SECOND DIVISION

[G.R. No. 166726. November 25, 2019.]

EQUITABLE PCI BANK 1 (formerly INSULAR BANK OF ASIA &

AMERICA/PHIL. COMMERCIAL AND INDUSTRIAL
BANK), 2 petitioner, vs. MANILA ADJUSTERS & SURVEYORS,
INC., 3 ILOCOS SUR FEDERATION OF FARMERS
COOPERATIVES, INC., ESTATE OF NG YEK KIONG and
ERNESTO COKAI, respondents.

DECISION

HERNANDO, J  : p

This is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court challenging the August 31, 2004 Decision 4 and January 5, 2005 Resolution 5 of
the Court of Appeals (CA) in CA-G.R. CV No. 54738, affirming with modification
the November 10, 1995 Decision 6 of the Regional Trial Court (RTC) of Manila,
Branch 7, in Civil Case No. 100783 which dismissed the Complaint for replevin and
damages filed by respondent Ilocos Sur Federation of Farmers Cooperatives, Inc.
(Federation). 
TIADCc

The Antecedents
On June 27, 1975, the Federation and the Philippine American General
Insurance Co., Inc. (Philam), represented by its adjuster, Manila Adjusters and
Surveyors, Company (MASCO), executed a Deed of Sale 7 involving salvaged
fertilizers which were stored in warehouses in San Fernando, La Union. The
agreement provided that the Federation would pay for the stocks of fertilizers in
installments in accordance with an agreed schedule for the total amount of
P5,159,725.00. Moreover, the Federation would be accountable for the storage and
warehousing charges. The Federation was also required to open an irrevocably
confirmed without recourse Letter of Credit (LOC) amounting to P1,000,000.00
which will be forfeited in favor of MASCO in case of the Federation's non-
compliance with the terms and conditions of the contract.
Apparently, the Federation already availed of Domestic LOC No. D-
75126 8 dated June 23, 1975 from petitioner Equitable PCI Bank (Bank) (then Insular
Bank of Asia & America), with a face value of P1,000,000.00 in favor of MASCO.
The said LOC was amended 9 on June 26, 1975 to extend its expiry date from July 23,
1975 to October 22, 1975. Likewise, the LOC shall be drawable by MASCO upon its
submission to the Bank of a certification that the Federation failed to comply with the
terms and conditions of the sale. 10 According to the Bank, the following documents
were needed to claim from the LOC: "(1) letter of default and demand for payment of
the proceeds of the [LOC]; (2) the original copy of the [LOC]; (3) the original copy of
the advice of [LOC] amendment extending the expiry date; (4) the original of the draft
drawn with the Bank; and 5) the certification of default." 11
Incidentally, the Federation only managed to pay the first installment of
P300,000.00 and part of the second installment amounting to P200,000.00 out of the
total amount of P5,159,725.00. Although the Federation also tendered a personal
check amounting to P259,725.00, the same bounced due to insufficient funds. Thus,
apart from its total previous payment of P500,000.00, the Federation no longer made
additional payments. MASCO demanded payment from the Federation but it failed to
settle its accountabilities.
On October 8, 1975, the date when the last installment became due, MASCO,
through its President and General Manager, Dominador Tiongco (Tiongco), wrote a
letter 12 to the Federation informing the latter of its (Federation's) failure to fulfill its
obligations. MASCO likewise signified its resolve to demand for the proceeds of the
LOC from the Bank. Thereafter, MASCO allegedly sent to the Bank the following: a
letter-claim 13 dated October 8, 1975 addressed to the Bank expressing MASCO's
intent to draw from the LOC; the original copy of LOC No. D-75126; the original
copy of the advice of LOC amendment dated June 26, 1975 (which extended the
original expiry date); the original of the draft drawn with the Bank; and the
certification of default. The letter-claim and documents were purportedly personally
delivered by MASCO's cashier to the Bank's branch manager. However, the Bank
refused to pay MASCO the proceeds of the LOC.
In view of these, on January 9, 1976, the Federation filed a Complaint 14 for
replevin with damages dated December 18, 1975 against MASCO and Philam before
the then Court of First Instance (CFI) of Manila which was raffled to Branch VII
thereof. The Federation asked to be placed in physical possession and control of
around 180 bags of fertilizers, in light of the parties' prior sale agreement. The
Complaint was subsequently amended 15 to include the alleged violation of MASCO
and Philam of the contract of sale as an added cause of action. The Complaint was
again amended 16 to implead the Bank as a party defendant to enjoin it from paying
the LOC it issued in favor of MASCO, and Ng Yek Kiong and Ernesto Cokai as third-
party defendants.
In its Answer with Counterclaim and Cross-Claim, 17 the Bank denied receipt
of the letter-claim dated October 8, 1975, as well as the documents attached thereto.
Likewise, it filed a cross-claim against MASCO contending that the latter failed to
present to the Bank the draft under the LOC. In addition, the Bank filed a Third-Party
Complaint 18 against Ng Yek Kiong and Ernesto Cokai for indemnity based on a
surety agreement in which the latter bound themselves jointly and severally to
indemnify the Bank up to P1,000,000.00 in connection with the LOC.  cSEDTC

MASCO, in its Answer 19 to the Bank's cross-claim, filed a counterclaim

against the Bank for the payment of the proceeds of the LOC and for damages.
During the proceedings, the Federation and MASCO jointly submitted a Partial
Stipulation of Facts 20 which provided that after the Federation's default, MASCO
duly and timely filed a claim against the LOC with then Insular Bank of Asia &
America. 21 Interestingly, the Federation did not present additional proof but opted to
rely on the said stipulations. MASCO's witnesses identified the Partial Stipulation of
Facts and its letter-claim dated October 8, 1975 addressed to the Bank along with the
required documents wherein it claimed for payment of the proceeds of the LOC
considering the Federation's failure to comply with the terms of the sale.
Nevertheless, the Bank denied receipt of the letter-claim dated October 8,
1975. It further averred that it received instructions from the Federation not to release
the proceeds of the LOC to MASCO since it (MASCO) supposedly violated the terms
and conditions for the issuance of the same.
Meanwhile, in another case filed by Ng Yek Kiong against the Bank docketed
as Civil Case No. 99661 22 with the CFI of Manila, Branch XVI, an injunctive order
was issued on February 18, 1976 which, as the Bank alleged, prevented it from paying
the proceeds of the LOC. The said injunction was eventually dissolved by the
Supreme Court in G.R. No. L-44126 23 which was promulgated on February 28, 1977.
In any case, the Federation's Complaint was dismissed for lack of interest on
the part of the plaintiff (Federation) and for failure to prosecute. Nonetheless, the
proceedings as regards the counterclaim of MASCO against the Federation as well as
the cross-claim of the Bank against MASCO (and the counterclaim of MASCO
against the Bank) ensued. 24
Tiongco testified that MASCO executed a Deed of Sale sometime in June 1975
covering approximately 75,000 bags of salvaged fertilizer in favor of the Federation.
He confirmed that the LOC was issued by then Insular Bank of Asia and America. He
reiterated that out of the eight installment payments, the Federation only paid the first
installment and part of the second installment. For this reason, MASCO repeatedly
demanded from the Federation to pay according to the installment schedule yet the
latter failed to do so. Because of the Federation's default, in October 1975 or when the
last installment became due, MASCO was constrained to file a claim on the proceeds
of the LOC from the Bank. 25
Tiongco averred that MASCO wrote a letter-claim to the Bank and appended
the required documents in order to properly claim from the LOC. 26 He specified that
he instructed MASCO's cashier, Antonio Jimenez (Jimenez), to personally deliver the
required documents to the Bank's manager. Yet, even after receipt of the claim, the
Bank did not release the proceeds of the LOC. Additionally, he insisted that the Bank
received the letter-claim dated October 8, 1975 and even pointed out the written date
of receipt by the Bank's representative in MASCO's receiving copy of the letter-
claim. 27 Regardless, Tiongco admitted that he did not personally see or meet the
individual who received the documents in behalf of the Bank and that he relied on
Jimenez's word that he (Jimenez) delivered everything to the Bank. 28
Carlos Macazo, the Bank's Account Officer Assistant, stated that the
Federation instructed the Bank not to pay MASCO because of its violation of the
provisions of the Deed of Sale. He explained that non-compliance with the terms and
conditions will result in the cancellation of the LOC. He added that based on the
Bank's records, MASCO failed to present the draft of the Federation drawn under the
LOC. 29 Notwithstanding this, he stated that the Bank could not locate the written
instruction of the Federation not to release the LOC's proceeds because there was no
smooth turnover of documents during the Bank's merger. 30
Andronico Uy, an officer of the Bank, asserted that documents for reception of
the Bank should pass through a metered machine and the date and time of receipt
should be stamped on the document and then signed by the Bank's clerk. 31 Thus, it
was the Bank's position that it could not have received MASCO's claim since there
was no indication that it passed through the said machine.
The Ruling of the Regional Trial Court
In the November 10, 1995 Decision, 32 the RTC held that the Federation did
not comply with the terms and conditions of the Deed of Sale, since it failed to pay
the entire sum of P5,159,725.00. On the other hand, the trial court found that MASCO
properly filed its claim against the LOC with the Bank. It further found that the
Federation and the Bank did not present sufficient evidence to overturn the said facts.
Thus, the dispositive portion of the trial court's Decision reads:
WHEREFORE, and considering the foregoing, judgment is hereby
rendered as follows:
1. The Complaint of plaintiff Ilocos Sur Federation of Farmers
Cooperatives, Inc. is hereby dismissed. Said plaintiff Ilocos Sur Federation is
hereby ordered to pay defendant Manila Adjusters & Surveyors, Inc. relative
to [its] counterclaim, the storage fee of P80,000.00 plus interest thereon every
year from the filing of the counterclaim until paid plus the sum of P50,000.00
as and for attorney's fees.
2. The cross-claim of cross-plaintiff Insular Bank of Asia and
America, now Philippine Commercial and International Bank, is dismissed.
Said cross-plaintiff Philippine Commercial and International Bank is ordered
to pay defendant Manila Adjusters & Surveyors, Inc. regarding the latter's
counterclaim, the face amount of the Letter of Credit of One Million
(P1,000,000.00)[,] Pesos (sic), plus 12% interest per year from October 8,
1975 until paid and attorney's fees of P50,000.00.
 3. Regarding the bank's counterclaim against plaintiff Ilocos Sur
Federation of Farmers Cooperatives, Inc. and the bank's Third-Party
complaint against Ng Yek Kiong and Ernesto Cokai, plaintiff Ilocos Sur
Federation of Farmers Cooperatives, Inc. is ordered to indemnify the
Philippine Commercial and International Bank whatever amounts that the
bank shall pay the Manila Adjusters and Surveyors, Inc. in connection with
the latter's judgment against the bank. Third-party defendants Ng Yek Kiong
and Ernesto Cokai are adjudged jointly and severally liable with the plaintiff
in favor of the bank up to the limit of their surety agreement of One Million
(P1,000,000.00) Pesos.
SO ORDERED. 33
The Bank asked for a reconsideration 34 but was denied in an Order 35 dated
March 4, 1996. Thus, the Bank appealed to the CA.
The Ruling of the Court of Appeals
The CA, in its assailed August 31, 2004 Decision, 36 affirmed the RTC's
findings and likewise found that MASCO complied with the conditions to claim the
proceeds of the LOC upon presentation of the required documents to the Bank.
Moreover, it ruled that MASCO was entitled to an award of interest based on Article
2209 37 of the Civil Code.Since MASCO strictly complied with the terms of the LOC,
it was legally entitled to payment and interest at the rate of 12% per annum. The
appellate court noted that the Bank failed and refused to pay MASCO upon the
instruction of the Federation because MASCO allegedly violated the terms and
conditions of the Deed of Sale and the LOC. Notwithstanding this, it held that
MASCO was not entitled to attorney's fees as such cannot be recovered as part of
damages considering the policy that no premium should be placed on the right to
litigate. The dispositive portion of the CA's assailed Decision reads:
WHEREFORE, the foregoing considered, the instant appeal is
hereby GRANTED and the assailed [RTC] decision is MODIFIED with the
deletion of the award of attorney's fees with respect to appellant bank. The
[RTC] decision is affirmed in all other respects. 
SDAaTC

No costs.
SO ORDERED. 38
The Bank filed a motion for reconsideration which was denied by the CA in a
Resolution 39 dated January 5, 2005. Discontented, the Bank elevated 40 this case
before US and raised the following issues:
(A) WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT
HOLDING THAT STRICT COMPLIANCE IN THE HANDLING OF
DOCUMENTS IN A LETTER OF CREDIT TRANSACTION IS
NECESSARY.
 (B) WHETHER OR NOT INTEREST IS DUE DURING THE TIME
INJUNCTION WAS ISSUED AND PRIOR TO THE REVERSAL
THEREOF BY THIS HONORABLE COURT. 41
In its Amended Petition for Review, 42 the Bank cited the following grounds:
Whether or not the Court of Appeals failed to cite evidence to support its
conclusion that petitioner Bank was liable under the letter of credit[.]
Whether or not petitioner Bank can be held liable for payment of interest
despite existence of an injunctive order that prevented it from paying[.] 43
Thus, the main issue is whether or not MASCO submitted the required
documents for it to be allowed to draw from the proceeds of the LOC from the Bank.
The Ruling of the Court
The petition is unmeritorious.
The Bank argues that there should be strict compliance with the terms of the
LOC before it can be required to pay. It insists that a party who seeks to draw from
the LOC must establish by clear and convincing evidence that the required documents
were submitted. It questions the trial court's finding that MASCO had submitted the
necessary documents to the Bank's manager, as this finding was only supported by an
oral testimony without documentary proof of actual receipt and was contrary to the
testimonies of the Bank's witnesses who denied receipt of the documents. 44 It avers
that "[t]he Bank's witness clearly testified that the bank receives every package
through its metered machine bearing the date and time of receipt and the signature of
the person in charge of receiving the same, usually the Bank clerk." 45
The Bank points out that as indicated in the Partial Stipulation of Facts offered
before the RTC, MASCO recognized that an injunction was issued 46 upon the
instance of Ng Yek Kiong directed against the claim of MASCO upon the LOC, and
that subsequently the Supreme Court dissolved the same injunctive order. In view of
this, the Bank posits that the computation of interest should not commence from
October 8, 1975, or the date of the alleged submission of the required documents to
the Bank. Instead, the interest should be computed from the time the Bank was
informed of the dissolution of the injunction. This is because at the time the injunction
was served upon the Bank, it had no legal right to question its validity. Ergo, it had to
comply with the order and should not be faulted for not releasing the proceeds during
the time that the injunction was in effect. 47
At the outset, it should be emphasized that it is a well-known procedural rule
that a petition for review on certiorari under Rule 45 of the Rules of Court is only
limited to questions of law. In fact,
Factual questions are not the proper subject of an appeal by certiorari. This
Court will not review facts, as it is not our function to analyze or weigh all
over again evidence already considered in the proceedings below. As held
 in Diokno v. Hon. Cacdac, a re-examination of factual findings is outside the
province of a petition for review on certiorari, to wit:
It is aphoristic that a re-examination of factual
findings cannot be done through a petition for review
on certiorari under Rule 45 of the Rules of Court because as
earlier stated, this Court is not a trier of facts x x x The
Supreme Court is not duty-bound to analyze and weigh again
the evidence considered in the proceedings below. This is
already outside the province of the instant Petition
for Certiorari.
There is a question of law when the doubt or difference arises as to
what the law is on a certain set of facts; a question of fact, on the other hand,
exists when the doubt or difference arises as to the truth or falsehood of the
alleged facts. Unless the case falls under any of the recognized exceptions, we
are limited solely to the review of legal questions. 48 (Citations omitted)
In the petition at bench, the Bank mainly contends that it did not receive the
required documents from MASCO in order for the latter to claim the proceeds of the
LOC. Undoubtedly, such contention's truth or falsity can easily be verified by
assessing the documentary and testimonial evidence submitted by the parties during
trial. Clearly, this is a question of fact which is not within the purview of a petition for
review on certiorari under Rule 45. Moreover, the instant case does not fall under the
exceptions wherein the Court should once again review the factual circumstances
surrounding the case before arriving at its conclusions. In fact, based on the records,
the findings of fact by the CA and the RTC are accurate and have no badges of
misapprehension or bad faith, and thus need not be interfered with.
To stress, "[f]actual findings of the CA, especially if they coincide with those
of the RTC, as in the instant case, is generally binding on us. In a petition for review
on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, this
Court, may not review the findings of facts all over again. It must be stressed that this
Court is not a trier of facts, and it is not its function to re-examine and weigh anew the
respective evidence of the parties. The jurisprudential doctrine that findings of the
[CA] are conclusive on the parties and carry even more weight when these coincide
with the factual findings of the trial court, must remain undisturbed, unless the factual
findings are not supported by the evidence on record." 49
Both the CA and the RTC found that MASCO properly presented the
documentary requirements of the Bank in order to claim from the LOC. The Bank
was not able to overturn such finding as it merely denied receipt of the same without
corroborating evidence, except for an allegation that all documents received by the
Bank should go through a metered machine which was not found on those documents
submitted by MASCO. Contrariwise, MASCO averred that the official papers were
personally handed over to the manager of the Bank at the time, which could explain
why it did not pass through the metered machine or the usual procedure in the Bank's
reception. Interestingly, the Bank was not able to completely establish if the practice
of utilizing a metered machine was already being enforced when the documents were
presented, considering that the incident happened in 1975. The Bank did not even
submit an affidavit or offer the testimony of the bank manager during trial in order to
debunk MASCO's assertion that he or she actually received the documents. In
addition, the contention that the Federation instructed the Bank not to pay MASCO
suggested that the Bank, regardless of receipt of the documents, would not pay
MASCO immediately. Unfortunately, it would be difficult to either prove or debunk
the parties' allegations since more than 40 years had already passed. To stress, We are
limited to the offered evidence from which the Court can draw its factual and legal
conclusions.
Hence, given that MASCO was able to prove with preponderant
evidence 50 that it submitted the documents which the Bank required in order to claim
from the LOC, there is basis to affirm the findings of the RTC and the CA that the
Bank should release the proceeds of the LOC amounting to P1,000,000.00 to
MASCO.
As for the payment of interest, the Court notes that the Bank failed to present
sufficient factual or legal basis to support its contention that the time in which the
injunction was in effect should not be included in the computation of the legal
interest, it being established that the parties to the Deed of Sale, particularly the
Federation and Philam/MASCO, did not stipulate an interest rate in case of default
when they entered into the sale. Furthermore, We find that the Bank did not advance
any amount or offer any alternative in order to show that it was willing to pay the
proceeds of the LOC in spite of the issuance of an injunctive order (which was
eventually dissolved by the Court anyway) and notwithstanding the Federation's
instruction to the Bank not to pay MASCO.
Withal, the legal interest on the face amount of the LOC or P1,000,000.00 shall
commence to run from the time extrajudicial demand 51 was made, or the date when
the letter-claim along with the documents were submitted to the Bank, specifically on
October 8, 1975. In this respect, the Court agrees with the ruling of the CA, which
affirmed the RTC's finding. However, the Court modifies the appealed CA Decision
with regard to the interest on the monetary awards following the guidelines laid down
by the Court in Nacar v. Gallery Frames 52 to wit:
[I]n the absence of an express stipulation as to the rate of interest that would
govern the parties, the rate of legal interest for loans or forbearance of any
money, goods or credits and the rate allowed in judgments shall no longer be
twelve percent (12%) per annum — as reflected in the case of Eastern
Shipping Lines and Subsection X305.1 of the Manual of Regulations for
Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of
Regulations for Non-Bank Financial Institutions, before its amendment by
BSP-MB Circular No. 799 — but will now be six percent (6%) per
annum effective July 1, 2013. It should be noted, nonetheless, that the new
rate could only be applied prospectively and not retroactively. Consequently,
the twelve percent (12%) per annum legal interest shall apply only until June
30, 2013. Come July 1, 2013 the new rate of six percent (6%) per annum shall
be the prevailing rate of interest when applicable.
xxx xxx xxx
Nonetheless, with regard to those judgments that have become final
and executory prior to July 1, 2013, said judgments shall not be disturbed and
shall continue to be implemented applying the rate of interest fixed therein.
To recapitulate and for future guidance, the guidelines laid down
in the case of Eastern Shipping Lines are accordingly modified to
embody BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-
contracts, delicts or quasi-delicts is breached, the contravenor
can be held liable for damages. The provisions under Title XVIII
on "Damages" of the Civil Code govern in determining the
measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of
actual and compensatory damages, the rate of interest, as well as
the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a
sum of money, i.e., a loan or forbearance of money, the interest
due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from
the time it is judicially demanded. In the absence of stipulation,
the rate of interest shall be 6% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money,
is breached, an interest on the amount of damages awarded may
be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated
claims or damages, except when or until the demand can be
established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest shall
begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code), but when such certainty
cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification
of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest
shall, in any case, be on the amount finally adjudged.
 3. When the judgment of the court awarding a sum of money becomes
final and executory, the rate of legal interest, whether the case
falls under paragraph 1 or paragraph 2, above, shall be 6% per
annum from such finality until its satisfaction, this interim period
being deemed to be by then an equivalent to a forbearance of
credit.
And, in addition to the above, judgments that have become final and
executory prior to July 1, 2013, shall not be disturbed and shall continue
to be implemented applying the rate of interest fixed therein. (Citations
omitted.)
Based on the foregoing, the amount of P1,000,000.00 shall be subject to
interest at the rate of 12% per annum from the date the extrajudicial demand was
made or on October 8, 1975 until June 30, 2013, and thereafter, 6% per annum from
July 1, 2013 until finality of this judgment.
Moreover, once the judgment in this case becomes final and executory, the
monetary award discussed above shall be subject to legal interest at the rate of 6%
per annum from such finality until its satisfaction.
As a final note, it is apt to mention that this is an inherited case which has been
pending final resolution since 1975. It has been around 44 years since the filing of the
case before the trial court. There is even a concern that a few of the parties liable
herein no longer exist or can no longer be located due to the passage of time.
Although the delay could be attributed to a number of factors, it remains that this case
has been pending for quite some time, especially considering that the main issue is
actually merely a factual one.
WHEREFORE, the Petition for Review on Certiorari is DENIED for failure
to establish any reversible error on the part of the Court of Appeals. The assailed
August 31, 2004 Decision and January 5, 2005 Resolution of the Court of Appeals in
CA-G.R. CV No. 54738 are hereby AFFIRMED WITH MODIFICATIONS that
the amount of P1,000,000.00 shall be subject to interest at the rate of 12%
per annum from October 8, 1975 until June 30, 2013, and at the rate of 6%
per annum from July 1, 2013 until full satisfaction of the same.
SO ORDERED.
Perlas-Bernabe, Inting and Zalameda,  ** JJ., concur.
A.B. Reyes, Jr.,  * J., is on leave.
 
