Prudential Guarantee and Assurance,
Inc.,28 wherein We upheld the trial court's
order declaring petitioner Atiko Trans, Inc.
(Atiko) in default despite the invalid
service of summons upon it. In this case,
respondent Prudential Guarantee and
Assurance Inc. (Prudential) moved to
declare Atiko in default due to the latter's
failure to file its responsive pleading
despite receipt of the summons. Acting on
Prudential's motion, the trial court
declared Atiko in default. In affirming the
validity of the default order, We took note
that the trial court acquired jurisdiction
over Atiko due to its voluntary submission
to the jurisdiction of the court by filing
numerous pleadings seeking affirmative
relief, and not on the strength of the
invalidly served summons.
In a similar vein, the erroneous basis cited
in the June 29, 2009 Order, due to the
RTC's mistaken belief that the substituted
service vested it with jurisdiction over
Carson, does not render the
pronouncement invalid in view of the
existence of a lawful ground therefor.

WHEREFORE, the petition is DENIED.

The Decision dated August 20, 2015 and
Resolution dated June 8, 2016 of the
Court of Appeals in CA G.R. SP No.
121983 are AFFIRMED.

SO ORDERED.cralawlawlibrary
G.R. No. 194751 November
26, 2014
AURORA N. DE PEDRO, Petitioner,
vs.
ROMASAN DEVELOPMENT
CORPORATION, Respondent.
DECISION
LEONEN, J.:
Regardless of the type of action - whether
it is in personam, in rem or quasi in rem -
the preferred mode of service of summons
is personal service. To avail themselves of
substituted service, courts must rely on a
detailed enumeration of the sheriff's
actions and a showing that the defendant
cannot be served despite diligent and
reasonable efforts. The sheriff's return,
which contains these details, is entitled to
a presumption of regularity, and on this
basis, the court may allow substituted
service. Should the sheriff's return be
wanting of these details, substituted
service will be irregular if no other
evidence of the efforts to serve summons
was presented. Failure to serve summons
will mean that the court failed to acquire
jurisdiction over the person of the
defendant. However, the filing of a motion
for new trial or reconsideration is
tantamount to voluntary appearance.
This Rule 45 petition seeks the review of
the Court of Appeals July 7, 2010 decision
in CA G.R. SP. No. 96471. The Court of
Appeals denied petitioner’s action for
annulment of the Regional Trial Court
decision, which, in turn, nullified her
certificate of title.
This case originated from separate
complaints for nullification of free patent
and original certificates of title, filed
against several defendants.1 One of the
defendants is petitioner Aurora De Pedro
(De Pedro).2 The complaints were filed by
respondent Romasan Development
Corporation before the Regional Trial
Court of Antipolo City on July 7, 1998.3
Respondent Romasan Development
Corporation alleged in its complaints that
it was the owner and possessor of a parcel
of land in Antipolo City.4 The land was
covered by Transfer Certificate of Title
(TCT) No. 236044.5
Based on respondent’s narrative, its
representative, Mr. Rodrigo Ko, discovered
sometime in November 1996 that De
Pedro put up fences on a portion of its
Antipolo property.6 Mr. Ko confronted De
Pedro regarding her acts, but she was
able to show title and documents
evidencing her ownership.7
Mr. Ko informed respondent about the
documents.8 Upon checking with the
Community Environment and Natural
Resources Office Department of
Environment and Natural Resources
(CENRO-DENR), it was discovered that the
DENR issued free patents covering
portions of respondent’s property to the
following:
a. Defendant Nora Jocson, married to
Carlito Jocson - OCT No. P-723, Free
Patent No. 045802-91-616;
b. Defendants Heirs of Marcelino Santos[,]
represented by Cristino Santos - OCT No.
P-727, Free Patent No. 045802-91-919;
c. Defendant Aurora de Pedro marriedto
Elpidio de Pedro - OCT No. 691, Free
Patent No. 045802-91-914;
d. Defendant Wilson Dadia - OCT No. P-
722, Free Patent No. 045802-91-915; and
e. Defendant Prudencio Marana - OCT No.
P-721, Free Patent N[o]. 045802-91-923.9
(Emphasis supplied)
Based on these free patents, the Register
of Deeds issued titles covering portions of
respondent’s property.10 Original
Certificate of Title (OCT) No. 691, Free
Patent No. 045802-91-914 was signed by
the Provincial Environment and Natural
Resources Office in favor of De Pedro on
December 9, 1991.11
Respondent further alleged in its separate
complaints that the government could not
legally issue the free patents because at
the time of their issuance, the land was
already released for disposition to private
individuals.12 OCT No. 438, from which
respondent’s TCT No. 236044 originated,
was already issued as early as August 30,
1937.13
Respondent also prayed for the payment
of attorney’s fees and exemplary
damages.14 Attempts to personally serve
summons on De Pedro failed.15 The
officer’s return, dated February 22, 1999
reads in part:
OFFICER’S RETURN
I HEREBY CERTIFY that on the 15th and
18th day of February, 1999, I have served
a copy of the summons with complaint
and annexes dated January 29, 1999
issued by Regional Trial Court, Fourth
Judicial Region, Branch 74, Antipolo City
upon defendants in the above-entitled
case on the following, to wit;
1. AURORA N. DE PEDRO – Unserved for
the reason that according to the
messenger of Post Office of Pasig their
[sic] is no person in the said given
address.16
Respondent filed a motion to serve
summons and the complaint by
publication.17
On August 17, 1998, the Regional Trial
Court granted the motion.18 The summons
and the complaint werepublished in
People’s Balita on its April 24, May 1, and
May 8, 1998 issues.19 On July 15, 1999,
respondent moved to declare all
defendants in its complaints, including De
Pedro, in default for failure to file their
answers.20 Respondent also moved to be
allowed to present evidence ex
parte.21 The Regional Trial Court granted
the motions on August 19, 1999.22
On January 7, 2000, the Regional Trial
Court issued an order declaring as nullity
the titles and free patents issued to all
defendants in respondent’s complaint,
including the free patent issued to De
Pedro.23 Thus:
Accordingly the Court declares asa nullity
the following titles and Free Patents
issued to the Defendants.
a. Defendant Nora Jocson married to
Carlito Jocson OCT No. P-723; Free
PatentN[o]. 045802-91-616;
b. Defendant Heirs of Marcelino Santos
represented by Cristino Santos – OCT
N[o]. P-727; Free Patent N[o]. 045802-
91-919;
c. Defendant Aurora N. de Pedro married
to Elpidio de Pedro – OCT No. P-691; Free
Patent No. 045802-91-914;
d. Defendant Wilson Dadia – OCT No. P-
722; Free Patent No. 045802-91-915;
e. Defendant Prudencio Marana – OCT No.
P-721; Free Patent N[o]. 045802-91-923.
There being clear bad faith on the part of
the Private defendants in obtaining said
Free Patents and titles in their names
covering the portions of the property of
the plaintiff, said defendants are each
ordered to pay to the plaintiff the amount
of ₱20,000.00 as attorney’s fees,
₱3,000.00 as appearance fee and also
₱50,000.00 as moral damages with costs
against said private defendants.
Once the Decision becomes final and in
order to give full force and effect to the
Decision of the Court nullifying the titles
and patents issued to the defendants, the
latter are directed to surrender the same
within a period of ten (10) days from the
finalityof said Decision to the Registry of
Deeds of Marikina City and failure on the
part of the defendants to surrender the
owner’s duplicate of the titles in their
possession, defendant Register of Deeds
of Marikina City is authorized to cancel the
same without the presentation of said
owner’s duplicate oftitles in the possession
of the defendants.24 (Emphasis supplied)
In so ruling, the Regional Trial Court
noted that none of the defendants,
including De Pedro, filed an answer to
respondent’s complaints.25 The Regional
Trial Court also noted the committee
report admitting CENRO’s irregularity in
the issuance of the free patents to the
defendants in the case.26
The Regional Trial Court also found that
the title and free patent issued to De
Pedro were void.27 As early as August 30,
1937, or before the free patents were
issued to the defendants in the case, OCT
No. 438 was already issued to the
property’s original owner.28 Hence, the
property was already "segregated from
the mass of public domain" that can be
disposed by the government.29
On March 30, 2000, De Pedro, through
counsel, filed before the Regional Trial
Court a motion for new trial, alleging that
the counsel received notice of the January
7, 2000 decision on March 16, 2000.30
De Pedro argued that the Regional Trial
Court did not acquire jurisdiction over her
person because of improper and defective
service of summons. Citing the officer’s
return dated February 22,1999, De Pedro
pointed out that summons was not
personally served upon her "for the
reason that according to the messenger of
Post Office of Pasig their (sic) is no person
in the saidgiven address."31
De Pedro also argued that the case should
have been dismissed on the ground of litis
pendentia. She alleged that there was a
pending civil case filed by her, involving
the same property, when respondent filed
the complaints against her and several
others.32
On September 30, 2002, the Regional
Trial Court issued an order denying De
Pedro’s motion for new trial.33
The Regional Trial Court ruled that
summons was validly served upon De
Pedro through publication, in accordance
with the Rules of Court.34 Moreover,
counting from the date of the summons’
publication beginning on March 2, 2000,
the motion for new trial was filed beyond
the 15-day period within which the motion
may be filed.35 Therefore, the Regional
Trial Court decision had become final and
executory.36
The Regional Trial Court also ruled that
the reckoning period for filing the motion
for new trial cannot be De Pedro’s
counsel’s receipt of the decision. This is
because at the time of the issuance of the
court’s decision, which had already
become final and executory, De Pedro’s
counsel was yet to enter his appearance
for De Pedro.37
De Pedro filed a petition for certiorari
before the Court of Appeals, alleging that
the Regional Trial Court committed grave
abuse of discretion when it denied her
motion for new trial.38
On March 30, 2006, the Court of Appeals
dismissed the petition for certiorari for
lack of merit, and affirmed the denial of
De Pedro’s motion for new trial.39
The Court of Appeals noted De Pedro’s
belated filing of her motion for new trial.
The Court of Appeals also noted De
Pedro’s failure to allege any ground that
would justify the grant of a motion for
new trial under Rule 37, Section 1 of the
Revised Rules of Civil Procedure.40
De Pedro’s motion for reconsideration was
denied in the Court of Appeals resolution
dated August 24, 2006.41
De Pedro elevated the case to this court,
but this was likewise denied in the
resolution dated October 4, 2006 for
failure to pay the Special Allowance for
the Judiciary and sheriff’s fees.42
On October 11, 2006, De Pedro filed
before the Court of Appeals a petition for
annulment of the January 7, 2000
judgment of the Regional Trial Court 43 on
grounds of lack of jurisdiction, litis
pendentia, and for having been
dispossessed of her property without due
process.
Citing Pantaleon v. Asuncion,44 De Pedro
pointed out that "[d]ue process of law
requires personal service to support a
personal judgment, and, when the
proceeding is strictly in personam brought
to determine the personal rights and
obligations of the parties, personal service
within the state or a voluntary appearance
in the case is essential to the acquisition
of jurisdiction [so] as to constitute
compliance with the constitutional
requirement of due process."45
De Pedro also claimed to be the real
owner of the property by virtue of OCT
No. P-691.46 She pointed out that the
same Regional Trial Court branch ordered
the reconstitution ofher title to the
property in 1997.47 The Regional Trial
Court also issued a certificate of finality
stating that "an Entry of Judgment had
already been issued by the Court of
Appeals dated January 16, 2006."48
On July 7, 2010, the Court of Appeals
promulgated its decision denying De
Pedro’s petition for annulment of
judgment.49 The dispositive portion of the
Court of Appeals decision reads:
WHEREFORE, this petition is hereby
DENIED.50
The Court of Appeals ruled that since
petitioner already availed herself of the
remedy of new trial, and raised the case
before the Court of Appeals via petition for
certiorari, she can no longer file a petition
for annulment of judgment.51
De Pedro’s motion for reconsideration was
denied on December 3, 2010:52
WHEREFORE, premises considered, the
motion for reconsideration is DENIED for
lack of merit.53
On January 13, 2011, De Pedro filed
before this court a Rule 45 petition,
seeking the reversal of the July 7, 2010
Court of Appeals decision and the
December 3, 2010 Court of Appeals
resolution.54
The issues in this case are:
I. Whether the trial court decision was
void for failure of the trial court to acquire
jurisdiction over the person of petitioner
Aurora N. De Pedro; and
II. Whether filing a motion for new trial
and petition for certiorari is a bar from
filing a petition for annulment of
judgment.
Petitioner argues that respondent’s prayer
for attorney’s fees, appearance fees,
exemplary damages, and costs of suit
sought to establish personal obligations
upon petitioner in favor of
respondent.55 Hence, the case filed by
respondent before the Regional Trial Court
was an action in personam, which
required personal service upon her for the
court’s acquisition of jurisdiction over her
person.56 In this case, the Regional Trial
Court allowed service of summons by
publication instead of ordering that
summons be served by substituted
service.57 Improper service of summons
rendered the trial court decision null and
void.58 It means that the court could not
acquire jurisdiction over the person of
petitioner.59
Petitioner also argues that respondent’s
complaints were dismissible on the ground
of litis pendentia, pointing to the alleged
pending case between the same parties
and involving same subject matter at the
time when respondent filed its complaint
before the Regional Trial Court in
1998.60 The alleged pending case was filed
in 1997 by petitioner and her spouse
against respondent, seeking
"enforce[ment] of their rights as owners,
and claim[ing] damages for the unlawful
and illegal acts of dispossession, terrorism
and violence which they, their family and
their close relatives were subjected to by
[respondent]."61
On her ownership of the property,
petitioner argues that she was able to
obtain OCT No. P-691 in 1991 in strict and
faithful compliance with all the
requirements.62 When the Register of
Deeds lost the records pertaining to the
property, the Regional Trial Court ordered
the reconstitution of the title on
September 23, 1997.63 The same trial
court issued the certificate of finality of
the order on March 16, 2006.64
Moreover, petitioner refersto a counter-
affidavit issued by a certain Jesus
Pampellona, Deputy Public Land Inspector
of CENRO-Antipolo, in the preliminary
investigation of a case before the
Department of Justice, docketed as I.S.
No. 99-503 and entitled: "Rodrigo Sy v.
Maximo Pentino, et al." Petitioner
highlights Pampellona’sstatements that
the free patent applicants for the property
were found to be in "actual, public,
adverse and continuous possession on the
specific lots applied for by them with
several improvements like the house of
Mrs. Aurora de Pedro and several fruit[-
]bearing trees with an average age of 20-
25 years scattered within the twelve (12)
hectares area applied for by the above
named applicants;"65 Based on the
affidavit, Pampellona was "unaware, at
the time, of any previous title issued in
favor of any person or entity covering the
subject lots above mentioned as there was
at that time, no existing record, both in
the CENRO, Antipolo, Rizal, or at the Land
Management Bureau in Manila, attesting
to the issuance of previous titles on the
subject lots."66
Lastly, petitioner argues that the trial
court decision was null and void,
considering that petitioner’s title was
cancelled in contravention of Section 48 of
Presidential Decree No. 1529, which
prohibits collateral attack upon certificates
of title.67
In its comment, respondent argues that
the process server tried other forms of
substituted service, including service by
registered mail.68
Respondent also argues that petitioner
was in evident malice and bad faith when
she allegedly did not disclose in her
petition other actions taken by her after
the Regional Trial Court had denied her
motion for new trial.69 Particularly,
petitioner filed a petition for certiorari
before the Court of Appeals, pertaining to
the trial court’s denial of the motion for
new trial.70
When the petition for certiorari was
denied, petitioner also filed a petition for
review before this court, which was also
denied.71 For these reasons, petitioner’s
petition for review before this court
deserves outright dismissal.72
I the limits and the requirements for the
The sheriff’s return must show the
details of the efforts exerted to
personally serve summons upon
defendants or respondents, before
substituted service or service by
publication is availed
Courts may exercise their powers validly
and with binding effect if they acquire
jurisdiction over: (a) the cause of action
or the subject matter of the case; (b) the
thing or the res; (c) the parties; and (d)
the remedy.
Jurisdiction over the subject matter refers
to the power or authority of courts to hear
and decidecases of a general class.73 It is
conferred by the Constitution or by
law.74 It is not acquired through
administrative issuances or court orders.
It is not acquired by agreement,
stipulation, waiver,75 or silence.76 Any
decision by a court, withouta law vesting
jurisdiction upon such court, is void.
Jurisdiction over the thing or res is the
power of the court over an object or thing
being litigated. The court may acquire
jurisdiction over the thing by actually or
constructively seizing or placing it under
the court’s custody.77
Jurisdiction over the parties refers tothe
power of the court to make decisions that
are binding on persons. The courts acquire
jurisdiction over complainants or
petitioners as soon as they file their
complaints or petitions. Over the persons
of defendants or respondents, courts
acquire jurisdiction by a valid service of
summons or through their voluntary
submission.78 Generally, a person
voluntarily submits tothe court’s
jurisdiction when he or she participates in
the trial despite improper service of
summons.
Courts79 and litigants must be aware of
acquisition of court jurisdiction. Decisions
or orders issued by courts outside their
jurisdiction are void. Complaints or
petitions filed before the wrong court or
without acquiring jurisdiction over the
parties may be dismissed.80
Petitioner argued that the trial court did
not acquire jurisdiction over her person
because she was not properly served with
summons. After the summons had
returned unserved to petitioner because
"there [was] no person in the said given
address,"81 the trial court allowed the
publication of the summons to petitioner.
Jurisdiction over the parties is required
regardless of the type of action — whether
the action is in personam, in rem, or quasi
in rem.
In actions in personam, the judgment is
for or against a person
directly.82 Jurisdiction over the parties is
required in actions in personam because
they seek to impose personal
responsibility or liability upon a person.83
Courts need not acquire jurisdiction over
parties on this basis in in rem and quasi in
rem actions. Actions in remor quasi in
remare not directed against the person
based on his or her personal liability.84
Actions in remare actions against the
thing itself. They are binding upon the
whole world.85 Quasi in remactions are
actions involving the status of a property
over which a party has interest.86 Quasi in
rem actions are not binding upon the
whole world. They affect only the interests
of the particular parties.87
However, to satisfy the requirements of
due process, jurisdiction over the parties
in in rem and quasi in rem actions is
required.
The phrase, "against the thing," to
describe in rem actions is a metaphor. It
is not the "thing" that is the party to an in
rem action; only legal or natural persons
may be parties even in in rem actions.
"Against the thing" means that resolution
of the case affects interests of others
whether direct or indirect. It also assumes
that the interests — in the form of rights
or duties — attach to the thing which is
the subject matter of litigation. In actions
in rem, our procedure assumes an active
vinculum over those with interests to the
thing subject of litigation.
Due process requires that those with
interest to the thing in litigation be
notified and given an opportunity to
defend those interests. Courts, as
guardians of constitutional rights, cannot
be expected to deny persons their due
process rights while at the same time be
considered as acting within their
jurisdiction.
Violation of due process rights is a
jurisdictional defect. This court recognized
this principle in Aducayen v. Flores.88 In
the same case, this court further ruled
that this jurisdictional defect is remedied
by a petition for certiorari.89
Similarly in Vda. de Cuaycong v. Vda. de
Sengbengco,90 this court held that a
decision that was issued in violation of a
person’s due process rights suffers a fatal
infirmity.91
The relation of due process to jurisdiction
is recognized even in administrative cases
wherein the standard of evidence is
relatively lower. Thus, in Montoya v.
Varilla:92
The cardinal precept is that where there is
a violation of basic constitutional rights,
courts are ousted from their jurisdiction.
The violation of a party’s right to due
process raises a serious jurisdictional
issue which cannot be glossed over or
disregarded at will. Where the denial of
the fundamental right of due process is
apparent, a decision rendered in disregard
of that rightis void for lack of
jurisdiction.93
An action for annulment of certificate of
title is quasi in rem. It is not an action
"against a person on the basis of his
personal liability,"94 but an action that
subjects a person’s interest over a
property to a burden. The action for
annulment of a certificate oftitle threatens
petitioner’s interest in the property.
Petitioner is entitled to due process with
respect to that interest. The court does
not have competence or authority to
proceed with an action for annulment of
certificate of title without giving the
person, in whose name the certificate was
issuedall the opportunities to be heard.
Hence, regardless of the nature of the
action, proper service of summons is
imperative. A decision rendered without
proper service of summons suffers a
defect in jurisdiction. Respondent’s
institution of a proceeding for annulment
of petitioner’s certificate of title is
sufficient to vest the court with
jurisdiction over the res, but it is not
sufficient for the court to proceed with the
case with authority and competence.
Personal service of summons is the
preferred mode of service of
summons.95 Thus, as a rule, summons
must be served personally upon the
defendant or respondent wherever he or
she may be found. If the defendant or
respondent refuses to receive the
summons, it shall be tendered to him or
her.96
If the defendant or respondent is a
domestic juridical person, personal service
of summons shall be effected upon its
president, managing partner, general
manager, corporate secretary, treasurer,
or in-house counsel wherever he or she
may be found.97
Other modes of serving summons may be
done when justified. Service of summons
through other modes will not be effective
without showing serious attempts to serve
summons through personal service. Thus,
the rules allow summons to be served by
substituted service only for justifiable
causes and if the defendant or respondent
cannot be served within reasonable
time.98 Substituted service is effected "(a)
by leaving copies of the summons at the
defendant’s residence with some person of
suitable age and discretion then residing
therein,or (b) by leaving the copies at
defendant’s office or regular place of
business with some competent person in
charge thereof."99
Service of summons by publication in a
newspaper of general circulation is
allowed when the defendant or respondent
is designated as an unknown owner or if
his or her whereabouts are "unknown and
cannot be ascertained by diligent
inquiry."100 It may only be effected after
unsuccessful attempts to serve the
summons personally, and after diligent
inquiry as to the defendant’s or
respondent’s whereabouts.
Service of summons by extra territorial
service is allowed after leave of court
when the defendant or respondentdoes
not reside or is not found in the country or
is temporarily out of the country.101
If a defendant or respondent voluntarily
appears in trial or participates in the
proceedings, it is generally construed as
sufficient service of summons.102
In this case, summons was served by
publication.