Footnotes
*On leave.
**Designated additional member per Special Order No. 2727 dated October 25, 2019.
1.Now Banco De Oro Unibank, Inc./Banco De Oro; rollo, p. 252.
2.Should be "Philippine Commercial International Bank"; see Records, Vol. II, p. 1045.
3.Should be "Manila Adjusters & Surveyors Company"; see Records, Vol. I, p. 59.
4.Rollo, pp. 34-41; penned by Associate Justice Josefina Guevara-Salonga and concurred in by
Associate Justices Conrado M. Vasquez, Jr. and Fernanda Lampas Peralta.
5.Id. at 43-44.
6.CA rollo, pp. 45-50; penned by Judge Enrico A. Lanzanas.
7.Records, Vol. I, 7-11.
8.Id. at 400-401.
9.Id. at 402.
10.Id. at 401.
11.Rollo, p. 268.
12.Records, Vol. I, pp. 59-60.
13.Id., Vol. II, pp. 1054-1055.
14.Id., Vol. I, pp. 1-6; Civil Case No. 100783 entitled, "The Ilocos Sur Federation of Farmers
Cooperatives, Inc. v. Manila Adjusters and Surveyors, Inc. and Phil-Am General
Insurance Co., Inc."
15.Records, Vol. I, pp. 90-103.
16.Id. at 200-213.
17.Id. at 394-399.
18.Id. at 493-495.
19.Id. at 406-408.
20.Id., Vol. II, pp. 681-683.
21.Id. at 683.
22.Id., Vol. I, pp. 241-247; "Ng Yek Kiong and Ernesto Cokai v. Insular Bank of Asia and
America, Manila Adjusters & Surveyors Company and Mariano Pintor, et. al."
23.Manila Adjusters & Surveyors Company v. Bocar, 166 Phil. 408 (1977).
24.Records, Vol. I, p. 899; see October 12, 1990 Order.
25.TSN, November 21, 1990, pp. 9-12.
26.Id. at 14-18.
27.Id. at 20-21; TSN, November 28, 1990, pp. 2-3; Records, Vol. II, p. 1054; Handwritten
marking signifying receipt on October 8, 1975.
28.TSN, November 28, 1990, p. 3.
29.TSN, February 13, 1991, pp. 5-7.
30.TSN, February 20, 1991, p. 3.
31.TSN, May 17, 1991, pp. 4-5.
32.CA rollo, pp. 45-50.
33.Id. at 49-50.
34.Records, Vol. II, pp. 1031-1039.
35.Id. at 1045.
36.Rollo, pp. 34-41.
37.Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor
incurs in delay, the indemnity for damages, there being no stipulation to the contrary,
shall be the payment of the interest agreed upon, and in the absence of stipulation, the
legal interest, which is six per cent per annum.
38.Rollo, p. 41.
39.Id. at 43-44.
40.Id. at 19-32.
41.Id. at 24-25.
42.Id. at 264-287.
43.Id. at 273.
44.Id. at 25-26 and 274.
45.Id. at 27.
46.By then CFI Judge Bocar.
47.Rollo, pp. 28-29.
48.Miro v. Vda. de Erederos, 721 Phil. 772, 785-786 (2012); Diokno v. Cacdac, 553 Phil. 405,
428 (2007); Phil. Veterans Bank v. Monillas, 573 Phil. 384, 389 (2008); and Cirtek
Employees Labor Union-Federation of Free Workers v. Cirtek Electronics, Inc., 665
Phil. 784, 789 (2011).
    (1) When the conclusion is a finding grounded entirely on speculation, surmises and
conjectures;
    (2) When the inference made is manifestly mistaken, absurd or impossible;
    (3) Where there is a grave abuse of discretion;
    (4) When the judgment is based on a misapprehension of facts;
    (5) When the findings of fact are conflicting;
     (6) When the Court of Appeals, in making its findings, went beyond the issues of the case
and the same is contrary to the admissions of both appellant and appellee;
    (7) When the findings are contrary to those of the trial court;
    (8) When the findings of fact are conclusions without citation of specific evidence on which
they are based;
    (9) When the facts set forth in the petition as well as in the petitioners' main and reply briefs
are not disputed by the respondents; and
    (10) When the findings of fact of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on record.
49.Cortez v. Cortez, G.R. No. 224638, April 10, 2019, citing Villanueva v. Court of Appeals,
536 Phil. 404, 408 (2006) and Valdez v. Reyes, 530 Phil. 605, 608 (2006).
50.RULES OF COURT, Rule 133, § (1).
51.Pineda v. Zuñiga Vda. de Vega, G.R. No. 233774, April 10, 2019, citing Desiderio P.
Jurado, COMMENTS AND JURISPRUDENCE ON OBLIGATIONS AND
CONTRACTS (1987 Ninth Revised Edition), p. 54.
52.716 Phil. 267, 280-283 (2013). See Bangko Sentral ng Pilipinas Monetary Board Circular
No. 799, Series of 2013.
 
 (Equitable PCI Bank v. Manila Adjusters & Surveyors, Inc., G.R. No. 166726,
|||

[November 25, 2019])

SECOND DIVISION

[G.R. No. 201116. March 4, 2019.]

PHILAM INSURANCE CO., INC., now CHARTIS

PHILIPPINES INSURANCE,
INC., petitioner, vs. PARC CHATEAU
 CONDOMINIUM UNIT OWNERS ASSOCIATION,
INC., and/or EDUARDO B. COLET, respondents.

DECISION

J.C. REYES, JR., J  :

p

The Facts
On October 7, 2003, petitioner Philam Insurance Co., Inc.
(Philam) [now Chartis Philippines Insurance, Inc.] submitted a
proposal to respondent Parc Chateau Condominium Unit
Owners Association, Inc. (Parc Association) to cover fire and
comprehensive general liability insurance of its condominium
building, Parc Chateau Condominium. 1
Respondent Eduardo B. Colet (Colet), as Parc
Association's president, informed Philam, through a letter dated
November 24, 2003, that Parc Association's board of directors
selected it, among various insurance companies, to provide the
insurance requirements of the condominium. 2
After Philam appraised the condominium, it issued Fire
and Lightning Insurance Policy No. 0601502995 for P900
million and Comprehensive General Liability Insurance Policy
No. 0301003155 for P1 Million, both covering the period from
November 30, 2003 to November 30, 2004. The parties
negotiated for a 90-day payment term of the insurance
premium, worth P791,427.50 including taxes. This payment
term was embodied in a Jumbo Risk Provision, which further
provided that the premium installment payments were due on
November 30, 2003, December 30, 2003, and January 30,
2004. The Jumbo Risk Provision also stated that if any of the
scheduled payments are not received in full on or before said
dates, the insurance shall be deemed to have ceased at 4 p.m.
of such date, and the policy shall automatically become void
and ineffective. 3
Parc Association's board of directors found the terms
unacceptable and did not pursue the transaction. Parc
Association verbally informed Philam, through its insurance
agent, of the board's decision. Since no premiums were paid,
Philam made oral and written demands upon Parc Association,
who refused to do so alleging that the insurance agent had
been informed of its decision not to take up the insurance
coverage. Philam sent demand letters with statement of
account claiming P363,215.21 unpaid premium based on Short
Scale Rate Period. Philam also cancelled the policies. 4 CAIHTE

On June 3, 2005, Philam filed a complaint against Parc

Association and Colet for recovery of P363,215.21 unpaid
premium, plus attorney's fees and costs of suit in the
Metropolitan Trial Court (MeTC) of Makati, Branch 65. 5
The Metropolitan Trial Court's Decision
On October 30, 2007, the MeTC dismissed the case. The
MeTC determined that since Philam admitted that Parc
Association did not pay its premium, one of the elements of an
insurance contract was lacking, that is, the insured must pay a
premium. The MeTC explained that payment of premium is a
condition precedent for the effectivity of an insurance contract.
Non-payment of premium prevents an insurance contract from
becoming binding even if there was an acceptance of the
application or issuance of a policy, unless payment of premium
was waived. With one of the elements missing, there is no
insurance contract to speak of and Philam has no right to
recover from defendant Parc Association. 6
The Regional Trial Court's Decision
Philam appealed to the Regional Trial Court (RTC) of
Makati, Branch 137, which partly affirmed the MeTC decision,
except as to attorney's fees, in its June 3, 2008 Decision. The
RTC pronounced that there was no valid insurance contract
between the parties because of non-payment of premium, and
there was no express waiver of full payment of premiums. 7
The RTC did not accept Philam's argument that the
Jumbo Risk Provision is an implied waiver of premium
payment. The RTC elucidated that the Jumbo Risk Provision
specifically requires full payment of premium within the given
period, and in case of default, the policy automatically becomes
void and ineffective. 8
Philam averred that Parc Association's newsletter and
treasurer's report confirmed that there was a perfected
insurance contract. The RTC held that Parc Association's
newsletter and treasurer's report, informing the condominium
unit owners that the building was insured, is not proof of a
perfected insurance contract. The newsletter stated that
negotiations were ongoing to try to lower the insurance
premium per square meter, while the treasurer's report did not
categorically mention that there was a perfected and effective
insurance contract. Hence, the RTC affirmed in part the MeTC
decision. 9
Philam moved for reconsideration, which the RTC denied
in a Resolution dated September 17, 2009. 10
The Court of Appeals' Decision
Unconvinced, Philam elevated the case before the Court
of Appeals (CA) through a petition for review under Rule 42 of
the Rules of Court, as amended. 11
On July 29, 2011, the CA rendered a Decision 12 denying
Philam's petition and affirming the June 3, 2008 RTC Decision
and September 17, 2009 Resolution. The CA discussed that
based on Section 77 of Presidential Decree 612 or
the Insurance Code of the Philippines, the general rule is that
no insurance contract issued by an insurance company is valid
and binding unless and until the premium has been paid.
Although there are exceptions laid down in UCPB General
Insurance Co., Inc. v. Masagana Telamart, Inc., 13 the CA
determined that none of these exceptions were applicable to
the case at hand. 14 DETACa

The first exception is in Section 77 of the Insurance

Code, that is, "in the case of a life or an industrial life policy
whenever the grace period provision applies." This exception
does not apply to this case because the policies involved here
are fire and comprehensive general liability insurance. 15
The second exception is in Section 78 of the Insurance
Code, which states that "an acknowledgment in a policy or
contract of insurance or the receipt of premium is conclusive
evidence of its payment, so far as to make the policy binding,
notwithstanding any stipulation therein that it shall not be
binding until the premium is actually paid." 16
The exception in Section 78 is inapplicable in this case,
because there was no acknowledgment of receipt of premium
in the policy or insurance contract, and in fact, no premium was
ever paid. 17
The third exception is taken from the case of Makati
Tuscany Condominium Corporation v. Court of
Appeals, 18 wherein the Court ruled that the general rule in
Section 77 may not apply if the parties agreed to the payment
of premium in installment and partial payment has been made
at the time of loss. Here, the parties agreed to a payment by
installment, but no actual payment was made. Thus, the third
exception has no application in this case. 19
The Makati Tuscany case also provided the fourth
exception, that is, if the insurer has granted the insured a credit
term for the payment of the premium, then the general rule may
not apply. 20 Philam argues that the 90-day payment term is a
credit extension. However, the CA emphasized that the Jumbo
Risk Provision is clear that failure to pay each installment on
the due date automatically voids the insurance policy. Here,
Parc Association did not pay any premium, which resulted in a
void insurance policy. Hence, the fourth exception finds no
application. 21
The fifth and last exception, taken from the UCPB case,
is estoppel in instances when the insurer had consistently
granted a credit term for the payment of premium despite full
awareness of Section 77. The insurer cannot deny recovery by
the insured by citing the general rule in Section 77, because the
insured had relied in good faith on the credit term granted. 22
The CA held that the factual circumstances of the UCPB
case differ from this case. In the UCPB case, the insurer
granted a credit extension for several years and the insured
relied in good faith on such practice. Here, the fire and lightning
insurance policy and comprehensive general insurance policy
were the only policies issued by Philam, and there were no
other policy/ies issued to Parc Association in the past granting
credit extension. Thus, the last exception is inapplicable. 23
After establishing that none of the exceptions are
applicable, the CA concluded that the general rule applies, that
is, no insurance contract or policy is valid and binding unless
and until the premium has been paid. Since Parc Association
did not pay any premium, then there was no insurance contract
to speak of. 24 
aDSIHc

Moreover, the CA pointed out that the Jumbo Risk

Provision clearly stated that failure to pay in full any of the
scheduled installments on or before the due date, shall render
the insurance policy void and ineffective as of 4 p.m. of such
date. Parc Association's failure to pay on the first due date,
November 30, 2003, resulted in a void and ineffective policy as
of 4 p.m. of November 30, 2003. As a consequence, Philam
cannot collect P363,215.21 unpaid premiums of void insurance
policies. 25
Philam moved for reconsideration, which the CA denied
in its March 14, 2012 Resolution. 26 Undeterred, Philam filed a
Petition for Review on Certiorari 27 under Rule 45 of the Rules
of Court, as amended, before the Court.
The Issues Presented
In its petition, Philam assigned the following errors:
I.
THE COURT OF APPEALS GROSSLY ERRED IN
NOT FINDING THAT RESPONDENTS' REQUEST
FOR TERMS OF PAYMENT OF PREMIUM AFTER
THE POLICIES WERE ISSUED AND PETITIONER'S
GRANT OF SAID REQUEST CONSTITUTE THE
INTENTION OF THE PARTIES TO BE BOUND BY
THE INSURANCE CONTRACT.
II.
THE APPELLATE COURT GROSSLY ERRED IN
RULING THAT THE FOURTH EXCEPTION
PROVIDED FOR UNDER SECTION 77 OF
THE INSURANCE CODE OF THE
PHILIPPINES DOES NOT APPLY IN THE INSTANT
CASE.
III.
THE COURT OF APPEALS GRIEVOUSLY ERRED IN
NOT FINDING THAT THE NEGOTIATIONS WHICH
THE PARTIES HAD WERE WITH RESPECT TO THE
TERMS OF PAYMENT OF PREMIUM ALREADY
AGREED UPON AND NOT ON THE REDUCTION OF
THE AMOUNT THEREOF AS TO NEGATE THE
EXISTENCE OF A PERFECTED CONTRACT OF
INSURANCE BETWEEN THEM. 28
In its Comment, 29 Parc Association alleged that Philam
did not raise new issues before the Court, and the issues
presented had been resolved by the MeTC and RTC. 30 Parc
Association averred that Philam's proposal was accepted for
consideration of the board of directors, who later disapproved
the terms and conditions. As such, there was no meeting of the
minds of the parties, and there was no insurance contract
initiated. 31
Parc Association further argued that non-payment of
premium means no juridical tie was created between the
insured and the insurer, and the insured was not exposed to the
insurable risk for lack of consideration. Parc Association
asserted that it would be unjust to allow Philam to recover
premiums on an insurance contract that was never effective
and despite not having been exposed to any risk at all. 32
In its Reply, 33 Philam insisted that there was a perfected
insurance contract, and Parc Association's request for terms of
payment indicate its intention to be bound by the insurance
contract. 34
In sum, the sole issue to be resolved is whether or not
the CA committed a reversible error in affirming the RTC
decision and ruling that Philam has no right to recover the
unpaid premium based on void and ineffective insurance
policies.
The Court's Ruling
The petition is denied.
Rule 45 of the Rules of Court, as amended, states that
only questions of law shall be raised in a petition for review
on certiorari. While the rule has exceptions, they are irrelevant
in this case, as Philam did not properly plead and substantiate
the applicability of the exceptions. Thus, the Court applies the
general rule. 35 
TIADCc

In resolving whether the CA was correct in affirming the

RTC decision, the Court considered the following simplified
alleged errors as presented by Philam:
1. Whether or not respondents' request for terms of
payment of premium after the policies were issued
and the grant of said request by petitioner
constitute the parties' intention to be bound by the
insurance contract;
2. Whether or not the fourth exception provided for under
Section 77 of the Insurance Code of the
Philippines applies in the instant case; and
 3. Whether or not the negotiations which the parties had
were with respect to the terms of payment of
premium already agreed upon by the parties and
not on the lowering of the amount of premium as
to negate the existence of a perfected contract of
insurance. 36
The first and third alleged errors refer to the request for
the terms of payment. Does Parc Association's request and
Philam's subsequent grant of the request constitute their
intention to be bound by the insurance contract? Does the
negotiation refer to the terms of payment or to the lowering of
the premium?
In arriving at the answers to the questions, the Court has
to determine the intention of the parties. In doing so, the Court
has to read the transcript of stenographic notes of the
witnesses, and review the language or tenor of some of the
documentary evidence, such as: Philam's proposal on October
7, 2003, Colet's acceptance letter dated November 24, 2003,
the Jumbo Risk Provision, and the written communications
between Philam and Parc Association.
In short, the Court has to re-evaluate the evidence on
record. Evaluation of evidence is an indication that the question
or issue posed before the Court is a question of fact or a factual
issue.
In Century Iron Works, Inc. v. Biñas, 37 the Court
differentiated between question of law and question of fact.
A question of law arises when there is doubt as
to what the law is on a certain state of facts, while there
is a question of fact when the doubt arises as to the
truth or falsity of the alleged facts. For a question to be
one of law, the question must not involve an
examination of the probative value of the evidence
presented by the litigants or any of them. The
resolution of the issue must rest solely on what the law
provides on the given set of circumstances. Once it is
clear that the issue invites a review of the evidence
presented, the question posed is one of fact. (Citation
omitted)
Thus, the test of whether a question is one of
law or of fact is not the appellation given to such
 question by the party raising the same; rather, it is
whether the appellate court can determine the issue
raised without reviewing or evaluating the evidence, in
which case, it is a question of law; otherwise it is a
question of fact. 38 (Citation omitted)
Applying the test to this case, it is without a doubt that the
questions/issues presented before the Court are factual in
nature, which are not proper subjects of a petition for review
on certiorari under Rule 45 of the Rules of Court, as amended.
It has been repeatedly pronounced that the Court is not a trier
of facts. Evaluation of evidence is the function of the trial
court. 
AIDSTE

As for the second alleged error, Philam avers that this

case falls under the fourth exception as explained in the Makati
Tuscany case. The Makati Tuscany case provides that if the
insurer has granted the insured a credit term for the payment of
the premium, it is an exception to the general rule that premium
must first be paid before the effectivity of an insurance contract.
Philam argues that the 90-day payment term is a credit
extension and should be considered as an exception to the
general rule.
However, the CA correctly determined that the Jumbo
Risk Provision clearly indicates that failure to pay in full any of
the scheduled installments on or before the due date shall
render the insurance policy void and ineffective as of 4 p.m. of
such date. Parc Association's failure to pay on the first due date
(November 30, 2003), resulted in a void and ineffective policy
as of 4 p.m. of November 30, 2003. Hence, there is no credit
extension to consider as the Jumbo Risk Provision itself
expressly cuts off the inception of the insurance policy in case
of default.
The Court resolves to deny the petition after finding that
the CA did not commit any reversible error in the assailed
decision and resolution. The CA had exhaustively explained the
law and jurisprudence, which are the bases of its decision and
resolution. Both trial courts and the appellate court are
consistent in its findings of fact that there is no perfected
insurance contract, because of the absence of one of the
elements, that is, payment of premium. As a consequence,
Philam cannot collect P363,215.21 unpaid premiums of void
insurance policies.
 WHEREFORE, premises considered, the petition
is DENIED. The Court of Appeals Decision dated July 29, 2011
and Resolution dated March 14, 2012 in CA-G.R. SP No.
110980 are AFFIRMED.
SO ORDERED.
Carpio, Caguioa and Hernando,  ** JJ., concur.
Perlas-Bernabe,  * J., is on wellness leave.
 

Footnotes

*On wellness leave.

**Additional Member per S.O. No. 2630 dated December 18, 2018.
1.Rollo, p. 33.
2.Id. at 33.
3.Id. at 33-34.
4.Id. at 34-35.
5.Id. at 33.
6.Id. at 35.
7.Id. at 35-36.
8.Id. at 36.
9.Id.
10.Id.
11.Id. at 32.
12.Penned by Associate Justice Rosalinda Asuncion-Vicente, with
Associate Justices Romeo F. Barza and Edwin D. Sorongon,
concurring; id. at 32-44.
13.408 Phil. 423, 432 (2001).
14.Rollo, p. 38.
15.Id. at 38, 40.
16.Id. at 38.
17.Id. at 40.
 18.289 Phil. 942 (1992).
19.Rollo, pp. 38-39.
20.Id. at 39.
21.Id. at 41.
22.Id. at 40.
23.Id. at 40-41.
24.Id. at 42.
25.Id. at 42-43.
26.Id. at 46-47.
27.Id. at 7-26.
28.Id. at 16.
29.Id. at 58-68.
30.Id. at 61.
31.Id.
32.Id. at 63, 67.
33.Id. at 76-[80].
34.Id. at 76, 78.
35.Cancio v. Performance Foreign Exchange Corp., G.R. No. 182307, June
6, 2018.
36.Rollo, p. 9.
37.711 Phil. 576 (2013).
38.Id. at 585-586.

 (Philam Insurance Co., Inc. v. Parc Chateau Condominium Unit Owners Association,
|||

Inc., G.R. No. 201116, [March 4, 2019])

 THIRD DIVISION

[G.R. No. 202052. March 7, 2018.]

SECURITIES AND EXCHANGE COMMISSION

(SEC) and INSURANCE COMMISSION
(IC), petitioners, vs. COLLEGE ASSURANCE
PLAN PHILIPPINES, INC., respondent.

DECISION

BERSAMIN, J  : p

The dispute concerns the use of the assets of the trust

fund of the respondent as a pre-need company. We reiterate
that the law clearly establishes the trust fund for the sole benefit
of the planholders, and its assets cannot be used to satisfy the
claims of the creditors of the company.  HTcADC

The Case

This appeal assails the decision promulgated on June 14,

2011, 1 whereby the Court of Appeals (CA) nullified the orders
issued by the Regional Trial Court (RTC), Branch 149, in
Makati City on April 29, 2009, 2 September 18, 2009 3 and
January 18, 2010 4 in SP. No. M-6144 entitled In the Matter of
Petition for Corporate Rehabilitation; College Assurance Plan
Philippines, Inc., Petitioner, and disposed thusly:
WHEREFORE, premises considered, finding
grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of the public respondent, the
instant petition is GRANTED. The assailed Orders
dated April 29, 2009, September 18, 2009 and January
18, 2010 of the Regional Trial Court of Makati City,
Branch 149, is hereby NULLIFIED. Petitioner College
Assurance Plan Philippines, Inc., through its Receiver,
is directed to pay its outstanding obligation to Smart
Share Investment, Ltd., and Fil-Estate Management,
 Inc. in the amount of $6 million as set aside by the
Trustee, Philippine Veterans Bank.
SO ORDERED. 5

Antecedents

The CA narrated the following factual and procedural

antecedents:
Petitioner College Assurance Plan Philippines,
Inc. (CAP) is a duly registered domestic corporation
with the primary purpose of selling pre-need
educational plans. To guarantee the payment of
benefits under its educational plans, CAP set up a
Trust Fund contributing therein a certain percentage of
the amount actually collected from each planholder.
The Trust Fund, with the aid of trustee banks, is
invested in assets and securities with yields higher than
the projected increase in tuition fees. With the adoption
of the policy of deregulation of private educational
institutions by the Department of Education in 1993 and
the economic crisis and peso devaluation which started
in 1997, CAP and its Trust Fund were adversely
affected.
In 2000, Republic Act No. 8799 (Securities
Regulation Code) was passed. Pursuant thereto, the
Securities and Exchange Commission (SEC)
promulgated on August 16, 2001 the New Rules on the
Registration and Sale of Pre-Need Plans under Section
16 of the Securities Regulation Code. With the
adoption of the Pre-Need Uniform Chart of Accounts
for the accounting and reporting of the operations of
the pre-need companies in the Philippines and the new
rules on the valuation of trust funds invested in real
property, CAP incurred a trust fund deficiency of
P3.179 billion as of December 31, 2001. In compliance
with the directive of SEC to submit a funding scheme to
correct the deficiency, CAP, among others, proposed to
purchase MRT III Bonds and assign the same to the
Trust Fund. Hence, on August 6, 2002, CAP purchased
MRT III Bonds with a present value then of $14 million
from Smart 6 and FEMI, 7 and assigned the same to
the Trust Fund. The purchase price was to be paid by
CAP in sixty (60) monthly installments payable over five
(5) years. This obligation was secured by a Deed of
Chattel Mortgage over 9,762,982 common shares of
Comprehensive Annuity Plans & Pension Corporation
owned by CAP. In 2003, after having paid
US$6,536,405.01 of the total purchase price, CAP was
ordered by the SEC Oversight Board to stop paying
SMART/FEMI due to its perceived inadequacy of
CAP's funds.
On August 23, 2005, CAP filed a Petition for
Rehabilitation. After finding the petition to be sufficient
in form and substance, a Stay Order was issued by the
court effectively staying and suspending the
enforcement of all claims against CAP. Mr. Mamerto
Marcelo, Jr. was appointed as Interim Rehabilitation
Receiver.
In its Order dated December 16, 2005, the trial
court gave due course to CAP's Petition for
Rehabilitation and directed the Receiver to submit a
report on the rehabilitation plan. The 2006 Revised
Business Plan was approved by the court on
November 8, 2006. Under the Rehabilitation Plan, CAP
intended to sell in 2009 the MRT Bonds at 60% of their
face value of US$81.2 million.
While negotiations to effect the sale were
ongoing, Smart demanded that CAP settle its
outstanding balance of US$10,680,045.25 as February
28, 2009 and warned that, should CAP insist on
holding on to the MRT III Bonds instead of selling them,
Smart would demand the immediate return of the MRT
III Bonds as full and final settlement of CAP's
outstanding obligation. The Receiver denied that CAP
has agreed to pay its liabilities to FEMI and Smart from
the proceeds of the prospective sale of the MRT III
Bonds. On April 13, 2009, the Receiver filed a
Manifestation seeking the public respondent's approval
of the sale of MRT III Bonds, with a face value of
US$81,2000,000.00, n "at the best possible price" to
the Development Bank of the Philippines (DBP) and
the Land Bank of the Philippines.
 In the Order of April 15, 2009, the public
respondent approved the sale n of MRT III Bonds "at
the best possible price." Two days later, the Receiver
received a letter from FEMI that Smart intended to
annotate a notice of unpaid seller's lien on the MRT III
Bonds with Deutsche Bank, the custodian bank.
However, Smart opted not to do so and would instead
assist in finding a buyer provided that the seller's lien of
US$9.5 million will be settled through the arrangement
it presented, subject to the approval of the rehabilitation
court. The Receiver then filed a Manifestation with
Motion dated April 22, 2009 where he sought the public
respondent's approval of CAP's payment of its
obligations to Smart and FEMI, partly from the
proceeds of the sale of the MRT III Bonds.  aScITE

The MRT III Bonds were in fact sold at

US$21,501,760 to DBP and Land Bank. The Buyers
agreed to purchase the MRT III Bonds at a premium of
3.30% made possible by: (1) Smart's desistance from
enforcing its unpaid seller's lien, (2) FEMI's
relinquishing its four (4) board seats with Metro Rail
Transit Corporation, (3) swap arrangement of FEMI
shares held by CAP to liquidate $3.5 million of the
outstanding obligation; and (4) substantial discount of
$1.2 million from CAP's outstanding liabilities. The
contract of sale was perfected and partly consummated
— FEMI gave up its four (4) board seats in MRTC, the
MRT III Bonds were delivered to the buyers, and the
buyers paid $21,501,760 to CAP, which amount was
credited to its trust accounts with Philippine Veterans
Bank (PVB). However, CAP's payment to Smart and
FEMI remained to be executed. 8
Based on the foregoing antecedents, the receiver moved
for the payment of the respondent's obligations to Smart and
FEMI. The RTC approved the motion in open court on April 24,
2009. 9 However, on April 29, 2009, the RTC withdrew the
approval and instead ordered the receiver and the respondent
to file their reply to the opposition. 10 After the exchange of
pleadings, the RTC issued a joint order dated September 18,
2009 denying the motion to approve payment to Smart as well
as the motion to approve the respondent's additional equity
infusion in CAP General Insurance. 11
 Subsequently, the respondent received summons from
the High Court of Hong Kong Special Administrative Region,
Court of First Instance, directing it to either satisfy the claim of
Smart and FEMI, or to return the Acknowledgment of Service,
stating whether it intended to contest the proceedings or to
make an admission. In view of this, the respondent filed its
motion dated December 21, 2009 in the RTC seeking
authorization to pay the claims of Smart and FEMI and
explaining that the institution of the action in Hong Kong
presented a real threat that the buyers would rescind their
contact with the respondent and demand the return of the
purchase price of $21,501,760.00. 12
On January 18, 2010, the RTC issued the assailed order
denying the respondent's motion for payment to Smart and
FEMI, and holding that in keeping with the principle of "equality
is equity" in rehabilitation proceedings, the respondent's assets
should be held in trust for the equal benefit of all the creditors,
both secured and unsecured, who stood on equal footing during
the rehabilitation. 13 The RTC disposed as follows:
WHEREFORE, premises considered, the motion
dated December 21, 2009 for authority to settle CAP's
obligations to Smart Share Investments Ltd. and Fil
Estate Management, Inc. is hereby denied for utter
lack of merit.
SO ORDERED. 14

Decision of the CA

The foregoing developments impelled the respondent to

bring a petition for certiorari to the CA, insisting therein that: 15
I
RESPONDENT COURT ACTED WITHOUT OR IN
EXCESS OF JURISDICTION, OR WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OF
EXCESS OF JURISDICTION, WHEN IT
UNILATERALLY MODIFIED THE TERMS AND
CONDITIONS OF THE SALE OF THE MRT III BONDS
AS AGREED UPON BY THE PARTIES
II
 RESPONDENT COURT ACTED WITHOUT OR IN
EXCESS OF JURISDICTION, OR WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION, WHEN IT DENIED THE
RECEIVER'S MOTION, KNOWING FULLY WELL
THAT SUCH ACTION WILL BE DETRIMENTAL TO
THE INTERESTS OF CAP AND ITS STAKEHOLDERS
On August 17, 2010, upon the application of the
respondent, the CA directed Philippine Veterans Bank and the
receiver to set aside US$6 million from the proceeds of the sale
of the MRT III Bonds pending the determination of the suit. 16
On June 14, 2011, the CA promulgated the assailed
decision, 17 whereby it found and declared that the RTC had
committed grave abuse of discretion in disapproving the
payment of the respondent's obligation to Smart and FEMI from
the proceeds of the sale of the MRT III Bonds.
The CA opined that payment to Smart and FEMI
constituted "benefits" that could be validly withdrawn from the
trust fund pursuant to Rule 16.4 of the New Rules on the
Registration and Sale of Pre-Need Plans under Section 16 of
the Securities and Regulation Code (New Rules) in relation to
Section 30 of Republic Act No. 9829 (Pre-Need Code of the
Philippines); 18 that because the MRT III Bonds had not been
fully paid, the unpaid portion of the purchase price thereof could
not be considered as part of the trust fund; that considering that
there was an unpaid seller's lien, the payment to Smart and
FEMI from the proceeds of the sale could not be considered as
payment to an ordinary creditor, but as payment to the
contributors of the source of the assets of the trust fund; 19 that
at any rate the respondent's outstanding obligation to Smart
and FEMI could be considered as an administrative expense
not covered by the stay order, and was an expense to preserve
the assets of the trust fund; 20 and that the "equality is equity"
principle did not apply because Smart and FEMI had played a
significant role in the sale of the MRT III Bonds that had worked
for the benefit of the planholders. 21
The petitioners sought reconsideration, but the CA
denied their motion for that purpose on May 21, 2012. 22  HEITAD

Hence, this appeal.

 Issues

The petitioners hereby submit the following for

consideration:
I
WHETHER OR NOT THE PAYMENT OF
RESPONDENT'S OUTSTANDING OBLIGATION TO
SMART AND FEMI, REPRESENTING THE BALANCE
OF THE PURCHASE PRICE OF THE MRT III BONDS
CAN BE VALIDLY WITHDRAWN FROM THE
RESPONDENT'S TRUST FUND.
II
WHETHER OR NOT PAYMENT OF RESPONDENT'S
OUTSTANDING OBLIGATION TO SMART AND FEMI
CAN BE CONSIDERED AN ADMINISTRATIVE
EXPENSE AND, THUS, AN ALLOWABLE
WITHDRAWAL FROM THE RESPONDENT'S TRUST
FUND.
III
WHETHER OR NOT THE TRIAL COURT ACTED
WITHOUT OR IN EXCESS OF JURISDICTION OR
WITH GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OR IN EXCESS OF JURISDICTION IN
DENYING PAYMENT OF RESPONDENT'S
OBLIGATION TO SMART AND FEMI FROM THE
PROCEEDS OF THE SALE OF THE MRT III BONDS,
WHICH FORM PART OF THE RESPONDENT'S
TRUST FUND. 23
The petitioners maintain that the trust fund, being
essentially and primarily constituted for the sole and exclusive
benefit of the planholders, should be treated separately and
distinctly from the paid-up capital and assets of the respondent;
that Section 30 of R.A. No. 9829 provided that the trust fund
should in no case be used to satisfy the claims of the creditors
of the pre-need company; 24 that because the proceeds of the
sale of the MRT III Bonds formed part of the assets of the trust
fund, they were not owned by the respondent, but by the
trustee insofar as the legal title was concerned and by the
planholders as beneficial owners; 25 that contrary to the view of
the CA, the infusion to the trust fund made by the respondent to
cover its deficiency could not have diluted the nature and
purpose of the trust fund because the respondent was legally
required to make the necessary deposit in case of fund
insufficiency; 26 that the "benefits" mentioned in Section 16.4,
Rule 16 of the New Rules referred to those that the pre-need
company undertook to deliver to planholders; that consequently
the "cost of services rendered or property delivered" should
refer to the cost of any service or property that the pre-need
company undertook to deliver to the planholders in the future as
specified in their respective pre-need plans; that the cost of
property infused by the pre-need company in order to cover the
deficiency in the trust fund was excluded; and that the CA erred
in ruling that the payment to Smart and FEMI constituted
"benefits" or "cost of services or property delivered" that could
be withdrawn from the trust fund. 27
Lastly, the petitioners posit that administrative expenses
included whatever was incurred in the operation of the trust
fund, like trust fees, bank charges and investment expenses
used in the operation of the trust fund, taxes on the fund, and
reasonable withdrawals for minor repairs and cost of ordinary
maintenance of the fund, but did not include the cost of the
capital asset infused in the trust fund. 28
In its comment, 29 the respondent counters that the
settlement of its obligation to Smart and FEMI was a necessary
condition of the sale of the MRT III Bonds; that the RTC had
already approved the payment of said obligations on April 24,
2009, but withdrew the approval on April 29, 2009 despite its
knowledge that the sale had been partly consummated; 30 that
the RTC as the rehabilitation court had no power to modify the
terms of the contract of sale as negotiated and agreed upon by
the parties; 31 that the "cost of services" that could be validly
withdrawn from the trust fund included payments of obligations,
aside from those made to the planholders, trustees, banks, and
the Government, among others; that the payment of its
obligation to Smart and FEMI constituted a "cost" of converting
the MRT III Bonds to much-needed cash that redounded to the
benefit of the planholders; 32 that the sale of the MRT III Bonds,
having been realized through the concessions made by Smart
and FEMI, was made for the benefit of the planholders; 33 and
that disapproving the payment to Smart and FEMI would result
to a protracted litigation that might be ultimately detrimental to
its rehabilitation, among other consequences. 34
 Did the CA correctly rule that the obligation to pay to
Smart and FEMI constituted "benefits" or "cost of services
rendered or property delivered" or "administrative expense" that
could be validly withdrawn from the trust fund pursuant to
Section 16.4, Rule 16 of the New Rules and Section 30 of R.A.
No. 9829?

Ruling of the Court

The appeal is meritorious.

I
The obligation to pay Smart and FEMI did not
constitute the "benefits" or "cost of services
rendered" or "property delivered" under Section
16.4, Rule 16 of the New Rules and Section 30
of R.A. No. 9829
The petitioners submit that the trust fund should be
treated separately and distinctly from the corporate assets and
obligations of the respondent. On the other hand, the
respondent insists that the CA correctly ruled that the payment
to Smart and FEMI constituted a valid withdrawal from the trust
fund because it was upon a "benefit" in the nature of "cost for
services rendered or property delivered."
We uphold the submission of the petitioners.
In respect of pre-need companies, the trust fund is set up
from the planholders' payments to pay for the cost of benefits
and services, termination values payable to the planholders and
other costs necessary to ensure the delivery of benefits or
services to the planholders as provided for in the
contracts. 35 The trust fund is to be treated as separate and
distinct from the paid-up capital of the company, and is
established with a trustee under a trust agreement approved by
the Securities and Exchange Commission to pay the benefits
as provided in the pre-need plans. 36
Section 16.4, Rule 16 of the New Rules, which governs
the utilization of the trust fund, states as follows:
16.4. No withdrawal shall be made from the
Trust Fund except for paying the Benefits such as
the monetary consideration, the cost of services
 rendered or property delivered, trust fees, bank
charges and investment expenses in the operation of
the Trust Fund, termination values payable to the
Planholders, annuities, contributions of cancelled plans
to the fund and taxes on Trust Funds. Furthermore,
only reasonable withdrawals for minor repairs and
costs of ordinary maintenance of trust fund assets shall
be allowed. (Bold scoring supplied for emphasis) ATICcS

The term "benefits" used in Section 16.4 is defined as

"the money or services which the Pre-Need Company
undertakes to deliver in the future to the planholder or his
beneficiary." 37 Accordingly, benefits refer to the payments
made to the planholders as stipulated in their pre-need plans.
Worthy of emphasis herein is that the trust fund is established
"to ensure the delivery of the guaranteed benefits and services
provided under a pre-need plan contract." 38 Hence, benefits
can only mean payments or services rendered to the
planholders by virtue of the pre-need contracts.
Moreover, Section 30 of R.A. No. 9829 expressly
stipulates that the trust fund is to be used at all times for
the sole benefit of the planholders, and cannot ever be applied
to satisfy the claims of the creditors of the company, viz.:
Section 30. Trust Fund. — To ensure the
delivery of the guaranteed benefits and services
provided under a pre-need plan contract, a trust fund
per pre-need plan category shall be established. A
portion of the installment payment collected shall be
deposited by the pre-need company in the trust fund,
the amount of which will be as determined by the
actuary based on the viability study of the pre-need
plan approved by the Commission. Assets in the trust
fund shall at all times remain for the sole benefit of
the planholders. At no time shall any part of the
trust fund be used for or diverted to any purpose
other than for the exclusive benefit of the
planholders. In no case shall the trust fund assets
be used to satisfy claims of other creditors of the
pre-need company. The provision of any law to the
contrary notwithstanding, in case of insolvency of
the pre-need company, the general creditors shall
not be entitled to the trust fund.
 Except for the payment of the cost of
benefits or services, the termination values payable
to the planholders, the insurance premium
payments for insurance-funded benefits of
memorial life plans and other costs necessary to
ensure the delivery of benefits or services to
planholders, no withdrawal shall be made from the
trust fund unless approved by the
Commission. The benefits received by the planholders
shall be exempt from all taxes and the trust fund shall
not be held liable for attachment, garnishment, levy or
seizure by or under any legal or equitable processes
except to pay for the debt of the planholder to the
benefit plan or that arising from criminal liability
imposed in a criminal action.
The trust fund shall at all times be sufficient to
cover the required pre-need reserve. (Bold
underscoring supplied)
Section 30 prohibits the utilization of the trust fund for
purposes other than for the benefit of the planholders. The
allowed withdrawals (specifically, the cost of benefits or
services, the termination values payable to the planholders, the
insurance premium payments for insurance-funded benefits of
memorial life plans and other costs) refer to payments that the
pre-need company had undertaken to be made based on the
contracts.
Accordingly, the CA gravely erred in authorizing the
payment out of the trust fund of the obligations due to Smart
and FEMI. Even assuming that the obligations were incurred by
the respondent in order to infuse sufficient money in the trust
fund to correct its deficiencies, such obligations should be paid
for by its assets, not by the trust fund. Indeed, Section 30
definitely provided that the trust fund could not be used to
satisfy the claims of the respondent's creditors. Worthy to
reiterate is our pronouncement in Securities and Exchange
Commission v. Laigo, 39 as follows:
In the course of delving into the complex
relationships created by the agreement and the existing
regulatory framework, this Court finds that Legacy's
claimed interest in the enforcement of the trust and in
the trust properties is mere apparent than real. Legacy
is not a beneficiary.
First, it must be stressed that a person is
considered as a beneficiary of a trust if there is a
manifest intention to give such a person the beneficial
interest over the trust properties. This is the considered
opinion expressed in the Restatement of the Law of
Trust (Restatement) which Justice Vicente Abad
Santos has described in his contribution to the
Philippine Law Journal as containing the more salient
principles, doctrines and rules on the subject. Here, the
terms of the trust agreement plainly confer the status of
beneficiary to the planholders, not to Legacy. In the
recital clauses of the said agreement, Legacy bound
itself to provide for the sound, prudent and efficient
management and administration of such portion of the
collection "for the benefit and account of the
planholders," through LBP (as the trustee).
This categorical declaration doubtless indicates
that the intention of the trustor is to make the
planholders the beneficiaries of the trust properties,
and not Legacy. It is clear that because the beneficial
ownership is vested in the planholders and the legal
ownership in the trustee, LBP, Legacy, as trustor, is left
without any iota of interest in the trust fund. This is
consistent with the nature of a trust arrangement,
whereby there is a separation of interests in the subject
matter of the trust, the beneficiary having an equitable
interest, and the trustee having an interest which is
normally legal interest.
Second, considering the fact that a mandated
pre-need trust is one imbued with public interest, the
issue on who the beneficiary is must be determined on
the basis of the entire regulatory framework. Under the
New Rules, it is unmistakable that the beneficial
interest over the trust properties is with the planholders.
Rule 16.3 of the New Rules provides that: [n]o
withdrawal shall be made from the trust fund except for
paying the benefits such as monetary consideration,
the cost of services rendered or property delivered,
trust fees, bank charges and investment expenses in
the operation of the trust fund, termination values
payable to the planholders, annuities, contributions of
cancelled plans to the fund and taxes on trust funds.
Rule 17.1 also states that to ensure the liquidity
of the trust fund to guarantee the delivery of the
benefits provided for under the plan contract and to
obtain sufficient capital growth to meet the growing
actuarial reserve liabilities, all investments of the trust
fund shall be limited to Fixed Income Instruments,
Mutual Funds, Equities, and Real Estate, subject to
certain limitations.
Further, Rule 20.1 directs the trustee to exercise
due diligence for the protection of the planholders
guided by sound investment principles in the exclusive
management and control over the funds and its right, at
any time, to sell, convert, invest, change, transfer, or
otherwise change or dispose of the assets comprising
the funds. All these certainly underscore the
importance of the planholders being recognized as the
ultimate beneficiaries of the SEC-mandated trust.
This consistently runs in accord with the
legislative intent laid down in Chapter IV of R.A. No.
8799, or the SRC, which provides for
the establishment of trust funds for the payment of
benefits under such plans. Section 16 of the SRC
provides: TIADCc

SEC. 16. Pre-Need Plans. — No

person shall sell or offer for sale to the
public any pre-need plan except in
accordance with rules and regulations
which the Commission shall prescribe.
Such rules shall regulate the sale of
pre-need plans by, among other things,
requiring the registration of pre-need
plans, licensing persons involved in the
sale of pre-need plans, requiring
disclosures to prospective plan holders,
prescribing advertising guidelines,
providing for uniform accounting system,
reports and record keeping with respect
to such plans, imposing capital, bonding
and other financial responsibility, and
 establishing trust funds for the payment of
benefits under such plans. [Emphasis
supplied]
It is clear from Section 16 that the underlying
congressional intent is to make the planholders the
exclusive beneficiaries. It has been said that what is
within the spirit is within the law even if it is not within
the letter of the law because the spirit prevails over the
letter.
This will by the legislature was fortified with the
enactment of R.A. No. 9829 or the Pre-Need Code in
2009. The Congress, because of the chaos
confounding the industry at the time, considered it
necessary to provide a stronger legal framework so
that no entity could claim that the mandate and
delegated authority of the SEC under the SRC was
nebulous. The Pre-Need Code cemented the
regulatory framework governing the pre-need industry
with precise specifics to ensure that the rights of the
pre-need planholders would be categorically defined
and protected. x x x 40
The CA observed that only the paid value of the MRT III
Bonds should be made part of the trust fund; that with the MRT
III Bonds being subject to the unpaid seller's lien, Smart and
FEMI were considered as contributors to the source of the
assets of the trust fund, and for that reason were not to be
treated as ordinary creditors of the respondent. 41
We cannot sustain the observations of the CA.
There had been no indication by the respondent to the
trustee bank that only the paid value of the MRT III Bonds
should accrue to the trust fund. Even in its comment, the
respondent intimated that the bonds were assigned to the trust
fund without any reservations or conditions imposed thereon, to
wit:
4. x x x With the adoption and immediate
retroactive implementation of the Pre-Need Uniform
Chart of Accounts for the accounting and reporting of
the operations of pre-need companies in the
Philippines and the new rules on the valuation of trust
funds invested in real property, CAP incurred a trust
 fund deficiency of P3.179 billion as of 31 December
2001. It must be stressed at this point theretofore, CAP
has strictly complied with the Trust Fund reserve and
build-up requirement of the SEC. The SEC, however,
required CAP to immediately submit a funding scheme
to correct the deficiency, under pain of summary
suspension of its permit to sell and the imposition of
other sanctions.
5. In compliance with the above directive of the
SEC, CAP proposed the infusion to the Trust Fund of
cash, several post-dated checks, land and buildings in
Digos, Davao del Sur and Kidapawan, North Cotabato,
and MRT III Bonds valued at $4,728,000.00. To cover
the remaining balance of the Trust Fund, CAP
proposed to, among other, purchase more MRT III
Bonds and assign the same to the Trust Fund. Hence,
on 6 August 2002, CAP purchased MRT III Bonds on
installment, with a present value then of $14 million,
from Smart and FEMI, and assigned the same to the
Trust Fund. 42
Thus, we uphold the petitioners' following stance that the
MRT III Bonds already formed part of the assets of the trust
fund upon infusion, viz.:
[I]n so far as the Trust Fund is concerned, the
MRT III bonds, upon their infusion thereto, and
consequently, the proceeds of the sale thereof, were
considered as the Trust Fund assets themselves.
The Agreement dated August 6, 2002 x x x
indicates, thus:
AGREEMENT
KNOW ALL MEN BY THESE
PRESENTS:
This AGREEMENT was made and
entered into on 6 August 2002 at Hong
Kong SAR, by and between:
COLLEGE ASSURANCE PLAN
PHILIPPINES, INC., a corporation duly
organized and existing under Philippine
laws with principal place of business at
the 6th [F]loor, CAP I Building, Amorsolo
 Street, Legaspi Village, Makati City,
represented in this act by its Senior Vice
President, ALFREDO R. COLLADO, and
hereinafter referred to as "CAP";
-and-
BANK OF COMMERCE TRUST
SERVICES GROUP AS TRUSTEE FOR
COLLEGE ASSURANCE PLAN
PHILIPPINES, INC. TRUST FUND, a
corporation duly organized and existing
under Philippine laws, duly
authorized/licensed to perform trust
functions, with principal place of business
at Banker's Centre, 6764 Ayala Avenue,
Makati City, represented in this act by its
Assistant Vice President of the Trust
Services Group, LYDIA E. VIRTUSIO,
and hereinafter referred to as
"TRUSTEE";
WITNESSETH: That
xxx xxx xxx
WHEREAS, upon the sale and delivery by
Vendors to CAP of said Bonds, CAP shall assign
the Bonds with a present value of approximately
US$14,000,000.00 to the Trust Fund administered
by and in the possession of the TRUSTEE.
xxx xxx xxx
NOW, THEREFORE, for and in consideration
of the foregoing premises, the parties agree as
follows:
xxx xxx xxx
5. CAP represents and warrants that:
a. It has the legal right to transfer
ownership of and interest in the Bonds in
favor of TRUSTEE in accordance with the
provisions of the contracts, agreements
and instruments relating to the issuance
and/or transfer thereof. It further
warrants that the Bonds are not
 mortgaged nor in any way
encumbered in favor of any person or
corporation.
xxx xxx xxx
That the unpaid purchase price of the MRT III
bonds in favor of Smart and FEMI was not the liability
of the respondent's Trust Fund is clearly shown in the
Trust Fund Statements of respondent's Trust Fund with
the Bank of Commerce (BOC). Specifically, the
Balance Sheet as of December 31, 2002 for CAP's
Trust Fund Account No. TG-91-07-00001-C x x x did
not include among the respondent's Trust Fund
liabilities the subject outstanding obligation of
respondent to Smart and FEMI.  AIDSTE

Likewise, the Balance Sheet as of February 28,

2009 of the Trust Account of respondent with Philippine
Veteran's Bank (PVB) with Trust Account Nos. TA
4450-58-000124 (Old TA No. 81), TA 4450-58-000126
(Old TA No. 85) and TA 4450-58-000123 (Old TA No.
91), x x x did not report any liability relating to the MRT
III bonds.
It should likewise be emphasized that the MRT
III bonds substituted the liquid assets available in the
restricted PVB Trust Funds under Account Nos. 85 and
91, which were all free from any liens and
encumbrances under the management of BOC as
trustee.
On the other hand, respondent CAP's unaudited
financial statements for the year ended December 31,
2008 submitted to petitioner SEC x x x disclosed that
respondent has an outstanding loan obligation to Smart
and FEMI. Note 8 of the said corporate financial
statements reported the details of the acquired MRT III
bonds and the terms of respondent's liability thereto. x
xx
xxx xxx xxx
It also bears emphasis that in a Certification
dated April 18, 2009 x x x issued by respondent, the
same "unpaid principal balance on the MRT Bonds
 was declared by CAP as one of their (sic) obligations in
its court-approved rehabilitation program" x x x.
The foregoing financial reports submitted by
respondent to the SEC as well as its April 18, 2009
Certification only show that indeed the MRT III bonds
were infused to respondent's Trust Fund free from any
liens and encumbrances, and that the purchase price
thereof is and remains to be respondent's loan
obligation to Smart and FEMI, or its corporate liability,
and not of the Trust Fund. 43

II

Payment to Smart and FEMI was not an administrative

expense to be withdrawn from the trust fund

The CA ruled that the respondent's outstanding obligation

to Smart and FEMI could be considered an administrative
expense that was not covered by the stay order.
The ruling of the CA was not warranted.
Section 16.4, Rule 6 of the New Rules made an exclusive
enumeration of the administrative expenses that may be
withdrawn from the trust fund, as follows: trust fees, bank
charges and investment expenses in the operation of the trust
fund, taxes on trust funds, as well as reasonable withdrawals
for minor repairs and costs of ordinary maintenance of trust
fund assets. Evidently, the purchase price of the bonds for the
capital infusion to the trust fund was not included as an
administrative expense that could be validly taken from the trust
fund.
Yet, assuming that the unpaid obligation to Smart and
FEMI constituted an administrative expense, its payment was
the liability of the respondent's assets, not of the trust fund. It is
already clear and definite enough that the trust fund was
separate and distinct from the corporate assets of the
respondent. In other words, only the planholders as the
beneficiaries of the trust fund could claim against the trust fund,
to the exclusion of Smart and FEMI as the respondent's
creditors.
 ACCORDINGLY, the Court GRANTS the petition for
review on certiorari; SETS ASIDE and REVERSES the decision
promulgated on June 14, 2011 and the resolution promulgated
on May 21, 2012 of the Court of Appeals in CA-G.R. SP No.
113576; and REINSTATES the orders dated April 29, 2009,
September 18, 2009 and January 18, 2010 issued by the
Regional Trial Court, Branch 149, in Makati City in SP. No. M-
6144.
No pronouncement on costs of suit.
SO ORDERED.
Velasco, Jr., Leonen, Martires and Gesmundo, JJ.,
concur.
 