A look into the content of the sheriff’s
return will determine if the circumstances
warranted the deviation from the rule
preferring personal service of summons
over other modes of service. The sheriff’s
return must contain a narration of the
circumstances showing efforts to
personally serve summons to the
defendants or respondents and the
impossibility of personal service of
summons. Citing Hamilton v. Levy,103 this
court said of substituted service in
Domagas v. Jensen:104
The pertinent facts and circumstances
attendant to the service of summons must
be stated in the proof of service or
Officer’s Return; otherwise, any
substituted service made in lieu of
personal service cannot be upheld. This is
necessary because substituted service is
in derogation of the usual method of
service. It is a method extraordinary in
character and hence may be used only as
prescribed and in the circumstances
authorized by statute. Here, no such
explanation was made. Failure to
faithfully, strictly, and fully comply with
the requirements of substituted service
renders said service ineffective.105
This court also said in Manotoc v. Court of
Appeals:
The date and time of the attempts on
personal service, the inquiries made to
locate the defendant, the name/s of the
occupants of the alleged residence or
house of defendant and all other acts
done, though futile, to serve the summons
on defendant must be specified in the
Return to justify substituted service. The
form on Sheriff’s Return of Summons on
Substituted Service prescribed in the
Handbook for Sheriffs published by the
Philippine Judicial Academy requires a
narration of the efforts made to find the
defendant personally and the fact of
failure.
....
However, in view of the numerous claims
of irregularities in substituted service
which have spawned the filing of a great
number of unnecessary special civil
actions of certiorari and appeals to higher
courts, resulting in prolonged litigation
and wasteful legal expenses, the Court
rules in the case at bar that the narration
of the efforts made to find the defendant
and the fact of failure written in broad and
imprecise words will not suffice. The facts
and circumstances should be stated with
more particularity and detail on the
number of attempts made at personal
service, dates and times of the attempts,
inquiries to locate defendant, names of
occupants of the alleged residence, and
the reasons for failure should be included
in the Return to satisfactorily show the
efforts undertaken. That such efforts were
made to personally serve summons on
defendant, and those resulted in failure,
would prove impossibility of prompt
personal service.
Moreover, to allow sheriffs to describe the
facts and circumstances in inexact terms
would encourage routine performance of
their precise duties relating to substituted
service—for it would be quite easy to
shroud or conceal carelessness or laxity in
such broad terms.106
A sheriff’s return enjoys the presumption
of regularity in its issuance if it contains
(1) the details of the circumstances
surrounding the sheriff’s attempt to serve
the summons personally upon the
defendants or respondents; and (2) the
particulars showing the impossibility of
serving the summons within reasonable
time.107 It does not enjoy the presumption
of regularity if the return was merely pro
forma.
Failure to state the facts and
circumstances that rendered service of
summons impossible renders service of
summons and the return ineffective. In
that case, no substituted service orservice
by publication can be valid.
This court in Manotoc explained that the
presumption of regularity in the issuance
of the sheriff’s return does not apply to
patently defective returns. Thus:
The court a quoheavily relied on the
presumption of regularity in the
performance of official duty. It reasons
out that "[t]he certificate of service by the
proper officer is prima facieevidence of the
facts set out herein, and to overcome the
presumption arising from said certificate,
the evidence must be clear and
convincing."
The Court acknowledges that this ruling is
still a valid doctrine. However, for the
presumption to apply, the Sheriff’s Return
must show that serious efforts or attempts
were exerted to personally serve the
summons and that said efforts failed.
These facts must be specifically narrated
in the Return. To reiterate, it must clearly
show that the substituted service must be
made on a person of suitable age and
discretion living in the dwelling or
residence of defendant. Otherwise, the
Return is flawed and the presumption
cannot be availed of. As previously
explained, the Return of Sheriff Cañelas
did not comply with the stringent
requirements of Rule 14, Section 8 on
substituted service. (Emphasis supplied)
In the case of Venturanza v. Court of
Appeals,it was held that "x x x the
presumption of regularity in the
performance of official functions by the
sheriff is not applicable in this case where
it is patent that the sheriff’s return is
defective." (Emphasis supplied) While the
Sheriff’s Return in the Venturanza case
had no statement on the effort or attempt
to personally serve the summons, the
Return of Sheriff Cañelas in the case at
bar merely described the efforts or
attempts in general terms lacking in
details as required by the ruling in the
case of Domagas v. Jensen and other
cases. It is as if Cañelas’ Return did not
mention any effort to accomplish personal
service. Thus, the substituted service is
void.108
In this case, the sheriff’s return states:
OFFICER’S RETURN
I HEREBY CERTIFY that on the 15th and
18th day of February, 1999, I have served
a copy of the summons with complaint
and annexes dated January 29, 1999
issued by Regional Trial Court, Fourth
Judicial Region, Branch 74, Antipolo City
upon defendants in the above-entitled
case on the following, to wit;
1. AURORA N. DE PEDRO – Unserved for
the reason that according to the
messenger of Post Office of Pasig their
[sic] is no person in the said given
address.109
This return shows no detail of the sheriff’s
efforts to serve the summons personally
upon petitioner. The summons was
unserved only because the post office
messenger stated that there was no
"Aurora N. De Pedro" in the service
address. The return did not show that the
sheriff attempted to locate petitioner’s
whereabouts. Moreover, it cannot be
concluded based on the return that
personal service was rendered impossible
under the circumstances or that service
could no longer be made within
reasonable time.
The lack of any demonstration of effort on
the part of the sheriff to serve the
summons personally upon petitioner is a
deviation from this court’s previous rulings
that personal service isthe preferred mode
of service, and that the sheriff must
narrate in his or her return the efforts
made to effect personal service. Thus, the
sheriff’s return in this case was defective.
No substituted service or service by
publication will be allowed based on such
defective return.
The issuance of a judgment without
proper service of summons is a violation
of due process rights. The judgment,
therefore, suffers a jurisdictional defect.
The case would have been dismissible had
petitioner learned about the case while
trial was pending. At that time, a motion
to dismiss would have been proper. After
the trial, the case would have been the
proper subject of an action for annulment
of judgment.
Petitioner learned about the action for
annulment of title only after trial. Instead
of filing an action for annulment of
judgment, however, she filed a motion for
new trial without alleging any proper
ground. Rule 37 of the Rules of Court
provides that a party may move and the
court may grant a new trial based on the
following causes:
(a) Fraud, accident, mistake or excusable
negligence which ordinary prudence could
not have guarded against and by reason
of which such aggrieved party has
probably been impaired in his rights; or
(b) Newly discovered evidence, which he
could not, with reasonable diligence, have
discovered and produced at the trial, and
which if presented would probably alter
the result.110
Petitioner insisted in her motion for new
trial that the trial court did not acquire
jurisdiction over her person. She did not
allege that fraud, accident, mistake, or
excusable negligence impaired her rights.
Neither did she allege that she found
newly discovered evidence that could have
altered the trial court decision. When her
motion for new trial was denied, she filed
a petition for certiorari, insisting that her
motion for new trial should have been
granted on the ground of lack of
jurisdiction over her person. The Court of
Appeals denied the petition for her failure
to allege any ground for new trial. We
cannot attribute error on the part of the
Court of Appeals for this denial because,
indeed, lack of jurisdiction is not a ground
for granting a new trial.
What cannot be denied is the fact that
petitioner was already notified of
respondent’s action for annulment of
petitioner’s title when she filed a motion
for new trial and, later, a petition for
certiorari. At that time, petitioner was
deemed, for purposes of due process, to
have been properly notified of the action
involving her title tothe property. Lack of
jurisdiction could have already been raised
in an action for annulment of judgment.
Thus, when petitioner erroneously filed
her motion for new trial and petition for
certiorari instead of an action for
annulment of judgment, she was deemed
to have voluntarily participated in the
proceedings against her title. The actions
and remedies she chose to avail bound
her. Petitioner’s failure to file an action for
annulment of judgment at this time was
fatal to her cause. We cannot conclude
now that she was denied due process.
II
Petitioner is already barred from
filing a petition for annulment of
judgment
A petition for annulment of judgment is a
recourse that is equitable in
character.111 It is independent of the
case112 and is "allowed only in exceptional
cases as where there isno available or
other adequate remedy."113
An action for annulment of judgment may
be filed to assail Regional Trial Court
judgments when resort toother remedies
can no longer be had through no fault of
petitioner. Section 1 of Rule 47 of the
Rules of Civil Procedure provides:
Section 1. Coverage. – This Rule shall
govern the annulment by the Court of
Appeals of judgments or final orders and
resolutions in civil actions of Regional Trial
Courts for which the ordinary remedies of
new trial, appeal, petition for relief or
other appropriate remedies are no longer
available through no fault of the
petitioner.
An action for annulment of judgment may
be based on only two grounds: 1)
extrinsic fraud; and 2) lack of jurisdiction.
Section 2 of Rule 47 of the Rules of Court
states:
Section 2. Grounds for Annulment. – The
annulment may be based only on the
grounds of extrinsic fraud and lack of
jurisdiction.
Extrinsic fraud shall not be a valid ground
if it was availed of, or could have been
availed of, in a motion for new trial or
petition for relief.
Lack of jurisdiction being a valid ground
for annulment of judgments,
circumstances that negate the court’s
acquisition of jurisdiction — including
defective service of summons — are
causes for an action for annulment of
judgments.114
However, this court had an occasion to
say that an action for annulment of
judgment "may not be invoked (1) where
the party has availed himself of the
remedy of new trial, appeal, petition for
relief, or other appropriate remedy and
lost; or (2) where he has failed to avail
himself of those remedies through his own
fault or negligence."115 Thus, an action for
annulment of judgment is not always
readily available even if there are causes
for annulling a judgment.
In this case, petitioner’s main grounds for
filing the action for annulment are lack of
jurisdiction over her person, and litis
pendentia. These are the same grounds
that were raised in the motion for new
trial filed before and denied by the
Regional Trial Court.
Applying the above rules, we rule that the
Court of Appeals did not err in denying
petitioner’s petition for annulment of the
Regional Trial Court’s judgment. Petitioner
had already filed a motion for new trial
and petition for certiorari invoking lack of
jurisdiction as ground.
Petitioner’s filing of the petition for
annulment of judgment after she had filed
a motion for new trial and lost, with both
actions raising the same grounds, reveals
an intent to secure a judgment in her
favor by abusing and making a mockery of
the legal remedies provided by law.
This kind of abuse is what this court tries
to guard against when it limited its
application, and stated in some of the
cases that an action for annulment of
judgment cannot be invoked when other
remedies had already been availed.
As this court explained in Macalalag v.
Ombudsman:116
Rule 47, entitled "Annulment of
Judgments or Final Orders and
Resolutions," is a new provision under the
1997 Rules of Civil Procedure albeit the
remedy has long been given imprimatur
by the courts. The rule covers "annulment
by the Court of Appeals of judgments or
final orders and resolutions in civil actions
of Regional Trial Courts for which the
ordinary remedies of new trial, appeal,
petition for relief or other appropriate
remedies could no longer beavailed of
through no fault of the petitioner." An
action for annulment of judgment is a
remedy in law independent of the case
where the judgment sought to be annulled
is rendered. The concern that the remedy
could soeasily be resorted to as an
instrument to delay a final and executory
judgment, has prompted safeguards to be
put in place in order to avoid an abuse of
the rule. Thus, the annulment of judgment
may be based only on the grounds of
extrinsic fraud and lack of jurisdiction, and
the remedy may not be invoked (1) where
the party has availed himself of the
remedy of new trial, appeal, petition for
relief or other appropriate remedy and lost
therefrom, or (2) where he has failed to
avail himself of those remedies through
his own fault or negligence.117 (Emphasis
supplied)
Similarly, this court ruled in Sigma
Homebuilding Corporation v. Inter-Alia
Management Corporation, et al.:118
A petition for annulment of judgment is an
extraordinary remedy and is not to be
granted indiscriminately by the Court. It is
allowed only in exceptional cases and
cannot beused by a losing party to make a
mockery of a duly promulgated decision
long final and executory. The remedy may
not be invoked where the party has
availed himself of the remedy ofnew trial,
appeal, petition for relief or other
appropriate remedy and lost, or where he
has failed to avail himself of those
remedies through his own fault or
negligence.
Litigation must end sometime. It is
essential to an effective and efficient
administration of justice that, once a
judgment becomes final, the winning
party should not be deprived of the fruits
of the verdict. Courts must therefore
guard against any scheme calculated to
bring about that undesirable result. Thus,
we deem it fit to finally put an end to the
present controversy.119 (Emphasis
supplied)
Thus, an action for annulment of
judgment "will not so easily and readily
lend itself to abuse by parties aggrieved
by final judgments."120 Petitioner cannot
abuse the court’s processes to revive a
case that has already been rendered final
against her favor, for the purpose of
securing a favorable judgment. An action
for annulment of judgment cannot be
used by petitioner who has lost her case
through fault of her own, to make "a
complete farce of a duly promulgated
decision that has long become final and
executory."121
III
Filing an action for annulment of
title is not a violation of Section 48
of Presidential Decree No. 1529
Petitioner insists that the annulment of
her title was a violation of Section 48 of
Presidential Decree No. 1529, which
provides:
Sec. 48. Certificate not subject to
collateral attack. – A certificate of title
shall not be subject to collateral attack. It
cannot be altered, modified, or cancelled
except in a direct proceeding in
accordance with law.
Petitioner is mistaken. In Sarmiento, et al.
v. Court of Appeals,122 this court said:
An action is deemed an attack on a title
when the object of the action or
proceeding is to nullify the title, and thus
challenge the judgment pursuant to which
the title was decreed. The attack is direct
when the object of the action is to annul
or set aside such judgment, or enjoin its
enforcement. On the other hand, the
attack is indirect or collateral when, in an
action to obtain a different relief, an
attack on the judgment is nevertheless
made as an incident thereof.123
An action for annulment of certificate of
title is a direct attack on the title because
it challenges the judgment decree of title.
In Goco v. Court of Appeals,124 this court
said that "[a]n action for annulment of
certificates of title to property [goes] into
the issue of ownership of the land covered
by a Torrens title and the relief generally
prayed for by the plaintiff is to be declared
as the land’s true owner."125 Hence, there
was no violation of Section 48 of
Presidential Decree No. 1529 when
petitioner’s title was declared null and
void by the Regional Trial Court.
Petitioner, however, points to the
following statement made by this court in
another case involving these same
parties:126
The resolution of the issue will not involve
the alteration, correction or modification
either of OCT No. P-691 under the name
of petitioner Aurora de Pedro, or TCT No.
236044 under the name of respondent
corporation. If the subject property is
found to be a portion of the property
covered by OCT No. P-691 but is included
in the technical description of the property
covered by TCT No. 236044, the latter
would have to be corrected. On the other
hand, if the subject property is found to
be a portion of the property covered by
TCT No. 236044, but is included in the
property covered by OCT NO. P-691, then
the latter title must be rectified. However,
the rectification of either title may be
made only via an action filed for the said
purpose, comformably with Section 48 of
Act No. 496
....
A. The action of the petitioners against
respondents, based on the material
allegations of the complaint, if one for
recovery of possession of the subject
property and damages. However, such
action is not a direct but a collateral
attack ofTCT No. 236044. Neither did the
respondents directly attack OCT No. P-691
in their answer to the complaint. Although
the respondents averred in said answer,
by way of special and affirmative
defenses, that the subject property is
covered by TCT No. 236044 issued in the
name of the respondent corporation, and
as suchthe said respondent is entitled to
the possession thereof to the exclusion of
the petitioners, such allegations does not
constitute a direct attack on OCT No. P-
691, but is likewise a collateral attack
thereon...127
Petitioner misreads the import of what
wesaid in that case. That case involves
petitioner’s action for recovery of
possession and damages against
respondents. It also involved respondent’s
allegations that the property was covered
by a certificate of title in its name and,
therefore, its entitlement to the
possession of the property. It does not
involve an action for annulment of title.
When this court said that "such action is
not a direct but a collateral attack of TCT
No. 236044" or that "such allegations
does [sic] not constitute a direct attack on
OCT No. P-691, butis likewise a collateral
attack thereon," we were referring to both
parties’ action for and allegations of
possessory rights over the property. This
court was not referring to an action for
annulment of title, which is the case
involved here. To reiterate, an action for
annulment constitutes a direct attack on a
certificate of title.
IV
The requisites of litis pendentia are
not satisfied when respondent filed
its action for annulment of title
Petitioner argued that the case for
annulment of title was dismissible on the
ground of litis pendentia because there
was a pending civil case filed by her
against respondent.
The requisites of litis pendentia are: "(a)
identity of parties, or interests in both
actions; (b) identity of rights asserted and
relief prayed for, the relief being founded
on the same facts; and (c) the identity of
the two preceding particulars is such that
any judgment rendered in the other
action, will, regardless of which party is
successful, amount to res judicata in the
action under consideration.128
Although both cases involve the
sameparcel of land, petitioner was not
able to show that there was identity of the
relief prayed for. A review of the
complaint in the said civil case shows that
it was a case for damages, for alleged
improper conduct of respondent relating
the property. The action filed by
respondent was an action for annulment
of petitioner’s title.
Petitioner was also not able to show that
the relief prayed for in both cases were
founded on the same facts. Petitioner’s
complaint for damages was founded on
the alleged misconduct of respondent.
Respondent’s action for annulment of title
was founded on the alleged irregularity in
the issuance of petitioner’s title.
Hence, the petitioner was not able toshow
that all the requisites for litis pendentiaare
present. Respondent’s action for
annulment of title cannot be dismissed on
this ground.
V petitioner’s certificate of title and
A certificate of title does not vest
ownership
Petitioner argues that her certificate of
title was erroneously declared null and
void because based on OCT No. P-691,
she is the real owner of the property.
It is true that certificates of titleare
indefeasible and binding upon the whole
world.1âwphi1 However, certificates of
title do not vest ownership.129 They
merely evidence title or ownership of the
property.130 Courts may, therefore, cancel
or declare a certificate of title null and
void when it finds that it was issued
irregularly.
In this case, the trial court ruled based on
the committee report that the free patents
and original certificate of title issued to
petitioner were irregularly issued, and,
therefore, invalid.
The principle of "bar by prior judgment" is
embodied in Rule 39, Section 47(b) of the
Rules of Court:
Section 47. Effect of judgments or final
orders. — The effect of a judgment or final
order rendered by a court of the
Philippines, having jurisdiction to
pronounce the judgment or final order,
may be as follows:
....
(b) In other cases, the judgment or final
order is, with respect to the matter
directly adjudged or asto any other matter
that could have been missed in relation
thereto, conclusive between the parties
and their successors in interest,by title
subsequent to the commencement of the
action or special proceeding, litigating for
the same thing and under the same title
and in the same capacity[.] (Emphasis
supplied)
In this case, the trial court, by annulling
declaring its issuance irregular, directly
adjudged petitioner’s certificate of title as
void. Because petitioner failed to appeal
and cause the annulment of the trial
court’s judgment as to her title’s validity,
this question is already barred. This
judgment has already attained finality and
can no longer be litigated.
This court explained in FGU Insurance
Corporation v. Regional Trial Court 131 the
doctrine of finality of judgment, thus:
Under the doctrine of finality of judgment
or immutability of judgment, a decision
that has acquired finality becomes
immutable and unalterable, and may no
longer be modified in any respect, even if
the modification is meant to correct
erroneous conclusions of fact and law, and
whether it bemade by the court that
rendered it or by the Highest Court of the
land. Any act which violates this principle
must immediately be struck down.132
In any case, even if petitioner’s original
certificate of title was not irregularly
issued as she claims, her original
certificate of title was issued later than the
title from which respondent’s title
originated. As a rule, original titles issued
earlier prevail over another original title
issued later.133
Therefore, petitioner's later-issued title
cannot prevail over respondent's title,
which was derived from an earlier issued
original certificate of title.
WHEREFORE, the petition is DENIED; The
Court of Appeals July 7, 2010 decision in
CA G.R. SP. No. 96471 is AFFIRMED.
SO ORDERED.
G.R. No. 161417 February 8,
2007
MA. TERESA CHAVES BIACO, Petitioner,
vs.
PHILIPPINE COUNTRYSIDE RURAL
BANK, Respondent.
DECISION
TINGA, J.:
Petitioner, Ma. Teresa Chaves Biaco,
seeks a review of the Decision1 of the
Court of Appeals in CA-G.R. No. 67489
dated August 27, 2003, which denied her
petition for annulment of judgment, and
the Resolution2 dated December 15, 2003
which denied her motion for
reconsideration.
The facts as succinctly stated by the Court
of Appeals are as follows:
Ernesto Biaco is the husband of petitioner
Ma. Teresa Chaves Biaco. While employed
in the Philippine Countryside Rural Bank
(PCRB) as branch manager, Ernesto
obtained several loans from the
respondent bank as evidenced by the
following promissory notes:
Feb. 17, 1998 ₱ 65,000.00
Mar. 18, 1998 30,000.00
May 6, 1998 60,000.00
May 20, 1998 350,000.00
July 30, 1998 155,000.00
Sept. 8, 1998 40,000.00
Sept. 8, 1998 120,000.00
As security for the payment of the said
loans, Ernesto executed a real estate
mortgage in favor of the bank covering
the parcel of land described in Original
Certificate of Title (OCT) No. P-14423. The
real estate mortgages bore the signatures
of the spouses Biaco.
When Ernesto failed to settle the above-
mentioned loans on its due date,
respondent bank through counsel sent
him a written demand on September 28,
1999. The amount due as of September
30, 1999 had already reached ONE
MILLION EIGHTY THOUSAND SIX
HUNDRED SEVENTY SIX AND FIFTY
CENTAVOS (₱1,080,676.50).
The written demand, however, proved
futile.
On February 22, 2000, respondent bank
filed a complaint for foreclosure of
mortgage against the spouses Ernesto and
Teresa Biaco before the RTC of Misamis
Oriental. Summons was served to the
spouses Biaco through Ernesto at his
office (Export and Industry Bank) located
at Jofelmor Bldg., Mortola Street, Cagayan
de Oro City.
Ernesto received the summons but for
unknown reasons, he failed to file an
answer. Hence, the spouses Biaco were
declared in default upon motion of the
respondent bank. The respondent bank
was allowed to present its evidence ex
parte before the Branch Clerk of Court
who was then appointed by the court as
Commissioner.
Arturo Toring, the branch manager of the
respondent bank, testified that the
spouses Biaco had been obtaining loans
from the bank since 1996 to 1998. The
loans for the years 1996-1997 had already
been paid by the spouses Biaco, leaving
behind a balance of ₱1,260,304.33
representing the 1998 loans. The amount
being claimed is inclusive of interests,
penalties and service charges as agreed
upon by the parties. The appraisal value
of the land subject of the mortgage is only
₱150,000.00 as reported by the
Assessor’s Office.
Based on the report of the Commissioner,
the respondent judge ordered as follows:
WHEREFORE, judgment is hereby
rendered ordering defendants spouses
ERNESTO R. BIACO and MA. THERESA
[CHAVES] BIACO to pay plaintiff bank
within a period of not less than ninety
(90) days nor more than one hundred
(100) days from receipt of this decision
the loan of ONE MILLION TWO HUNDRED
SIXTY THOUSAND THREE HUNDRED FOUR
PESOS and THIRTY THREE CENTAVOS
(₱1,260,304.33) plus litigation expenses
in the amount of SEVEN THOUSAND SIX
HUNDRED FORTY PESOS (₱7,640.00) and
attorney’s fees in the amount of TWO
HUNDRED FIFTY TWO THOUSAND THIRTY
PESOS and FORTY THREE CENTAVOS
(₱252,030.43) and cost of this suit.
In case of non-payment within the period,
the Sheriff of this Court is ordered to sell
at public auction the mortgaged Lot, a
parcel of registered land (Lot 35802, Cad.
237 {Lot No. 12388-B, Csd-10-002342-
D}), located at Gasi, Laguindingan,
Misamis Oriental and covered by TCT No.
P-14423 to satisfy the mortgage debt, and
the surplus if there be any should be
delivered to the defendants spouses
ERNESTO and MA. THERESA [CHAVES]
BIACO. In the event however[,] that the
proceeds of the auction sale of the
mortgage[d] property is not enough to
pay the outstanding obligation, the
defendants are ordered to pay any
deficiency of the judgment as their
personal liability.
SO ORDERED.
On July 12, 2000, the sheriff personally
served the above-mentioned judgment to
Ernesto Biaco at his office at Export and
Industry Bank. The spouses Biaco did not
appeal from the adverse decision of the
trial court. On October 13, 2000, the
respondent bank filed an ex parte motion
for execution to direct the sheriff to sell
the mortgaged lot at public auction. The
respondent bank alleged that the order of
the court requiring the spouses Biaco to
pay within a period of 90 days had
passed, thus making it necessary to sell
the mortgaged lot at public auction, as
previously mentioned in the order of the
court. The motion for execution was
granted by the trial court per Order dated
October 20, 2000.
On October 31, 2000, the sheriff served a
copy of the writ of execution to the
spouses Biaco at their residence in #92
9th Street, Nazareth, Cagayan de Oro
City. The writ of execution was personally
received by Ernesto. By virtue of the writ
of execution issued by the trial court, the
mortgaged property was sold at public
auction in favor of the respondent bank in
the amount of ONE HUNDRED FIFTY
THOUSAND PESOS (₱150,000.00).
The amount of the property sold at public
auction being insufficient to cover the full
amount of the obligation, the respondent
bank filed an "ex parte motion for
judgment" praying for the issuance of a
writ of execution against the other
properties of the spouses Biaco for the full
settlement of the remaining obligation.
Granting the motion, the court ordered
that a writ of execution be issued against
the spouses Biaco to enforce and satisfy
the judgment of the court for the balance
of ONE MILLION THREE HUNDRED SIXTY
NINE THOUSAND NINE HUNDRED
SEVENTY FOUR PESOS AND SEVENTY
CENTAVOS (₱1,369,974.70).
The sheriff executed two (2) notices of
levy against properties registered under
the name of petitioner Ma. Teresa Chaves
Biaco. However, the notices of levy were
denied registration because Ma. Teresa
had already sold the two (2) properties to
her daughters on April 11, 2001.3
Petitioner sought the annulment of the
Regional Trial Court decision contending
that extrinsic fraud prevented her from
participating in the judicial foreclosure
proceedings. According to her, she came
to know about the judgment in the case
only after the lapse of more than six (6)
months after its finality. She claimed that
extrinsic fraud was perpetrated against
her because the bank failed to verify the
authenticity of her signature on the real
estate mortgage and did not inquire into
the reason for the absence of her
signature on the promissory notes. She
moreover asserted that the trial court
failed to acquire jurisdiction because
summons were served on her through her
husband without any explanation as to
why personal service could not be made.
The Court of Appeals considered the two
circumstances that kept petitioner in the
dark about the judicial foreclosure
proceedings: (1) the failure of the sheriff
to personally serve summons on
petitioner; and (2) petitioner’s husband’s
concealment of his knowledge of the
foreclosure proceedings. On the validity of
the service of summons, the appellate
court ruled that judicial foreclosure
proceedings are actions quasi in rem. As
such, jurisdiction over the person of the
defendant is not essential as long as the
court acquires jurisdiction over
the res. Noting that the spouses Biaco
were not opposing parties in the case, the
Court of Appeals further ruled that the
fraud committed by one against the other
cannot be considered extrinsic fraud.
Her motion for reconsideration having
been denied, petitioner filed the instant
Petition for Review,4 asserting that even if
the action is quasi in rem, personal
service of summons is essential in order to
afford her due process. The substituted
service made by the sheriff at her
husband’s office cannot be deemed proper
service absent any explanation that efforts
had been made to personally serve
summons upon her but that such efforts
failed. Petitioner contends that extrinsic
fraud was perpetrated not so much by her
husband, who did not inform her of the
judicial foreclosure proceedings, but by
the sheriff who allegedly connived with
her husband to just leave a copy of the
summons intended for her at the latter’s
office.
Petitioner further argues that the
deficiency judgment is a personal
judgment which should be deemed void
for lack of jurisdiction over her person.
Respondent PCRB filed its
Comment,5 essentially reiterating the
appellate court’s ruling. Respondent avers
that service of summons upon the
defendant is not necessary in
actions quasi in rem it being sufficient that
the court acquire jurisdiction over
the res. As regards the alleged conspiracy
between petitioner’s husband and the
sheriff, respondent counters that this is a
new argument which cannot be raised for
the first time in the instant petition.
We required the parties to file their
respective memoranda in the
Resolution6 dated August 18, 2004.
Accordingly, petitioner filed her
Memorandum7 dated October 10, 2004,
while respondent filed its Memorandum
for Respondent8 dated September 9,
2004.
Annulment of judgment is a recourse
equitable in character, allowed only in
exceptional cases as where there is no
available or other adequate remedy.
Jurisprudence and Sec. 2, Rule 47 of the
1997 Rules of Civil Procedure (Rules of
Court) provide that judgments may be
annulled only on grounds of extrinsic
fraud and lack of jurisdiction or denial of
due process.9
Petitioner asserts that extrinsic fraud
consisted in her husband’s concealment of
the loans which he obtained from
respondent PCRB; the filing of the
complaint for judicial foreclosure of
mortgage; service of summons; rendition
of judgment by default; and all other
proceedings which took place until the writ
of garnishment was served.10
Extrinsic fraud exists when there is a
fraudulent act committed by the prevailing
party outside of the trial of the case,
whereby the defeated party was
prevented from presenting fully his side of
the case by fraud or deception practiced
on him by the prevailing party.11 Extrinsic
fraud is present where the unsuccessful
party had been prevented from exhibiting
fully his case, by fraud or deception
practiced on him by his opponent, as by
keeping him away from court, a false
promise of a compromise; or where
the defendant never had knowledge of the
suit, being kept in ignorance by the acts
of the plaintiff; or where an attorney
fraudulently or without authority assumes
to represent a party and connives at his
defeat; or where the attorney regularly
employed corruptly sells out his client’s
interest to the other side. The overriding
consideration is that the fraudulent
scheme of the prevailing
litigant prevented a party from having his
day in court.12
With these considerations, the appellate
court acted well in ruling that there was
no fraud perpetrated by respondent bank
upon petitioner, noting that the spouses
Biaco were co-defendants in the case and
shared the same interest. Whatever fact
or circumstance concealed by the husband
from the wife cannot be attributed to
respondent bank.
Moreover, petitioner’s allegation that her
signature on the promissory notes was
forged does not evince extrinsic fraud. It
is well-settled that the use of forged
instruments during trial is not extrinsic
fraud because such evidence does not
preclude the participation of any party in
the proceedings.13
The question of whether the trial court has
jurisdiction depends on the nature of the
action, i.e., whether the action is in
personam, in rem, or quasi in rem. The
rules on service of summons under Rule
14 of the Rules of Court likewise apply
according to the nature of the action.
An action in personam is an action against
a person on the basis of his personal
liability. An action in rem is an action
against the thing itself instead of against
the person. An action quasi in rem is one
wherein an individual is named as
defendant and the purpose of the
proceeding is to subject his interest
therein to the obligation or lien burdening
the property.14
In an action in personam, jurisdiction over
the person of the defendant is necessary
for the court to validly try and decide the
case. In a proceeding in rem or quasi in
rem, jurisdiction over the person of the
defendant is not a prerequisite to confer
jurisdiction on the court provided that the
court acquires jurisdiction over the res.
Jurisdiction over the res is acquired either
(1) by the seizure of the property under
legal process, whereby it is brought into
actual custody of the law; or (2) as a
result of the institution of legal
proceedings, in which the power of the
court is recognized and made effective.15
Nonetheless, summons must be served
upon the defendant not for the purpose of
vesting the court with jurisdiction but
merely for satisfying the due process
requirements.16
A resident defendant who does not
voluntarily appear in court, such as
petitioner in this case, must be personally
served with summons as provided under
Sec. 6, Rule 14 of the Rules of Court. If
she cannot be personally served with
summons within a reasonable time,
substituted service may be effected (1) by
leaving copies of the summons at the
defendant’s residence with some person of
suitable age and discretion then residing
therein, or (2) by leaving the copies at
defendant’s office or regular place of
business with some competent person in
charge thereof in accordance with Sec. 7,
Rule 14 of the Rules of Court.
In this case, the judicial foreclosure
proceeding instituted by respondent PCRB
undoubtedly vested the trial court with
jurisdiction over the res. A judicial
foreclosure proceeding is an action quasi
in rem. As such, jurisdiction over the
person of petitioner is not required, it
being sufficient that the trial court is
vested with jurisdiction over the subject
matter.
There is a dimension to this case though
that needs to be delved into. Petitioner
avers that she was not personally served
summons. Instead, summons was served
to her through her husband at his office
without any explanation as to why the
particular surrogate service was resorted
to. The Sheriff’s Return of Service dated
March 21, 2000 states:
xxxx
That on March 16, 2000, the undersigned
served the copies of Summons, complaint
and its annexes to the defendants Sps.
Ernesto R. & Ma. Teresa Ch. Biaco thru
Ernesto R. Biaco[,] defendant of the
above-entitled case at his office EXPORT &
INDUSTRY BANK, Jofelmore Bldg.[,]
Mortola St., Cagayan de Oro City and he
acknowledged receipt thereof as
evidenced with his signature appearing on
the original copy of the
Summons.17 [Emphasis supplied]
Without ruling on petitioner’s allegation
that her husband and the sheriff connived
to prevent summons from being served
upon her personally, we can see that
petitioner was denied due process and
was not able to participate in the judicial
foreclosure proceedings as a consequence.
The violation of petitioner’s constitutional
right to due process arising from want of
valid service of summons on her warrants
the annulment of the judgment of the trial
court.
There is more, the trial court granted
respondent PCRB’s ex-parte motion for
deficiency judgment and ordered the
issuance of a writ of execution against the
spouses Biaco to satisfy the remaining
balance of the award. In short, the trial
court went beyond its jurisdiction over
the res and rendered a personal judgment
against the spouses Biaco. This cannot be
countenanced.1awphil.net
In Sahagun v. Court of Appeals,18 suit was
brought against a non-resident defendant,
Abelardo Sahagun, and a writ of
attachment was issued and subsequently
levied on a house and lot registered in his
name. Claiming ownership of the house,
his wife, Carmelita Sahagun, filed a
motion to intervene. For failure of plaintiff
to serve summons extraterritorially upon
Abelardo, the complaint was dismissed
without prejudice.
Subsequently, plaintiff filed a motion for
leave to serve summons by publication
upon Abelardo. The trial court granted the
motion. Plaintiff later filed an amended
complaint against Abelardo, this time
impleading Carmelita and Rallye as
additional defendants. Summons was
served on Abelardo through publication in
the Manila Evening Post. Abelardo failed to
file an answer and was declared in default.
Carmelita went on certiorari to the Court
of Appeals assailing as grave abuse of
discretion the declaration of default of
Abelardo. The Court of Appeals dismissed
the petition and denied reconsideration.
In her petition with this Court, Carmelita
raised the issue of whether the trial court
acquired jurisdiction over her husband, a
non-resident defendant, by the publication
of summons in a newspaper of general
circulation in the Philippines. The Court
sustained the correctness of extrajudicial
service of summons by publication in such
newspaper.
The Court explained, citing El Banco
Español-Filipino v. Palanca,19 that
foreclosure and attachment proceedings
are both actions quasi in rem. As such,
jurisdiction over the person of the (non-
resident) defendant is not essential.
Service of summons on a non-resident
defendant who is not found in the country
is required, not for purposes of physically
acquiring jurisdiction over his person but
simply in pursuance of the requirements
of fair play, so that he may be informed of
the pendency of the action against him
and the possibility that property belonging
to him or in which he has an interest may
be subjected to a judgment in favor of a
resident, and that he may thereby be
accorded an opportunity to defend in the
action, should he be so minded.
Significantly, the Court went on to rule,
citing De Midgely v. Ferandos, et.
al.20 and Perkins v. Dizon, et al.21 that in a
proceeding in rem or quasi in rem, the
only relief that may be granted by the
court against a defendant over whose
person it has not acquired jurisdiction
either by valid service of summons or by
voluntary submission to its jurisdiction, is
limited to the res.
Similarly, in this case, while the trial court
acquired jurisdiction over the res, its
jurisdiction is limited to a rendition of
judgment on the res. It cannot extend its
jurisdiction beyond the res and issue a
judgment enforcing petitioner’s personal
liability. In doing so without first having
acquired jurisdiction over the person of
petitioner, as it did, the trial court violated
her constitutional right to due process,
warranting the annulment of the judgment
rendered in the case.
WHEREFORE, the instant petition is
GRANTED. The Decision dated August 27,
2003 and the Resolution dated December
15, 2003 of the Court of Appeals in CA-
G.R. SP No. 67489 are SET ASIDE. The
Judgment dated July 11, 2000 and Order
dated February 9, 2001 of the Regional
Trial Court of Cagayan de Oro City, Branch
20, are likewise SET ASIDE.
SO ORDERED.
G.R. No. 132400 January 31,
2005
EDUARDO J. MARIÑO, JR., MA.
MELVYN P. ALAMIS and UST FACULTY
UNION, petitioners,
vs.
GIL GAMILLA, DUPONT ASERON and
JUSTINO CARDENAS, respondents.
DECISION
TINGA, J.:
This is a petition for review under Rule 45
assailing the Decision1 of the Court of
Appeals in CA-G.R. SP No. 43701,2 setting
aside the order and the writ of preliminary
mandatory injunction issued by the lower
court.
The facts of the case are as follows:
Sometime in May 1986, the UST Faculty
Union (USTFU) entered into an initial
collective bargaining agreement with the
University of Santo Tomas (UST) wherein
UST undertook to provide USTFU with a
free office space at Room 302 of its Health
Center Building.3
On 21 September 1996, the officers and
directors of USTFU scheduled a general
membership meeting on 5 October 1996
for the election of the union officers.
However, respondent Gamilla and some
faculty members filed a Petition4 with the
Med-Arbitration Unit of the Department of
Labor and Employment (DOLE) seeking to
stop the holding of the USTFU election.5
Meanwhile, on 2 October 1996, Rev. Fr.
Rodel Aligan, O.P., Secretary General of
the UST, issued a Memorandum to the
Deans, Regents, Principals and Heads of
Departments regarding the holding of a
faculty convocation on 4 October 1996.6
On 4 October 1996, Med-Arbiter Tomas
Falconitin issued a temporary restraining
order (TRO) in Case No. NCR-OD-M-9610-
001, enjoining the holding of the election
of the USTFU officers and directors.
However, denying the TRO they
themselves sought, Gamilla and some of
the faculty members present in the 4
October 1996 faculty convocation
proceeded with the election of the USTFU
officers. On the other hand, the scheduled
election for 5 October 1996 did not push
through by virtue of the TRO.7
In the succeeding week, on 11 October
1996, petitioners filed with the DOLE a
petition for prohibition, injunction, with
prayer for preliminary injunction and
temporary restraining order,8 seeking to
invalidate the election held on 4 October
1996.
Two months later, on 4 December 1996,
UST and USTFU, represented by Gamilla
and his co-officers, entered into a
collective bargaining agreement (CBA) for
a period of five (5) years from 1 June
1996 up to 31 May 2001. The CBA was
ratified on 12 December 1996.9
In another front, the Med-Arbiter issued a
TRO dated 11 December 1996, enjoining
Gamilla and his fellow officers to "cease
and desist from performing any and all
acts pertaining to the duties and functions
of the officers and directors" of USTFU.10
On 27 January 1997, at around eleven in
the morning (11:00 a.m.), respondents
Gamilla, Cardenas and Aseron, with some
other persons, served a letter of even
date on petitioners Mariño and Alamis,
demanding that the latter vacate the
premises located at Room 302, Health
Center Building, UST—the Office of
USTFU. However, only the office
messenger was in the office at the time.
After coercing the office messenger to
step out of the office, Gamilla and
company padlocked the door leading to
the union’s office.11
On 5 February 1997, petitioners filed with
the Regional Trial Court (RTC) of Manila
a Complaint12 for injunction and damages
with a prayer for preliminary injunction
and temporary restraining order over the
use of the USTFU office.
At the 11 February 1997 hearing on the
application for TRO before the trial court,
respondents through a consolidated
motion to dismiss sought the dismissal of
the complaint on the ground of forum-
shopping and prayed that the trial court
suspend the application for injunctive
relief until it shall have resolved the
motion to dismiss.13l^vvphi1.net
On the same date, Med-Arbiter Falconitin
rendered a decision,14 declaring the 4
October 1996 election and its results null
and void ab initio. The decision was
appealed to the Bureau of Labor Relations
which affirmed the same.15 Respondents
brought the matter to this Court via a
special civil action for certiorari.16 The
Court promulgated its
decision,17 dismissing the petition on 16
November 1999.
On 3 March 1997, the RTC issued the
assailed order,18 to wit:
WHEREFORE, upon plaintiff’s filing a bond
in the amount of ₱50,000.00, let a writ of
preliminary mandatory injunction issue
requiring defendants their representatives
and agents or other persons acting in their
behalf to remove the padlocks on the door
of the UST Faculty Union office located at
Room 302, Health Center Bldg., UST,
España, Manila and to refrain from
preventing/disturbing in any manner
whatsoever the plaintiffs in entering the
said premises.
In the meantime, defendants are hereby
ordered to submit their answer to the
complaint within fifteen (15) days from
receipt hereof.
On 5 March 1997, after petitioners as
plaintiffs therein had posted the requisite
bond, the RTC issued a writ of preliminary
mandatory injunction.19
On 19 March 1997, respondents filed a
Petition for Certiorari20 before the Court of
Appeals, claiming that the orders dated 3
and 5 March 1997 were void ab initio for
lack of jurisdiction and on the ground that
they were issued in violation of due
process of law.21 The Court of Appeals
stated that the basic issue of the case was
whether the RTC of Manila had jurisdiction
over the subject matter of Civil Case No.
97-81928.22 It agreed with respondents’
disquisition that petitioners’ cause of
action in the complaint before the trial
court is inextricably linked and intertwined
with the issue of who are the legitimate
officers of the USTFU, which issue was
then being litigated before the DOLE. The
appellate court held that Civil Case No.
97-81928 and Case No. NCR-OD-M-9610-
016 appear to be the same, with the
observation that the civil case merely
"grew out" from the labor case. It also
cited the prohibition against the issuance
of injunction in any case involving or
growing out of a labor dispute, unless
otherwise provided by law.23 It added that
it would have been more appropriate for
the RTC to determine whether it had
jurisdiction over the subject case before
issuing the assailed orders.24 The
dispositive portion of the decision reads:
WHEREFORE, premises considered, the
petition is hereby GRANTED—and the
assailed order (dated March 3, 1997) and
the writ of preliminary mandatory
injunction (dated March 5, 1997) SET
ASIDE—and the respondent judge
ordered to DISMISS Civil Case No. 97-
81928.
SO ORDERED.25 (Emphasis in the
original.)
Petitioners’ Motion for
Reconsideration26 was denied. Hence, this
petition.
Petitioners assert that the RTC has
jurisdiction to decide Civil Case No. 97-
81928, as the determination of the
legality and propriety of padlocking the
doors of the USTFU office and preventing
the free and unhampered ingress to and
egress from the said premises, as alleged
in the complaint, are matters incapable of
pecuniary estimation.27 Moreover, they
claim that the civil case was premised on
causes of action belonging to the USTFU
which are to be resolved not by reference
to the Labor Code or other labor relations
statutes. They stress that the causes of
action involve a tortious act and the
corresponding claim for damages that are
both governed by the civil law and fall
under the jurisdiction of regular courts.28
Petitioners add that not all controversies
involving members of the same union are
to be decided by the labor tribunal. They
add that in the instant case, the pendency
of the labor case should not militate
against the civil case they filed since the
criminal and civil aspects of a violation of
Article 241 of the Labor Code29 can be
litigated separately and independently
from the administrative aspect of a breach
of the rights and conditions of
membership.30
Anent the ruling of the Court of Appeals
on the writ of injunction issued by the trial
court, petitioners state that Art. 254 of
the Labor Code31 on prohibition against
injunctions is not applicable to the instant
case since the controversy cannot be
categorized as a labor dispute. They argue
that the injunction was called for
considering that they "have rights to be
protected and preserved," which however,
"were violated, invaded and trampled
upon" by respondents through the acts
complained of.32
Petitioners claim that respondents were
not denied their day in court when the
trial court did not resolve the issue of
jurisdiction before proceeding with the
hearing on the application for injunctive
order. According to them, respondents
were given the chance to present their
evidence in support of their opposition to
the injunction and TRO, but respondents
chose not to avail of this opportunity.33
Lastly, they add that respondents Gamilla,
Cardenas and Aseron had no right to act
for and in behalf of the USTFU for the
following reasons, to wit: Gamilla’s claim
to the USTFU presidency was declared
non-existent by the labor tribunals;
Cardenas was the chief of the security
force in the university and not a faculty
member; and, Aseron was a Barangay
Chairman and not a member of the UST
faculty.34 Thus, petitioners claim that
USTFU was improperly included as
petitioner in the petition35 before the
Court of Appeals.