Footnotes

1. Rollo, pp. 135-159; penned by Associate Justice Rosmari D. Carandang,

with Associate Justice Ramon R. Garcia and Associate Justice
Samuel H. Gaerlan, concurring.
2. Id. at 373.
3. Id. at 430-431.
4. Id. at 488-490.
5. Supra note 1, at 159.
6. Referring to Smart Share Investment, Ltd.
7. Referring to Fil-Estate Management, Inc.
8. Rollo, pp. 136-139.
9. Id. at 140.
10. Id. at 373.
11. Id. at 430-431.
12. Id. at 432-435.
13. Id. at 438-490.
14. Id. at 490.
15. Id. at 503.
16. Id. at 537-544.
17. Id. at 135-159.
18. Id. at 147.
19. Id. at 149-150.
20. Id. at 151-153.
21. Id. at 156-157.
22. Id. at 162-171.
23. Id. at 51-52.
24. Id. at 52-66.
25. Id. at 72.
26. Id. at 73.
27. Id. at 86-93.
28. Id. at 106-107.
29. Id. at 720-754.
30. Id. at 737-741.
31. Id. at 744-746.
32. Id. at 747-749.
33. Id. at 751-752.
34. Id. at 753-757.
35. Section 4 (j), R.A. No. 9829.
36. Section 1.9, Rule 1, New Rules.
37. Section 1.6, Rule 1, New Rules.
38.Section 30, R.A. No. 9829.
39.G.R. No. 188639, September 2, 2015, 768 SCRA 633.
40.Id. at 652-653.
41.Rollo, pp. 149-150.
42.Id. at 722-723.
43.Id. at 74-79.
n Note from the Publisher: Copied verbatim from the official copy.
n Note from the Publisher: Written as "ale" in the original document.
 (Securities and Exchange Commission v. College Assurance Plan Philippines, Inc.,
|||

G.R. No. 202052, [March 7, 2018])

FIRST DIVISION

[G.R. No. 193138. August 20, 2018.]

ANICETO G. SALUDO,
JR., petitioner, vs. PHILIPPINE NATIONAL
BANK, respondent.

DECISION

JARDELEZA, J  : p

In this petition, we emphasize that a partnership for the

practice of law, constituted in accordance with the Civil
Code provisions on partnership, acquires juridical personality
by operation of law. Having a juridical personality distinct and
separate from its partners, such partnership is the real party-in-
interest in a suit brought in connection with a contract entered
into in its name and by a person authorized to act on its behalf.
Petitioner Aniceto G. Saludo, Jr. (Saludo) filed this
petition for review on certiorari 1 assailing the February 8, 2010
Decision 2 and August 2, 2010 Resolution 3 issued by the Court
of Appeals (CA) in CA-G.R. SP No. 98898. The CA affirmed
with modification the January 11, 2007 Omnibus Order 4 issued
by Branch 58 of the Regional Trial Court (RTC) of Makati City in
Civil Case No. 06-678, and ruled that respondent Philippine
National Bank's (PNB) counterclaims against Saludo and the
Saludo Agpalo Fernandez and Aquino Law Office (SAFA Law
Office) should be reinstated in its answer.
Records show that on June 11, 1998, SAFA Law Office
entered into a Contract of Lease 5 with PNB, whereby the latter
agreed to lease 632 square meters of the second floor of the
PNB Financial Center Building in Quezon City for a period of
three years and for a monthly rental fee of P189,600.00. The
rental fee is subject to a yearly escalation rate of 10%. 6 SAFA
Law Office then occupied the leased premises and paid
advance rental fees and security deposit in the total amount of
P1,137,600.00. 7
On August 1, 2001, the Contract of Lease
expired. 8 According to PNB, SAFA Law Office continued to
occupy the leased premises until February 2005, but
discontinued paying its monthly rental obligations after
December 2002. 9 Consequently, PNB sent a demand
letter 10 dated July 17, 2003 for SAFA Law Office to pay its
outstanding unpaid rents in the amount of P4,648,086.34. PNB
sent another letter 11 demanding the payment of unpaid rents in
the amount of P5,856,803.53 which was received by SAFA Law
Office on November 10, 2003.
In a letter 12 to PNB dated June 9, 2004, SAFA Law
Office expressed its intention to negotiate. It claimed that it was
enticed by the former management of PNB into renting the
leased premises by promising to: (1) give it a special rate due
to the large area of the place; (2) endorse PNB's cases to the
firm with rents to be paid out of attorney's fees; and (3) retain
the firm as one of PNB's external counsels. When new
management took over, it allegedly agreed to uphold this
agreement to facilitate rental payments. However, not a single
case of significance was referred to the firm. SAFA Law Office
then asked PNB to review and discuss its billings, evaluate the
improvements in the area and agree on a compensatory sum to
be applied to the unpaid rents, make good its commitment to
endorse or refer cases to SAFA Law Office under the intended
terms and conditions, and book the rental payments due as
receivables payable every time attorney's fees are due from the
bank on the cases it referred. The firm also asked PNB to give
a 50% discount on its unpaid rents, noting that while it was
waiting for case referrals, it had paid a total amount of
P13,457,622.56 from January 1999 to December 2002, which
included the accelerated rates of 10% per annum beginning
August 1999 until July 2003.
In February 2005, SAFA Law Office vacated the leased
premises. 13 PNB sent a demand letter 14 dated July 7, 2005
requiring the firm to pay its rental arrears in the total amount of
P10,951,948.32. In response, SAFA Law Office sent a letter
dated June 8, 2006, proposing a settlement by providing a
range of suggested computations of its outstanding rental
obligations, with deductions for the value of improvements it
introduced in the premises, professional fees due from
Macroasia Corporation, and the 50% discount allegedly
promised by Dr. Lucio Tan. 15 PNB, however, declined the
settlement proposal in a letter 16 dated July 17, 2006, stating
that it was not amenable to the settlement's terms. Besides,
PNB also claimed that it cannot assume the liabilities of
Macroasia Corporation to SAFA Law Office as Macroasia
Corporation has a personality distinct and separate from the
bank. PNB then made a final demand for SAFA Law Office to
pay its outstanding rental obligations in the amount of
P25,587,838.09.
On September 1, 2006, Saludo, in his capacity as
managing partner of SAFA Law Office, filed an amended
complaint 17 for accounting and/or recomputation of unpaid
rentals and damages against PNB in relation to the Contract of
Lease.
On October 4, 2006, PNB filed a motion to include an
indispensable party as plaintiff, 18 praying that Saludo be
ordered to amend anew his complaint to include SAFA Law
Office as principal plaintiff. PNB argued that the lessee in the
Contract of Lease is not Saludo but SAFA Law Office, and that
Saludo merely signed the Contract of Lease as the managing
partner of the law firm. Thus, SAFA Law Office must be joined
as a plaintiff in the complaint because it is considered an
indispensable party under Section 7, Rule 3 of the Rules of
Court. 19
On October 13, 2006, PNB filed its answer. 20 By way of
compulsory counterclaim, it sought payment from SAFA Law
Office in the sum of P25,587,838.09, representing overdue
rentals. 21 PNB argued that as a matter of right and equity, it
can claim that amount from SAFA Law Office in solidum with
Saludo. 22
On October 23, 2006, Saludo filed his motion to dismiss
counterclaims, 23 mainly arguing that SAFA Law Office is
neither a legal entity nor party litigant. As it is only a relationship
or association of lawyers in the practice of law and a single
proprietorship which may only be sued through its owner or
proprietor, no valid counterclaims may be asserted against it. 24
On January 11, 2007, the RTC issued an Omnibus Order
denying PNB's motion to include an indispensable party as
plaintiff and granting Saludo's motion to dismiss counterclaims
in this wise:
The Court DENIES the motion of PNB to
include the SAFA Law Offices. Plaintiff has shown by
documents attached to his pleadings that indeed SAFA
Law Offices is a mere single proprietorship and not a
commercial and business partnership. More
importantly, plaintiff has admitted and shown sole
responsibility in the affairs entered into by the SAFA
Law Office. PNB has even admitted that the SAFA Law
Office, being a partnership in the practice of law, is a
non-legal entity. Being a non-legal entity, it cannot be a
proper party, and therefore, it cannot sue or be sued.
Consequently, plaintiff's Motion to Dismiss
Counterclaims (claimed by defendant PNB) should
be GRANTED. The counterclaims prayed for to the
effect that the SAFA Law Offices be made to pay in
solidum with plaintiff the amounts stated in defendant's
Answer is disallowed since no counterclaims can be
raised against a non-legal entity. 25
PNB filed its motion for reconsideration 26 dated February
5, 2007, alleging that SAFA Law Office should be included as a
co-plaintiff because it is the principal party to the contract of
lease, the one that occupied the leased premises, and paid the
monthly rentals and security deposit. In other words, it was the
main actor and direct beneficiary of the contract. Hence, it is the
real party-in-interest. 27 The RTC, however, denied the motion
for reconsideration in an Order 28 dated March 8, 2007.
 Consequently, PNB filed a petition for certiorari 29 with
the CA. On February 8, 2010, the CA rendered its assailed
Decision, 30 the dispositive portion of which reads:
WHEREFORE, the petition is PARTIALLY
GRANTED. The assailed Omnibus Order dated 11
January 2007 and Order dated 8 March 2007, issued
by respondent Court in Civil Case No. 06-678,
respectively, are AFFIRMED with MODIFICATION in
that petitioner's counterclaims should be reinstated in
its Answer.
SO ORDERED. 31
The CA ruled that an order granting Saludo's motion to
dismiss counterclaim, being interlocutory in nature, is not
appealable until after judgment shall have been rendered on
Saludo's complaint. Since the Omnibus Order is interlocutory,
and there was an allegation of grave abuse of discretion, a
petition for certiorari is the proper remedy. 32
On the merits, the CA held that Saludo is estopped from
claiming that SAFA Law Office is his single proprietorship.
Under the doctrine of estoppel, an admission or representation
is rendered conclusive upon the person making it, and cannot
be denied or disproved as against the person relying thereon.
Here, SAFA Law Office was the one that entered into the lease
contract and not Saludo. In fact, the latter signed the contract
as the firm's managing partner. The alleged Memorandum of
Understanding 33 (MOU) executed by the partners of SAFA Law
Office, which states, among others, that Saludo alone would be
liable for the firm's losses and liabilities, and the letter of Saludo
to PNB confirming that SAFA Law Office is his single
proprietorship did not convert the firm to a single proprietorship.
Moreover, SAFA Law Office sent a letter to PNB regarding its
unpaid rentals which Saludo signed as a managing partner.
The firm is also registered as a partnership with the Securities
and Exchange Commission (SEC). 34
On the question of whether SAFA Law Office is an
indispensable party, the CA held that it is not. As a partnership,
it may sue or be sued in its name or by its duly authorized
representative. Saludo, as managing partner, may execute all
acts of administration, including the right to sue. Furthermore,
the CA found that SAFA Law Office is not a legal entity. A
partnership for the practice of law is not a legal entity but a
mere relationship or association for a particular purpose. Thus,
SAFA Law Office cannot file an action in court. Based on these
premises, the CA held that the RTC did not gravely abuse its
discretion in denying PNB's motion to include an indispensable
party as plaintiff. 35
Nonetheless, the CA ruled that PNB's counterclaims
against SAFA Law Office should not be dismissed. While SAFA
Law Office is not a legal entity, it can still be sued under Section
15, 36 Rule 3 of the Rules of Court considering that it entered
into the Contract of Lease with PNB. 37
The CA further ruled that while it is true that SAFA Law
Office's liability is not in solidum with Saludo as PNB asserts, it
does not necessarily follow that both of them cannot be made
parties to PNB's counterclaims. Neither should the
counterclaims be dismissed on the ground that the nature of the
alleged liability is solidary. According to the CA, the presence of
SAFA Law Office is required for the granting of complete relief
in the determination of PNB's counterclaim. The court must,
therefore, order it to be brought in as defendant since
jurisdiction over it can be obtained pursuant to Section
12, 38 Rule 6 of the Rules of Court. 39
Finally, the CA emphasized that PNB's counterclaims are
compulsory, as they arose from the filing of Saludo's complaint.
It cannot be made subject of a separate action but should be
asserted in the same suit involving the same transaction. Thus,
the Presiding Judge of the RTC gravely abused his discretion in
dismissing PNB's counterclaims as the latter may forever be
barred from collecting overdue rental fees if its counterclaims
were not allowed. 40
Saludo and PNB filed their respective motions for partial
reconsideration dated February 25, 2010 41 and February 26,
2010. 42 In a Resolution dated August 2, 2010, the CA denied
both motions on the ground that no new or substantial matters
had been raised therein. Nonetheless, the CA addressed the
issue on the joining of SAFA Law Office as a defendant in
PNB's compulsory counterclaim. Pertinent portions of the CA
Resolution read:
The Private Respondent claims that a
compulsory counterclaim is one directed against an
opposing party. The SAFA Law Office is not a party to
the case below and to require it to be brought in as a
 defendant to the compulsory counterclaim would entail
making it a co-plaintiff. Otherwise, the compulsory
counterclaim would be changed into a third-party
complaint. The Private Respondent also argues that
Section 15, Rule 3 of the Rules of Court (on entities
without juridical personality) is only applicable to
initiatory pleadings and not to compulsory
counterclaims. Lastly, it is claimed that since the
alleged obligations of the SAFA Law Office is solidary
with the Private Respondent, there is no need to make
the former a defendant to the counterclaim.
We disagree with the reasoning of the Private
Respondent. That a compulsory counterclaim can only
be brought against an opposing party is belied by
considering one of the requisites of a compulsory
counterclaim — it does not require for its adjudication
the presence of third parties of whom the court cannot
acquire jurisdiction. This shows that non-parties to a
suit may be brought in as defendants to such a
counterclaim. x x x
xxx xxx xxx
In the case at bench, the trial court below can
acquire jurisdiction over the SAFA Law Office
considering the amount and the nature of the
counterclaim. Furthermore, the inclusion of the SAFA
Law Office as a defendant to the counterclaim will
enable the granting of complete relief in view [of] the
liability of a partner to the partnership's creditors under
the law. 43
Hence, this petition, where Saludo raises the following
issues for our resolution:
(1) Whether the CA erred in including SAFA Law Office
as defendant to PNB's counterclaim despite its
holding that SAFA Law Office is neither an
indispensable party nor a legal entity;
(2) Whether the CA went beyond the issues in the
petition for certiorari and prematurely dealt with
the merits of PNB's counterclaim; and
(3) Whether the CA erred when it gave due course to
PNB's petition for certiorari to annul and set aside
 the RTC's Omnibus Order dated January 11,
2007. 44
The petition is bereft of merit.
We hold that SAFA Law Office is a juridical entity and the
real party-in-interest in the suit filed with the RTC by Saludo
against PNB. Hence, it should be joined as plaintiff in that case.

I.

Contrary to Saludo's submission, SAFA Law Office is a

partnership and not a single proprietorship.
Article 1767 of the Civil Code provides that by a contract
of partnership, two or more persons bind themselves to
contribute money, property, or industry to a common fund, with
the intention of dividing the profits among themselves. Two or
more persons may also form a partnership for the exercise of a
profession. Under Article 1771, a partnership may be
constituted in any form, except where immovable property or
real rights are contributed thereto, in which case a public
instrument shall be necessary. Article 1784, on the other hand,
provides that a partnership begins from the moment of the
execution of the contract, unless it is otherwise stipulated.
Here, absent evidence of an earlier agreement, SAFA
Law Office was constituted as a partnership at the time its
partners signed the Articles of Partnership 45 wherein they
bound themselves to establish a partnership for the practice of
law, contribute capital and industry for the purpose, and receive
compensation and benefits in the course of its operation. The
opening paragraph of the Articles of Partnership reveals the
unequivocal intention of its signatories to form a partnership, to
wit:
WE, the undersigned ANICETO G. SALUDO, JR.,
RUBEN E. AGPALO, FILEMON L. FERNANDEZ, AND
AMADO D. AQUINO, all of legal age, Filipino citizens
and members of the Philippine Bar, have this day
voluntarily associated ourselves for the purpose of
forming a partnership engaged in the practice of law,
effective this date, under the terms and conditions
hereafter set forth, and subject to the provisions of
existing laws[.] 46
 The subsequent registration of the Articles of Partnership
with the SEC, on the other hand, was made in compliance with
Article 1772 of the Civil Code, since the initial capital of the
partnership was P500,000.00. 47 Said provision states:
Art. 1772. Every contract of partnership having a
capital of Three thousand pesos or more, in money or
property, shall appear in a public instrument, which
must be recorded in the Office of the Securities and
Exchange Commission.
xxx xxx xxx
The other provisions of the Articles of Partnership also
positively identify SAFA Law Office as a partnership. It
constantly used the words "partners" and "partnership." It
designated petitioner Saludo as managing partner, 48 and Attys.
Ruben E. Agpalo, Filemon L. Fernandez, and Amado D. Aquino
as industrial partners. 49 It also provided for the term of the
partnership, 50 distribution of net profits and losses, and
management of the firm in which "the partners shall have equal
interest in the conduct of [its] affairs." 51 Moreover, it provided
for the cause and manner of dissolution of the
partnership. 52 These provisions would not have been
necessary if what had been established was a sole
proprietorship. Indeed, it may only be concluded from the
circumstances that, for all intents and purposes, SAFA Law
Office is a partnership created and organized in accordance
with the Civil Code provisions on partnership.
Saludo asserts that SAFA Law Office is a sole
proprietorship on the basis of the MOU executed by the
partners of the firm. The MOU states in full: 53
MEMORANDUM OF UNDERSTANDING
WHEREAS, the undersigned executed and filed
with the SEC the Articles of Incorporation of SALUDO,
AGPALO, FERNANDEZ and AQUINO on March 13,
1997;
WHEREAS, among the provisions of said
Articles of Incorporation are the following:
1. That partners R. E. Agpalo, F. L. Fernandez
and A. D. Aquino shall be industrial partners, and they
shall not contribute capital to the partnership and shall
not in any way be liable for any loss or liability that may
be incurred by the law firm in the course of its
operation.
2. That the partnership shall be dissolved by
agreement of the partners or for any cause as and in
accordance with the manner provided by law, in which
event the Articles of Dissolution of said partnership
shall be filed with the Securities and Exchange
Commission. All remaining assets upon dissolution
shall accrue exclusively to A. G. Saludo, Jr. and all
liabilities shall be solely for his account.
WHEREAS, the SEC has not approved the
registration of the Articles of Incorporation and its
Examiner required that the phrase "shall not in any way
be liable for any loss or liability that may be incurred by
the law firm in the course of its operation" in Article VII
be deleted;
WHEREAS, the SEC Examiner likewise
required that the sentence "All remaining assets upon
dissolution shall accrue exclusively to A. G. Saludo, Jr.
and all liabilities shall be solely for his account" in
Article X be likewise deleted;
WHEREAS, in order to meet the objections of
said Examiner, the objectionable provisions have been
deleted and new Articles of Incorporation deleting said
objectionable provisions have been executed by the
parties and filed with the SEC.
NOW, THEREFORE, for and in consideration of
the premises and the mutual covenant of the parties,
the parties hereby agree as follows:
1. Notwithstanding the deletion of the portions
objected to by the said Examiner, by reason of which
entirely new Articles of Incorporation have been
executed by the parties removing the objected
portions, the actual and real intent of the parties is still
as originally envisioned, namely:
a) That partners R. E. Agpalo, F.
L. Fernandez and A. D. Aquino shall not
in any way be liable for any loss or
liability that may be incurred by the law
firm in the course of its operation;
 b) That all remaining assets upon
dissolution shall accrue exclusively to A.
G. Saludo, Jr. and all liabilities shall be
solely for his account.
2. That the parties hereof hereby bind and
obligate themselves to adhere and observe the real
intent of the parties as above-stated, any provisions in
the Articles of Incorporation as filed to meet the
objections of the SEC Examiner to the contrary
notwithstanding.
IN WITNESS WHEREOF, we have set our
hands this _____ day of May, 1997 at Makati City,
Philippines.
 
[Sgd.]
A.G. SALUDO, JR.
[Sgd.] [Sgd.] [Sgd.]
RUBEN E. FILEMON L. AMADO D. AQUINO
AGPALO FERNANDEZ
 
The foregoing evinces the parties' intention to entirely
shift any liability that may be incurred by SAFA Law Office in
the course of its operation to Saludo, who shall also receive all
the remaining assets of the firm upon its dissolution. This MOU,
however, does not serve to convert SAFA Law Office into a
sole proprietorship. As discussed, SAFA Law Office was
manifestly established as a partnership based on the Articles of
Partnership. The MOU, from its tenor, reinforces this fact. It did
not change the nature of the organization of SAFA Law Office
but only excused the industrial partners from liability.
The law, in its wisdom, recognized the possibility that
partners in a partnership may decide to place a limit on their
individual accountability. Consequently, to protect third persons
dealing with the partnership, the law provides a rule, embodied
in Article 1816 of the Civil Code, which states:
Art. 1816. All partners, including industrial ones,
shall be liable pro rata with all their property and after
all the partnership assets have been exhausted, for the
contracts which may be entered into in the name and
for the account of the partnership, under its signature
 and by a person authorized to act for the partnership.
However, any partner may enter into a separate
obligation to perform a partnership contract.
The foregoing provision does not prevent partners from
agreeing to limit their liability, but such agreement may only be
valid as among them. Thus, Article 1817 of the Civil
Code provides:
Art. 1817. Any stipulation against the liability laid
down in the preceding article shall be void, except as
among the partners.
The MOU is an agreement forged under the foregoing
provision. Consequently, the sole liability being undertaken by
Saludo serves to bind only the parties to the MOU, but never
third persons like PNB.
Considering that the MOU is sanctioned by the law on
partnership, it cannot change the nature of a duly-constituted
partnership. Hence, we cannot sustain Saludo's position that
SAFA Law Office is a sole proprietorship.

II.

Having settled that SAFA Law Office is a partnership, we

hold that it acquired juridical personality by operation of law.
The perfection and validity of a contract of partnership brings
about the creation of a juridical person separate and distinct
from the individuals comprising the partnership. Thus, Article
1768 of the Civil Code provides:
Art. 1768. The partnership has a juridical
personality separate and distinct from that of each of
the partners, even in case of failure to comply with the
requirements of Article 1772, first paragraph.
Article 44 of the Civil Code likewise provides that
partnerships are juridical persons, to wit:
Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for
public interest or purpose, created by law;
 their personality begins as soon as they
have been constituted according to law;
(3) Corporations, partnerships and associations
for private interest or purpose to which the
law grants a juridical personality, separate
and distinct from that of each shareholder,
partner or member. 54
It is this juridical personality that allows a partnership to
enter into business transactions to fulfill its purposes. Article 46
of the Civil Code provides that "[j]uridical persons may acquire
and possess property of all kinds, as well as incur obligations
and bring civil or criminal actions, in conformity with the laws
and regulations of their organization."
SAFA Law Office entered into a contract of lease with
PNB as a juridical person to pursue the objectives of the
partnership. The terms of the contract and the manner in which
the parties implemented it are a glaring recognition of SAFA
Law Office's juridical personality. Thus, the contract stated that
it is being executed by PNB as the lessor and "SALUDO
AGPALO FERNANDEZ & AQUINO, a partnership organized
and existing under the laws of the Republic of the Philippines,"
as the lessee. 55 It also provided that the lessee, i.e., SAFA Law
Office, shall be liable in case of default. 56 Furthermore,
subsequent communications between the parties have always
been made for or on behalf of PNB and SAFA Law Office,
respectively. 57
In view of the above, we see nothing to support the
position of the RTC and the CA, as well as Saludo, that SAFA
Law Office is not a partnership and a legal entity. Saludo's
claims that SAFA Law Office is his sole proprietorship and not a
legal entity fail in light of the clear provisions of the law on
partnership. To reiterate, SAFA Law Office was created as a
partnership, and as such, acquired juridical personality by
operation of law. Hence, its rights and obligations, as well as
those of its partners, are determined by law and not by what the
partners purport them to be.

III.
 In holding that SAFA Law Office, a partnership for the
practice of law, is not a legal entity, the CA cited 58 the case
of Petition for Authority to Continue Use of the Firm Name
"Sycip, Salazar, Feliciano, Hernandez &
Castillo" 59 (Sycip case) wherein the Court held that "[a]
partnership for the practice of law is not a legal entity. It is a
mere relationship or association for a particular purpose. x x x It
is not a partnership formed for the purpose of carrying on trade
or business or of holding property." 60 These are direct quotes
from the US case of In re Crawford's Estate. 61 We hold,
however, that our reference to this US case is an obiter
dictum which cannot serve as a binding precedent. 62
An obiter dictum is an opinion of the court upon a
question which was not necessary to the decision of the case
before it. It is an opinion uttered by the way, not upon the point
or question pending, as if turning aside from the main topic of
the case to collateral subjects, or an opinion that does not
embody the court's determination and is made without
argument or full consideration of the point. It is not a professed
deliberate determination of the judge himself. 63
The main issue raised for the court's determination in
the Sycip case is whether the two petitioner law firms may
continue using the names of their deceased partners in their
respective firm names. The court decided the issue in the
negative on the basis of "legal and ethical impediments." 64 To
be sure, the pronouncement that a partnership for the practice
of law is not a legal entity does not bear on either the legal or
ethical obstacle for the continued use of a deceased partner's
name, inasmuch as it merely describes the nature of a law firm.
The pronouncement is not determinative of the main issue. As
a matter of fact, if deleted from the judgment, the rationale of
the decision is neither affected nor altered.
Moreover, reference of the Sycip case to the In re
Crawford's Estate case was made without a full consideration of
the nature of a law firm as a partnership possessed with legal
personality under our Civil Code. First, we note that while the
Court mentioned that a partnership for the practice of law is not
a legal entity, it also identified petitioner law firms as
partnerships over whom Civil Code provisions on partnership
apply. 65 The Court thus cannot hold that a partnership for the
practice of law is not a legal entity without running into conflict
with Articles 44 and 1768 of the Civil Code which provide that a
partnership has a juridical personality separate and distinct
from that of each of the partners.
Second, our law on partnership does not exclude
partnerships for the practice of law from its coverage. Article
1767 of the Civil Code provides that "[t]wo or more persons
may also form a partnership for the exercise of a profession."
Article 1783, on the other hand, states that "[a] particular
partnership has for its object determinate things, their use or
fruits, or a specific undertaking, or the exercise of a profession
or vocation." Since the law uses the word "profession" in the
general sense, and does not distinguish which professional
partnerships are covered by its provisions and which are not,
then no valid distinction may be made.
Finally, we stress that unlike Philippine law, American law
does not treat of partnerships as forming a separate juridical
personality for all purposes. In the case of Bellis v. United
States, 66 the US Supreme Court stated that law firms, as a
form of partnership, are generally regarded as distinct entities
for specific purposes, such as employment, capacity to be
sued, capacity to hold title to property, and more. 67 State and
federal laws, however, do not treat partnerships as distinct
entities for all purposes. 68
Our jurisprudence has long recognized that American
common law does not treat of partnerships as a separate
juridical entity unlike Philippine law. Hence, in the case
of Campos Rueda & Co. v. Pacific Commercial Co., 69 which
was decided under the old Civil Code, we held:
Unlike the common law, the Philippine statutes
consider a limited partnership as a juridical entity for all
intents and purposes, which personality is recognized
in all its acts and contracts (art. 116, Code of
Commerce). This being so and the juridical personality
of a limited partnership being different from that of its
members, it must, on general principle, answer for, and
suffer, the consequence of its acts as such an entity
capable of being the subject of rights and
obligations. 70 x x x
On the other hand, in the case of Commissioner of
Internal Revenue v. Suter, 71 which was decided under the new
Civil Code, we held:
 It being a basic tenet of the Spanish and
Philippine law that the partnership has a juridical
personality of its own, distinct and separate from that of
its partners (unlike American and English law that does
not recognize such separate juridical personality), the
bypassing of the existence of the limited partnership as
a taxpayer can only be done by ignoring or
disregarding clear statutory mandates and basic
principles of our law. 72 x x x
Indeed, under the old and new Civil Codes, Philippine
law has consistently treated partnerships as having a juridical
personality separate from its partners. In view of the clear
provisions of the law on partnership, as enriched by
jurisprudence, we hold that our reference to In re Crawford's
Estate in the Sycip case is an obiter dictum.

IV.

Having settled that SAFA Law Office is a juridical person,

we hold that it is also the real party-in-interest in the case filed
by Saludo against PNB.
Section 2, Rule 3 of the Rules of Court defines a real
party-in-interest as the one "who stands to be benefited or
injured by the judgment in the suit, or the party entitled to the
avails of the suit." In Lee v. Romillo, Jr., 73 we held that the "real
[party-in-interest]-plaintiff is one who has a legal right[,] while a
real [party-in-interest]-defendant is one who has a correlative
legal obligation whose act or omission violates the legal rights
of the former." 74
SAFA Law Office is the party that would be benefited or
injured by the judgment in the suit before the RTC. Particularly,
it is the party interested in the accounting and/or recomputation
of unpaid rentals and damages in relation to the contract of
lease. It is also the party that would be liable for payment to
PNB of overdue rentals, if that claim would be proven. This is
because it is the one that entered into the contract of lease with
PNB. As an entity possessed of a juridical personality, it has
concomitant rights and obligations with respect to the
transactions it enters into. Equally important, the general rule
under Article 1816 of the Civil Code is that partnership assets
are primarily liable for the contracts entered into in the name of
the partnership and by a person authorized to act on its behalf.
All partners, including industrial ones, are only liable pro
rata with all their property after all the partnership assets have
been exhausted.
In Guy v. Gacott, 75 we held that under Article 1816 of
the Civil Code, the partners' obligation with respect to the
partnership liabilities is subsidiary in nature. It is merely
secondary and only arises if the one primarily liable fails to
sufficiently satisfy the obligation. Resort to the properties of a
partner may be made only after efforts in exhausting
partnership assets have failed or if such partnership assets are
insufficient to cover the entire obligation. 76 Consequently,
considering that SAFA Law Office is primarily liable under the
contract of lease, it is the real party-in-interest that should be
joined as plaintiff in the RTC case.
Section 2, Rule 3 of the Rules of Court requires that
every action must be prosecuted or defended in the name of
the real party-in-interest. As the one primarily affected by the
outcome of the suit, SAFA Law Office should have filed the
complaint with the RTC and should be made to respond to any
counterclaims that may be brought in the course of the
proceeding.
In Aguila, Jr. v. Court of Appeals, 77 a case for
declaration of nullity of a deed of sale was filed against a
partner of A.C. Aguila & Sons, Co. We dismissed the complaint
and held that it was the partnership, not its partners, which
should be impleaded for a cause of action against the
partnership itself. Moreover, the partners could not be held
liable for the obligations of the partnership unless it was shown
that the legal fiction of a different juridical personality was being
used for fraudulent, unfair, or illegal purposes. We held:
Rule 3, §2 of the Rules of Court of 1964, under
which the complaint in this case was filed, provided that
"every action must be prosecuted and defended in the
name of the real party in interest." A real party in
interest is one who would be benefited or injured by the
judgment, or who is entitled to the avails of the suit.
This ruling is now embodied in Rule 3, §2 of the 1997
Revised Rules of Civil Procedure. Any decision
rendered against a person who is not a real party in
interest in the case cannot be executed. Hence, a
 complaint filed against such a person should be
dismissed for failure to state a cause of action.
Under Art. 1768 of the Civil Code, a partnership
"has a juridical personality separate and distinct from
that of each of the partners." The partners cannot be
held liable for the obligations of the partnership unless
it is shown that the legal fiction of a different juridical
personality is being used for fraudulent, unfair, or illegal
purposes. In this case, private respondent has not
shown that A.C. Aguila & Sons, Co., as a separate
juridical entity, is being used for fraudulent, unfair, or
illegal purposes. Moreover, the title to the subject
property is in the name of A.C. Aguila & Sons, Co. and
the Memorandum of Agreement was executed between
private respondent, with the consent of her late
husband, and A.C. Aguila & Sons, Co., represented by
petitioner. Hence, it is the partnership, not its officers or
agents, which should be impleaded in any litigation
involving property registered in its name. A violation of
this rule will result in the dismissal of the complaint. 78
In this case, there is likewise no showing that SAFA Law
Office, as a separate juridical entity, is being used for
fraudulent, unfair, or illegal purposes. Hence, its partners
cannot be held primarily liable for the obligations of the
partnership. As it was SAFA Law Office that entered into a
contract of lease with respondent PNB, it should also be
impleaded in any litigation concerning that contract.
Accordingly, the complaint filed by Saludo should be
amended to include SAFA Law Office as plaintiff. Section
11, 79 Rule 3 of the Rules of Court gives power to the court to
add a party to the case on its own initiative at any stage of the
action and on such terms as are just. We have also held in
several cases 80 that the court has full powers, apart from that
power and authority which are inherent, to amend processes,
pleadings, proceedings, and decisions by substituting as party-
plaintiff the real party-in-interest.
In view of the above discussion, we find it unnecessary to
discuss the other issues raised in the petition. It is unfortunate
that the case has dragged on for more than 10 years even if it
involves an issue that may be resolved by a simple application
of Civil Code provisions on partnership. It is time for trial to
proceed so that the parties' substantial rights may be
adjudicated without further unnecessary delay.
WHEREFORE, the petition is DENIED. Petitioner is
hereby ordered to amend his complaint to include SAFA Law
Office as plaintiff in Civil Case No. 06-678 pending before
Branch 58 of the Regional Trial Court of Makati City, it being
the real party-in-interest.
SO ORDERED.
Peralta, * Del Castillo, Tijam and Gesmundo, ** JJ.,
concur.
 
Footnotes

* Designated as Acting Chairperson of the First Division per Special Order

No. 2582 (Revised) dated August 8, 2018.
** Designated as Acting Member of the First Division per Special Order No.
2560 (Revised) dated May 11, 2018.
1. Rollo, pp. 102-150.
2. Id. at 152-165. Penned by Associate Justice Florito S. Macalino, with
Associate Justices Hakim S. Abdulwahid and Normandie B. Pizarro,
concurring.
3. Id. at 167-169.
4. Id. at 272-273. Issued by Presiding Judge Eugene C. Paras.
5. CA rollo, pp. 85-90.
6. Id. at 85.
7. Rollo, p. 216.
8. Id. at 153; CA rollo, p. 100.
9. Rollo, pp. 226-227.
10. CA rollo, p. 143.
11. Id. at 144.
12. Id. at 94-96.
13. Id. at 101.
14. Id. at 145.
15. Rollo, pp. 227-228.
16. CA rollo, pp. 146-147.
17. Rollo, pp. 194-211.
18.CA rollo, pp. 120-123.
19.Id. at 121.
20.Id. at 124-141.
21.Id. at 138.
22.Id. at 137-138.
23.Rollo, pp. 237-271.
24.Id. at 239.
25.Id. at 272-273. Emphasis in the original.
26.Id. at 274-279.
27.Id. at 275-277.
28.Id. at 300.
29.Id. at 301-326.
30.Supra note 2.
31.Rollo, p. 164.
32.Id. at 157.
33.CA rollo, pp. 103-105.
34.Rollo, pp. 158-159.
35.Id. at 160-161.
36.Sec. 15. Entity without juridical personality as defendant. — When two or
more persons not organized as an entity with juridical personality
enter into a transaction, they may be sued under the name by which
they are generally or commonly known.

xxx xxx xxx

37.Rollo, p. 162.
38.Sec. 12. Bringing new parties. — When the presence of parties other
than those to the original action is required for the granting of
 complete relief in the determination of a counterclaim or cross-claim,
the court shall order them to be brought in as defendants, if
jurisdiction over them can be obtained.
39.Rollo, pp. 162-163.
40.Id. at 163-164.
41.Id. at 170-191.
42.Id. at 449-454.
43.Id. at 167-169. Citations omitted.
44.Id. at 110-111.
45.CA rollo, pp. 202-213.
46.Id. at 204.
47.Id. at 206.
48.Id. at 207.
49.Id. at 206, 210.
50.Item V of the Articles of Partnership provides:
   The term for which the partnership is to exist shall be for an indefinite
period from date hereof, until dissolved for any cause recognized by
law. Id. at 205.
51.Id. at 207.
52.Item X of the Articles of Partnership provides:
   That the partnership shall be dissolved by agreement of the partners or
for any cause as and in accordance with the manner provided by law,
in which event the Articles of Dissolution of said partnership shall be
filed with the Securities and Exchange Commission. All remaining
assets upon dissolution shall accrue exclusively to A.G. Saludo, Jr.
and all liabilities shall be solely for his account. Id. at 212.
53.Id. at 103-105. Italics and emphasis in the original.
54.Emphasis supplied.
55.CA rollo, p. 85. Italics supplied.
56.The lease contract provides:
   SECTION 12. DEFAULT AND SURRENDER OF LEASED PREMISES.
—
 xxx xxx xxx

   In addition[,] the Lessee shall pay the Lessor (i) all accrued and unpaid
rents and penalty charges; (ii) all expenses incurred by the Lessor in
repossessing and [clearing] the Leased Premises; and (iii) any other
damages incurred by the Lessor due to the default of the Lessee. Id.
at 88.
57.Id. at 91-102.
58.Id. at 160-161.
59.July 30, 1979, 92 SCRA 1.
60.Id. at 9.
61.Cited as 184 NE 2d 779, 783. Id.
62.See Republic v. Gingoyon, G.R. No. 166429, December 19, 2005, 478
SCRA 474.
63.Advincula-Velasquez v. Court of Appeals, G.R. No. 111387, June 8,
2004, 431 SCRA 165, 188, citing Auyong Hian v. Court of Tax
Appeals, G.R. No. L-28782, September 12, 1974, 59 SCRA 110, 120
and People v. Macadaeg, 91 Phil. 410, 413 (1952).
64.Petition for Authority to Continue Use of the Firm Name "Sycip, Salazar,
Feliciano, Hernandez & Castillo," supra at 59.
65.Id. at 7.
66.417 U.S. 85 (1974).
67.Id. at 97.
68.Id. at 101.
69.44 Phil. 916 (1922).
70.Id. at 918.
71.G.R. No. L-25532, February 28, 1969, 27 SCRA 152.
72.Id. at 158.
73.G.R. No. L-60937, May 28, 1988, 161 SCRA 589.
74.Id. at 595. Italics supplied.
75.G.R. No. 206147, January 13, 2016, 780 SCRA 579.
76.Id. at 593.
 77.G.R. No. 127347, November 25, 1999, 319 SCRA 246.
78.Id. at 253-254. Citations omitted.
79.Sec. 11. Misjoinder and non-joinder of parties. — Neither misjoinder nor
non-joinder of parties is ground for dismissal of an action. Parties
may be dropped or added by order of the court on motion of any party
or on its own initiative at any stage of the action and on such terms as
are just. Any claim against a misjoined party may be severed and
proceeded with separately.
80.See Salvador v. Court of Appeals, G.R. No. 109910, April 5, 1995, 243
SCRA 239, 257; Domingo v. Scheer, G.R. No. 154745, January 29,
2004, 421 SCRA 468, 484; and Pacaña-Contreras v. Rovila Water
Supply, Inc., G.R. No. 168979, December 2, 2013, 711 SCRA 219,
244.

|||  (Saludo, Jr. v. Philippine National Bank, G.R. No. 193138, [August 20, 2018])

SECOND DIVISION

[G.R. No. 199562. January 16, 2019.]

BANK OF THE PHILIPPINE ISLANDS and ANA C.

GONZALES, petitioners, vs. SPOUSES
FERNANDO V. QUIAOIT and NORA L.
QUIAOIT, respondents.
 DECISION

CARPIO, J  :p

The Case

Before the Court is a petition for review

on certiorari 1 assailing the 22 September 2011 Decision 2 and
the 29 November 2011 Resolution 3 of the Court of Appeals in
CA-G.R. CV No. 94141. The Court of Appeals affirmed the 15
May 2009 Decision 4 of the Regional Trial Court of Quezon
City, Branch 100 in Civil Case No. Q-00-42619.

The Antecedent Facts

Fernando V. Quiaoit (Fernando) maintains peso and

dollar accounts with the Bank of the Philippine Islands (BPI)
Greenhills-Crossroads Branch (BPI Greenhills). On 20 April
1999, Fernando, through Merlyn Lambayong (Lambayong),
encashed BPI Greenhills Check No. 003434 dated 19 April
1999 for US$20,000.
In a complaint filed by Fernando and his wife Nora L.
Quiaoit (Nora) against BPI, they alleged that Lambayong did
not count the US$20,000 that she received because the money
was placed in a large Manila envelope. They also alleged that
BPI did not inform Lambayong that the dollar bills were marked
with its "chapa" and the bank did not issue any receipt
containing the serial number of the bills. Lambayong delivered
the dollar bills to the spouses Quiaoit in US$100 denomination
in US$10,000 per bundle. Nora then purchased plane tickets
worth US$13,100 for their travel abroad, using part of the
US$20,000 bills withdrawn from BPI.
On 22 April 1999, the spouses Quiaoit left the Philippines
for Jerusalem and Europe. Nora handcarried US$6,900 during
the tour. The spouses Quiaoit alleged that on 19 May 1999,
Nora was placed in a shameful and embarrassing situation
when several banks in Madrid, Spain refused to exchange
some of the US$100 bills because they were counterfeit. Nora
was also threatened that she would be taken to the police
station when she tried to purchase an item in a shop with the
dollar bills. The spouses Quiaoit were also informed by their
friends, a priest and a nun, that the US dollar bills they gave
them were refused by third persons for being counterfeit. Their
aunt, Elisa Galan (Galan) also returned, via DHL, the five
US$100 bills they gave her and advised them that they were
not accepted for deposit by foreign banks for being
counterfeit. 
CAIHTE

On 21 May 1999, while the spouses Quiaoit were still

abroad, they asked their daughter Maria Isabel, who was
employed with BPI Makati, to relay their predicament to BPI
Greenhills. However, Ana C. Gonzales 5 (Gonzales), branch
manager of BPI Greenhills, failed to resolve their concern or
give them a return call. When the spouses Quiaoit returned,
they personally complained to Gonzales who went to
Fernando's office with three bank personnel. Gonzales took
from Fernando the remaining 44 dollar bills worth US$4,400
and affixed her signature on the photocopy of the bills,
acknowledging that she received them. Chito Bautista
(Bautista), a bank representative, and another bank employee
informed the spouses Quiaoit that an investigation would be
conducted but they were not furnished any report. They
gathered from a telephone conversation with Clemente Banson
(Banson), the bank-designated investigator, that the dollar bills
came from BPI Vira Mall and were marked with "chapa" by the
BPI Greenhills. On 9 June 1999, Fernando tried to submit to
Banson the five US$100 bills returned by Galan but Banson
refused to accept them because they were counterfeit. On 18
August 1999, Gonzales informed Fernando that the absence of
the identification mark ("chapa") on the dollar bills meant they
came from other sources and not from BPI Greenhills.
On 7 July 1999, Fernando withdrew the remaining
balance of his account through his representative, Henry
Mainot (Mainot). The dollar bills withdrawn by Mainot were
marked and the serial numbers were listed. On 7 July 1999,
Fernando's brother Edgardo encashed a US$500 check from
BPI San Juan Branch and while the dollar bills were not
marked, the serial numbers thereof were listed.
The spouses Quiaoit alleged that Nora Cayetano, area
manager of BPI San Juan, called up Fernando and promised to
do something about the refund of the US$4,400 they
surrendered to Gonzales. On 17 January 2000, the spouses
Quiaoit demanded in writing for the refund of the US$4,400
from Gonzales. On 9 February 2000, BPI sent its written refusal
to refund or reimburse the US$4,400.
The spouses Quiaoit alleged that BPI failed in its duty to
ensure that the foreign currency bills it furnishes its clients are
genuine. According to them, they suffered public
embarrassment, humiliation, and possible imprisonment in a
foreign country due to BPI's negligence and bad faith.
BPI countered that it is the bank's standing policy and
part of its internal control to mark all dollar bills with "chapa"
bearing the code of the branch when a foreign currency bill is
exchanged or withdrawn. BPI alleged that any local or foreign
currency bill deposited or withdrawn from the bank undergoes
careful and meticulous scrutiny by highly-trained and
experienced personnel for genuineness and authenticity. BPI
alleged that the US$20,000 in US$100 bills encashed by
Fernando through Lambayong were inspected, counted,
personally examined, and subjected to a counterfeit detector
machine by the bank teller under Gonzales' direct supervision.
Gonzales also personally inspected and "piece-counted" the
dollar bills which bore the identifying "chapa" and examined
their genuineness and authenticity. BPI alleged that after its
investigation, it was established that the 44 US$100 bills
surrendered by the spouses Quiaoit were not the same as the
dollar bills disbursed to Lambayong. The dollar bills did not bear
the identifying "chapa" from BPI Greenhills and as such, they
came from another source.

The Decisions of the Trial Court and the Court of Appeals

In its 15 May 2009 Decision, the Regional Trial Court of

Quezon City, Branch 100 (trial court), ruled in favor of the
spouses Quiaoit. The dispositive portion of the trial court's
Decision reads:
WHEREFORE, premises considered, judgment
is hereby rendered in favor of the plaintiffs and against
the defendants. HEITAD

Accordingly, defendants are ordered to pay

jointly and severally the plaintiffs the following:
 1. the amount of Four Thousand Four Hundred
US Dollars (US$4,400) as and for actual
damages;
2. the amount of Two Hundred Thousand Pesos
(P200,000.00) as and for moral damages;
3. the amount of Fifty Thousand Pesos
(P50,000.00) as and for exemplary
damages;
4. the amount of Fifty Thousand Pesos
(P50,000.00) as and for attorney's fees.
SO ORDERED. 6
In its 22 September 2011 Decision, the Court of Appeals
affirmed the trial court's Decision. The Court of Appeals ruled
that BPI did not follow the normal banking procedure of listing
the serial numbers of the dollar bills considering the reasonable
length of time from the time Fernando advised them of the
withdrawal until Lambayong's actual encashment of the check.
The Court of Appeals noted that BPI only listed down the serial
numbers of the dollar bills when Fernando, through Edgardo,
withdrew his remaining money from the bank. According to the
Court of Appeals, BPI had been negligent in not listing down
the serial numbers of the dollar bills. The Court of Appeals
further ruled that, assuming BPI had not been negligent, it had
the last clear chance or the last opportunity to avert the injury
incurred by the spouses Quiaoit abroad. The Court of Appeals
ruled that BPI was the proximate, immediate, and efficient
cause of the loss incurred by the spouses Quiaoit.
The Court of Appeals noted that BPI failed to return the
call and to attend to the needs of the spouses Quiaoit even
when their daughter Maria Isabel called the attention of the
bank about the incidents abroad. Gonzales also failed to
disclose to Fernando about the identifying "chapa" when she
accepted the US$4,400 from him.
The dispositive portion of the Court of Appeals' Decision
reads:
WHEREFORE, premises considered, the
Decision dated May 15, 2009 of the RTC, Branch 100,
Quezon City in Civil Case No. Q-00-42619 is hereby
AFFIRMED.
 SO ORDERED. 7
BPI filed a motion for reconsideration. In its 29 November
2011 Resolution, the Court of Appeals denied the motion for
lack of merit.
Thus, BPI came to this Court for relief.
BPI raised the following issues in its petition:
A. The Court of Appeals erred in its legal conclusions in
disregarding the preponderance of evidence
showing no irreconcilable inconsistencies in the
testimonies of the bank's witnesses. The "listing
process" being imposed by the [court a quo] did
not impeach the credibility of petitioner[s']
witnesses which proved that the 44 pieces of fake
USD100 dollar bills shown by Mr. [Quiaoit] could
not have come from BPI Greenhills-Crossroads
branch.
B. The Court of Appeals erred in its legal conclusions by
holding that there [was] "gross negligence
amounting to bad faith" because petitioner bank,
through its officers and employees[,] followed its
[then] existing procedure in handling dollar
withdrawals. Respondents' own negligence was
the proximate cause of the loss. 8

The Issues

Whether the counterfeit US dollar bills came from BPI;

Whether BPI exercised due diligence in handling the
withdrawal of the US dollar bills; and
Whether BPI is liable for damages. ATICcS

The Ruling of this Court

We deny the petition.