Accordingly, petitioners assert that the
Court of Appeals erred and gravely abused
its discretion when:
I. It ruled that the regional trial court had
no jurisdiction over Civil Case No. 97-
81928;
II. It ruled that Civil Case No. 97-81928 is
a labor dispute cognizable by the DOLE;
III. It granted the petition for certiorari in
CA-G.R. SP No. 43701, set aside the
orders issued by the trial court, and
ordered the dismissal of the civil case;
IV. It ruled that Art. 254 of the Labor
Code is applicable to the matters involved
in Civil Case No. 97-81928;
V. It ruled that respondents were denied
their day in court; and
VI. It ruled that the Motion for
Reconsideration filed in CA-G.R. SP No.
43701 was pro-forma.36
On the other hand, respondents maintain
that the regional trial court had no
jurisdiction over the issue as to who has
the right to use the union office because
the same is inextricably linked and
intertwined with the issue as to who are
the legitimate and duly elected officers of
the USTFU, which was then the subject of
another case before the
DOLE.37 Furthermore, respondents insist
that the trial court violated their right to
due process when it refused to determine
the issue of jurisdiction before issuing its
assailed orders.38 Respondents submit
that the only issue in the instant petition
is whether the RTC has jurisdiction over
Civil Case No. 97-81928.39
There is merit in the petition but only in
part.
Jurisdiction over a subject matter is
conferred by law and determined by the
allegations in the complaint40 and the
character of the relief sought, irrespective
of whether the plaintiff is entitled to all or
some of the claims asserted therein.41
Central to the assailed decision of the
Court of Appeals is its adoption of
respondents’ argument that the issue in
Civil Case No. 97-81928 is "inextricably
linked and intertwined with the issue as to
who are the lawful officers of the USTFU,"
which is within the exclusive jurisdiction of
the Secretary of Labor; and that "the use
of the union office is a mere incident of
the labor dispute." 42 Specifically, the
Court of Appeals held:
. . . .The two cases (Civil Case No. 97-
81928 and Case No. NCR-OD-M-9610-
016) appear the same. While ostensibly,
the complaint filed with the trial court was
branded ‘injunction and damages’, the
action challenged the legitimacy of
petitioners’ election as officers of the UST
Faculty Union, with the plaintiff therein
(respondent herein) seeking to enjoin
them (petitioners herein) from claiming
and acting as such (elected officers of the
union) and to have the election
proceedings of October 4, 1996
invalidated and declared null and void.
Taking note of plaintiffs’ (private
respondents’) previous moves before the
Department of Labor, Civil Case No. 97-
81928 appear (sic) to have grown out
therefrom—hence, said case clearly falls
outside of the competence of the trial
court.43
Another reason that militates against the
trial court’s assumption of jurisdiction over
the case is Article 254 of the Labor Code
that states:
Art. 254. Injunction prohibited.—No
temporary or permanent injunction or
restraining order in any case involving or
growing out of labor disputes shall be
issued by any court or other entity, except
as otherwise provided in Articles 218 and
264 of this Code.441awphi1.nét
As pointed out by petitioners, the Court of
Appeals erroneously categorized the
instant matter as a labor dispute. Such
labor dispute includes any controversy or
matter concerning terms or conditions of
employment or the association or
representation of persons in negotiating,
fixing, maintaining, changing or arranging
the terms and conditions of employment,
regardless of whether the disputants
stand in the proximate relation of
employer and employee.45 Jurisdiction
over labor disputes, including claims for
actual, moral, exemplary and other forms
of damages arising from the employer-
employee relations is vested in Labor
Arbiters and the National Labor Relations
Commission (NLRC).46
On the other hand, an intra-union dispute
refers to any conflict between and among
union members. It encompasses all
disputes or grievances arising from any
violation of or disagreement over any
provision of the constitution and by-laws
of a union, not excepting cases arising
from chartering or affiliation of labor
organizations or from any violation of the
rights and conditions of union membership
provided for in the Labor Code.47 In
contrast, an inter-union dispute refers to
any conflict between and among
legitimate labor organizations involving
questions of representation for purposes
of collective bargaining; it includes all
other conflicts which legitimate labor
organizations may have against each
other based on any violations of their
rights as labor organizations.48 Like labor
disputes, jurisdiction over intra-union and
inter-union disputes does not pertain to
the regular courts. It is vested in the
Bureau of Labor Relations Divisions in the
regional offices of the Department of
Labor.
Case No. NCR-OD-M-9610-016
entitled "Eduardo J. Mariño, Jr., et al. v.
Gil Gamilla, et al." before the BLR is
neither a labor nor an inter-union dispute.
It is clearly an intra-union dispute.
The case before the trial court, Civil Case
No. 97-81928 entitled Eduardo J. Mariño,
Jr. et al. v. Gil Gamilla, et al.,49 on the
other hand, is a simple case for damages,
with an accompanying application for
injunction. The complaint essentially bears
the following allegations: that despite an
outstanding temporary restraining order
prohibiting the holding of an election of
officers, respondent Gamilla and others
proceeded to hold a purported election;
that there was a case pending before the
DOLE questioning the validity of the
supposed election; and, that respondent
Gamilla with two other persons (later
learned to be respondents Aseron and
Cardenas) compelled the office messenger
to vacate the premises of the USTFU
office, and thereafter padlocked the room.
Petitioners alleged respondents’ act of
padlocking the office was without lawful
basis, and had prevented them from
entering the office premises, thereby
denying them access to personal effects,
documents and records needed in the on-
going cases both in the DOLE and in the
complaint a quo, and ultimately precluding
the union from serving its members.
Fundamentally, the civil case a quo seeks
two reliefs¾one is for the removal of the
padlocks on the office door and restraining
respondents from blocking petitioners’
access to the premises, while the other is
for the recovery of moral and exemplary
damages.
Prior to the institution of the civil case,
petitioners filed before the Med-Arbitration
Unit of the DOLE-NCR a petition for
prohibition, injunction with a prayer for
preliminary injunction and temporary
restraining order against herein
respondents for the latter’s assumption of
office as elected USTFU officers.
Specifically, they prayed that respondents
be enjoined from claiming to be the duly
elected officers of the union and from
performing acts for and in behalf of the
union.
The propriety of padlocking the union’s
office, the relief sought by the petitioner
in the civil case, is interwoven with the
issue of legitimacy of the assumption of
office by the respondents in light of the
violation of the union’s constitution and
by-laws, which was then pending before
the Med-Arbiter. Necessarily, therefore,
the trial court has no jurisdiction over the
case insofar as the prayer for the removal
of the padlocks and the issuance of an
injunctive writ is concerned.
It is a settled rule that jurisdiction, once
acquired, continues until the case is finally
terminated.50 The petition with the Med-
Arbiter was filed ahead of the complaint in
the civil case before the RTC. As such,
when the petitioners filed their complaint
a quo, jurisdiction over the injunction and
restraining order prayed for had already
been lodged with the Med-Arbiter. The
removal of padlocks and the access to the
office premises is necessarily included in
petitioners’ prayer to enjoin respondents
from performing acts pertaining to union
officers and on behalf of the union. In
observance of the principle of adherence
of jurisdiction, it is clear that the RTC
should not have exercised jurisdiction over
the provisional reliefs prayed for in the
complaint. A review of the complaint
shows that petitioners disclosed the
existence of the petition pending before
the Med-Arbiter and even attached a copy
thereof.51 The trial court was also aware of
the decision of the Med-Arbiter dated 11
February 1997, declaring the supposed
union officers’ election void ab initio and
ordering respondents to cease and desist
from discharging the duties and functions
of the legitimate officers of the USTFU.
The trial court even obtained a copy of the
said decision two (2) days after its
promulgation.52 Still, it continued the
hearing on the application for injunction
and eventually issued the assailed orders.
At this juncture, the Court notes that a
key question in this case has already been
settled by the Court in its decision in UST
Faculty Union, et al. v. Bitonio, Jr., et
al.53 In that case, it was ruled that the 04
October 1996 election was void for having
been conducted in violation of the union’s
constitution and by-laws. Nevertheless,
the complaint a quo could not have validly
proceeded at the time of its filing of the
said case due to petitioners’ lack of cause
of action.
As to the alleged inclusion of the USTFU
as petitioner in the petition before the
Court of Appeals, suffice it to say that the
right to use the union’s name as well as to
represent it has been settled by our
decision in UST Faculty Union, et al. v.
Bitonio, Jr., et al. Petitioners, as the
rightful officers of the USTFU, and not
respondents, have the right to represent
USTFU in the proceedings.
Let us go back to the claim for damages
before the lower court. Art. 226 of the
Labor Code provides, thus:
The Bureau of Labor Relations and the
Labor Relations Divisions in the regional
offices of the Department of Labor shall
have original and exclusive authority to
act, at their own initiative or upon request
of either or both parties, on all inter-union
and intra-union conflicts, and all disputes,
grievances or problems arising from or
affecting labor-management relations in
all workplaces whether agricultural or
non-agricultural, except those arising from
the implementation or interpretation of
collective bargaining agreements which
shall be the subject of grievance
procedure and/or voluntary arbitration.
Thus, unlike the NLRC which is explicitly
vested with the jurisdiction over claims for
actual, moral, exemplary and other forms
of damages,54 the BLR is not specifically
empowered to adjudicate claims of such
nature arising from intra-union or inter-
union disputes. In fact, Art. 241 of the
Labor Code ordains the separate
institution before the regular courts of
criminal and civil liabilities arising from proceedings in accordance with
violations of the rights and conditions of this Decision. No costs.
union membership. The Court has SO ORDERED.
consistently held that where no employer-
employee exists between the parties and
no issue is involved which may be
resolved by reference to the Labor Code,
other labor statutes, or any collective
bargaining agreement, it is the regional
trial court that has
jurisdiction.551awphi1.nét
Administrative agencies are tribunals of
limited jurisdiction and as such, can
exercise only those powers which are
specifically granted to them by their
enabling statutes. Consequently, matters
over which they are not granted authority
are beyond their competence.56 While the
trend is towards vesting administrative
bodies with the power to adjudicate
matters coming under their particular
specialization, to ensure a more
knowledgeable solution of the problems
submitted to them, this should not deprive
the courts of justice their power to decide
ordinary cases in accordance with the
general laws that do not require any
particular expertise or training to interpret
and apply.57 In their complaint in the civil
case, petitioners do not seek any relief
under the Labor Code but the payment of
a sum of money as damages on account
of respondents’ alleged tortuous conduct.
The action is within the realm of civil law
and, hence, jurisdiction over the case
belongs to the regular courts.58
WHEREFORE, the Petition is hereby
GRANTED IN PART. The Decision of the
Court of Appeals setting aside the Order
dated 3 March 1997 and the writ of
preliminary mandatory injunction dated 5
March 1997 is hereby AFFIRMED. The case
is REMANDED to the trial court for further
THIRD DIVISION
G.R. No. 194767, October 14, 2015
EDGAR T. BARROSO, Petitioner, v. HON.
JUDGE GEORGE E. OMELIO,
PRESIDING JUDGE, REGIONAL TRIAL
COURT, BRANCH 14, DAVAO CITY AND
TRAVELLERS INSURANCE & SURETY
CORPORATION, ANTONIO V. BATAO,
REGIONAL MANAGER, Respondents.
DECISION
PERALTA, J.:
This deals with the Petition
for Certiorari under Rule 65 of the Rules of
Court praying that the Order1 dated July
29, 2009, and the Order2 dated
September 15, 2010, both of the Regional
Trial Court of Davao City, Branch 14 (RTC-
Br. 14), be reversed and set aside.
The antecedent facts are as follow.
Sometime in 2007, herein petitioner filed
with the Regional Trial Court of Davao
City, Branch 16 (RTC-Br. 16) a Complaint
for sum of money, damages and
attorney's fees against Dennis Li. The
complaint included a prayer for the
issuance of a writ of attachment, and after
Dennis Li filed his Answer, RTC-Br. 16
granted herein petitioner's application for
a Writ of Attachment and approved the
corresponding attachment bond. On the
other hand, Dennis Li filed a counter-
attachment bond purportedly issued by
herein respondent Travellers Insurance &
Surety Corporation (Travellers).
On January 7, 2008, petitioner filed a
Motion for Approval of Compromise
Agreement. Thereafter, RTC-Br. 16 issued
a Judgment on Compromise Agreement
dated January 22, 2008. However, Dennis
Li failed to pay the sums of money as
provided for under said Judgment on
Compromise Agreement. Herein petitioner
then filed a Motion for Execution and RTC-
Br. 16 issued a Writ of Execution solely
against Dennis Li. When said Writ of
Execution against Dennis Li was returned
by the Sheriff unsatisfied, petitioner then
filed a Motion for Execution of Judgment
upon the Counterbond. Acting on said
Motion, RTC-Br. 16 issued an Order3 dated
April 2, 2009, pertinent portions of which
read as follows:cralawlawlibrary
Since the Writ was returned
"UNSATISFIED", plaintiff filed a Motion for
Execution of Judgment upon the Counter-
Bond, a copy of which was sent to the
Head Office of Travellers Insurance Surety
Corporation. In accordance with the Rules,
a summary hearing to determine the
liability under the counterbond was set.
Notice of said hearing was likewise sent to
the Head Office of the surety corporation
at the address appearing on the face of
the counterbond issued. For reasons
unknown, the notice was simply returned.
The case law cited by movant x x x
justifies the issuance of an Alias Writ of
Execution against the Defendant Dennis Li
but this time including the Travellers
Insurance Surety Corporation based on its
counterbond. x x x.4chanrobleslaw
An Alias Writ of Execution dated April 28,
2009 was then issued against both Dennis
Li and respondent Travellers based on the
counterbond it issued in favor of the
former, and pursuant to said writ, Sheriff
Anggot served a Demand Letter on
Travellers. In a letter dated July 1, 2009
addressed to Sheriff Anggot, Travellers
asked for a period of seven (7) days
within which to validate the counterbond
and, thereafter, for its representative to
discuss the matter with complainant,
herein petitioner.
However, on July 10, 2009, instead of
appearing before RTC-Br. 16, Travellers
filed a separate case for Declaration of
Nullity, Prohibition, Injunction with Prayer
for Writ of Preliminary Injunction &
Temporary Restraining Order (TRO), and
Damages, which was raffled to RTC-Br.
14. Said petition prayed for the following
reliefs: (a) the issuance of a TRO
enjoining Sheriff Anggot and herein
petitioner from implementing and
enforcing the Writ of Execution dated April
28, 2009, and after hearing, the issuance
of a writ of preliminary injunction; (b)
judgment be rendered declaring the
counterbond and its supporting
documents to be null and void; ordering
Sheriff Anggot and herein petitioner to
desist from further implementing the Writ
of Execution dated April 28, 2009; and (c)
ordering Sheriff Anggot and herein
petitioner to pay Travellers actual and
moral damages, attorney's fees and costs
of suit.
After hearing on the application for a writ
of preliminary injunction, herein
respondent judge issued the assailed
Order dated July 29, 2009 directing the
issuance of the writ of preliminary
injunction. RTC-Br. 14, in its Order dated
July 29, 2009, ratiocinated,
thus:cralawlawlibrary
Be it noted that under letter (b) of
paragraph six (6) of respondents' [herein
petitioner among them] answer with
counterclaim they alleged that: "x x x The
evidence the counter-attachment bond is
fake has yet to be proven by the
petitioner [Travellers] in the proper forum.
Till then, said judicial officers enjoy the
presumption of regularity in the
performance of their judicial duties . . ."
Precisely, herein petitioner [comes] before
this Court, which is the "proper forum"
referred to by the respondents in their
answer, to prove that the counter-
attachment bond which herein
respondents are about to implement, is
fake. And the only remedy for the
petitioner to hold in abeyance the
enforcement of the subject writ of
execution lest the decision of this Court on
the merit more so if favorable to the
petitioner will become moot and academic
or phyrric victory, is the writ of
preliminary injunction.
Anent the respondents' defense that "this
Court has no jurisdiction to interfere with
the judgment of RTC, Branch 16 in Davao
City" x x x, suffice it to state that this
Court is not interfering with the Order or
judgment of RTC-Br. 16 which is a
coordinate Court. On the contrary[,] this
Court is merely exercising its
complementary jurisdiction with that of
the jurisdiction of RTC 16 - a coordinate
court, the latter - to hypothetical ly state,
was hoodwinked into believing as to the
regularity and due production of the
subject counter-attachment bond now
subject to be executed and enforced
against herein petitioner. While this Court
is aware of this doctrine of non-
interference by a Court against the Order
or judgment of another coordinate court,
this doctrine, however, is not without
exception. The maxim is: For every rule,
there is an exception; for in every room,
there is always a door. This case is an
exception, x x x5chanrobleslaw
On July 30, 2009, the Writ of Preliminary
Injunction was issued, commanding
Sheriff Anggot to refrain from
implementing the Writ of Execution dated
April 28, 2009. Petitioner's motion for
reconsideration of the afore-quoted Order
was denied in the Order dated September
15, 2010.
Hence, the instant petition was filed with
this Court, alleging that respondent judge
committed grave abuse of discretion
amounting to lack or in excess of
jurisdiction and gross ignorance of the law
by (1) acting on respondent Travellers'
petition despite the lack of jurisdiction of
RTC-Br. 14; (2) issuing the writ of
preliminary injunction without requiring
Travellers to put up an injunction bond;
and (3) assuming jurisdiction over the
action for prohibition and injunction
against the executive sheriff of a coequal
court.
Herein petitioner, while acknowledging
that the Court of Appeals (CA) had
concurrent jurisdiction over this petition,
justified his immediate resort to this Court
by pointing out that respondent judge's
conduct shows his gross ignorance of the
law, and any other remedy under the
ordinary course of law would not be
speedy and adequate.
Private respondents, on the other hand,
counter that its petition before RTC-Br. 14
involved the issue of the validity of a
contract, hence, the court presided by
respondent judge had jurisdiction to take
cognizance of the same. Private
respondent then reiterated its arguments
regarding the dubious authenticity and
genuineness of the counterbond
purportedly issued by Travellers and filed
by Dennis Li before RTC-Br. 16.
It must first be emphasized that trifling
with the rule on hierarchy of courts is
looked upon with disfavor by the Court.
Said rule is an important component of
the orderly administration of justice and
not imposed merely for whimsical and
arbitrary reasons. This doctrine was
exhaustively explained in The Diocese of
Bacolod, represented by the Most Rev.
Bishop Vicente M. Navarra and the Bishop
Himself in His Personal Capacity v.
Commission on Elections and the Election
Officer of Bacolod City, Atty. Mavil V.
Majarucon6 in this wise:cralawlawlibrary
x x x we explained the necessity of the
application of the hierarchy of courts:
The Court must enjoin the observance of
the policy on the hierarchy of courts, and
now affirms that the policy is not to be
ignored without serious
consequences. The strictness of the
policy is designed to shield the Court
from having to deal with causes that
are also well within the competence
of the lower courts, and thus leave
time for the Court to deal with the
more fundamental and more essential
tasks that the Constitution has
assigned to it. The Court may act on
petitions for the extraordinary writs of
certiorari, prohibition and mandamus only
when absolutely necessary or when
serious and important reasons exist to
justify an exception to the policy.
xxxx
The doctrine that requires respect for
the hierarchy of courts was created
by this court to ensure that every
level of the judiciary performs its
designated roles in an effective and
efficient manner.
Trial courts do not only determine the
facts from the evaluation of the evidence
presented before them. They are likewise
competent to determine issues of law
which may include the validity of an
ordinance, statute, or even an executive
issuance in relation to the Constitution. To
effectively perform these functions, they
are territorially organized into regions and
then into branches. Their writs generally
reach within those territorial boundaries.
Necessarily, they mostly perform the all-
important task of inferring the facts from
the evidence as these are physically
presented before them. In many
instances, the facts occur within their
territorial jurisdiction, which properly
present the "actual case" that makes ripe
a determination of the constitutionality of
such action. The consequences, of course,
would be national in scope. There are,
however, some cases where resort to
courts at their level would not be practical
considering their decisions could still be
appealed before the higher courts, such as
the Court of Appeals.
The Court of Appeals is primarily designed
as an appellate court that reviews the
determination of facts and law made by
the trial courts. It is collegiate in nature.
This nature ensures more standpoints in
the review of the actions of the trial court.
But the Court of Appeals also has original
jurisdiction over most special civil actions.
Unlike the trial courts, its writs can have a
nationwide scope. It is competent to
determine facts and, ideally, should act on
constitutional issues that may not
necessarily be novel unless there are
factual questions to determine.
This court, on the other hand, leads the
judiciary by breaking new ground or
further reiterating - in the light of new
circumstances or in the light of some
confusion of bench or bar - existing
precedents. Rather than a court of first
instance or as a repetition of the actions
of the Court of Appeals, this court
promulgates these doctrinal devices in
order that it truly performs that
role.7chanrobleslaw
However, in the same case, it was
acknowledged that for exceptionally
compelling reasons, the Court may
exercise its discretion to act on special
civil actions for certiorari filed directly with
it. Examples of cases that present
compelling reasons are: (1) those
involving genuine issues of
constitutionality that must be addressed
at the most immediate time; (2) those
where the issues are of transcendental
importance, and the threat to
fundamental constitutional rights are so
great as to outweigh the necessity for
prudence; (3) cases of first impression,
where no jurisprudence yet exists that will
guide the lower courts on such issues; (4)
where the constitutional issues raised are
better decided after a thorough
deliberation by a collegiate body and with
the concurrence of the majority of those
who participated in its discussion; (5)
where time is of the essence; (6) where
the act being questioned was that of a
constitutional body; (7) where there is no
other plain, speedy, and adequate remedy
in the ordinary course of law that could
free petitioner from the injurious effects of
respondents' acts in violation of their
constitutional rights; and (8) the issues
involve public welfare, the advancement
of public policy, the broader interest of
justice, or where the orders complained of
are patent nullities, or where appeal can
be considered as clearly an inappropriate
remedy.8
Verily, the issues in this case could have
been competently resolved by the CA,
thus, the Court was initially inclined to
reject taking cognizance of this case.
However, we cannot close our eyes to the
unbecoming conduct exhibited by
respondent judge in obstinately issuing an
injunction against the orders of a co-equal
court despite this Court's consistent
reiteration of the time-honored principle
that "no court has the power to interfere
by injunction with the judgments or
decrees of a court of concurrent or
coordinate jurisdiction. The various trial
courts of a province or city, having
the same or equal authority, should
not, cannot, and are not permitted to
interfere with their respective cases,
much less with their orders or
judgments."9 The issue raised in this
case, therefore, falls under one of the
exceptions to the rule on hierarchy of
courts, i.e., where the order complained of
is a patent nullity.
Atty. Cabili v. Judge Balindong10 is closely
analogous to the present case. In Cabili,
the RTC of Iligan City issued a writ of
execution, but the judgment debtor,
instead of complying with said writ, filed a
separate petition for prohibition and
mandamus with application for issuance of
temporary restraining order (TRO) and/or
preliminary injunction with the RTC of
Marawi City. After the hearing, the
Presiding Judge of the RTC of Marawi City
issued the TRO restraining the sheriff from
enforcing the writ of execution issued by
the RTC of Iligan City.
In the aforementioned case, the Court
struck down such action of the RTC of
Marawi City, ruling thus:cralawlawlibrary
The doctrine of judicial stability or non-
interference in the regular orders or
judgments of a co-equal court is an
elementary principle in the administration
of justice: no court can interfere by
injunction with the judgments or orders of
another court of concurrent
jurisdiction having the power to grant
the relief sought by the injunction. The
rationale for the rule is founded on the
concept of jurisdiction: a court that
acquires jurisdiction over the case and
renders judgment therein has jurisdiction
over Its judgment, to the exclusion of
all other coordinate courts, for its
execution and over all its incidents,
and to control, in furtherance of
justice, the conduct of ministerial
officers acting in connection with this
judgment.
Thus, we have repeatedly held that a case
where an execution order has been issued
is considered as still pending, so that all
the proceedings on the execution are still
proceedings in the suit. A court which
issued a writ of execution has the inherent
power, for the advancement of justice, to
correct errors of its ministerial officers and
to control its own processes. To hold
otherwise would be to divide the
jurisdiction of the appropriate forum in the
resolution of incidents arising in execution
proceedings-Splitting of jurisdiction is
obnoxious to the orderly administration of
justice.
xxxx
To be sure, the law and the rules are not
unaware that an issuing court may violate
the law in issuing a writ of execution and
have recognized that there should be a dismissed from the service in 2013 for
remedy against this violation. The gross ignorance of the law and violation of
remedy, however, is not the resort to judicial conduct, he could have been
another co-equal body but to a higher subjected to an investigation again for
court with authority to nullify the action of gross ignorance due to his unprecedented
the issuing court. This is precisely the acts in the case at bar.
judicial power that the 1987 Constitution,
under Article VIII, Section 1, paragraph 2, WHEREFORE, the instant petition
speaks of and which this Court has is GRANTED and the Orders dated July
operationalized through a petition 29, 2009 and September 15, 2010, both
for certiorari, under Rule 65 of the Rules issued by the Regional Trial Court of
of Court. Davao City, Branch 14, are hereby SET
ASIDE and declared NULL and VOID.
xxxx
SO ORDERED
It is not a viable legal position to claim
that a TRO against a writ of execution is
issued against an erring sheriff, not
against the issuing Judge. A TRO enjoining
the enforceability of a writ addresses the
writ itself, not merely the executing sheriff
x x x As already mentioned above, the
appropriate action is to assail the
implementation of the writ before the
issuing court in whose behalf the sheriff
acts, and, upon failure, to seek redress
through a higher judicial body,
xxx.11chanrobleslaw
Applying the foregoing ruling, it is quite
clear that, in this case, the issuance of the
subject writ of preliminary injunction was
improper and, thus, correctible
by certiorari. Herein respondent judge
does not have jurisdiction to hinder the
enforcement of an order of a co-equal
court. He must be aware that said co-
equal court had the exclusive jurisdiction
or authority to correct its own issuances if
ever there was, indeed, a mistake. There
is no question, therefore, that subject writ
of preliminary injunction is null and void.
Further, had Judge Omelio not been
G.R. No. 168380 February 8,
2007
MANUEL V. BAVIERA, Petitioner,
vs.
ESPERANZA PAGLINAWAN, in her
capacity as Department of Justice
State Prosecutor; LEAH C. TANODRA-
ARMAMENTO, In her capacity as
Assistant Chief State Prosecutor and
Chairwoman of Task Force on
Business Scam; JOVENCITO R. ZUNO,
in his capacity as Department of
Justice Chief State Prosecutor;
STANDARD CHARTERED BANK, PAUL
SIMON MORRIS, AJAY KANWAL,
SRIDHAR RAMAN, MARIVEL
GONZALES, CHONA REYES, MARIA
ELLEN VICTOR, and ZENAIDA
IGLESIAS, Respondents.
x--------------------------
---x
G.R. No. 170602 February 8,
2007
MANUEL V. BAVIERA, Petitioner,
vs.
STANDARD CHARTERED BANK, BRYAN
K. SANDERSON, THE RIGHT
HONORABLE LORD STEWARTBY, EVAN
MERVYN DAVIES, MICHAEL BERNARD
DENOMA, CHRISTOPHER AVEDIS
KELJIK, RICHARD HENRY MEDDINGS,
KAI NARGOLWALA, PETER
ALEXANDER SANDS, RONNIE CHI
CHUNG CHAN, SIR CK CHOW, BARRY
CLARE, HO KWON PING, RUDOLPH
HAROLD PETER ARKHAM, DAVID
GEORGE MOIR, HIGH EDWARD
NORTON, SIR RALPH HARRY ROBINS,
ANTHONY WILLIAM PAUL STENHAM
(Standard Chartered Bank Chairman,
Deputy Chairman, and Members of
the Board), SHERAZAM MAZARI
(Group Regional Head for Consumer
Banking), PAUL SIMON MORRIS, AJAY
KANWAL, SRIDHAR RAMAN, MARIVEL
GONZALES, CHONA REYES, ELLEN
VICTOR, RAMONA H. BERNAD,
DOMINGO CARBONELL, JR., and
ZENAIDA IGLESIAS (Standard
Chartered Bank-Philippines Branch
Heads/Officers), Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us are two consolidated Petitions
for Review on Certiorari assailing the
Decisions of the Court of Appeals in CA-
G.R. SP No. 873281 and in CA-G.R. SP No.
85078.2
The common factual antecedents of these
cases as shown by the records are:
Manuel Baviera, petitioner in these cases,
was the former head of the HR Service
Delivery and Industrial Relations of
Standard Chartered Bank-Philippines
(SCB), one of herein respondents. SCB is
a foreign banking corporation duly
licensed to engage in banking, trust, and
other fiduciary business in the Philippines.
Pursuant to Resolution No. 1142 dated
December 3, 1992 of the Monetary Board
of the Bangko Sentral ng Pilipinas (BSP),
the conduct of SCB’s business in this
jurisdiction is subject to the following
conditions:
1. At the end of a one-year period from
the date the SCB starts its trust functions,
at least 25% of its trust accounts must be
for the account of non-residents of the
Philippines and that actual foreign
exchange had been remitted into the
Philippines to fund such accounts or that
the establishment of such accounts had
reduced the indebtedness of residents
(individuals or corporations or government
agencies) of the Philippines to non-
residents. At the end of the second year,
the above ratio shall be 50%, which ratio
must be observed continuously thereafter;
2. The trust operations of SCB shall be
subject to all existing laws, rules and
regulations applicable to trust services,
particularly the creation of a Trust
Committee; and
3. The bank shall inform the appropriate
supervising and examining department of
the BSP at the start of its operations.
Apparently, SCB did not comply with the
above conditions. Instead, as early as
1996, it acted as a stock broker, soliciting
from local residents foreign securities
called "GLOBAL THIRD PARTY MUTUAL
FUNDS" (GTPMF), denominated in US
dollars. These securities were not
registered with the Securities and
Exchange Commission (SEC). These were
then remitted outwardly to SCB-Hong
Kong and SCB-Singapore.
SCB’s counsel, Romulo Mabanta
Buenaventura Sayoc and Delos Angeles
Law Office, advised the bank to proceed
with the selling of the foreign securities
although unregistered with the SEC, under
the guise of a "custodianship agreement;"
and should it be questioned, it shall
invoke Section 723 of the General Banking
Act (Republic Act No.337).4 In sum, SCB
was able to sell GTPMF securities worth
around ₱6 billion to some 645 investors.
However, SCB’s operations did not remain
unchallenged. On July 18, 1997, the
Investment Capital Association of the
Philippines (ICAP) filed with the SEC a
complaint alleging that SCB violated the
Revised Securities Act,5 particularly the
provision prohibiting the selling of
securities without prior registration with
the SEC; and that its actions are
potentially damaging to the local mutual
fund industry.
In its answer, SCB denied offering and
selling securities, contending that it has
been performing a "purely informational
function" without solicitations for any of
its investment outlets abroad; that it has
a trust license and the services it renders
under the "Custodianship Agreement" for
offshore investments are authorized by
Section 726 of the General Banking Act;
that its clients were the ones who took the
initiative to invest in securities; and it has
been acting merely as an agent or
"passive order taker" for them.
On September 2, 1997, the SEC issued a
Cease and Desist Order against SCB,
holding that its services violated Sections
4(a)7 and 198 of the Revised Securities
Act.
Meantime, the SEC indorsed ICAP’s
complaint and its supporting documents to
the BSP.
On October 31, 1997, the SEC informed
the Secretary of Finance that it withdrew
GTPMF securities from the market and
that it will not sell the same without the
necessary clearances from the regulatory
authorities.
Meanwhile, on August 17, 1998, the BSP
directed SCB not to include investments in
global mutual funds issued abroad in its
trust investments portfolio without prior
registration with the SEC.
On August 31, 1998, SCB sent a letter to
the BSP confirming that it will withdraw
third-party fund products which could be
directly purchased by investors.
However, notwithstanding its commitment
and the BSP directive, SCB continued to
offer and sell GTPMF securities in this
country. This prompted petitioner to enter
into an Investment Trust Agreement with
SCB wherein he purchased US$8,000.00
worth of securities upon the bank’s
promise of 40% return on his investment
and a guarantee that his money is safe.
After six (6) months, however, petitioner
learned that the value of his investment
went down to US$7,000.00. He tried to
withdraw his investment but was
persuaded by Antonette de los Reyes of
SCB to hold on to it for another six (6)
months in view of the possibility that the
market would pick up.
Meanwhile, on November 27, 2000, the
BSP found that SCB failed to comply with
its directive of August 17, 1998.
Consequently, it was fined in the amount
of ₱30,000.00.
The trend in the securities market,
however, was bearish and the worth of
petitioner’s investment went down further
to only US$3,000.00.
On October 26, 2001, petitioner learned
from Marivel Gonzales, head of the SCB
Legal and Compliance Department, that
the latter had been prohibited by the BSP
to sell GPTMF securities. Petitioner then
filed with the BSP a letter-complaint
demanding compensation for his lost
investment. But SCB denied his demand
on the ground that his investment is
"regular."
On July 15, 2003, petitioner filed with the
Department of Justice (DOJ), represented
herein by its prosecutors, public
respondents, a complaint charging the
above-named officers and members of the
SCB Board of Directors and other SCB
officials, private respondents, with
syndicated estafa, docketed as I.S. No.
2003-1059.
For their part, private respondents filed
the following as counter-charges against
petitioner: (1) blackmail and extortion,
docketed as I.S. No. 2003-1059-A; and
blackmail and perjury, docketed as I.S.
No. 2003-1278.
On September 29, 2003, petitioner also
filed a complaint for perjury against
private respondents Paul Simon Morris
and Marivel Gonzales, docketed as I.S.
No. 2003-1278-A.
On December 4, 2003, the SEC issued a
Cease and Desist Order against SCB
restraining it from further offering,
soliciting, or otherwise selling its securities
to the public until these have been
registered with the SEC.
Subsequently, the SEC and SCB reached
an amicable settlement.1awphi1.net
On January 20, 2004, the SEC lifted its
Cease and Desist Order and approved the
₱7 million settlement offered by SCB.
Thereupon, SCB made a commitment not
to offer or sell securities without prior
compliance with the requirements of the
SEC.
On February 7, 2004, petitioner filed with
the DOJ a complaint for violation of
Section 8.19 of the Securities Regulation
Code against private respondents,
docketed as I.S. No. 2004-229.
On February 23, 2004, the DOJ rendered
its Joint Resolution10 dismissing
petitioner’s complaint for syndicated
estafa in I.S. No. 2003-1059; private
respondents’ complaint for blackmail and
extortion in I.S. No. 2003-1059-A; private
respondents’ complaint for blackmail and
perjury in I.S. No. 2003-1278; and
petitioner’s complaint for perjury against
private respondents Morris and Gonzales
in I.S. No. 2003-1278-A.
Meanwhile, in a Resolution11 dated April 4,
2004, the DOJ dismissed petitioner’s
complaint in I.S. No. 2004-229 (violation
of Securities Regulation Code), holding
that it should have been filed with the
SEC.
Petitioner’s motions to dismiss his
complaints were denied by the DOJ. Thus,
he filed with the Court of Appeals a
petition for certiorari, docketed as CA-G.R.
SP No. 85078. He alleged that the DOJ
acted with grave abuse of discretion
amounting to lack or excess of jurisdiction
in dismissing his complaint for syndicated
estafa.
He also filed with the Court of Appeals a
separate petition for certiorari assailing
the DOJ Resolution dismissing I.S. No.
2004-229 for violation of the Securities
Regulation Code. This petition was
docketed as CA-G.R. SP No. 87328.
Petitioner claimed that the DOJ acted with
grave abuse of discretion tantamount to
lack or excess of jurisdiction in holding
that the complaint should have been filed
with the SEC.
On January 7, 2005, the Court of Appeals
promulgated its Decision dismissing the
petition.1avvphi1.net It sustained the
ruling of the DOJ that the case should
have been filed initially with the SEC.
Petitioner filed a motion for
reconsideration but it was denied in a
Resolution dated May 27, 2005.
Meanwhile, on February 21, 2005, the
Court of Appeals rendered its Decision in
CA-G.R. SP No. 85078 (involving
petitioner’s charges and respondents’
counter charges) dismissing the petition
on the ground that the purpose of a
petition for certiorari is not to evaluate
and weigh the parties’ evidence but to
determine whether the assailed Resolution
of the DOJ was issued with grave abuse of
discretion tantamount to lack of
jurisdiction. Again, petitioner moved for a
reconsideration but it was denied in a
Resolution of November 22, 2005.
Hence, the instant petitions for review on
certiorari.
For our resolution is the fundamental
issue of whether the Court of Appeals
erred in concluding that the DOJ did not
commit grave abuse of discretion in
dismissing petitioner’s complaint in I.S.
2004-229 for violation of Securities
Regulation Code and his complaint in I.S.
No. 2003-1059 for syndicated estafa.
G.R. No 168380
Re: I.S. No. 2004-229
For violation of the Securities
Regulation Code
Section 53.1 of the Securities Regulation
Code provides:
SEC. 53. Investigations, Injunctions and
Prosecution of Offenses.–
53. 1. The Commission may, in its
discretion, make such investigation as it
deems necessary to determine whether
any person has violated or is about to
violate any provision of this Code, any
rule, regulation or order thereunder, or
any rule of an Exchange, registered
securities association, clearing agency,
other self-regulatory organization, and
may require or permit any person to file
with it a statement in writing, under oath
or otherwise, as the Commission shall
determine, as to all facts and
circumstances concerning the matter to be
investigated. The Commission may publish
information concerning any such violations
and to investigate any fact, condition,
practice or matter which it may deem
necessary or proper to aid in the
enforcement of the provisions of this
Code, in the prescribing of rules and
regulations thereunder, or in securing
information to serve as a basis for
recommending further legislation
concerning the matters to which this Code
relates: Provided, however, That any
person requested or subpoenaed to
produce documents or testify in any
investigation shall simultaneously be
notified in writing of the purpose of such
investigation: Provided, further, That all
criminal complaints for violations of
this Code and the implementing rules
and regulations enforced or
administered by the Commission shall
be referred to the Department of
Justice for preliminary investigation
and prosecution before the proper
court: Provided, furthermore, That in
instances where the law allows
independent civil or criminal proceedings
of violations arising from the act, the
Commission shall take appropriate action
to implement the same: Provided, finally;
That the investigation, prosecution, and
trial of such cases shall be given priority.
The Court of Appeals held that under the
above provision, a criminal complaint for
violation of any law or rule administered
by the SEC must first be filed with the
latter. If the Commission finds that there
is probable cause, then it should refer the
case to the DOJ. Since petitioner failed to
comply with the foregoing procedural
requirement, the DOJ did not gravely
abuse its discretion in dismissing his
complaint in I.S. No. 2004-229.
A criminal charge for violation of the
Securities Regulation Code is a specialized
dispute. Hence, it must first be referred to
an administrative agency of special
competence, i.e., the SEC. Under the
doctrine of primary jurisdiction, courts will
not determine a controversy involving a
question within the jurisdiction of the
administrative tribunal, where the
question demands the exercise of sound
administrative discretion requiring the
specialized knowledge and expertise of
said administrative tribunal to determine
technical and intricate matters of
fact.12 The Securities Regulation Code is a
special law. Its enforcement is particularly
vested in the SEC. Hence, all complaints
for any violation of the Code and its
implementing rules and regulations should
be filed with the SEC. Where the
complaint is criminal in nature, the SEC
shall indorse the complaint to the DOJ for
preliminary investigation and prosecution
as provided in Section 53.1 earlier quoted.
We thus agree with the Court of Appeals
that petitioner committed a fatal
procedural lapse when he filed his criminal
complaint directly with the DOJ. Verily, no
grave abuse of discretion can be ascribed
to the DOJ in dismissing petitioner’s
complaint.
G.R. No. 170602
Re: I.S. No. 2003-1059 for
Syndicated Estafa
Section 5, Rule 110 of the 2000 Rules of
Criminal Procedure, as amended, provides
that all criminal actions, commenced by
either a complaint or an information, shall
be prosecuted under the direction and
control of a public prosecutor. This
mandate is founded on the theory that a
crime is a breach of the security and
peace of the people at large, an outrage
against the very sovereignty of the State.
It follows that a representative of the
State shall direct and control the
prosecution of the offense.13 This
representative of the State is the public
prosecutor, whom this Court described in
the old case of Suarez v. Platon,14 as:
[T]he representative not of an ordinary
party to a controversy, but of a
sovereignty whose obligation to govern
impartially is as compelling as its
obligation to govern at all; and whose
interest, therefore, in a criminal
prosecution is not that it shall win a case,
but that justice shall be done. As such, he
is in a peculiar and very definite sense a
servant of the law, the twofold aim of
which is that guilt shall not escape or
innocence suffers.
Concomitant with his authority and power
to control the prosecution of criminal
offenses, the public prosecutor is vested
with the discretionary power to determine
whether a prima facie case exists or
not.15 This is done through a preliminary
investigation designed to secure the
respondent from hasty, malicious and
oppressive prosecution. A preliminary
investigation is essentially an inquiry to
determine whether (a) a crime has been
committed; and (b) whether there is
probable cause that the accused is guilty
thereof.16 In Pontejos v. Office of the
Ombudsman,17 probable cause is defined
as such facts and circumstances that
would engender a well-founded belief that
a crime has been committed and that the
respondent is probably guilty thereof and
should be held for trial. It is the public
prosecutor who determines during the
preliminary investigation whether
probable cause exists. Thus, the decision
whether or not to dismiss the criminal
complaint against the accused depends on
the sound discretion of the prosecutor.
Given this latitude and authority granted
by law to the investigating
prosecutor, the rule in this jurisdiction
is that courts will not interfere with
the conduct of preliminary
investigations or reinvestigations or
in the determination of what
constitutes sufficient probable cause
for the filing of the corresponding
information against an
offender.18 Courts are not empowered to
substitute their own judgment for that of
the executive branch.19 Differently stated,
as the matter of whether to prosecute or
not is purely discretionary on his part,
courts cannot compel a public prosecutor
to file the corresponding information,
upon a complaint, where he finds the
evidence before him insufficient to
warrant the filing of an action in court. In
sum, the prosecutor’s findings on the
existence of probable cause are not
subject to review by the courts,
unless these are patently shown to
have been made with grave abuse of
discretion.20
Grave abuse of discretion is such
capricious and whimsical exercise of
judgment on the part of the public officer
concerned which is equivalent to an
excess or lack of jurisdiction. The abuse of
discretion must be as patent and gross as
to amount to an evasion of a positive duty
or a virtual refusal to perform a duty
enjoined by law, or to act at all in
contemplation of law, as where the power
is exercised in an arbitrary and despotic
manner by reason of passion or hostility.21
In determining whether the DOJ
committed grave abuse of discretion, it is
expedient to know if the findings of
fact of herein public prosecutors were
reached in an arbitrary or despotic
manner.
The Court of Appeals held that petitioner’s
evidence is insufficient to establish
probable cause for syndicated estafa.
There is no showing from the record that
private respondents herein did induce
petitioner by false representations to
invest in the GTPMF securities. Nor did
they act as a syndicate to misappropriate
his money for their own benefit. Rather,
they invested it in accordance with his
written instructions. That he lost his
investment is not their fault since it was
highly speculative.
Records show that public respondents
examined petitioner’s evidence with care,
well aware of their duty to prevent
material damage to his constitutional right
to liberty and fair play.