BPI failed to exercise due diligence

in the transaction
 In Spouses Carbonell v. Metropolitan Bank and Trust
Company, 9 the Court emphasized that the General Banking
Act of 2000 demands of banks the highest standards of integrity
and performance. The Court ruled that banks are under
obligation to treat the accounts of their depositors with
meticulous care. 10 The Court ruled that the bank's compliance
with this degree of diligence has to be determined in
accordance with the particular circumstances of each case. 11
In this case, BPI failed to exercise the highest degree of
diligence that is not only expected but required of a banking
institution.
It was established that on 15 April 1999, Fernando
informed BPI to prepare US$20,000 that he would withdraw
from his account. The withdrawal, through encashment of BPI
Greenhills Check No. 003434, was done five days later, or on
20 April 1999. BPI had ample opportunity to prepare the dollar
bills. Since the dollar bills were handed to Lambayong inside an
envelope and in bundles, Lambayong did not check them.
However, as pointed out by the Court of Appeals, BPI could
have listed down the serial numbers of the dollar bills and
erased any doubt as to whether the counterfeit bills came from
it. While BPI Greenhills marked the dollar bills with "chapa" to
identify that they came from that branch, Lambayong was not
informed of the markings and hence, she could not have
checked if all the bills were marked.
BPI insists that there is no law requiring it to list down the
serial numbers of the dollar bills. However, it is well-settled that
the diligence required of banks is more than that of a good
father of a family. 12 Banks are required to exercise the highest
degree of diligence in its banking transactions. 13 In releasing
the dollar bills without listing down their serial numbers, BPI
failed to exercise the highest degree of care and diligence
required of it. BPI exposed not only its client but also itself to
the situation that led to this case. Had BPI listed down the serial
numbers, BPI's presentation of a copy of such listed serial
numbers would establish whether the returned 44 dollar bills
came from BPI or not.
We agree with the Court of Appeals that the action of BPI
is the proximate cause of the loss suffered by the spouses
Quiaoit. Proximate cause is defined as the cause which, in
natural and continuous sequence, unbroken by any efficient
intervening cause, produces injury and without which the result
would not have occurred. 14 Granting that Lambayong counted
the two bundles of the US$100 bills she received from the
bank, there was no way for her, or for the spouses Quiaoit, to
determine whether the dollar bills were genuine or counterfeit.
They did not have the expertise to verify the genuineness of the
bills, and they were not informed about the "chapa" on the bills
so that they could have checked the same. BPI cannot pass the
burden on the spouses Quiaoit to verify the genuineness of the
bills, even if they did not check or count the dollar bills in their
possession while they were abroad.
The Court has also applied the doctrine of last clear
chance in banking transactions. In Allied Banking Corporation
v. Bank of the Philippine Islands, 15 the Court explained:
The doctrine of last clear chance, stated broadly,
is that the negligence of the plaintiff does not preclude
a recovery for the negligence of the defendant where it
appears that the defendant, by exercising reasonable
care and prudence, might have avoided injurious
consequences to the plaintiff notwithstanding the
plaintiff's negligence. The doctrine necessarily
assumes negligence on the part of the defendant and
contributory negligence on the part of the plaintiff, and
does not apply except upon that assumption. Stated
differently, the antecedent negligence of the plaintiff
does not preclude him from recovering damages
caused by the supervening negligence of the
defendant, who had the last fair chance to prevent the
impending harm by the exercise of due diligence.
Moreover, in situations where the doctrine has been
applied, it was defendant's failure to exercise such
ordinary care, having the last clear chance to avoid
loss or injury, which was the proximate cause of the
occurrence of such loss or injury. 16
As pointed out by the Court of Appeals, BPI had the last
clear chance to prove that all the dollar bills it issued to the
spouses Quiaoit were genuine and that the counterfeit bills did
not come from it if only it listed down the serial numbers of the
bills. BPI's lapses in processing the transaction fall below the
extraordinary diligence required of it as a banking institution.
Hence, it must bear the consequences of its action.  TIADCc
 Respondents are entitled to moral damages and
attorney's fees.
We sustain the award of moral damages to the spouses
Quiaoit.
In Pilipinas Bank v. Court of Appeals, 17 the Court
sustained the award of moral damages and explained that while
the bank's negligence may not have been attended with malice
and bad faith, it caused serious anxiety, embarrassment, and
humiliation to respondents. We apply the same in this case. In
this case, it was established that the spouses Quiaoit suffered
serious anxiety, embarrassment, humiliation, and even threats
of being taken to police authorities for using counterfeit bills.
Hence, they are entitled to the moral damages awarded by the
trial court and the Court of Appeals.
Nevertheless, we delete the award of exemplary
damages since it does not appear that BPI's negligence was
attended with malice and bad faith. We sustain the award of
attorney's fees because the spouses Quiaoit were forced to
litigate to protect their rights.
WHEREFORE, we DENY the petition. We AFFIRM the
22 September 2011 Decision and the 29 November 2011
Resolution of the Court of Appeals in CA-G.R. CV No. 94141
with MODIFICATION by deleting the award of exemplary
damages.
SO ORDERED.
Perlas-Bernabe, Caguioa, J.C. Reyes,
Jr. and Hernando,  * JJ., concur.
 
Footnotes

*Designated additional member per Special Order No. 2630 dated 18

December 2018.
1.Under Rule 45 of the Revised Rules of Court.
2.Rollo, pp. 34-64. Penned by Associate Justice Remedios A. Salazar-
Fernando, with Associate Justices Michael P. Elbinias and Elihu A.
Ybañez concurring.
 3.Id. at 66-67. Penned by Associate Justice Remedios A. Salazar-Fernando,
with Associate Justices Jane Aurora C. Lantion and Elihu A. Ybañez
concurring.
4.Petitioners did not attach a copy of the trial court's decision with the
petition.
5.Also referred to in the records as "Ana C. Gonzalez."
6.Rollo, pp. 34-35.
7.Id. at 64.
8.Id. at 18.
9.G.R. No. 178467, 26 April 2017, 825 SCRA 1.
10.Id.
11.Id.
12.Philippine National Bank v. Spouses Cheah, 686 Phil. 760 (2012).
13.Id.
14.Id.
15.705 Phil. 174 (2013).
16.Id. at 182-183.
17.304 Phil. 601 (1994), citing Bank of the Philippine Islands v. Intermediate
Appellate Court, 283 Phil. 331 (1992).

 (Bank of the Philippine Islands v. Spouses Quiaoit, G.R. No. 199562, [January 16,
|||

2019])

SECOND DIVISION

[G.R. No. 228807. February 11, 2019.]

 CARLITO B.
LINSANGAN, petitioner, vs. PHILIPPINE DEPOSIT
INSURANCE CORPORATION, respondent.

DECISION

J.C. REYES, JR., J  :p

Assailed in this petition for review on certiorari are the

March 31, 2016 Decision 1 and the December 19, 2016
Resolution 2 of the Court of Appeals (CA) in CA-G.R. SP No.
137172 which affirmed the Philippine Deposit Insurance
Corporation's (PDIC's) denial of petitioner Carlito B.
Linsangan's (petitioner's) deposit insurance claim on July 12,
2013.

The Antecedents

In a Resolution dated May 23, 2013, the Monetary Board

(MB) of the Bangko Sentral ng Pilipinas (BSP) ordered the
closure of the Cooperative Rural Bank of Bulacan, Inc. (CRBBI)
and placed it under PDIC's receivership. PDIC took over
CRBBI's assets and affairs and examined its records in order to
determine the insured deposits.
Petitioner filed a claim for payment of deposit insurance
for his Special Incentive Savings Account (SISA) No. 00-44-
10750-9, which had a balance of P400,000.00 at the time of
CRBBI's closure.
Upon investigation, PDIC found that petitioner's account
originated from the account of "Cornelio Linsangan or Ligaya
Linsangan" (source account) with an opening balance of
P1,531,993.42. On December 13, 2012, the source account
was closed and its balance of P1,544,081.48 was transferred
and distributed to four accounts.
PDIC then conducted a tracing of relationship for the
purpose of determining beneficial ownership of accounts and it
discovered that petitioner is not a qualified relative 3 of Cornelio
Linsangan and Ligaya Linsangan (Cornelio and Ligaya).
 Consequently, pursuant to the provisions
of PDIC Regulatory Issuance No. 2009-03, par. V, petitioner's
account was consolidated with the other legitimate deposits of
Cornelio and Ligaya for purposes of computing the insurable
deposit. PDIC considered the source account holders Cornelio
and Ligaya as the real owners of the four resulting accounts.
Thus, they were only entitled to the maximum deposit insurance
of P500,000.00.
On July 12, 2013, PDIC denied petitioner's claim. Then,
on August 6, 2014, it also denied petitioner's request for
reconsideration. The PDIC ruled that under PDIC Regulatory
Issuance No. 2009-03, the transferee is considered the
beneficial owner of the deposit provided that (a) the transfer is
for valid consideration as shown by the documents supporting
the transfer which should be in the custody of the bank upon
takeover by PDIC; or (b) he/she is a qualified relative of the
transferor. It held that CRBBI was not furnished a copy of any
document which could prove the transfer of the deposit from the
transferors to petitioner. The PDIC added that the documents
which petitioner submitted did not show that he is a relative of
documents which petitioner submitted did not show that he is a
relative of Cornelio and Ligaya within the second degree of
consanguinity or affinity. It concluded that the transferors
should be considered the beneficial owners of the transferred
deposit. 
cSaATC

Aggrieved, petitioner filed a petition for certiorari before

the CA.
The CA Ruling

In a Decision dated March 31, 2016, the CA ruled that

the PDIC did not act with grave abuse of discretion because it
merely followed the applicable law in determining whether
petitioner's account was insurable or not. It noted that both
petitioner and the transferor failed to provide CRBBI of the
details regarding the splitting of deposit and the circumstances
behind such transfer. The appellate court declared
that PDIC had sufficient reason to doubt the validity of the
splitting of accounts and subject them to scrutiny as there were
indicators that the source account was divided and distributed
to newly-opened and existing accounts to make them covered
under the PDIC insurance. It held that PDIC's denial of
insurance deposit does not invalidate the alleged donation, nor
will it result in the total non-payment of said deposit because
the latter may still be paid from the assets of CRBBI. Thus, it
disposed:
WHEREFORE, the Petition for Certiorari [is]
hereby DENIED for lack of merit. Accordingly, the
denial of Carlito B. Linsangan's claim for Deposit
Insurance from the Philippine Deposit Insurance
[Corporation] is hereby AFFIRMED.
SO ORDERED. 4
Petitioner moved for reconsideration, but the same was
denied by the CA in a Resolution dated December 19, 2016.
Hence, this petition for review on certiorari wherein petitioner
assails the denial of his deposit insurance claim.
Petitioner argues that the transfer of funds to his account
is not deposit splitting because the transfer took place more
than 120 days prior to the closure of the bank; that as stated
in PDIC Regulatory Issuance No. 2009-03, splitting of deposits
occurs whenever an account is broken down and transferred
into two or more accounts in the name/s of natural or juridical
person/s or entity/entities who have no beneficial ownership on
transferred deposits in their names within 120 days immediately
preceding or during bank-declared bank holiday, or immediately
preceding a closure order issued by the MB of the BSP; and
that he was not informed of the requirement that the documents
proving transfer must be in the records of the bank at the time
of its closure. 5
In its Comment, 6 respondent counters that the joint
account of Cornelio and Ligaya was split and transferred to
different persons, thus, the provisions of PDIC Regulatory
Issuance No. 2009-03, which was published in the Philippine
Star on October 10, 2009, find application in determining the
beneficial ownership of the resulting deposit accounts; that the
alleged donation was not supported by documents evidencing
transfer of account in the records of the bank; and that there is
no premium if the splitting of deposit was done within 120 days
preceding a bank closure, because if an account was split prior
to the 120-day period, PDIC Regulatory Issuance No. 2009-03
steps in and determines the beneficial ownership of the
resulting accounts, whereas, if the splitting of deposit was made
within 120 days preceding the bank closure, the act is a
criminal offense and the director, officer, employee, or agent of
the bank who facilitated the splitting would be held liable.
In his Reply, 7 petitioner contends that the bank failed to
inform him of PDIC Regulatory Issuance No. 2009-03, thus, the
provisions thereof are not binding upon him; that requiring the
submission of transfer documents prior to the takeover
by PDIC of the bank violates his constitutional right against
deprivation of property without due process; and that
demanding the transfer documents to be kept in a particular
location adds another requisite for the validity of donation.

The Court's Ruling

The petition lacks merit.

The PDIC was created by Republic Act (R.A.) No.
3591 8 on June 22, 1963 as an insurer of deposits in all banks
entitled to the benefits of insurance under the PDIC Charter to
promote and safeguard the interests of the depositing public by
way of providing permanent and continuing insurance coverage
of all insured deposits. 9
Based on its charter, the PDIC has the duty to grant or
deny claims for deposit insurance. "The term 'insured deposit'
means the amount due to any bona fide depositor for legitimate
deposits in an insured bank net of any obligation of the
depositor to the insured bank as of the date of closure, but not
to exceed Five Hundred Thousand Pesos (P500,000.00). x x x
In determining such amount due to any depositor, there shall be
added together all deposits in the bank maintained in the same
right and capacity for his benefit either in his own name or in
the names of others." 10 To determine beneficial ownership of
legitimate deposits which are entitled to deposit insurance, the
provisions of PDIC Regulatory Issuance No. 2009-03
provides: cHDAIS

III. n Determination of Beneficial Ownership of

Legitimate Deposits
1. In determining the depositor entitled to insured deposit
payable by the PDIC, the registered owner/holder
of a Legitimate Deposit in the books of the issuing
bank shall be recognized as the depositor entitled
 to deposit insurance, except as otherwise
provided by this Issuance.
2. Where the records of the bank show that one or
several deposit accounts in the name of one or
several other persons or entities are maintained in
the same right and capacity for the benefit of a
depositor, PDIC shall recognize said depositor as
the beneficial owner of the account/s entitled to
deposit insurance.
3. here a deposit account/s with an outstanding balance
of more than the maximum deposit insurance
coverage is/are broken up and transferred to one
or more account/s, PDIC shall recognize the
transferor as the beneficial owner of the resulting
deposit accounts entitled to deposit insurance,
unless the transferee/s can prove that:
a. The break-up and transfer of Legitimate Deposit
was made under all of the following
conditions:
i. The break-up and transfer of Legitimate
Deposit to the transferee is for a
Valid Consideration;
ii. The details or information for the transfer,
which establish the validity of the
transfer from the transferor to the
transferee, are contained in any of
the Deposit Account Records of the
bank; and
iii. Copies of documents, which show the
details or information for the transfer,
such as[,] but not limited to[,]
contracts, agreements, board
resolutions, orders of the courts or of
competent government
body/agency, are in the custody or
possession of the bank upon
takeover by PDIC.
b. He/she is a Qualified Relative of the transferor,
in which case PDIC shall recognize the
transferee as the beneficial owner of the
 resulting deposit accounts. Relationship
shall be proven by relevant documents
such as, but not limited to, birth certificates
and marriage certificates.
II. Definition of Terms
xxx xxx xxx
f. Qualified Relative — means a relative
within the second degree of
consanguinity or affinity.
Petitioner, however, argues that the foregoing provisions
are not applicable to him because the transfer did not occur
within 120 days immediately preceding bank closure as stated
in PDIC Regulatory Issuance No. 2009-03, viz.:
IV. Deposit Splitting
xxx xxx xxx
3. Elements. The elements of Deposit Splitting are as
follows:
a. Existence of source account/s in a bank with a
balance or aggregate balance of more than
the MDIC;
b. There is a break up and transfer of said
account/s into two or more existing or new
accounts in the name of another person/s
or entity/entities;
c. The transferee/s have no Beneficial Ownership
over the transferred funds; and
d. Transfer occurred within 120 days immediately
preceding or during a bank-declared bank
holiday, or immediately preceding bank
closure.
4. The PDIC shall deem that there exists Deposit
Splitting for the purpose of availing of the
maximum deposit insurance coverage when all of
these elements are present.
5. The bank, its directors, officers, employees, or agents
are prohibited from and shall not in any way
participate or aid in, or otherwise abet Deposit
Splitting activities as herein defined, nor shall they
 promote or encourage the commission of Deposit
Splitting among the bank's depositors. The
approval by a bank officer or employee of a
transaction resulting to Deposit Splitting shall
be prima facie evidence of participation in Deposit
Splitting activities. 
ISHCcT

Petitioner's argument is erroneous. In deposit splitting,

there is a presumption that the transferees have no beneficial
ownership considering that the source account, which
exceeded the maximum deposit insurance coverage, was split
into two or more accounts within 120 days immediately
preceding bank closure. On the other hand, in cases wherein
the transfer into two or more accounts occurred before the 120-
day period, the PDIC does not discount the possibility that there
may have been a transfer for valid consideration, but in the
absence of transfer documents found in the records of the bank
at the time of closure, the presumption arises that the source
account remained with the transferor. Consequently, even if the
transfer into different accounts was not made within 120 days
immediately preceding bank closure, the grant of deposit
insurance to an account found to have originated from another
deposit is not automatic because the transferee still has to
prove that the transfer was for a valid consideration through
documents kept in the custody of the bank.
In this case, even assuming that Cornelio donated the
amount contained in the subject savings account to petitioner,
not one document evidencing the alleged donation is in the
custody or possession of the bank upon takeover by PDIC.
Thus, the PDIC properly relied on the records of the bank which
showed that Cornelio's accounts remained in his name and for
his account. Moreover, even if the Court disregards the
submission of transfer documents, petitioner could not be
considered the beneficial owner of the resulting deposit account
because he is not a qualified relative of the transferor. Being
the son of Cornelio's cousin, petitioner is already a fifth degree
relative of the transferor, 11 far from the requirement that the
transferee must be a relative within the second degree of
consanguinity or affinity.
As regards petitioner's contention that the provisions
of PDIC Regulatory Issuance No. 2009-03 do not apply to him
because he was not personally notified of the contents thereof
by CRBBI, the same deserves scant consideration. Ignorantia
legis non excusat remains a valid dictum. Here, it is settled
that PDIC Regulatory Issuance No. 2009-03 was published in a
newspaper of general circulation. Hence, the publication
operated as constructive notice to all owners of bank deposits.
Personal notice to all citizens of promulgated laws and
regulations is not required.
Considering the above disquisitions, it is sufficiently
established that the PDIC did not commit any grave abuse of
discretion in denying petitioner's claim for deposit insurance.
WHEREFORE, the petition is DENIED. The March 31,
2016 Decision and the December 19, 2016 Resolution of the
Court of Appeals in CA-G.R. SP No. 137172
are AFFIRMED.  CAacTH

SO ORDERED.
Carpio, Perlas-Bernabe, Caguioa and Hernando,  * JJ.,
concur.
 
Footnotes

*Additional Member per S.O. No. 2630 dated December 18, 2018.
1.Penned by Associate Justice Edwin D. Sorongon, with Associate Justices
Ricardo R. Rosario and Marie Christine Azcarraga-Jacob,
concurring; rollo, pp. 33-42.
2.Id. at 45-47.
3.PDI Regulatory Issuance No. 2009-03.
   II. Definition of Terms

xxx xxx xxx

   f. Qualified Relative — means a relative within the second degree of

consanguinity or affinity (PDIC Regulatory Issuance No. 2002-03).
4.Rollo, p. 41.
5. Id. at 18-28.
6. Id. at 62-71.
7. Id. at 74-85.
 8. AN ACT ESTABLISHING THE PHILIPPINE DEPOSIT INSURANCE
CORPORATION, DEFINING ITS POWERS AND DUTIES AND FOR
OTHER PURPOSES.
9. Phil. Deposit Insurance Corp. v. Phil. Countryside Rural Bank, Inc., 655
Phil. 313, 337 (2011).
10. Republic Act No. 3591, Sec. 3 (g).
11. Petition for review; rollo, p. 12.
n Note from the Publisher: Copied verbatim from the official copy. Irregular
numerical sequence.

 (Linsangan v. Philippine Deposit Insurance Corp., G.R. No. 228807, [February 11,
|||

2019])
 SECOND DIVISION

[G.R. No. 233850. July 1, 2019.]

TRADE AND INVESTMENT DEVELOPMENT

CORPORATION OF THE PHILIPPINES also
known as PHILIPPINE EXPORT-IMPORT CREDIT
AGENCY, petitioner, vs. PHILIPPINE VETERANS
BANK, respondent.

DECISION

CAGUIOA, J  : p

Before the Court is a Petition for Review

on Certiorari 1 (Petition) under Rule 45, in relation to Rule 41,
Section 2 (c), of the Rules of Court filed by petitioner Trade and
Investment Development Corporation (petitioner TIDCORP),
also known as Philippine Export-Import Credit Agency
(PhilEXIM), assailing the Order 2 dated August 16, 2017
(assailed Order) issued by the Regional Trial Court of Makati
City, Branch 150 (RTC) in Civil Case No. R-MKT-16-02011-CV,
which granted respondent Philippine Veterans Bank's
(respondent PVB) Motion for Summary Judgment 3 dated
February 14, 2017.
The Facts and Antecedent Proceedings
As culled from the records of the instant case, the
pertinent facts and antecedent proceedings are as follows:
The instant case stems from a Complaint for Specific
Performance 4 (Complaint) filed on September 22, 2016 before
the RTC by respondent PVB against petitioner TIDCORP.
In its Complaint, respondent PVB alleged that on
November 23, 2011, PVB, together with other banking
institutions (Series A Noteholders), entered into a Five-Year
Floating Rate Note Facility Agreement 5 (NFA) with debtor
Philippine Phosphate Fertilizer Corporation (PhilPhos), a PEZA
registered domestic corporation situated in Leyte, up to the
aggregate amount of P5 billion. Under the said NFA,
respondent PVB committed the amount of P1 billion.
 To secure payment of the Series A Notes, petitioner
TIDCORP, with the express conformity of PhilPhos, executed
a Guarantee Agreement 6 dated November 23, 2011
(Guarantee Agreement) whereby petitioner TIDCORP agreed
to guarantee the payment of the guaranty obligation to the
extent of ninety (90%) of the outstanding Series A Notes,
including interest, on a rolling successive three-month period
commencing on the first drawdown date and ending on the
maturity date of the Series A Notes.
On November 8, 2013, Typhoon Yolanda made landfall
in Central Visayas, which resulted in widespread devastation in
the province of Leyte where PhilPhos' manufacturing plant was
situated. Due to the damage brought by said typhoon to
PhilPhos' manufacturing facilities, it failed to resume its
operations.
Thus, on September 17, 2015, PhilPhos filed a Petition
for Voluntary Rehabilitation under the Financial Rehabilitation
and Insolvency Act of 2010 7 (FRIA) before the Regional Trial
Court of Ormoc City, Branch 12 (Rehabilitation Court). On
September 22, 2015, the Rehabilitation Court issued a
Commencement Order, which included a Stay Order. 8  CAIHTE

On November 5, 2015, or 45 days as provided in the

Guarantee Agreement, 9 respondent PVB filed its Notice of
Claim 10 with petitioner TIDCORP, which received the same on
November 6, 2015.
In a Letter 11 dated November 12, 2015, petitioner
TIDCORP declined to give due course to respondent PVB's
Notice of Claim, invoking the Stay Order issued by the
Rehabilitation Court. Despite several demands 12 made by
respondent PVB pursuant to the Guarantee Agreement,
petitioner TIDCORP maintained its position to deny PVB's claim
due to the issuance of the said Stay Order.
In its Complaint, respondent PVB asserted that "[t]o
secure the payment of the Series A Notes, [petitioner]
TIDCORP, with the express conformity of PhilPhos, executed
a Guarantee Agreement with the Series A Noteholders
(except CBC) x x x, whereby, among others, it: (a) agreed to
guarantee payment to the Series A Noteholders to the
extent of Ninety (90%) Percent of the Series A Notes and
interest; and (b) waived the benefit of excussion, x x x." 13
 In its Answer with Counterclaim 14 (Answer), petitioner
TIDCORP argued that the RTC cannot validly try the case
because of the Rehabilitation Court's Stay Order, which
enjoined the enforcement of all claims, actions and proceedings
against PhilPhos.
In view of the Answer filed by petitioner TIDCORP,
respondent PVB filed a Motion for Summary Judgment 15 dated
February 14, 2017 (Motion for Summary Judgment). Thereafter,
petitioner TIDCORP filed its Comment (On Plaintiff's Motion for
Summary Judgment) 16 dated March 6, 2017.
The Ruling of the RTC on Respondent PVB's
Motion for Summary Judgment
On August 16, 2017, the RTC issued the assailed
Order 17 granting respondent PVB's Motion for Summary
Judgment. The dispositive portion of the Order reads:
The facts are clear and undisputed from the
pleadings, supporting affidavits, and admissions on file.
Thus, a full-blown trial need not be conducted to
resolve the merits of this case, hence, the Motion for
Summary Judgment is granted. x x x.
SO ORDERED. 18
In sum, the RTC held that, as made manifest in the
pleadings, supporting affidavits, and admissions on record,
there was no genuine issue as to any material fact posed by
petitioner TIDCORP with respect to its liability under the
Guarantee Agreement, except as to the amount of damages.
Thus, the RTC found that respondent PVB was entitled to a
judgment in its favor as a matter of law.
Hence, as petitioner TIDCORP deemed the assailed
Order as a final order susceptible of appeal in which pure
questions of law are involved, petitioner TIDCORP directly filed
the instant Petition before the Court under Rule 45, in relation
to Section 2 (c), Rule 41 of the Rules of Court. Respondent
PVB filed a Motion to Dismiss 19 dated November 8, 2017
(Motion to Dismiss), arguing that petitioner TIDCORP filed the
wrong mode of appeal. In a Resolution 20 dated September 12,
2018, the Court denied respondent PVB's Motion to Dismiss for
lack of merit. On November 5, 2018, respondent PVB filed its
Comment. 21
Issue
 The singular issue posited by petitioner TIDCORP for the
Court's disposition is whether the RTC erred in granting
respondent PVB's Motion for Summary Judgment.
The Court's Ruling
I. Procedural Issue — Correct Mode of Appeal
Before delving into the merits of the instant Petition, the
Court first deals with the procedural matter raised by
respondent PVB in its Motion to Dismiss.
Respondent PVB argues that the instant Petition should
be summarily dismissed because the petitioner allegedly
pursued the wrong mode of appeal, maintaining that the
assailed Order is a mere interlocutory order and not a final
order subject of an appeal under Rule 45. DETACa

Respondent PVB's contention is incorrect.