In Suarez previously cited, this Court
made it clear that a public prosecutor’s
duty is two-fold. On one hand, he is bound
by his oath of office to prosecute persons
where the complainant’s evidence is
ample and sufficient to
show prima facie guilt of a crime. Yet, on
the other hand, he is likewise duty-bound
to protect innocent persons from
groundless, false, or malicious
prosecution.22
Hence, we hold that the Court of Appeals
was correct in dismissing the petition for
review against private respondents and in
concluding that the DOJ did not act with
grave abuse of discretion tantamount to
lack or excess of jurisdiction.
On petitioner’s complaint for violation of
the Securities Regulation Code, suffice it
to state that, as aptly declared by the
Court of Appeals, he should have filed it
with the SEC, not the DOJ. Again, there is
no indication here that in dismissing
petitioner’s complaint, the DOJ acted
capriciously or arbitrarily.
WHEREFORE, we DENY the petitions
and AFFIRM the assailed Decisions of the
Court of Appeals in CA-G.R. SP No. 87328
and in CA-G.R. SP No. 85078.
Costs against petitioner.
SO ORDERED.
FIRST DIVISION down as
G.R. No. 169343, August 05, 2015 follows:chanRoblesvirtualLawlibrary
SAN MIGUEL PROPERTIES, Deed Date of No Total Considerati
INC., Petitioner, v. BF HOMES, of Execut . Area on
INC., Respondent. Absol ion of (squa
DECISION
ute Lo re
LEONARDO-DE CASTRO, J.:
Sale ts mete
Assailed in this Petition for Review rs)
on Certiorari under Rule 45 of the Revised
Rules of Court filed by San Miguel First In 1992 76 22,81 P52,134,560
Properties, Inc. (SMPI) are: 1) the Deed3 6 .00
Decision1 dated January 31, 2005 of the Secon In 1993 13 5,964 P14,990,514
Court of Appeals in CA-G.R. SP No. 83631, d .00
which affirmed with modification the Deed4
Decision dated January 27, 2004 of the
Third April 41 15,56 P39,122,627
Office of the President (OP), in O.P. Case Deed5 1993 5 .00
No. 03-E-203, and remanded the case to
(Third
the Housing and Land Use Regulatory Sale)
Board (HLURB) for further proceedings;
and 2) the Resolution2 dated August 9, Total 13 44,34 P106,247,70
2005 of the appellate court in the same 0 5 1.00
case, which denied the Motion for
Reconsideration of SMPI.
SMPI completed the payments for the 130
The antecedents of the case are as Italia II lots in December 1995.6 In
follows:chanRoblesvirtualLawlibrary compliance with Section 37 of all the three
Deeds of Absolute Sale, BF Homes
BF Homes, Inc. (BF Homes) is the owner delivered the Transfer Certificates of Title
of several parcels of land located in the (TCTs) to SMPI but only for 110 of the
northern portion of BF Homes Parañaque 130 Italia II lots purchased by SMPI.
Subdivision, particularly identified as Italia
II lots. SMPI, thru counsel, sent BF Homes a
letter on May 20, 1996 demanding the
BF Homes, represented by Florencio B. delivery of the remaining 20 TCTs,
Orendain (Orendain), as rehabilitation specifically:chanRoblesvirtualLawlibrary
receiver appointed by the Securities and TCT No. Area
Exchange Commission (SEC); and SMPI,
1. (S-41285) 123526-A 538 sq. m.
represented by Federico C. Gonzales,
2. (S-41261) 123522-A 329 sq. m.
President, entered into three successive
3. (S-41279) 123520-A 384 sq. m.
Deeds of Absolute Sale whereby the
former sold to the latter a total of 130 4. (S-41277) 123518-A 380 sq. m.
Italia II lots with a combined area of 5. (S-41275) 123516-A 364 sq. m.
44,345 square meters for the aggregate 6. (S-41271) 123512-A 364 sq. m.
consideration of P106,247,701.00, broken 7. (S-41273) 123514-A 364 sq. m.
8. (S-41269) 123510-A 364 sq. m.
9. (S-41267)123508-A 364 sq. m.
10. (S-41265) 123506-A 429 sq. m.
11. (S-41263) 123505-A 329 sq. m.
12. (S-41261) 19477-A 329 sq. m.
13.(S-41258)19476-A 280 sq. m.
14. (S-41257) 23504-A 308 sq. m.
15.(S-41256)23503-A 280 sq. m.
16. (S-41255) 23502-A 308 sq. m.
17. (S-41254)23501-A 280 sq. m.
8. (S-41253) 123500-A 308 sq. m.
19. (S-41557)28372-A 502 sq. m.
20. (S-41279) 123520-A 665 sq. m.
Despite receipt of the afore-mentioned
letter, BF Homes failed or refused to heed
the demand of SMPI. Consequently, SMPI
filed a Complaint8 for specific performance
with damages before the HLURB on
August 24, 2000 to compel BF Homes to
deliver the remaining 20 TCTs to SMPI.
The case was docketed as HLURB Case
No. REM-082400-11183.
In its Answer (With Counterclaim),9 BF
Homes alleged that the Deeds of Absolute
Sale executed in 1992 to 1993 were
entered into by Orendain in his personal
capacity and without authority, as his
appointment as rehabilitation receiver was
revoked by the SEC in an Order dated May
17, 1989. In support of its counterclaims,
BF Homes averred that the consideration
paid by SMPI for the 130 Italia II lots was
grossly inadequate and disadvantageous
to BF Homes; and that the Deeds of
Absolute Sale were undated and not
notarized. Hence, BF Homes prayed that
the HLURB render judgment: 1)
dismissing the complaint of SMPI; 2)
declaring the sale of the 130 Italia II lots
null and void; 3) ordering SMPI to
reconvey to BF Homes the titles for the
[110] Italia II lots; and 4) ordering SMPI
to pay BF Homes exemplary damages,
attorney's fees, and cost of suit.
SMPI, in its Reply (Answer with
Counterclaim dated October 16,
2000),10 countered that the validity of the
three Deeds of Absolute Sale was already
upheld by the SEC in its Omnibus Order
dated November 7, 1994, and the motion
for reconsideration of BF Homes of said
Omnibus Order was denied by the SEC in
its subsequent Order dated August 22,
1995. Both Orders were deemed final,
executory, and unappealable by the SEC
in another Omnibus Order dated July 31,
1996. As a result, the Deeds of Absolute
Sale were binding on BF Homes. SMPI
further maintained that Orendain was
authorized to sign the Deeds of Absolute
Sale for and in behalf of FBO Networks
Management, Inc. - the receiver which the
SEC appointed to replace Orendain, upon
the latter's motion to convert his
involvement in the receivership from an
individual to a corporate capacity. SMPI
additionally asserted that absent
substantiation, the allegation of BF Homes
of inadequate consideration for the sale of
the Italia II lots was self-serving; and that
despite being undated and not notarized,
the Deeds of Absolute Sale were valid
since they contained the essential
elements of a contract. And even
assuming that the Deeds of Absolute Sale
may be rescinded, SMPI argued that BF
Homes did not offer and was not prepared
to return the consideration paid by SMPI,
plus interest.
BF Homes filed a Rejoinder (To
Complainant's Reply)11 contending that
the SEC Omnibus Order dated July 31,
1996 has not yet become final as BF
Homes assailed the said Order in a
Petition for Certiorari before the SEC. In
its Decision dated May 8, 1997, the SEC
neither confirmed the authority of
Orendain nor cleared Orendain/FBO
Networks Management, Inc. from any
liability for his/its unauthorized acts, but
clarified that the final report of the
rehabilitation receiver was not yet
approved and was merely admitted as
part of the records. BF Homes also stated
that although the SEC Order dated
September 12, 2000 already terminated
the rehabilitation proceedings because of
the improvement in the solvency status of
BF Homes, BF Homes filed a Motion for
Clarification and/or Partial Reconsideration
of said SEC Order and sought a resolution
of the issues relating to the receiver's
irregular acts, including the sale of the
Italia II lots to SMPI. BiF Homes insisted
that the transactions entered into by
Orendain were anomalous as the latter
sold the 130 Italia II lots to SMPI at a
price that was inadequate and
disadvantageous to BF Homes.
Housing and Land Use Arbiter Rowena C.
Balasolla (Arbiter Balasolla) issued an
Order dated January 22, 200112 directing
the parties to submit their respective
position papers and supporting evidence,
as well as their draft decisions. Thereafter,
the case was deemed submitted for
resolution.
In her Decision13 dated January 25, 2002,
Arbiter Balasolla suspended the
proceedings in HLURB Case No. REM-
082400-11183 for the following
reasons:cralawlawlibrary
What clearly is the issue to be resolved is
whether or not [BF Homes] is obligated to
deliver the title of the remaining twenty
(20) lots to [SMPI] notwithstanding that
the latter had fully paid the same.
Were this is a simple case of non-delivery
of title of the lot or unit to the buyer upon
full payment, sans the attendant
problems, the answer would readily be in
the affirmative. But this is not so in the
instant case. This is a case of non-delivery
of titles of a sale of 20 lots between two
developers, and the lots sold are from an
existing subdivision, which was under
rehabilitation and made by a receiver
which authority had been continuously
questioned by the controlling stockholders
of a corporation under rehabilitation.
In the light thereof, it becomes imperative
to discuss the antecedent facts that would
help in arriving at a judicious resolution of
the instant complaint.
Sometime in September 1984, respondent
[BF Homes] filed with the SEC a petition
for rehabilitation and for declaration of
suspension of payments. In February
1988, the SEC appointed Florencio
Orendain as [BF Homes'] rehabilitation
receiver. In May 1989, the SEC revoked
the appointment of Mr. Orendain and
appointed FBO Networks Management,
Inc. (FBO) as receiver of the [BF Homes].
It was during the time 1992-1993 that
[SMPI] bought from [BF Homes] the 130
parcels of land located in the northern
portion of BF Homes, Paranaque City.
In June 1994, Mr. Orendain, on behalf of
FBO, submitted to the SEC the Closing
Report on [BF Homes] I of the
receivership program covering the period
from March 1988 to January 1994. [BF
Homes] protested and questioned the said
report by filing the corresponding
pleadings with the SEC praying that the
receivership of FBO represented by Mr.
Orendain be suspended due to violations
of trust and breach of fiduciary obligation
and sought the nullification of the
transaction entered into by Mr. Orendain.
In November 1994, FBO was relieved of
its duties and responsibilities as
rehabilitation receiver and a Committee of
Receivers was appointed in lieu thereof, to
undertake and continue the rehabilitation
program of [BF Homes].
In July 1996, the SEC issued an Omnibus
Order in regard to rehabilitation case.
Subsequently, however, [BF Homes] filed
a petition for review for which the SEC
rendered a decision in May 1997. In the
said decision, the SEC held that the
admission of the Receiver's Closing Report
is merely for the purpose of receiving and
noting them for inclusion in the records of
the case and not an admittance (sic) and
acceptance of the merits and veracity of
the contents thereof.
In September 2000, the SEC issued
another Order terminating the
rehabilitation proceedings without,
however, deciding on the merits and
veracity of the contents of the Receiver's
Closing Report. Hence, [BF Homes] filed in
October 2000 a Motion for Clarification
and/or Partial Reconsideration of the said
Order which remains pending with the
SEC until the present.
Apparently, it is in the context of the
foregoing issues that [BF Homes] refused
to deliver the remaining twenty (20) titles
of the lots sold to [SMPI] as the former
claimed, among others, that Mr. Orendain
did not have the authority to sell the 130
parcels of land in the first place.
As the peculiar background of this case
would tell, it is inevitable that the
resolution of the issues raised in the
instant complaint would be largely
influenced by the outcome of the cases
pending in other tribunals which are
directly and ineluctably related to the
issues brought before this Board.
This Board is cognizant of the fact that
respondent had questioned the action of
its rehabilitation receiver before the SEC,
raising several issues against him,
including but not limited, to his authority
to sell the subject lots to the complainant
the resolution of which is still pending the
said body.
Thus, while this Board may have
jurisdiction over the instant complaint, the
issue on whether or not Mr. Orendain has
overstepped his authority which is
pending resolution by the SEC, is to our
mind a condition sine qua non, the final
resolution of which by said body is a
logical antecedent to the issue involved in
the instant complaint and which only the
SEC has exclusive jurisdiction to decide.
Under the circumstances, we are inclined
to suspend the proceedings before the
Board until the SEC shall have resolved
with finality on the issue of the authority
of Mr. Orendain/FBO Networks
Management to enter into such
transactions on behalf of [BF Homes].
WHEREFORE, PREMISES CONSIDERED,
this Office hereby suspends the
proceedings of the instant complaint until
the final resolution of the pending
incidents before the Securities and
Exchange Commission.14chanrobleslaw
SMPI filed a Petition for Review (Re:
Decision dated January 25, 2002)15 with
the HLURB Board of Commissioners,
asseverating that: 1) the SEC, in its
Orders dated November 7, 1994 and
August 22, 1995, had upheld the validity
of the Deeds of Absolute Sale and
confirmed the authority of the receiver to
sell the 130 Italia II lots to SMPI, and said
Orders already became final after BF
Homes failed to appeal the same before
the Court of Appeals, as provided for in
Section 3,16 Republic Act No. 5434, the
law in force at that time; 2) Orendain
and/or FBO Networks Management, Inc.
were immune from suit pursuant to
Section 9, Rule 917 of the Interim Rules of
Procedure Governing Intra-corporate
Controversies and Section 17, Rule 4 18 of
the Interim Rules of Procedure on
Corporate Rehabilitation; 3) BF Homes
was estopped from refusing to deliver the
remaining 20 titles since it had already
received the consideration and benefits
from the sale of the Italia II lots to SMPI
and delivered 110 out of 130 TCTs to
SMPI; 4) the principle of suspending a
case due to a prejudicial question only
applies to criminal cases; 5) BF Homes
was mandated, under pain of criminal
sanction under Section 25,19 in relation to
Section 3920 of Presidential Decree No.
957,21 also known as "The Subdivision and
Condominium Buyer's Protection Decree,"
to deliver the TCTs of the remaining 20
Italia II lots, which had already been fully
paid for by SMPI; 6) assuming that
Orendain exceeded his authority as
receiver of BF Homes in selling the 130
Italia II lots to SMPI, then Orendain could
be held liable for damages but the titles to
said lots acquired by SMPI by reason of
the sale would be unaffected, absent any
action for reconveyance instituted by BF
Homes; and 7) the issue regarding
Orendain's authority to undertake the sale
of the Italia II lots to SMPI was rendered
moot and academic by the issuance of
SEC Order dated September 12, 2000,
terminating the receivership of BF Homes.
After a further exchange of pleadings by
the parties, the HLURB Board of
Commissioners22 rendered its
Decision23 dated March 28, 2003, ruling
thus:cralawlawlibrary
We find no evidence to support the
argument that the SEC had upheld with
finality on the sales transaction entered
into by Orendain with [SMPI]. On the
contrary the order of the SEC stated that
the closing report of the receiver is being
accepted for inclusion of the records and
not an admittance (sic) or acceptance of
the merits and veracity of the contents
thereof. The issue of whether Orendain
had authority to sell the lots is still
unresolved.
While this board may have the
competence to rule on the validity of the
sales transaction entered into by Orendain
ostensibly in behalf of BF Homes, we
decline to rule on the said issue in
deference to the SEC or its successor-in-
interest, which has first taken cognizance
of the issue, applying the doctrine of
primary jurisdiction. Thus, in Vidad vs.
RTC of Negros Oriental, it was
held:chanRoblesvirtualLawlibrary
While no prejudicial question strictly arises
where one is a civil case and the other is
an administrative proceeding, in the
interest of good order, it behooves the
court to suspend its action on the cases
before it pending the final outcome of the
administrative proceedings. The doctrine
of primary jurisdiction does not warrant a
court to arrogate unto itself the authority
to resolve a controversy the jurisdiction
over which is initially lodged with an
administrative body [of special
competence].
Wherefore, the petition for review is
denied and the decision of the office below
is affirmed.24
chanrobleslaw
SMPI appealed the foregoing Decision of
the HLURB Board of Commissioners before
the OP. The appeal was docketed as O.P.
Case No. 03-E-203. The OP, in its
Decision25 dated January 27, 2004,
adjudged that the HLURB should have
resolved HLURB Case No. REM-082400-
11183:cralawlawlibrary
The basic complaint in this case is one for
specific performance under Section 25 of
Presidential Decree (PD) 957 - "The
Subdivision and Condominium Buyers'
Protective", infra.
As early as August 1987, the Supreme
Court already recognized the authority of
the HLURB, as successor agency of the
National Housing Authority (NHA), to
regulate, pursuant to PD 957 in relation to
PD 1344, the real estate trade, with
exclusive jurisdiction to hear and decide
cases "involving specific performance of
contractual and statutory obligations filed
by buyers of subdivision lots . . . against
the owner, developer, dealer, broker or
salesman" (Antipolo Realty Corp. vs.
National Housing Authority (153 SCRA).
Then came the reiterative rulings in Solid
Homes vs. Pavawal (177 SCRA 72
[1989]), United Housing Corp. vs.
Dayrit (181 SCRA 295 [1990]), and Realty
Exchange Venture Corp. vs. Sendino, 233
SCRA 665 [1994]. And as stressed in
Realty Exchange, citing C.T. Torres
Enterprises, Inc. vs. Hibionada (191 SCRA
268 [1990], the HLURB, in the exercise of
its adjudicatory powers and
functions, "must interpret and apply
contracts, determine the rights of the
parties under these contracts and award
damages whenever appropriate."
Given its clear statutory mandate, the
HLURB's decision to await for some other
forum to decide - if ever one is
forthcoming - the issue on the authority of
Orendain to dispose of subject lots before
it peremptorily resolves the basic
complaint is unwarranted, the issues
thereon having been joined and the
respective position papers and the
evidence of the parties having been
submitted. To us, it behooved the HLURB
to adjudicate, with usual dispatch, the
right and obligations of the parties in line
with its appreciation of the obtaining facts
and applicable law. To borrow
from Mabuhay Textile Mills Corp. vs.
Ongpin (141 SCRA 437), it does not have
to rely on the findings of others to
discharge this adjudicatory
functions.26chanrobleslaw
The OP then proceeded to resolve the
question of whether or not SMPI was
entitled to the delivery of the 20
TCTs:cralawlawlibrary
There can be no quibbling about the
following postulates: 1) The existence of a
perfected deed of absolute sale covering
the said lots; 2) SMPI appears to be an
innocent purchaser for value; 3) Full
payment and receipt by [BF Homes] of the
stipulated purchase price; 4) Admission by
the SEC of FBO's audited Closing Report;
5). Termination of the rehabilitation
proceedings, and 6) The obligation of the
owner or developer under Sec. 25 of PD
957 to "deliver the title of the lot or units
to the buyer upon [full] payment of the lot
or unit."
Given the foregoing perspective, the
question thus formulated should be
answered in the affirmative. [BF Homes']
challenge against the validity of the
conveying deed on the ground of
inadequacy of the purchase price cannot
be given cogency. As a matter of law,
lesion or inadequacy of cause shall not
invalidate a contract, save in cases
specified by law or unless there has been
fraud, mistake or undue influence (Art.
1355, Civil Code). Thus, [BF Homes']
allegation about the inadequacy of price
for the twenty (20) lots, even if true,
cannot invalidate the sale in question,
absent a showing that such sale is a case
exempted by law from the operation of
said article or that fraud, mistake or
undue influence attended the sale
(Auyong Hian vs. CTA, 59 SCRA 110).
[BF Homes'] posture regarding the
invalidity of the same sales transaction
owing to Orendain's alleged lack of
authority to execute the corresponding
deed may be accorded serious
consideration were it not for its
acceptance and retention of the purchase
price for the covered lots. As aptly argued
in this appeal, citing jurisprudence,
estoppel attached to [BF Homes] when it
accepted the benefits arising from the
performance of SMPI of its undertaking
under the contract of sale. By the doctrine
of estoppel, a party is barred from
repudiating or canceling an otherwise
defective or rescissible contract by his
receipt of payments due thereunder
(Republic v. Acoje Mining Co., Inc., 7
SCRA 361; Angeles v. Calasanz, 135 SCRA
332); the bar of estoppel also precludes
one who, by his conduct, had induced
another to act in a particular manner,
from adopting an inconsistent position
that thereby causes prejudice to another
(Cruz vs. CA, 293 SCRA 239).
Significantly, Orendain signed the three
deeds of sale adverted to covering 130
lots in 1992 and 1993, or during FBO's
watch as receiver. Yet, [BF Homes] opted
to fully implement the transactions
covered by two of these deeds and
partially implement the third by delivering
the titles to 110 lots. In net effect, [BF
Homes] did recognize the authority of
Orendain to execute those contracts. But
if Orendain was indeed bereft of authority
during the time material, as [BF Homes]
would have this Office believe, how
explain (sic) its inaction to recover
damages against one it veritably depicts
as an impostor?
xxxx
Much has been made about the sale of the
130 lots not having been approved by the
SEC. It bears to stress in this regard that
the Closing Report which, doubtless
includes the said sale, had been confirmed
and admitted by the SEC Hearing Panel. It
may be that the Commission en banc did
not specifically confirm and approve the
sale. But neither did it interpose objection
thereto, let alone disapprove the same. Be
that as it may, the presumptive validity
and enforceability of such sale must be
posited.27
chanrobleslaw
The OP denied the claims for damages of
both parties for insufficiency of evidence
but awarded attorney's fees in the amount
of PI00,000.00 to SMPI, which was
compelled to litigate. In the end, the OP
decreed:cralawlawlibrary
IN VIEW OF ALL THE FOREGOING,
judgment is hereby entered ordering BF
Homes, Inc., to deliver to San Miguel
Properties, Inc., the corresponding titles
to the lots subject of the instant case, free
from all liens aind encumbrances, except
to the subdivision restrictions referred to
in the conveying deed of sale, and to pay
the latter the sum of P100,000.00 as and.
by way of attorneys' fees. All other claims
and counterclaims are hereby DISMISSED.
The decision of the HLURB dated 28 March
2003 is accordingly REVERSED and SET
ASIDE.28chanrobleslaw
BF Homes filed a Motion for
Reconsideration but it was denied by the
OP in a Resolution29 dated March 26,
2004.