An order or resolution granting a Motion for Summary
Judgment which fully determines the rights and obligations of
the parties relative to the case and leaves no other issue
unresolved, except the amount of damages, is a final judgment.
As explained by the Court in Ybiernas, et al. v. Tanco-
Gabaldon, et al., 22 when a court, in granting a Motion for
Summary Judgment, adjudicates on the merits of the case and
declares categorically what the rights and obligations of the
parties are and which party is in the right, such order or
resolution takes the nature of a final order susceptible to
appeal. In leaving out the determination of the amount of
damages, a summary judgment is not removed from the
category of final judgments. 23
In the instant case, it is clear that the assailed Order
discussed at length the applicable facts, the governing law, and
the arguments put forward by both parties, making an extensive
assessment of the merits of respondent PVB's Complaint. The
RTC then made a definitive adjudication in favor of respondent
PVB. As manifestly seen in the assailed Order, the RTC
categorically determined what the rights and obligations of the
parties are, ruling in no uncertain terms that respondent PVB's
Complaint was meritorious and that petitioner TIDCORP should
be made liable under the Guarantee Agreement.
Hence, respondent PVB's argument in its Motion to
Dismiss is unmeritorious.
 Having disposed of the procedural issues, the Court now
decides the substantive merits of the instant Petition.
II. Substantive Issue — The Propriety of the RTC's
Summary Judgment
The solitary matter to be dealt with by the Court is the
propriety of the RTC's Order granting respondent PVB's Motion
for Summary Judgment.
Summary judgment is a device for weeding out sham
claims or defenses at an early stage of the litigation, thereby
avoiding the expense and loss of time involved in a trial. 24
According to Section 1, Rule 35 of the Rules of Court, a
party seeking to recover upon a claim may, at any time after the
pleading in answer thereto has been served, move with
supporting affidavits, depositions or admissions for a summary
judgment in his/her favor.
According to Section 3 of the same Rule, the judgment
sought shall be rendered forthwith if the pleadings, supporting
affidavits, depositions, and admissions on file, show that,
except as to the amount of damages, there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.
The term "genuine issue" has been defined as an issue
of fact which calls for the presentation of evidence as
distinguished from an issue which is sham, fictitious,
contrived, set up in bad faith and patently unsubstantial so
as not to constitute a genuine issue for trial. 25 The court
can determine this on the basis of the pleadings, admissions,
documents, affidavits and/or counter-affidavits submitted by the
parties before the court. 26
In assailing the RTC's decision granting the Motion for
Summary Judgment, petitioner TIDCORP, in the main, asserts
that respondent PVB is not entitled to judgment as a matter of
law and that there are genuine issues on material facts that
necessitate trial on the merits, contrary to the findings of the
RTC.
To support this theory, petitioner TIDCORP raises two
grounds: (1) the RTC cannot validly hear and decide
respondent PVB's Complaint because of the Rehabilitation
Court's Stay Order which enjoined the enforcement of all
claims, actions and proceedings against PhilPhos; and (2) there
is supposedly a contentious material fact that raises a genuine
issue in the instant case.
The Court shall discuss these two grounds in seriatim.
The Stay Order of the Rehabilitation Court
did not divest the RTC's jurisdiction to hear
and decide respondent PVB's Complaint.
With respect to the first ground raised by petitioner
TIDCORP, the Court holds that the Stay Order issued by the
Rehabilitation Court did not preclude the RTC from hearing and
deciding respondent PVB's Complaint.  aDSIHc

First and foremost, it must be noted that the Stay Order

relied upon by petitioner TIDCORP merely ordered the staying
and suspension of enforcement of all claims and proceedings
against the petitioner PhilPhos and not against all the other
persons or entities solidarily liable with the debtor. The tenor of
the Stay Order itself belies the theory of petitioner TIDCORP.
According to the Stay Order, the said order only covers "all
claims, actions, or proceedings against the petitioner
[referring to debtor PhilPhos]." 27
Second, Section 18 (c) of the FRIA explicitly states that a
stay order shall not apply "to the enforcement of claims
against sureties and other persons solidarily liable with the
debtor, and third party or accommodation mortgagors as
well as issuers of letters of credit, x x x." 28
In addition, under Rule 4, Section 6 of A.M. No. 00-8-10-
SC or the Interim Rules of Procedure on Corporate
Rehabilitation, a stay order has the effect of staying
enforcement only with respect to claims made against the
debtor, its guarantors and persons not solidarily liable with the
debtor:
Section 6. Stay Order. — If the court finds the
petition to be sufficient in form and substance, it shall,
not later than five (5) working days from the filing of the
petition, issue an order: (a) appointing a rehabilitation
receiver and fixing his bond; (b) staying enforcement
of all claims, whether for money or otherwise and
whether such enforcement is by court action or
otherwise, against the debtor, its guarantors and
persons not solidarily liable with the debtor x x x. 29
 In Situs Dev. Corporation, et al. v. Asiatrust Bank, et
al., 30 the Court held that when a stay order is issued, the
rehabilitation court is only empowered to suspend claims
against the debtor, its guarantors, and sureties who are not
solidarily liable with the debtor. Hence, the making of claims
against sureties and other persons solidarily liable with the
debtor is not barred by a stay order.
Thus, the question now redounds to whether the
abovementioned provision of the FRIA on the non-application of
a stay order with respect to the enforcement of claims against
sureties and other persons solidarily liable with the debtor
applies to petitioner TIDCORP.
Upon a simple perusal of the Guarantee Agreement, to
which petitioner TIDCORP readily admitted it is bound, the
answer to the aforementioned question becomes a clear and
unmistakable yes. Petitioner TIDCORP indubitably engaged
to be solidarily liable with PhilPhos under the Guarantee
Agreement.
The Guarantee Agreement unequivocally states that
petitioner TIDCORP waived its right of excussion under Article
2058 of the Civil Code 31 and that, consequently, the Series A
Noteholders can claim under the Guarantee
Agreement DIRECTLY against petitioner TIDCORP without
having to exhaust all the properties of PhilPhos and without
need of any prior recourse against PhilPhos:
5.1 ORDINARY GUARANTEE. TIDCORP, with
the ISSUER's express conformity, hereby waives the
provision of Article 2058 of the New Civil Code of
the Philippines on excussion, as well as
presentment, demand, protest or notice of any kind
with respect to this Guarantee Agreement. It is
therefore understood that the SERIES A
NOTEHOLDERS can claim under this Guarantee
Agreement directly with TIDCORP without the
SERIES A NOTEHOLDERS having to exhaust all the
properties of the ISSUE and without need of prior
recourse to the ISSUER. 32
Under a normal contract of guarantee, the guarantor
binds himself to the creditor to fulfill the obligation of the
principal debtor in case the latter should fail to do so. The
guarantor who pays for a debtor, in turn, must be indemnified
by the latter. However, the guarantor cannot be compelled to
pay the creditor unless the latter has exhausted all the
property of the debtor and resorted to all the legal
remedies against the debtor. This is what is otherwise known
as the benefit of excussion. 33 Conversely, if this benefit of
excussion is waived, 34 the guarantor can be directly compelled
by the creditor to pay the entire debt even without the
exhaustion of the debtor's properties.
In other words, a guarantor who engages
to directly shoulder the debt of the debtor, waiving the benefit
of excussion and the requirement of prior presentment,
demand, protest or notice of any kind, undoubtedly makes
himself/herself solidarily liable to the creditor. 
ETHIDa

As explained in Spouses Ong v. Philippine Commercial

International Bank 35 (Spouses Ong), a surety is one who
directly, equally, and absolutely binds himself/herself with the
principal debtor for the payment of the debt:
x x x Thus, a creditor can go directly against the
surety although the principal debtor is solvent and is
able to pay or no prior demand is made on the principal
debtor. A surety is directly, equally and absolutely
bound with the principal debtor for the payment of
the debt and is deemed as an original promissor
and debtor from the beginning. 36
Recognized Civil Law Commentator, former Court of
Appeals Justice Eduardo P. Caguioa also explained that one of
the hallmarks of a contract of guaranty is its subsidiary
character — "that the guarantor only answers if the debtor
cannot fulfill his obligation; hence the benefit of excussion in
favor of the guarantor." 37 Hence, under the Civil Code, "by
virtue of [Article 2047, which states that a contract is called a
suretyship when a person binds himself solidarily with the
principal debtor,] when the guarantor binds himself
solidarily with the debtor, the contract ceases to be a
guaranty and becomes suretyship." 38 The eminent civilist
further explained that what differentiates a surety from a
guaranty is that in the former, "a surety is principally liable[,]
while a guarantor is [only] secondarily liable." 39
In the instant case, without any shadow of doubt,
petitioner TIDCORP had expressly renounced the benefit of
excussion and in no uncertain terms made itself directly and
principally liable without any qualification to the Series A
Noteholders and without the need of any prior recourse to
PhilPhos.
In effect, the nature of the guarantee obligation assumed
by petitioner TIDCORP under the Guarantee Agreement was
transformed into a suretyship. This is the case because the
defining characteristic that distinguishes a guarantee from a
suretyship is that in the latter, the obligor promises to pay the
principal's debt if the principal will not pay, while in the former,
the obligor agrees that the creditor, after proceeding against the
principal and exhausting all of the principal's properties, may
proceed against the obligor. 40
And yet, petitioner TIDCORP insists that despite the
waiver of the benefit of excussion, it is still considered a
guarantor because the Guarantee Agreement expressly
designates petitioner TIDCORP as an "Ordinary Guarantor."
The argument fails to convince.
The determination of whether an obligation is a
suretyship is not a matter of nomenclature and semantics. That
an obligor is designated as a "guarantor" or that the contract is
denominated as a "guarantee agreement" does not
automatically mean that the obligor is a guarantor or that the
contract entered into is a contract of guarantee. As previously
held by the Court, even assuming that a party was expressly
made liable only as a "guarantor" in an agreement, he/she can
be held immediately liable directly and immediately if the benefit
of excussion was waived. 41
Petitioner TIDCORP downplays the waiver of the benefit
of excussion by making the specious argument that the waiver
does not define or characterize a guaranty and that it is
supposedly merely one of the effects of a guaranty. But as
already explained, the waiver of the benefit of excussion is the
crucial factor that differentiates a surety from a guaranty.
Otherwise stated, when a person/entity engages that he/she
will be directly liable to the creditor as to another debtor's
obligation without the need for the creditor to exhaust the
properties of the debtor and to have prior recourse against the
latter, then for all intents and purposes, such obligation is in the
nature of a suretyship regardless of how the parties labelled the
agreement.
 As explained in Spouses Ong, one of the defining
characteristics of a suretyship contract is that the benefit of
excussion is not available to the surety as he is principally liable
for the payment of the debt:
x x x There is a sea of difference in the rights
and liabilities of a guarantor and a surety. A guarantor
insures the solvency of the debtor while a surety is an
insurer of the debt itself. A contract of guaranty gives
rise to a subsidiary obligation on the part of the
guarantor. It is only after the creditor has proceeded
against the properties of the principal debtor and the
debt remains unsatisfied that a guarantor can be held
liable to answer for any unpaid amount. This is the
principle of excussion. In a suretyship contract,
however, the benefit of excussion is not available
to the surety as he is principally liable for the
payment of the debt. As the surety insures the debt
itself, he obligates himself to pay the debt if the
principal debtor will not pay, regardless of whether or
not the latter is financially capable to fulfill his
obligation. 42 
cSEDTC

Petitioner TIDCORP argues that the Court in JN

Development Corporation, et al. v. Philippine Export and
Foreign Loan Guarantee Corporation 43 supposedly considered
the contract therein a contract of guarantee despite the waiver
of the benefit of excussion.
Petitioner TIDCORP's assertion is not well-taken as the
Court made no such pronouncement in the said case. In fact,
the Court in the aforementioned case explained that what
distinguishes a contract of guaranty is that the "guarantor
cannot be compelled to pay the creditor unless the latter has
exhausted all the property of the debtor and resorted to all the
legal remedies against the debtor." 44 Hence, in a contract
where an obligor can be compelled to pay the creditor even
when the latter has not exhausted all the property of the debtor
and resorted to all the legal remedies against the debtor, such
contract is not in the nature of a contract of guarantee.
In fact, in citing Philippine Export and Foreign Loan
Guarantee Corporation v. VP Eusebio Construction,
Inc., 45 petitioner TIDCORP actually further strengthened the
argument that it is a surety and not a guaranty. 46 In the said
case, the Court explained that one of the essential features
of a suretyship is when the obligor's obligation is not
discharged by the absence of a notice of default of the
principal debtor. In the instant case, the Guarantee
Agreement clearly states that petitioner TIDCORP will be
liable to satisfy its obligations under the said agreement
despite the absence of "presentment, demand, protest or
notice of any kind with respect to this Guarantee
Agreement." 47
Hence, in accordance with the Guarantee Agreement,
which states that respondent PVB can claim DIRECTLY from
petitioner TIDCORP without the former having to exhaust all the
properties of and without need of prior recourse to PhilPhos, in
accordance with Section 18 (c) of the FRIA, the issuance of the
Stay Order by the Rehabilitation Court clearly did not prevent
the RTC from acquiring jurisdiction over respondent PVB's
Complaint, as correctly held by the RTC in the assailed Order.
Based on the records of the instant case,
there was no genuine issue raised as to a
material fact posed by petitioner TIDCORP.
With respect to petitioner TIDCORP's second argument,
the Court likewise concurs with the RTC's finding that upon
examination of the records of the instant case, there was no
genuine issue raised as to a material fact.
There is no "genuine issue" which calls for the
presentation of evidence if the issues raised by a party are a
sham, fictitious, contrived, set up in bad faith and patently
unsubstantial so as not to constitute a genuine issue for
trial. 48 The court can determine this on the basis of the
pleadings, admissions, documents, affidavits and/or counter-
affidavits submitted by the parties to the court. 49 In a collection
case, where the obligation and the fact of non-fulfillment of the
obligation, as well as the execution of the debt instrument, are
admitted by the debtor, with the rate of interest and/or amount
of damages being the only remaining issue, there is no genuine
issue and a summary judgment may be rendered upon proper
motion. 50
In the instant case, as correctly pointed out by the
RTC, petitioner TIDCORP readily admitted that it was
bound by the Guarantee Agreement, which expressly
obligated petitioner TIDCORP to guarantee the payment of the
Guaranty obligation, which was specifically pegged at 90% of
the outstanding Series A Notes. With petitioner TIDCORP
admitting that it was "bound by the terms and conditions
enumerated in this Guarantee Agreement and such other
related documents x x x," 51 the RTC did not commit any error
in holding that respondent PVB was entitled to judgment as a
matter of law.
Jurisprudence holds that "the defendant must show that
he has a bona fide defense to the action, one which he may be
able to establish. It must be a plausible ground of defense,
something fairly arguable and of a substantial character. This
he must show by affidavits or other proof." 52
The RTC was correct in holding that petitioner TIDCORP
failed to proffer a plausible ground of defense of a substantial
character, considering that in its Answer, the only special
and/or affirmative defense raised by petitioner TIDCORP was
the argument on the lack of jurisdiction of the RTC in light of the
Rehabilitation Court's Stay Order, which as previously
discussed, is an erroneous assertion.  SDAaTC

Further, petitioner TIDCORP's argument on its denial of

receiving a Notice of Claim with attachments from respondent
PVB in accordance with the Guarantee Agreement is manifestly
unmeritorious, considering that its letters dated November 12,
2015 53 and January 27, 2016 54 expressly acknowledged the
fact that they received the said Notice of Claim on November 6,
2015. Petitioner TIDCORP is bound by such admissions.
Also telling is the fact that in its correspondence with
respondent PVB, 55 petitioner TIDCORP consistently failed to
assail the correctness and completeness of the Notice of Claim.
Its denial of respondent PVB's Notice of Claim was confined
merely to its allegation that it was precluded by the
Rehabilitation Court's Stay Order from acting on the claim.
Hence, taking together the fact that petitioner TIDCORP
expressly admitted its obligations under the Guarantee
Agreement, and that it failed to offer any substantial defense
against the claim of respondent PVB, the RTC was not in error
in holding that there is no genuine issue as to a material fact
extant in the instant case.
For the foregoing reasons, the Court hereby denies the
instant Petition for lack of merit.
 WHEREFORE, in view of the foregoing, the instant
Petition is hereby DENIED. The Order dated August 16, 2017
rendered by the Regional Trial Court of Makati City, Branch 150
in Civil Case No. R-MKT-16-02011-CV is AFFIRMED.
SO ORDERED.
Carpio, Perlas-Bernabe, J.C. Reyes, Jr. and Lazaro-
Javier, JJ., concur.
 
Footnotes

1. Rollo, pp. 19-42.

2. Id. at 45-51; penned by Presiding Judge Elmo M. Alameda.
3. Id. at 165-184.
4. Id. at 141-152.
5. Id. at 52-102.
6. Id. at 103-124.
7. Republic Act No. (RA) 10142 or An Act Providing for the Rehabilitation or
Liquidation of Financially Distressed Enterprises and Individuals.
8. Rollo, pp. 126-128.
9. Id. at 113.
10.Id. at 129-130.
11.Id. at 131-132.
12.Id. at 133-139.
13.Id. at 143; emphasis supplied.
14.Id. at 153-164.
15.Id. at 165-184.
16.Id. at 185-190.
17.Id. at 45-51.
18.Id. at 51.
19.Id. at 192-201.
20.Id. at 217.
21.Id. at 219-240.
22.665 Phil. 297 (2011).
23.Id. at 308-309.
24.Excelsa Industries, Inc. v. Court of Appeals, 317 Phil. 664, 671 (1995).
25.Id.
26.Id.
27.Rollo, p. 128; emphasis and underscoring supplied.
28.Emphasis and underscoring supplied.
29.Emphasis and underscoring supplied.
30.701 Phil. 569, 572-573 (2013).
31.Article 2058. The guarantor cannot be compelled to pay the creditor
unless the latter has exhausted all the property of the debtor, and has
resorted to all the legal remedies against the debtor.
32.Rollo, p. 106; emphasis and underscoring supplied.
33.JN Development Corporation v. Philippine Export and Foreign Loan
Guarantee Corporation, 505 Phil. 636, 643 (2005).
34.According to Article 2059 of the Civil Code, even in agreements
denominated as guarantee contracts, excussion shall not take place:
   (1) If the guarantor has expressly renounced it;
   (2) If he has bound himself solidarily with the debtor;
   (3) In case of insolvency of the debtor;
   (4) When he has absconded, or cannot be sued within the Philippines
unless he has left a manager or representative;
   (5) If it may be presumed that an execution on the property of the
principal debtor would not result in the satisfaction of the obligation.
35.489 Phil. 673 (2005).
36.Id. at 677. Emphasis supplied; italics in the original.
37.EDUARDO P. CAGUIOA, COMMENTS AND CASES ON CIVIL LAW
CIVIL CODE OF THE PHILIPPINES, Vol. VI, 306 (First ed. 1970).
38.Id.; emphasis and underscoring supplied.
39.Id. at 309.
 40.Palmares v. Court of Appeals, 351 Phil. 664, 680-681 (1998).
41.Orix Metro Leasing and Finance Corporation v. Cardline, Inc., 778 Phil.
280, 290 (2016).
42.Supra note 35 at 676-677. Emphasis supplied; italics in the original.
43.Supra note 33.
44.Id. at 643.
45.478 Phil. 269 (2004).
46.Rollo, p. 37.
47.Item No. 5.1, id. at 106.
48.Excelsa Industries, Inc. v. Court of Appeals, supra note 24.
49.Id.
50.Asian Construction and Development Corporation v. Philippine
Commercial International Bank, 522 Phil. 168, 178 (2006); Garcia v.
Llamas, 462 Phil. 779, 794 (2003).
51.Item No. 7.1.3, rollo, p. 107.
52.Asian Construction and Development Corporation v. Philippine
Commercial International Bank, supra note 50 at 180.
53.Rollo, pp. 131-132.
54.Id. at 140.
55.Letters dated November 12, 2015 and January 27, 2016, id. at 131-132
and 140.

 (Trade and Investment Development Corporation of the Philippines v. Philippine

|||

Veterans Bank, G.R. No. 233850, [July 1, 2019])

 EN BANC

[G.R. No. 217158. March 12, 2019.]

GIOS-SAMAR, INC., represented by its

Chairperson GERARDO M.
MALINAO, petitioner, vs. DEPARTMENT OF
TRANSPORTATION AND COMMUNICATIONS
and CIVIL AVIATION AUTHORITY OF THE
PHILIPPINES, respondents.

DECISION

JARDELEZA, J  : p

The 1987 Constitution and the Rules of Court

promulgated, pursuant to its provisions, granted us original
jurisdiction over certain cases. In some instances, this
jurisdiction is shared with Regional Trial Courts (RTCs) and the
Court of Appeals (CA). However, litigants do not have
unfettered discretion to invoke the Court's original jurisdiction.
The doctrine of hierarchy of courts dictates that, direct recourse
to this Court is allowed only to resolve questions of law,
notwithstanding the invocation of paramount or transcendental
importance of the action. This doctrine is not mere policy,
rather, it is a constitutional filtering mechanism designed to
enable the Court to focus on the more fundamental and
essential tasks assigned to it by the highest law of the land.
 On December 15, 2014, the Department of
Transportation and Communication 1 (DOTC) and its attached
agency, the Civil Aviation Authority of the Philippines (CAAP),
posted an Invitation to Pre-qualify and Bid 2 (Invitation) on the
airport development, operations, and maintenance of the
Bacolod-Silay, Davao, Iloilo, Laguindingan, New Bohol
(Panglao), and Puerto Princesa Airports (collectively,
Projects). 3 The total cost of the Projects is P116.23 Billion,
broken down as follows: 4
 
Bacolod-Silay P20.26 Billion
Davao P40.57 Billion
Iloilo P30.4 Billion
Laguindingan P14.62 Billion
New Bohol (Panglao) P4.57 Billion
Puerto Princesa P5.81 Billion
  ––––––––––––––
  P116.23 Billion 5
 
The Invitation stated that the Projects aim to improve
services and enhance the airside and landside facilities of the
key regional airports through concession agreements with the
private sector. The Projects will be awarded through
competitive bidding, following the procurement rules and
procedure prescribed under Republic Act (RA) No. 6957, 6 as
amended by RA No. 7718 7 (BOT Law), and its Implementing
Rules and Regulations. The concession period would be for 30
years. 8
On March 10, 2015, the DOTC and the CAAP issued the
Instructions to Prospective Bidders (ITPB), 9 which provided
that prospective bidders are to pre-qualify and bid for the
development, operations, and maintenance of the airports,
which are now bundled into two groups (collectively, the
Bundled Projects), namely:
Bundle 1: Bacolod-Silay and Iloilo
Bundle 2: Davao, Laguindingan, and New Bohol
(Panglao) 10
The costs of Bundle 1 and Bundle 2 are P50.66 Billion
and P59.66 Billion, respectively. The Puerto Princesa Airport
project was not included in the bundling. 11
 The general procedure for the bidding of the Bundled
Projects stated that "[p]rospective [b]idders may bid for only
Bundle 1 or Bundle 2, or bid for both Bundle 1 and Bundle 2. x
x x The [Pre-Qualification, Bids and Awards Committee
(PBAC)] shall announce in a Bid Bulletin prior to the
Qualifications Submission Date[,] its policy on whether a
[p]rospective [b]idder may be awarded both bundles or whether
a [p]rospective [b]idder may only be awarded with one (1)
bundle." 12
The submission of the Pre-Qualification Queries was
scheduled for April 3, 2015 and the submission of Qualification
Documents on May 18, 2015. 13  CAIHTE

On March 27, 2015, petitioner GIOS-SAMAR, Inc.,

represented by its Chairperson Gerardo M. Malinao (petitioner),
suing as a taxpayer and invoking the transcendental
importance of the issue, filed the present petition for
prohibition. 14 Petitioner alleges that it is a non-governmental
organization composed of subsistence farmers and fisherfolk
from Samar, who are among the victims of Typhoon Yolanda
relying on government assistance for the rehabilitation of their
industry and livelihood. 15 It assails the constitutionality of the
bundling of the Projects and seeks to enjoin the DOTC and the
CAAP from proceeding with the bidding of the same.
Petitioner raises the following arguments:
First, the bundling of the Projects violated the
"constitutional prohibitions on the anti-dummy and the grant of
opportunity to the general public to invest in public
utilities," 16 citing Section 11, Article XII of the 1987
Constitution. 17 According to petitioner, bundling would allow
companies with questionable or shaky financial background to
have direct access to the Projects "by simply joining a
consortium which under the bundling scheme adopted by the
DOTC said [P]rojects taken altogether would definitely be
beyond the financial capability of any qualified, single Filipino
corporation." 18
Second, bundling violates the constitutional prohibition on
monopolies under Section 19, Article XII of the Constitution
because it would allow one winning bidder to operate and
maintain several airports, thus establishing a monopoly.
Petitioner asserts that, given the staggering cost of the Bundled
Projects, the same can only be undertaken by a group, joint
venture outfits, and consortiums which are susceptible to
combinations and schemes to control the operation of the
service for profit, enabling a single consortium to control as
many as six airports. 19
Third, bundling will "surely perpetrate an undue restraint
of trade." 20 Mid-sized Filipino companies which may have
previously considered participating in one of the six (6) distinct
Projects will no longer have a realistic opportunity to participate
in the bidding because the separate projects became two (2)
gargantuan projects. This effectively placed the Projects
beyond the reach of medium-sized Filipino companies. 21
Fourth, the PBAC of the DOTC committed grave abuse
of discretion amounting to excess of jurisdiction when it bundled
the projects without legal authority. 22
Fifth, bundling made a mockery of public bidding
because it raised the reasonable bar to a level higher than what
it would have been, had the projects been bidded out
separately. 23
In support of petitioner's prayer, for the issuance of a
temporary restraining order and/or writ of preliminary injunction,
it states that there is extreme urgency to enjoin the bidding of
the Bundled Projects so as not to cause irreparable damage
and injury to the coffers of the government. 24
In its comment, 25 the DOTC counters that: (1) the
petition is premature because there has been no actual bidding
yet, hence there is no justiciable controversy to speak of; (2)
petitioner has no legal standing to file the suit whether as a
taxpayer or as a private individual; (3) petitioner's allegation on
the violation of anti-dummy and equal opportunity clauses of
the Constitution are speculative and conjectural; (4) Section 11,
Article XII of the Constitution is not applicable to the bidding
process assailed by petitioner; (5) the bundling of the Projects
does not violate the prohibitions on monopolies or combinations
in restraint of trade; and (6) the DOTC and the CAAP did not
commit grave abuse of discretion amounting to lack or excess
of jurisdiction. 26
For its part, the CAAP asserts that the petition violated
the basic fundamental principle of hierarchy of courts. Petitioner
had not alleged any special and compelling reason to allow it to
seek relief directly from the Court. The case should have been
filed with the trial court, because it raises factual issues which
need to be threshed out in a full-blown trial. 27 The CAAP also
maintains that petitioner has neither legal capacity nor authority
to file the suit and that the petition has no cause of action. 28
In its reply, 29 petitioner argues that it need not wait for
the conduct of the bidding to file the suit because doing so
would render useless the very purpose for filing the petition for
prohibition. 30 As it is, five groups have already been pre-
qualified to bid in the Bundled Projects. 31 Petitioner also
submits that direct recourse to this Court is justified as the
"matter of prohibiting the bidding process of the x x x illegally
bundled projects are matters of public interest and
transcendental importance." 32 It further insists that it has legal
standing to file the suit through Malinao, its duly authorized
representative. 33
The main issue brought to us for resolution is whether the
bundling of the Projects is constitutional.
Petitioner argues that the bundling of the Projects is
unconstitutional because it will: (i) create a monopoly; (ii) allow
the creation and operation of a combination in restraint of trade;
(iii) violate anti-dummy laws and statutes giving citizens the
opportunity to invest in public utilities; and (iv) enable
companies with shaky financial backgrounds to participate in
the Projects. 
DETACa

While petitioner asserts that the foregoing arguments

involve legal (as opposed to factual) issues, our examination of
the petition shows otherwise. As will be demonstrated shortly,
petitioner's arguments against the constitutionality of the
bundling of the Projects are inextricably intertwined with
underlying questions of fact, the determination of which require
the reception of evidence. This Court, however, is not a trier of
fact. We cannot resolve these factual issues at the first
instance. For this reason, we DISMISS the petition.