Aggrieved, BF Homes sought recourse
from the Court of Appeals by way of a
Petition for Review30 under Rule 43 of the
Revised Rules of Court, which was
docketed as CA-G.R. SP No. 83631. In its
Decision31 dated January 31, 2005, the
Court of Appeals agreed with the OP that
the HLURB had the primary and exclusive
jurisdiction to resolve the complaint for
specific performance and damages of
SMPI and should not have suspended the
proceedings until the SEC had ruled with
finality on the issue of Orendain's
authority to sell the 130 Italia II lots to
SMPI:cralawlawlibrary
Presidential Decree No. 957 was issued on
12 July 1976. It was promulgated to cover
questions that relate to subdivisions and
condominiums. Its object is to provide for
an appropriate government agency, the
HLURB, to which all parties aggrieved in
the enforcement of contractual rights with
respect to said category of real estate
may take course.
In the case of JESUS LIM ARRANZA vs.
B.F. HOMES, INC., the Supreme Court
said:cralawlawlibrary
Section 3 ofP.D. No. 957 empowered
the National Housing Authority (NHA)
with the "exclusive jurisdiction to
regulate the real estate trade and
business." On 2 April
1978, P.D. No. 1344 was issued to expand
the jurisdiction of the NHA to include the
following:chanRoblesvirtualLawlibrary
SECTION 1. In the exercise of its
functions to regulate the real estate
trade and business and in addition to
its powers provided for in Presidential
Decree No. 957, the National Housing
Authority shall have exclusive
jurisdiction to hear and decide cases
of the following
nature:chanRoblesvirtualLawlibrary
A. Unsound real estate business
practices;ChanRoblesVirtualawlibrary
B. Claims involving refund and any
other claims filed by subdivision lot or
condominium unit buyer against the
project owner, developer, dealer,
broker or salesman; and
C. Cases involving specific
performance of contractual and
statutory obligations filed by buyers
of subdivision lot or condominium
unit asainst the owner, developer,
dealer, broker or
salesman. (Emphasis supplied.)
Thereafter, the regulatory and quasi-
judicial functions of the NHA were
transferred to the Human Settlements
Regulatory Commission (HSRC) by
virtue of Executive Order No. 648
dated 7 February 1981. Section 8
thereof specifies the functions of the
NHA that were transferred to the
HSRC including the authority to hear
and decide "cases on unsound real
estate business practices; claims
involving refund filed against project
owners, developers, dealers, brokers
or salesmen and cases of specific
performance." Executive Order No. 90
dated 17 December 1986 renamed
the HSRC as the Housing and Land
Use Resulatory
Board (HLURB). (Underscoring
supplied.)
Certainly, in the instant case, [SMPI] is a
buyer within the contemplation of P.D.
957. Clearly, the acquisition of the one
hundred thirty (130) lots was for a
valuable consideration.
The jurisdiction of the SEC, on the other
hand, is defined by P.D. No. 902-A, as
amended, as follows:
Sec. 5. In addition to the regulatory
and adjudicative functions of the
Securities and Exchange Commission
over corporations, partnerships and
other forms of associations registered
with it as expressly granted under
existing laws and decrees, it shall
have original and exclusive
jurisdiction to hear and decide cases
involving.
(a) Devices or schemes employed by
or any acts, of the board of directors,
business associates, its officers or
partnership, amounting to fraud and
misrepresentation which may be
detrimental to the interest of the
public and/or of the stockholder,
partners, members of associations or
organizations registered with the
Commission;ChanRoblesVirtualawlibr
ary
(b) Controversies arising out of intra-
corporate or partnership relations,
between and among stockholders,
members, or associates; between any
or all of them and the corporation,
partnership or association of which
they are stockholders, members or
associates, respectively; and between
such corporation, partnership or
association and the state insofar as it
concerns their individual franchise or
right to exist as such entity; and
(c) Controversies in the election or
appointments of directors, trustees,
officers or managers of such
corporations, partnerships or
associations.
In the ARRANZA case, the Supreme
Court said that:
For the SEC to acquire jurisdiction
over any controversy under these
provisions, two elements must be
considered: (1) the status or
relationship of the parties; and (2)
the nature of the Question that is the
subject of their controversy.
The first element requires that
the controversy must arise "out of
intra-corporate or partnership
relations between and among
stockholders, members or associates;
between any or all of them and the
corporation, partnership or
association of which they are
stockholders, members or associates,
respectively; and between such
corporation, partnership or
association and the State in so far as
it concerns their individual franchises.
In the instant case, [SMPI] is not a
stockholder, member or associate of [BF
Homes]. It is a lot buyer in the subdivision
developed by [BF Homes.]
The second element requires that the
dispute among the parties be intrinsically
connected with the regulation or the
internal affairs of the corporation,
partnership or association.
In the case at hand, [SMPI's] complaint
before the HLURB is for specific
performance to enforce its rights as
purchaser of subdivision lots as regards
the delivery of twenty (20) TCTs.
Certainly, the issue in this case is not
related to the "regulation" of [BF Homes]
or to [BF Homes'] "internal affairs."
As a matter of fact, Section 25 of PD
957 provides:
Section 25. Issuance of Title. The
owner or developer shall deliver the
title of the lot or unit to the buyer
upon full payment of the lot or unit.
No fee, except those required for the
registration of the deed of sale in the
Registry of Deeds, shall be collected
for the issuance of such title. In the
event a mortgage over the lot or unit
is outstanding at the time of the
issuance of the title to the buyer, the
owner or developer shall redeem the
mortgage or the corresponding
portion thereof within six months
from such issuance in order that the
title over any fully paid lot or unit
may be secured and delivered to the
buyer in accordance herewith,
(underscoring supplied.)
In the above-mentioned case of Arranza,
the Supreme Court also said:
P.D. No. 902-A, as amended, defines the
jurisdiction of the SEC; while P.D. No.
957, as amended, delineates that of the
HLURB. These two quasi-judicial agencies
exercise functions that are distinct from
each other. The SEC has authority over
the operation of all kinds of corporations,
partnerships or associations with the end
in view of protecting the interests of the
investing public and creditors. On the
other hand, the HLURB has jurisdiction
over matters relating to observance of
laws governing corporations engaged in
the specific business of development of
subdivisions and condominiums. The
HLURB and the SEC being bestowed with
distinct powers and functions, the exercise
of those functions by one shall not abate
the performance by the other of its own
functions. As respondent puts it, "there is
no contradiction between P.D. No. 902-A
and P.D. No. 957."
Hence, the powers of the HLURB can not
be in derogation of the SEC's authority.
P.D. Nos. 902-A and 957 are laws in pari
materia. This is because P.D. No. 902-A
relates to all corporations, while P.D. No.
957 pertains to corporations engaged in
the particular business of developing
subdivisions and condominiums.
Next, this brings us to the collateral issue
of whether or not HLURB properly
suspended the proceeding until SEC shall
have resolved with finality the issue of
authority of Mr. Orendain.
Given the foregoing perspective, the
collateral issue thus formulated should be
answered in the negative. Furthermore, in
several cases decided by the Supreme
Court, the High Court has consistently
ruled that the NHA or the HLURB has
jurisdiction over complaints arising from
contracts between the subdivision
developer and the lot buyer or those
aimed at compelling the subdivision
developer to comply with its contractual
and statutory obligations.
Hence, the HLURB should take jurisdiction
over respondent's complaint because it
pertains to matters within the HLURB's
competence and expertise. The
proceedings before the HLURB should not
be suspended.32chanrobleslaw
The Court of Appeals, however, differed
from the OP Decision by ordering the;
remand of the case to the HLURB in
recognition of the doctrine of primary
jurisdiction. The dispositive portion of the
Decision of the appellate court
reads:cralawlawlibrary
WHEREFORE, the questioned Decision of
the Office of the President [is] AFFIRMED
with modification. The case is REMANDED
to the Housing and Land Use Regulatory
Board for continuation of proceedings with
dispatch.33
SMPI filed a Motion for Partial
Reconsideration (Re: Decision dated
January 31, 2005)34 insofar as the Court
of Appeals remanded the case to the
HLURB for further proceedings. The
appellate court denied said Motion in a
Resolution35 dated August 9, 2005.
SMPI now comes before this Court,.
through the instant Petition, assailing the
aforementioned Decision and Resolution of
the Court of Appeals based on the
following assignment of
errors:cralawlawlibrary
I.
THE COURT OF APPEALS' DECISION
DATED 31 JANUARY 2005 REMANDING
THE CASE TO THE HLURB IS
CONSTITUTIONALLY FLAWED AND A
PATENT NULLITY CONSIDERING
THAT:chanRoblesvirtualLawlibrary
1. IT MISERABLY FAILED TO DISCUSS
CLEARLY AND DISTINCTLY THE
LEGAL BASIS AND/OR
JUSTIFICATION FOR REMANDING
THE CASE TO THE HLURB AS
MANDATED BY SECTION 14,
ARTICLE VIII, 1987
CONSTITUTION.
2. WORSE, THE COURT OF APPEALS
FAILED TO IDENTIFY THE FACTUAL
MATTERS THAT IT CLAIMS NEED
STILL BE TRIED OR DETERMINED
BY THE HLURB THAT WOULD HAVE
JUSTIFIED THE REMAND OF THE
CASE.
3. IN ANY EVENT, [BF HOMES] AND
THE COURT OF APPEALS' CLAIMED
DOCTRINE OF PRIMARY
JURISDICTION IS FOREVER
BARRED AS IT COULD NOT BE
INVOKED FOR THE FIRST TIME ON
APPEAL.
4. EVEN ASSUMING ARGUENDO THAT
THE DOCTRINE OF PRIMARY
JURISDICTION IS STILL
INVOCABLE, IT IS NONETHELESS
INAPPLICABLE SINCE THE PARTIES
HAD DULY AMPLIFIED THEIR
RESPECTIVE CAUSES OF ACTION
AND DEFENSES VIA THEIR
SUBMISSION OF PLEADINGS AND
POSITION PAPERS BEFORE THE
HLURB, AND UPON WHICH THE
OFFICE OF THE PRESIDENT
DECIDED ON THE MERITS.
II.
EVEN THEN, THE COURT OF APPEALS
COMMITTED GRAVE, SERIOUS AND
REVERSIBLE ERROR WHEN IT REMANDED
THE CASE TO THE HLURB FOR FURTHER
"PRESENTATION OF EVIDENCE" DESPITE
THE DECISION ON THE MERITS OF THE
OFFICE OF THE PRESIDENT IN
THAT:chanRoblesvirtualLawlibrary
1. THE ISSUE HERE BEING A SIMPLE
QUESTION OF LAW ON WHETHER
OR NOT SMPI WAS ENTITLED TO
THE DELIVERY OF THE BALANCE
OF 130 FULLY PAID LOTS/TITLES
OR EQUIVALENT TO TWENTY (20)
TITLES, THE COURT OF APPEALS
SHOULD HAVE AFFIRMED THE
DECISION ON THE MERITS OF THE
OFFICE OF THE PRESIDENT.
2. IN FACT, THE RELEVANT FACTS OF
THE CASE, E.G. FULL PAYMENT OF
THE PURCHASE PRICE OF THE
SUBJECT LOTS IN FAVOR OF [BF
HOMES] AND NON-DELIVERY TO
SMPI OF THE TITLES OVER THE
SUBJECT LOTS BY [BF HOMES],
WERE UNDISPUTED AND MORE SO
ADMITTED BY THE PARTIES IN
THEIR RESPECTIVE HLURB
POSITION PAPERS AND OTHER
PLEADINGS FOR WHICH NO
TRIABLE EVIDENTIARY MATTER IS
LEFT TO BE RESOLVED BY THE
HLURB.
3. INDEED, THE OFFICE OF THE
PRESIDENT, PER ITS DECISION
DATED 27 JANUARY 2004,
CORRECTLY RESOLVED THIS
SIMPLE ISSUE, AND FORTUNATELY
IN FAVOR OF SMPI, BASED ON THE
PLEADINGS AND POSITION
PAPERS FILED BY THE PARTIES IN
ACCORDANCE WITH SECTION 5,
RULE VI, HLURB RULES. THE
COURT OF APPEALS OUGHT TO
HAVE SIMILARLY ENFORCED THIS
HLURB RULE.
4. FURTHER PROCEEDINGS BEFORE
THE HLURB IS DILATORY,
UNNECESSARY, SUPERFLUOUS
AND CIRCUITOUS.
HIERARCHICALLY (sic), THE HLURB
IS PRECLUDED AND BARRED FROM
REOPENING, MUCH LESS
REVERSING THE DECISION OF THE
OFFICE OF THE PRESIDENT.
5. THE COURT OF APPEALS' STANCE
IS TANTAMOUNT TO A RE-
OPENING OF THE OFFICE OF THE
PRESIDENT'S DECISION, HENCE
WOULD WREAK HAVOC TO THE
DOCTRINE OF SUBSTANTIAL RES
JUDICATA.
6. IF AT ALL, THE HLURB NEED ONLY
BE DIRECTED TO RESOLVE SMPI'S
PENDING MOTION FOR
EXECUTION, AND NOT CONDUCT
FURTHER PROCEEDINGS FOR
RECEPTION OF THE PARTIES'
EVIDENCE THAT ARE
UNSPECIFIED.
III.
THE COURT OF APPEALS COMMITTED
GRAVE, SERIOUS AND REVERSIBLE
ERROR WHEN IT FAILED AND/OR
REFUSED TO AFFIRM THE OFFICE OF THE
PRESIDENT'S DECISION DATED 27
JANUARY 2004 IN
THAT:chanRoblesvirtualLawlibrary
1. THE SUBJECT SALE
TRANSACTIONS, DULY APPROVED
AND CONFIRMED BY THE SEC PER
ITS ORDERS DATED 07 NOVEMBER
1994 AND 31 JULY-1996, ARE
PRESUMED VALID AND REGULAR
SINCE THESE WERE OFFICIAL
ACTS OF SEC-APPOINTED
RECEIVER MR. FLORENCIO B.
ORENDAIN.
2. IN FACT, SEC RECEIVER
ORENDAIN'S ACTS CANNOT BE
IMPUGNED BY [BF HOMES] SINCE
UNDER SECTION 9, RULE 9,
INTERIM RULES OF PROCEDURE
GOVERNING INTRA- CORPORATE
CONTROVERSIES AND SECTION
17, RULE 4, INTERIM RULES OF
PROCEDURE ON CORPORATE
REHABILITATION, WHICH
OPERATES RETROACTIVELY BEING
A PROCEDURAL RULE, RECEIVERS
ENJOY IMMUNITY FROM SUITS
ARISING FROM THE EXERCISE OF
THEIR FUNCTIONS AND DUTIES.
3. NONETHELESS, [BF HOMES] IS
ESTOPPED FROM REFUSING TO
DELIVER THE REMAINING 20 TCTs
SINCE IT HAD PREVIOUSLY
DELIVERED TO SMPI 110 TCTs OUT
OF 130 TCTs FOR WHICH [BF
HOMES] HAD DULY .RECEIVED
FULL PAYMENT THEREFOR IN THE
TOTAL AMOUNT
PHP104,600,402.47.36 CONSEQUE
NTLY, [BF HOMES] IS OBLIGED TO
DELIVER THE TITLES TO SMPI
PURSUANT TO SECTION 25, P.D.
957.
4. THE MATTER OF THE PURCHASE
PRICE IS IRRELEVANT
CONSIDERING THE BIG VOLUME
INVOLVED. IN FACT, THE AVERAGE
PURCHASE PRICE OF THE LOTS IN
THE AMOUNT OF PHP2,500.00 PER
SQ. M. IS VALID AND
REASONABLE SINCE THE SALE
INVOLVED A TOTAL OF 130 LOTS
AMOUNTING TO PHP
104,600,402.47.
5. EVEN ASSUMING ARGUENDO THAT
THERE MAY BE SUBSTANTIAL
DISPARITY BETWEEN THE
AVERAGE PURCHASE PRICE OF
PHP2.500/SQ.M. AND THE MARKET
VALUE AT PHP3,500/SQ.M. AS [BF
HOMES] CLAIMS, MERE
INADEQUACY OF THE PURCHASE
PRICE, STANDING ALONE AND
WITHOUT PROOF OF ACTUAL
FRAUD, CANNOT INVALIDATE THE
PARTIES' SALES CONTRACT PER
ARTICLE 1355, NEW CIVIL CODE.
6. IF AT ALL, [BF HOMES'] REMEDY IS
TO FILE THE APPROPRIATE ACTION
FOR RECONVEYANCE WITH THE
REGULAR COURT, ABSENT WHICH,
IT IS LEGALLY BOUND TO DELIVER
TO SMPI THE SUBJECT TITLES.
7. ACCORDINGLY, SINCE SMPI WAS
CONSTRAINED TO LITIGATE DUE
TO [BF HOMES'] UNJUSTIFIED
REFUSAL TO DELIVER THE
SUBJECT TITLES, SMPI IS
ENTITLED TO THE PAYMENT OF
ATTORNEY'S FEES.37
chanrobleslaw
The Petition is meritorious.
Presidential Decree No. 95738 dated July
12, 1976 conferred exclusive jurisdiction
to regulate the real estate trade and
business upon the National Housing
Authority (NHA).39 Presidential Decree No.
134440 dated April 2, 1978 expanded the
quasi-judicial powers of NHA by providing
as follows:cralawlawlibrary
Section 1. In the exercise of its functions
to regulate the real estate trade and
business and in addition to its powers
provided for in Presidential Decree No.
957, the National Housing Authority shall
have exclusive jurisdiction to hear and
decide cases of the following
nature:chanRoblesvirtualLawlibrary
A. Unsound real estate business
practices;ChanRoblesVirtualawlibra
ry
B. Claims involving refund and any
other claims filed by subdivision lot
or condominium unit buyer against
the project owner, developer,
dealer, broker or salesman; and
C. Cases involving specific
performance of contractual and
statutory obligations filed by
buyers of subdivision lot or
condominium unit against the
owner, developer, dealer,
broker or salesman." (Emphases
ours.)
chanrobleslaw
Per Executive Order No. 64841 dated
February 7, 1981, the powers of the NHA
were transferred to the Human
Settlements Regulatory Commission,
which, pursuant to Executive Order No. 90
dated December 17, 1986, was
subsequently renamed as
HLURB.42 In Siasoco v. Narvaja,43 the
Court highlighted the exclusive jurisdiction
of the HLURB over complaints for specific
performance in certain real estate
transactions:cralawlawlibrary
Under the Executive Order creating it, the
HLURB has exclusive jurisdiction to
"hear and decide cases of unsound real
estate business practices; claims involving
refund filed against project owners,
developers, dealers, brokers, or salesmen;
and cases of specific performance."
Accordingly, in United Housing
Corporation v. Dayrit, we ruled that it is
the HLURB, not the trial court, which has
jurisdiction over complaints for specific
performance filed against subdivision
developers to compel the latter to
execute deeds of absolute sale and to
deliver the certificates of title to
buyers. (Emphases
supplied.)chanrobleslaw
The Court reiterated in Bank of the
Philippines Islands v. ALS Management
and Development
Corporation44 that:cralawlawlibrary
[T]he jurisdiction of the HLURB over cases
enumerated in Section 1 of PD No. 1344
is exclusive. Thus, we have ruled that
the board has sole jurisdiction in a
complaint of specific performance for
the delivery of a certificate of title to
a buyer of a subdivision lot; for claims
of refund regardless of whether the sale is
perfected or not; and for determining
whether there is a perfected contract of
sale. (Emphases supplied.)
chanrobleslaw
It is clear from the plain language of
Section 1 of Presidential Decree No. 1344
and aforecited jurisprudence that the
HLURB had exclusive jurisdiction over the
complaint for specific performance filed by
SMPI against BF Homes for the delivery of
the remaining 20 TCTs.
In fact, in the instant case, the HLURB did
exercise jurisdiction over and did take
cognizance of the complaint of SMPI.
Arbiter Balasolla received pleadings and
evidences from the parties, and after the
period for filing position papers and draft
decisions by the parties had lapsed,
deemed the case submitted for decision.
However, at this stage, Arbiter Balasolla
demurred, and instead of deciding the
case, suspended the proceedings until the
SEC ruled on the issue of whether or not
Orendain, the receiver of BF Homes, had
authority to execute the Deeds of
Absolute Sale over the 130 Italia II lots in
favor of SMPI. On appeal, the HLURB
Board of Commissioners affirmed the
suspension of proceedings.
When the case was appealed to the OP by
SMPI, and then to the Court of Appeals by
BF Homes, both the OP and the Court of
Appeals sustained the jurisdiction of
HLURB over the complaint for specific
performance filed by SMPI, the only
difference being that the OP proceeded to
resolve the case on the merits based on
the evidence on record while the appellate
court remanded the case to the HLURB for
further proceedings.
The OP and the Court of Appeals are
correct that the HLURB, in the exercise of
its exclusive jurisdiction, did not have to
suspend the proceedings and should have
went ahead to resolve the complaint for
specific performance filed by SMPI given
its statutory mandate under Section 1 of
Presidential Decree No. 1344 and its
technical competence and expertise over
the subject matter. The HLURB was called
upon to determine the contractual
obligations of BF Homes and SMPI, as
seller and buyer of subdivision lots,
respectively, under the terms and
conditions of the Deeds of Absolute Sale in
relation to the provisions of Presidential
Decree No. 957. In contrast, the
proceedings before the SEC involved the
receivership of BF Homes, an intra-
corporate matter, as pointed out by the
Court of Appeals. While the HLURB and
SEC proceedings may be related (i.e.,
Orendain executed the Deeds of Absolute
Sale of the 130 Italia II lots as receiver of
BF Homes), the two cases could proceed
independently of one another. A ruling by
the SEC that Orendain did not have or had
exceeded his authority as receiver in
executing the Deeds of Absolute Sale is
not absolutely determinative of the fate of
the complaint for specific performance of
SMPI before the HLURB. It would not
automatically result in the nullification or
rescission of the said Deeds or justify the
refusal of BF Homes to deliver the 20
TCTs to SMPI as there would be other
issues which need to be considered, such
as the good faith or bad faith of SMPI as
buyer, ratification by BF Homes of the
Deeds, etc., and the HLURB is not obliged
to suspend its proceedings until all of
these issues are resolved or decided by
other courts/tribunals. HLURB could
already make a preliminary finding on the
validity of the Deeds of Absolute Sale
executed by Orendain for the purpose of
ascertaining the right of SMPI to the
delivery of the 20 TCTs. The HLURB is
behooved to settle the controversy
brought before it with dispatch if only to
achieve the purpose of Presidential Decree
No. 957, to wit:cralawlawlibrary
The provisions of P.D No. 957 were
intended to encompass all questions
regarding subdivisions and condominiums.
The intention was to provide for an
appropriate government agency, the
HLURB, to which all parties - buyers and
sellers of subdivision and condominium
units - may seek remedial recourse. The
law recognized, too, that subdivision and
condominium development involves public
interest and welfare and should be
brought to a body, like the HLURB, that
has technical expertise. In the exercise of
its powers, the HLURB, on the other hand,
is empowered to interpret and apply
contracts, and determine the rights of
private parties under these contracts. This
ancillary power, generally judicial, is now
no longer with the regular courts to the
extent that the pertinent HLURB laws
provide.45
chanrobleslaw
Nonetheless, the Court disagrees with the
Court of Appeals and finds no more need
to remand the case to the HLURB.
To recall, the parties were able to file
pleadings and submit evidence before
Arbiter Balasolla. The case was already
deemed submitted for resolution with
Arbiter Balasolla stopping short only of
actually rendering a decision. Taking into
account that the necessary pleadings and
evidence of the parties are already on
record, returning the instant case to the
HLURB for further proceedings will simply
be circuitous and inconsistent with the
summary nature of HLURB
proceedings.46 The Court keeps in mind
the shared objective of Rule 1, Section 2
of the 1996 Rules of Procedure of the
HLURB, as amended, and Rule 1, Section
6 of the Revised Rules of Court to promote
a just, speedy, and inexpensive
disposition/determination of every
action.47
Pursuant to the doctrine of primary
jurisdiction, "the courts cannot or will not
determine a controversy involving a
question which is within the jurisdiction of
an administrative tribunal, where the
question demands the exercise of sound
administrative discretion requiring the
special knowledge, experience, and
services of the administrative tribunal to
determine technical and intricate matters
of fact, and a uniformity of ruling is
essential to comply with the purposes of
the regulatory statute
administered."48 However, said doctrine is
not an absolute or inflexible rule. The
Court recognized several exceptions
in Republic v.
Lacap,49viz.:cralawlawlibrary
[T]he doctrine of exhaustion of
administrative remedies and the corollary
doctrine of primary jurisdiction, which are
based on sound public policy and practical
considerations, are not inflexible rules.
There are many accepted exceptions, such
as: (a) where there is estoppel on the part
of the party invoking the doctrine; (b)
where the challenged administrative act is
patently illegal, amounting to lack of
jurisdiction; (c) where there is
unreasonable delay or official inaction that
will irretrievably prejudice the
complainant; (d) where the amount
involved is relatively small so as to make
the rule impractical and oppressive; (e)
where the question involved is purely legal
and will ultimately have to be decided by
the courts of justice; (f) where judicial
intervention is urgent; (g) when its
application may cause great and
irreparable damage; (h) where the
controverted acts violate due process; (i)
when the issue of non-exhaustion of
administrative remedies has been
rendered moot; (j) when there is no other
plain, speedy and adequate remedy;
(k) when strong public interest is
involved; and, (1) in quo warranto
proceedings, x x x. (Emphases
supplied.)chanrobleslaw
The contractual relationship between BF
Homes as owner and SMPI as buyer of
subdivision lots is governed by
Presidential Decree No. 957 and is
undeniably imbued with public interest.
Hence, it is crucial that the dispute
between them be resolved as swiftly as
possible. In Spouses Chua v. Ang,50 the
Court declared that "public interest and
welfare are involved in subdivision and
condominium development, as the terms
of Presidential Decree Nos. 957 and 1344
expressly reflect, x x x Shelter is a basic
human need whose fulfillment cannot
afford any kind of delay."
Even if the case is no longer remanded,
BF Homes cannot claim denial of due
process. "The essence of due process is to
be heard, and, as applied to
administrative proceedings, this means a
fair and reasonable opportunity to explain
one's side, or an opportunity to seek a
reconsideration of the action or ruling
complained of. Administrative due process
cannot be fully equated with due process
in its strict judicial sense, for in the former
a formal or trial-type hearing is not always
necessary, and technical rules of
procedure are not strictly applied."51 In
the instant case, SMPI and BF Homes
were afforded the opportunity to present
and address each other's arguments
through an exchange of pleadings, as well
as to submit their respective evidence
before Arbiter Balasolla. To recall, the
case was already submitted for decision
before Arbiter Balasolla, meaning, there is
nothing more left for the parties to submit
or do. To remand the case and repeat the
entire process once again before the
HLURB Arbiter will not only be impractical,
but also unreasonable and oppressive for
SMPI.
Relevant herein are the following
pronouncements of the Court in Ching v.
Court of Appeals52:cralawlawlibrary
[T]he Supreme Court may, on certain
exceptional instances, resolve the merit:?
of a case on the basis of the records and
other evidence before it, most especially
when the resolution of these issues would
best serve the ends of justice and
promote the speedy disposition of cases.
Thus, considering the peculiar
circumstances attendant in the instant
case, this Court sees the cogency to
exercise its plenary power:
"It is a rule of procedure for the Supreme
Court to strive to settle the entire
controversy in a single proceeding leaving
no root or branch to bear the seeds of
future litigation. No useful purpose will be
served if a case or the determination of an
issue in a case is remanded to the trial
court only to have its decision raised again
to the Court of Appeals and from there to
the Supreme Court (citing Board
of Commissioners vs. Judge Joselito de la
Rosa and Judge Capulong, G.R. Nos.
95122-23).
"We have laid down the rule that the
remand of the case or of an issue to the
lower court for further reception of
evidence is not necessary where the Court
is in position to resolve the dispute based
on the records before it and particularly
where the ends of justice would not be
subserved by the remand thereof
(Escudem vs. Dulay, 158 SCRA 69).
Moreover, the Supreme Court is clothed
with ample authority to review matters,
even those not raised on appeal if it finds
that their consideration is necessary in
arriving at a just disposition of the case."
On many occasions, the Court, in the
public interest and for the expeditious
administration of justice, has resolved
actions on the merits instead of
remanding them to the trial court for
further proceedings, such as where the
ends of justice would not be subserved by
the remand of the case.
chanrobleslaw
Consequently, the Court proceeds to
resolve the primary issue in this case:
Whether or not SMPI is entitled to the
delivery of the remaining 20 TCTs for the
lots it purchased from BF Homes.
The Court answers affirmatively.
Section 25 of Presidential Decree No. 957
explicitly mandates that "[t]he owner or
developer shall deliver the title of the
[subdivision] lot or [condominium] unit to
the buyer upon full payment of the lot or
unit."
Section 3 of all the three Deeds of
Absolute Sale also reads:cralawlawlibrary
3. [BF Homes] likewise covenants to
deliver to [SMPI] the properties free and
clear of tenants, if any, and shall submit
any and all titles, documents and/or
papers which may be required to effect
the transfer of the properties to
[SMPI][.]53chanrobleslaw
In the case at bench, SMPI submitted
adequate proof showing full payment to
and receipt by BF Homes of the purchase
price for the 130 Italia II lots as fixed in
the Deeds of Absolute Sale.54 BF Homes
expressly admitted receipt of some
payments, while it remained silent as to
the others without presenting
controverting evidence.
Upon full payment by SMPI of the
purchase price for the 130 Italia II lots to
BF Homes, it became mandatory upon BF
Homes to deliver the TCTs for said lots to
SMPI. As the Court held in G.O.A.L., Inc.
v. Court of Appeals55:cralawlawlibrary
Upon full payment of the agreed
price, petitioner is mandated by law
to deliver the title of the lot or unit to
the buyer. Both the "Contract to Sell" of
petitioner and private respondents, and
Sec. 25 of P.D. 957 state -
Sec. III (Contract to Sell). - Title and
Ownership of Unit. Upon full payment by
the vendees of the full amount of the
purchase price stipulated under Sec. Ill
hereof, the assessments and expenses
under Sec. IV and otherwise upon
compliance by the VENDEES of all
obligations therein, the VENDOR will
convey to the VENDEE all rights and
interests of the former and to the Unit,
subject hereof together with the interest
in the common area and in the
Condominium Corporation appurtenant to
such unit x x x."
Sec. 25, P.D. 957 - Issuance of
Title. - The owner or developer shall
deliver the title of the lot or unit to
the buyer upon full payment of the lot
or unit x x x. In the event a mortgage
over the lot or unit is outstanding at the
time of the issuance of the title to the
buyer, the owner or developer shall
redeem the mortgage or the
corresponding portion thereof within six
months from such issuance in order that
the title over any paid lot or unit may be
secured and delivered to the buyer in
accordance herewith."
Petitioner also attempts to justify its
failure to deliver the certificate of title of
private respondent Teng by claiming that
it used the title as part collateral for the
additional loan NHA had extended for the
construction of the fifth floor.
The Court observes the frequent allusion
of petitioner to its predicament brought
about by the abandonment of the project
by the first contractor. But such is
irrelevant in light of Sec. 25 of P.D.
957 as well as of the Contract to Sell
of the parties. While we empathize
with petitioner in its financial
dilemma we cannot make innocent
parties suffer the consequences of the
former's lack of business acumen.
Upon full payment of a unit, petitioner
loses all its rights and interests to the
unit in favor of the buyer, x x x.
(Emphases supplied.)chanrobleslaw
To justify its refusal to deliver the
remaining 20 TCTs to SMPI, BF Homes
asserts that 1) the Deeds of Absolute Sale
were undated and not notarized; 2)
Orendain did not have or exceeded his
authority as receiver in entering into the
contracts of sale of the Italia II lots with
SMPI; and 3) the consideration for the
said Italia II lots were grossly inadequate
and disadvantageous for BF Homes.
The Court is not persuaded.
Article 1358(1) of the Civil Code requires
that "[a]cts and contracts which have for
their object the creation, transmission,
modification or extinguishment of real
rights over immovable property" must
appear in a public document; and sales of
real property or of an interest therein shall
be governed by Article 1403(2) and 1405
of the same Code. Pertinent portions of
Articles 1403(2) and 1405 of the Civil
Code are reproduced
below:cralawlawlibrary
Art. 1403. The following contracts are
unenforceable, unless they are
ratified:chanRoblesvirtualLawlibrary
xxxx
(2) Those that do not comply with the
Statute of Frauds as set forth in this
number. In the following cases an
agreement hereafter made shall be
unenforceable by action, unless the same,
or some note or memorandum, thereof,
be in writing, and subscribed by the party
charged, or by his agent; evidence,
therefore, of the agreement cannot be
received without the writing, or a
secondary evidence of its contents:
xxxx
(e) An agreement of the leasing for a
longer period than one year, or for the
sale of real property or of an interest
therein;ChanRoblesVirtualawlibrary
xxxx
Art. 1405. Contracts infringing the Statute
of Frauds, referred to in No. 2 of Article
1403, are ratified by the failure to object
to the presentation of oral evidence to
prove the same, or by the acceptance of
benefit under them.chanrobleslaw
The contracts of sale of the 130 Italia II
lots between BF Homes and SMPI were
actually reduced into writing into the three
Deeds of Absolute Sale which were signed
by the representatives of the two
corporations. The only defect was that the
Deeds were not notarized and, therefore,
were not public documents as required by
Article 1358(1) of the Civil Code. Cenido
v. Spouses Apacionado56 involved a
closely similar situation and the Court
adjudged therein that:cralawlawlibrary
The sale of real property should be in
writing and subscribed by the party
charged for it to be enforceable. The
"Pagpapatunay" is in writing and
subscribed by Bonifacio Aparato, the
vendor; hence, it is enforceable under
the Statute of Frauds. Not having been
subscribed and sworn to before a notary
public, however, the "Pagpapatunay" is
not a public document, and therefore does
not comply with Article 1358, Paragraph 1
of the Civil Code.
The requirement of a public document
in Article 1358 is not for the validity
of the instrument but for its efficacy.
Although a conveyance of land is not
made in a public document, it does
not affect the validity of such
conveyance. Article 1358 does not
require the accomplishment of the acts or
contracts in a public instrument in order
to validate the act or contract but only to
insure its efficacy, so that after the
existence of said contract has been
admitted, the party bound may be
compelled to execute the proper
document, x x x.
xxxx
The private conveyance of the house and
lot is therefore valid between Bonifacio
Aparato and respondent spouses, x x x
For greater efficacy of the contract,
convenience of the parties and to bind
third persons, respondent spouses have
the right to compel the vendor or his
heirs; to execute the necessary document
to properly convey the
property.chanrobleslaw
Also instructive is the following discussion
of the Court in Swedish Match v. Court
of Appeals,57 on the Statute of
Frauds:cralawlawlibrary
The Statute of Frauds embodied in Article
1403, paragraph (2), of the Civil Code
requires certain contracts enumerated
therein to be evidenced by some note or
memorandum in order to be enforceable.
The term "Statute of Frauds" is descriptive
of statutes which require certain classes of
contracts to be in writing. The Statute
does not deprive the parties of the
right to contract with respect to the
matters therein involved, but merely
regulates the formalities of the
contract necessary to render it
enforceable. Evidence of the
agreement cannot be received
without the writing or a secondary
evidence of its contents.
The Statute, however, simply
provides the method by which the
contracts enumerated therein may be
proved but does not declare them
invalid because they are not reduced
to writing. By law, contracts are
obligatory in whatever form they may
have been entered into, provided all the
essential requisites for their validity are
present. However, when the law
requires that a contract be in some
form in order that it may be valid or
enforceable, or that a contract be
proved in a certain way, that
requirement is absolute and
indispensable. Consequently, the
effect of non-compliance with the
requirement of the Statute is simply
that no action can be enforced unless
the requirement is complied
with. Clearly, the form required is for
evidentiary purposes only. Hence, if the
parties permit a contract to be proved,
without any objection, it is then just as
binding as if the Statute has been
complied with.
The purpose of the Statute is to prevent
fraud and perjury in the enforcement of
obligations depending for their evidence
on the unassisted memory of witnesses,
by requiring certain enumerated contracts
and transactions to be evidenced by a
writing signed by the party to be charged.
However, for a note or memorandum to
satisfy the Statute, it must be complete in
itself and cannot rest partly in writing and
partly in parol. The note or memorandum
must contain the names of the parties, the
terms and conditions of the contract, and
a description of the property sufficient to
render it capable of identification. Such
note or memorandum must contain the
essential elements of the contract
expressed with certainty that may be
ascertained from the note or
memorandum itself, or some other writing
to which it refers or within which it is
connected, without resorting to parol
evidence.
xxxx
The Statute of Frauds is applicable
only to contracts which are executory
and not to those which have been
consummated either totally or
partially. If a contract has been
totally or partially performed, the
exclusion of parol evidence would
promote fraud or bad faith, for it
would enable the defendant to keep
the benefits already derived by him
from the transaction in litigation, and
at the same time, evade the
obligations, responsibilities or
liabilities assumed or contracted by
him thereby. This rule, however, is
predicated on the fact of ratification
of the contract within the meaning of
Article 1405 of the Civil Code either
(1) by failure to object to the
presentation of oral evidence to prove
the same, or (2) by the acceptance of
benefits under them. x x x. (Emphases
supplied.)chanrobleslaw
Based on the afore-quoted jurisprudence,
the Deeds of Absolute Sale are
enforceable. First, the Deeds are already
in writing and signed by the parties, and
only lack notarization, a formality which
SMPI could compel BF Homes to comply
with. As private documents, the Deeds are
still binding between the parties and the
conveyance of the 130 Italia II lots by BF
Homes to SMPI by virtue of said Deeds is
valid. And second, the Deeds were already
ratified as BF Homes had accepted the
benefits from said contracts when it
received full payment from SMPI of the
purchase price for the 130 Italia II lots.
The Deeds were also substantially
performed considering that BF Homes had
previously delivered to SMPI the TCTs for
110 out of the 130 lots, only refusing to
deliver the TCTs for the remaining 20 lots.
BF Homes cannot insist on the lack of
authority of Orendain as receiver to sign
the Deeds of Absolute Sale for the 130
Italia II lots. While it is true the SEC
revoked the appointment of Orendain as
rehabilitation receiver of BF Homes in
1989, the SEC thereafter immediately
appointed FBO Networks Management,
Inc., in replacement as receiver. Orendain
was the Chairman of FBO Networks
Management, Inc. Hence, when Orendain
signed the Deeds of Absolute Sale for the
130 Italia II lots, he did so as Chairman of
FBO Networks Management, Inc., the
appointed receiver of BF Homes.
Under Section 6(d) of Presidential Decree
No. 902-A, otherwise known as the SEC
Reorganization Act, the management
committee or rehabilitation receiver is
empowered to take custody and control of
all existing assets and properties of such
corporations under management; to
evaluate the existing assets and liabilities,
earnings and operations of such
corporations; to determine the best way
to salvage and protect the interest of
investors and creditors; to study, review
and evaluate the feasibility of continuing
operations, and restructure and
rehabilitate such entities if determined to
be feasible by the SEC.58 The acts of the
receiver, being an appointed officer of the
SEC,59 enjoy the presumption of
regularity.60
In the instant case, the acts of FBO
Networks Management, Inc., as receiver
of BF Homes, undertaken through
Orendain, including the sale of the 130
Italia II lots to SMPI in 1992 and 1993,
are so far presumed to have been
regularly performed absent evidence to
the contrary. While BF Homes questioned
the acts of Orendain/FBO Networks
Management, Inc. as receiver before the
SEC, the SEC terminated the rehabilitation
proceedings without definitively ruling on
the same and recognized the transfer of
jurisdiction over such subject matter to
the Regional Trial Courts (RTC) with the
passage of Republic Act No. 8799,
otherwise known as the Securities
Regulation Code. There is no showing
herein whether BF Homes pursued before
the RTC any case to nullify or invalidate
the alleged unauthorized or irregular acts
of Orendain/FBO Networks Management,
Inc. as receiver.
Moreover, even assuming for the sake of
argument that Orendain/FBO Networks
Management, Inc. did act without or
beyond his/its authority as receiver in
entering into the contracts of sale of the
130 Italia II lots with SMPI, then the said
contracts were merely unenforceable and
could be ratified, Article 1403(1) of the
Civil Code provides:cralawlawlibrary
ARTICLE 1403. The following contracts are
unenforceable, unless they are
ratified:chanRoblesvirtualLawlibrary
(1) Those entered into in the name of
another person by one who has been
given no authority or legal representation,
or who has acted beyond his
powers[.]chanrobleslaw
As the OP observed, BF Homes ratified the
Deeds of Absolute Sale with SMPI by
accepting full payment from SMPI of the
purchase price for the 130 Italia II lots,
and fully implementing the transaction
covered by the first two Deeds and
partially implementing the third by
delivering the TCTs for 110 of the 130
lots.
Receiving full payment for the 130 Italia II
lots from SMPI also estops BF Homes from
denying the authority of Orendain/FBO
Networks Management, Inc. to enter into
the Deeds of Absolute Sale. The Court
applies by analogy its declarations
in Bisaya Land Transportation, Inc. v.
Sanchez,61 which involved the acts of a
court-appointed receiver for an
estate:cralawlawlibrary
Furthermore, it is clear that BISTRANCO
received material benefits from the
contracts of agency of Sanchez, based
upon the monthly statements of income of
BISTRANCO, upon which the commissions
of Sanchez were based, x x x.
xxxx
[I]n our considered opinion, the doctrine
of estoppel precludes BISTRANCO from
repudiating an obligation voluntarily
assumed by it, after having accepted
benefits therefrom.' To countenance such
repudiation would be contrary to equity
and would put a premium on fraud or
misrepresentation, which this Court will
not sanction.chanrobleslaw
Furthermore, the averment of BF Homes
of inadequacy of the purchase price for
the 130 Italia II lots deserves scant
consideration. Section 3(p), Rule 131 of
the Revised Rules of Court presumes that
private transactions have been fair and
regular. The only evidence submitted by
BF Homes in support of its claim is the
appraisal report which valued the lots at
P3,500.00 and P3,000.00 per square
meter. The appraisal report, however,
does not necessarily prove that the
purchase price for the lots agreed upon in
the Deeds of Absolute Sale, averaged at
P2,500.00 per square meter, is grossly
inadequate and disadvantageous to BF
Homes. There are considerations for which
sellers may agree to sell their property for
less than the market value, such as the
urgent financial need of the seller, cash or
immediate payment, and/or the high
number of properties purchased at the
same time. In this case, SMPI explained
that it was granted a lower purchase price
because it bought the Italia II lots in
volume, and BF Homes was unable to
repudiate said explanation.
Finally, as to the award of attorney's fees,
Article 2208 of the Civil Code allows the
recovery of attorney's fees and expenses
of litigation, other than judicial costs, even
in the absence of stipulation, "[w]here the
defendant acted in gross and evident bad
faith in refusing to satisfy the plaintiffs
plainly valid, just and demandable claim."
SMPI obviously had a valid and
demandable claim against BF Homes,
which unjustifiably and inexcusably
refused to comply with the mandate in
Presidential Decree No. 957 and
undertaking in the Deeds of Absolute Sale
to deliver the titles to the subdivision lots
upon complete payment for said
properties. The sudden refusal of BF
Homes to deliver the last 20 TCTs, after
having previously delivered the other 110
TCTs, constitutes bad faith and justifies
the award of attorney's fees in favor of
SMPI, which was forced to litigate to
enforce its rights. The amount of
P100,000.00 awarded by the OP as
attorney's fees is just and reasonable
under the circumstances.

WHEREFORE, premises considered, the

Petition for Review on Certiorari of San
Miguel Properties, Inc. is GRANTED. The
Decision dated January 31, 2005 and
Resolution dated August 9, 2005 of the
Court of Appeals in CA-G.R. SP No. 83631
ordering the remand of the case to the
Housing and Land Use Regulatory Board
is REVERSED and SET ASIDE; and the
Decision dated January 27, 2004 of the
Office of the President in O.P. Case No.
03-E-203 is REINSTATED.

SO ORDERED