A
 Petitioner claims that the bundling of the Projects violates
the constitutional provisions on monopolies and combinations in
restraint of trade under Section 19, Article XII of the
Constitution, which reads:
Sec. 19. The State shall regulate or prohibit
monopolies when the public interest so requires. No
combinations in restraint of trade or unfair competition
shall be allowed.
In Tatad v. Secretary of the Department of Energy, 34 we
clarified that the Constitution does not prohibit the operation of
monopolies per se. 35 With particular respect to the operation of
public utilities or services, this Court, in Anglo-Fil Trading
Corporation v. Lazaro, 36 further clarified that "[b]y their very
nature, certain public services or public utilities such as those
which supply water, electricity, transportation, telephone,
telegraph, etc. must be given exclusive franchises if public
interest is to be served. Such exclusive franchises are not
violative of the law against monopolies."
In short, we find that the grant of a concession
agreement to an entity, as a winning bidder, for the exclusive
development, operation, and maintenance of any or all of the
Projects, does not by itself create a monopoly violative of the
provisions of the Constitution. Anglo-Fil Trading
Corporation teaches that exclusivity is inherent in the grant of a
concession to a private entity to deliver a public service, where
Government chooses not to undertake such
service. 37 Otherwise stated, while the grant may result in a
monopoly, it is a type of monopoly not violative of law. This is
the essence of the policy decision of the Government to enter
into concessions with the private sector to build, maintain and
operate what would have otherwise been government-operated
services, such as airports. In any case, the law itself provides
for built-in protections to safeguard the public interest, foremost
of which is to require public bidding. Under the BOT Law, for
example, a private-public partnership (PPP) agreement may be
undertaken through public bidding, in cases of solicited
proposals, or through "Swiss challenge" (also known as
comparative bidding), in cases of unsolicited proposals.
In any event, the Constitution provides that the State
may, by law, prohibit or regulate monopolies when the public
interest so requires. 38 Petitioner has failed to point to any
provision in the law, which specifically prohibits the bundling of
bids, a detail supplied by the respondent DOTC as
implementing agency for the PPP program for airports. Our
examination of the petition and the relevant statute, in fact,
provides further support for the dismissal of the present action.
Originally, monopolies and combinations in restraint of
trade were governed by, and penalized under, Article 186 39 of
the Revised Penal Code. This provision has since been
repealed by RA No. 10667, or the Philippine Competition Act,
which defines and penalizes "all forms of anti-competitive
agreements, abuse of dominant position, and anti-competitive
mergers and acquisitions." 40
RA No. 10667 does not define what constitutes a
"monopoly." Instead, it prohibits one or more entities which
has/have acquired or achieved a "dominant position" in a
"relevant market" from "abusing" its dominant position. In other
words, an entity is not prohibited from, or held liable for
prosecution and punishment for, simply securing a dominant
position in the relevant market in which it operates. It is only
when that entity engages in conduct in abuse of its dominant
position that it will be exposed to prosecution and possible
punishment.
Under RA No. 10667, "dominant position" is defined as
follows:
Sec. 4. Definition of Terms. — As used in this
Act:

xxx xxx xxx

(g) Dominant position refers to a position of

economic strength that an entity or entities hold which
makes it capable of controlling the relevant market
independently from any or a combination of the
following: competitors, customers, suppliers, or
consumers[.]
"Relevant market," on the other hand, refers to the
market in which a particular good or service is sold and which is
a combination of the relevant product market and the relevant
geographic market. 41 The determination of a particular relevant
market depends on the consideration of factors which affect the
substitutability among goods or services constituting such
market, and the geographic area delineating the boundaries of
the market. 42 An entity with a dominant position in a relevant
market is deemed to have abused its dominant position if it
engages in a conduct that would substantially prevent, restrict,
or lessen competition. 43 aDSIHc

Here, petitioner has not alleged ultimate facts to support

its claim that bundling will create a monopoly, in violation of the
Constitution. By merely stating legal conclusions, petitioner did
not present any sufficient allegation upon which the Court could
grant the relief petitioner prayed for. In Zuñiga-Santos v.
Santos-Gran, 44 we held that "[a] pleading should state the
ultimate facts essential to the rights of action or defense
asserted, as distinguished from mere conclusions of fact, or
conclusions of law. General allegations that a contract is valid
or legal, or is just, fair, and reasonable, are mere conclusions of
law. Likewise, allegations that a contract is void, voidable,
invalid, illegal, ultra vires, or against public policy, without
stating facts showing its invalidity, are mere conclusions of
law." 45 The present action should thus be dismissed on the
ground of failure to state cause of action. 46
Similarly, RA No. 10667 does not define what a
"combination in restraint of trade" is. What it does is penalize
anti-competitive agreements. Agreement refers to "any type of
form or contract, arrangement, understanding, collective
recommendation, or concerted action, whether formal or
informal." 47 The following agreements are considered anti-
competitive:
Sec. 14. Anti-Competitive Agreements. —
(a) The following agreements, between or
among competitors, are per se prohibited:
(1) Restricting competition as to price, or
components thereof, or other terms of trade;
(2) Fixing price at an auction or in any form of
bidding including cover bidding, bid suppression, bid
rotation and market allocation and other analogous
practices of bid manipulation;
(b) The following agreements, between or
among competitors which have the object or effect of
 substantially preventing, restricting or lessening
competition shall be prohibited:
(1) Setting, limiting, or controlling production,
markets, technical development, or investment;
(2) Dividing or sharing the market, whether by
volume of sales or purchases, territory, type of goods
or services, buyers or sellers or any other means;
(c) Agreements other than those specified in (a)
and (b) of this section which have the object or effect of
substantially preventing, restricting or lessening
competition shall also be prohibited: Provided, Those
which contribute to improving the production or
distribution of goods and services or to promoting
technical or economic progress, while allowing
consumers a fair share of the resulting benefits, may
not necessarily be deemed a violation of this Act.
An entity that controls, is controlled by, or is
under common control with another entity or entities,
have common economic interests, and are not
otherwise able to decide or act independently of each
other, shall not be considered competitors for purposes
of this section.
The bundling of the Projects is an arrangement made by
the DOTC and the CAAP in the conduct of public bidding. The
question that arises is whether the same constitutes an anti-
competitive agreement prohibited by RA No. 10667. However,
to resolve this, we refer to the factors enumerated in Section 26
of RA No. 10667 on the determination of anti-competitive
agreements or conduct:
Sec. 26. Determination of Anti-Competitive
Agreement or Conduct. — In determining whether anti-
competitive agreement or conduct has been
committed, the Commission shall:
(a) Define the relevant market allegedly
affected by the anti-competitive agreement or
conduct, following the principles laid out in Section 24
of this Chapter;
(b) Determine if there is actual or potential
adverse impact on competition in the relevant
market caused by the alleged agreement or
 conduct, and if such impact is substantial and
outweighs the actual or potential efficiency gains
that result from the agreement or conduct;
(c) Adopt a broad and forward-looking
perspective, recognizing future developments, any
overriding need to make the goods or services
available to consumers, the requirements of large
investments in infrastructure, the requirements of
law, and the need of our economy to respond to
international competition, but also taking account of
past behavior of the parties involved and prevailing
market conditions;
(d) Balance the need to ensure that competition
is not prevented or substantially restricted and the risk
that competition efficiency, productivity, innovation, or
development of priority areas or industries in the
general interest of the country may be deterred by
overzealous or undue intervention; and  ETHIDa

(e) Assess the totality of evidence on whether it

is more likely than not that the entity has engaged in
anti-competitive agreement or conduct including
whether the entity's conduct was done with a
reasonable commercial purpose such as but not limited
to phasing out of a product or closure of a business, or
as a reasonable commercial response to the market
entry or conduct of a competitor. (Emphasis supplied.)
Similar to its assertion that bundling will create a
monopoly prohibited by law, we find that petitioner, again,
utterly failed to sufficiently state a cause of action, by failing to
plead ultimate facts to support its conclusion that bundling, as
an arrangement, is in restraint of trade or results in unfair
competition under the provisions of RA No. 10667.
Even granting that the petition sufficiently pleads a cause
of action for the foregoing violations, there is a need to receive
evidence to test the premises of petitioner's conclusions.
To illustrate, applying the facts and claims relative to
the violation of the proscription against monopolies, what RA
No. 10667, in fact, prohibits and punishes is the situation
where: (1) an entity, having been granted an exclusive
franchise to maintain and operate one or more airports, attains
a dominant position in that market; and (2) abuses such
dominant position by engaging in prohibited conduct, i.e., acts
that substantially prevent, restrict or lessen competition in
market of airport development, operations and maintenance.
Thus, for petitioner to succeed in asserting that such a
prohibited situation legally obtains, it must first establish, by
evidence, that indeed: (1) the relevant market is that of airport
development, maintenance, and operation (under the facts-
based criteria enumerated in Section 24 of RA No. 10667); (2)
the entity has achieved a dominant position (under the facts-
based criteria enumerated in Section 27 of RA No. 10667) in
that relevant market; and (3) the entity commits acts
constituting abuse of dominant position (under the facts based
criteria enumerated in Section 27 of RA No. 10667).
In addition, to support the legal conclusion that bundling
is an anti-competitive agreement, there must be evidence that:
(1) the relevant market is that of airport development,
maintenance, and operation (under the facts-based criterion
enumerated in Section 24 of RA No. 10667); (2) bundling
causes, or will cause, actual or potential adverse impact on the
competition in that relevant market; (3) said impact is
substantial and outweighs the actual or potential efficiency
gains that results from bundling; and (4) the totality of evidence
shows that the winning bidder, more likely than not engaged, in
anti-competitive conduct.
The Court, however, is still not a trier of facts. Petitioner
should have brought the challenge before a tribunal, specially
equipped to resolve the factual and legal issues presented. 48

We now jointly discuss petitioner's remaining allegations,

namely, that bundling of the Projects: (i) violates the anti-
dummy law and the constitutional provision allegedly giving
citizens the opportunity to invest in public utilities; (ii) is in grave
abuse of discretion; and (iii) enables companies with shaky
financial backgrounds to participate in the Projects.
Commonwealth Act No. 108, as amended, otherwise
known as the Anti-Dummy Law, was enacted to limit the
enjoyment of certain economic activities to Filipino citizens or
corporations. 49 Section 2 of said law states:
 Sec. 2. Simulation of minimum capital stock. —
In all cases in which a constitutional or legal provision
requires that, in order that a corporation or association
may exercise or enjoy a right, franchise or privilege, not
less than a certain per centum of its capital must be
owned by citizens of the Philippines or of any other
specific country, it shall be unlawful to falsely simulate
the existence of such minimum stock or capital as
owned by such citizens, for the purpose of evading said
provision. The president or managers and directors or
trustees of corporations or associations convicted of a
violation of this section shall be punished by
imprisonment of not less than five nor more than fifteen
years, and by a fine not less than the value of the right,
franchise or privilege, enjoyed or acquired in violation
of the provisions hereof but in no case less than five
thousand pesos.  cSEDTC

For liability for violation of Section 2 to attach, it must first

be established that there is a law limiting or reserving the
enjoyment or exercise of a right, franchise, privilege, or
business to citizens of the Philippines, or to corporations or
associations at least a certain percentage of which is owned by
such citizens. 50 Moreover, it must be shown by evidence that a
corporation or association falsely simulated the existence of the
minimum required Filipino stock or capital ownership to enjoy or
exercise the right, franchise, privilege, or business.
In this case, petitioner failed to allege ultimate facts
showing how the bundling of the Projects violated the Anti-
Dummy Law. It did not identify what corporation or association
falsely simulated the composition of its stock ownership.
Moreover, it did not allege that there is a law limiting, reserving,
or requiring that infrastructure or development projects must be
awarded only to corporations, a certain percentage of the
capital of which is exclusively owned by Filipinos. Executive
Order (EO) No. 65, 51 even exempts contracts for
infrastructure/development projects covered by the BOT
Law from the 40% foreign ownership limitation.
For the same reasons above, petitioner's allegation that
bundling violated Section 11, 52 Article XII of the Constitution —
which prescribes a 60% Filipino ownership requirement for
franchises, certificate, or for the operation of public utilities —
must be rejected.
 Petitioner's argument that, bundling of the Projects gave
shady companies direct access to the Projects, also raises
questions of fact. Foremost, petitioner does not identify these
"shady companies." Even assuming that petitioner is referring
to any or all of the five companies who have been pre-qualified
to bid in the projects, 53 its assertion that these companies
are not financially able to undertake the project raises a
question of fact, financial ability being a pre-qualification
requirement. As already stated earlier, such question is one
which this Court is ill-equipped to resolve. 54
Finally, the allegation that bundling is in grave abuse of
discretion is a conclusion of law. As shown, no facts were even
alleged to show which specific law was violated by the decision
to bundle the Projects.
In short, these three above arguments of petitioner must
be dismissed for failure to sufficiently plead a cause of action.
Even assuming that petitioner's causes of action were properly
alleged, the resolution of said issues would still require the
determination of factual issues which this Court simply cannot
undertake.
In fine, while this Court has original and concurrent
jurisdiction with the RTC and the CA in the issuance of writs
of certiorari, prohibition, mandamus, quo warranto, and habeas
corpus 55 (extraordinary writs), direct recourse to this Court is
proper only to seek resolution of questions of law. Save for the
single specific instance provided by the Constitution under
Section 18, Article VII, 56 cases the resolution of which depends
on the determination of questions of fact cannot be brought
directly before the Court because we are not a trier of facts. We
are not equipped, either by structure or rule, to receive and
evaluate evidence in the first instance; these are the primary
functions of the lower courts or regulatory agencies. 57 This is
the raison d'être behind the doctrine of hierarchy of courts. It
operates as a constitutional filtering mechanism designed to
enable this Court to focus on the more fundamental tasks
assigned to it by the Constitution. It is a bright-line rule which
cannot be brushed aside by an invocation of the transcendental
importance or constitutional dimension of the issue or cause
raised.

II
 For a better understanding of our ruling today, we review
below, in light of the Court's fundamental constitutional tasks,
the constitutional and statutory evolution of the Court's original
and concurrent jurisdiction, and its interplay with related
doctrines, pronouncements, and even the Court's own rules, as
follows:
(a) The Court's original and concurrent jurisdiction;
(b) Direct recourse to the Court under
the Angara  58 model;
(c) The transcendental importance doctrine;
(d) The Court is not a trier of facts;
(e) The doctrine of hierarchy of courts;
(f) The Court's expanded jurisdiction, social rights, and
the Court's constitutional rule-making power under
the 1987 Constitution;
(g) Exceptions to the doctrine of hierarchy of courts: The
case of The Diocese of Bacolod v. Commission on
Elections; 59
(h) Hierarchy of courts as a constitutional imperative; and
(i) Hierarchy of courts as a filtering mechanism.

The Court's original and concurrent jurisdiction

The Supreme Court's original jurisdiction over petitions

for extraordinary writs predates the 1935 Constitution.  SDAaTC

On June 11, 1901, the Second Philippine Commission,

popularly known as the Taft Commission, enacted Act No. 136,
or An Act Providing for the Organization of Courts in the
Philippine Islands. 60 Act No. 136 vested the judicial power of
the Government of the Philippine Islands unto the Supreme
Court, Courts of First Instance (CFI), courts of justices of the
peace, together with such special jurisdiction of municipal
courts, and other special tribunals as may be authorized by
law. 61 Under Act No. 136, the Supreme Court had original
jurisdiction over the following cases:
 Sec. 17. Its Original Jurisdiction. — The
Supreme Court shall have original jurisdiction to issue
writs of mandamus, certiorari, prohibition, habeas
corpus, and quo warranto in the cases and in the
manner prescribed in the Code of Civil Procedure,
and to hear and determine controversies thus brought
before it, and in other cases provided by law.
(Emphasis supplied.)
The Code of Civil Procedure 62 (1901 Rules) referred to
in Section 17 of Act No. 136, in turn, provided that the Supreme
Court shall have concurrent jurisdiction with the CFIs
in certiorari, prohibition, and mandamus proceedings over any
inferior tribunal, board, or officer and in quo
warranto and habeas corpus proceedings. 63 Likewise, the
1901 Rules stated that the Court shall have original jurisdiction
by certiorari and mandamus over the proceedings of CFIs
wherever said courts have acted without, or in excess of,
jurisdiction, or in case of a mandamus proceeding, when the
CFIs and judges thereof unlawfully neglect the performance of
a duty imposed by law. 64
Notably, Sections 496 and 497 of the 1901 Rules
proscribed the Court not only from reviewing the evidence
taken in the court below but also from retrying questions of
fact, viz.;
Sec. 496. General Procedure in the Supreme
Court. — The Supreme Court may, in the exercise of
its appellate jurisdiction, affirm, reverse, or modify any
final judgment, order, or decree of a Court of First
Instance, regularly entered in the Supreme Court by bill
of exceptions, or appeal, and may direct the proper
judgment, order, or decree to be entered, or direct a
new trial, or further proceedings to be had, and if a
new trial shall be granted, the court shall pass
upon and determine all the questions of law
involved in the case presented by such bill of
exceptions and necessary for the final
determination of the action.
Sec. 497. Hearings Confined to Matters of Law,
with Certain Exceptions. — In hearings upon bills of
exception, in civil actions and special proceedings, the
Supreme Court shall not review the evidence taken
 in the court below, nor retry the questions of fact,
except as in this section hereafter provided; but
shall determine only questions of law raised by the
bill of exceptions. x x x (Emphasis supplied.)
On July 1, 1902, the Congress enacted the Philippine
Bill 65 or the first "Constitution" of the Philippines under the
American occupation. 66 The Philippine Bill retained original
jurisdiction of the Supreme Court conferred under Act No. 136,
with the caveat that the legislative department might add to
such jurisdiction. 67 Thus, in Weigall v. Shuster, 68 one of the
earliest cases of the Court, we held that the Philippine
Commission could increase, but not decrease, our original
jurisdiction under Act No. 136.
On December 31, 1916, Act No. 2657 or the
Administrative Code was enacted, which included the "Judiciary
Law" under Title IV, Chapter 10. It was revised on March 10,
1917 through the Revised Administrative Code, 69 which
increased the original jurisdiction of the Supreme Court by
adding those cases affecting ambassadors, other public
ministers, and consuls. 70
On May 14, 1935, 33 years after the enactment of the
Philippine Bill, the Philippines ratified the 1935 Constitution.
Like its predecessor, the 1935 Constitution adopted the original
jurisdiction of the Supreme Court as provided in existing
laws, i.e., Act No. 136, the 1901 Rules, and the Revised
Administrative Code. Section 3, Article VIII of the 1935
Constitution states that, "[u]ntil the [Congress] shall provide
otherwise the Supreme Court shall have such original and
appellate jurisdiction as may be possessed and exercised by
the Supreme Court of the Philippine Islands at the time of the
adoption of this Constitution. x x x" 71 The 1935 Constitution
further stated that the Congress may not deprive the Supreme
Court of its original jurisdiction over cases affecting
ambassadors, other public ministers, and consuls. 72  acEHCD

On December 31, 1935, Commonwealth Act No.

3, 73 amending the Revised Administrative Code, created the
Court of Appeals (CA) and granted it "original jurisdiction to
issue writs of mandamus, prohibition,
injunction, certiorari, habeas corpus, and all other auxiliary writs
and process in aid of its appellate jurisdiction." 74
 On June 17, 1948, the Congress enacted RA No. 296,
otherwise known as the Judiciary Reorganization Act of 1948.
Section 17 of RA No. 296 vested the Supreme Court with
"original and exclusive jurisdiction in petitions for the issuance
of writs of certiorari, prohibition and mandamus against the
Court of Appeals." It also provided that the Supreme Court shall
exercise original and concurrent jurisdiction with CFIs:

xxx xxx xxx

1. In petitions for the issuance of writs

of certiorari, prohibition, mandamus, quo warranto,
and habeas corpus;
2. In actions between the Roman Catholic
Church and the municipalities or towns, or the Filipino
Independent Church for controversy as to title to, or
ownership, administration or possession of hospitals,
convents, cemeteries or other properties used in
connection therewith;
3. In actions brought by the Government of the
Philippines against the Roman Catholic Church or vice
versa for the title to, or ownership of, hospitals,
asylums, charitable institutions, or any other kind of
property; and
4. In actions brought to prevent and restrain
violations of law concerning monopolies and
combinations in restraint of trade.
RA No. 5440 amended RA No. 296 on September 9,
1968, deleting numbers 3 and 4 mentioned above. 75
Several years later, on January 17, 1973, the Philippines
ratified the 1973 Constitution. Article X of the same is dedicated
to the Judiciary. Section 5 (1) of the said article provides for the
Supreme Court's original jurisdiction, viz.:
Sec. 5. The Supreme Court shall have the
following powers:
(1) Exercise original jurisdiction over cases
affecting ambassadors, other public
ministers and consuls, and over petitions
 for certiorari, prohibition, mandamus, quo
warranto, and habeas corpus.

xxx xxx xxx

Where the 1935 Constitution only referred to the original

jurisdiction which the Supreme Court possessed at the time of
its adoption, the 1973 Constitution expressly provided for the
Supreme Court's original jurisdiction over petitions for the
issuance of extraordinary writs.
In 1981, this Court's original jurisdiction over
extraordinary writs became concurrent with the CA, pursuant
to Batas Pambansa Bilang 129 (BP 129) or The Judiciary
Reorganization Act of 1980. BP 129 repealed RA No.
296 76 and granted the CA with "[o]riginal jurisdiction to issue
writs of mandamus, prohibition, certiorari, habeas corpus,
and quo warranto, and auxiliary writs or processes, whether or
not in aid of its appellate jurisdiction." 77 In addition, Section 21
(2) of BP 129 bestowed the RTCs (formerly the CFIs) with
original (and consequently, concurrent with the Supreme Court)
jurisdiction over actions affecting ambassadors and other public
ministers and consuls.
Seven years after the enactment of BP 129, the
Philippines ratified the 1987 Constitution; Article VII, Section 5
(1) of which provides the original jurisdiction of the Supreme
Court, which is an exact reproduction of Section 5 (1), Article X
of the 1973 Constitution.

Direct recourse to the Court under the Angara model

Direct invocation of the Court's original jurisdiction over

the issuance of extraordinary writs started in 1936 with Angara
v. Electoral Commission. 78 Angara is the first case directly filed
before the Court after the 1935 Constitution took effect on
November 15, 1935. It is the quintessential example of a valid
direct recourse to this Court on constitutional questions.
 Angara was an original petition for prohibition seeking to
restrain the Electoral Commission from taking further
cognizance of an election contest filed against an elected (and
confirmed) member of the National Assembly. The main issue
before the Court involved the question of whether the Supreme
Court had jurisdiction over the Electoral Commission and the
subject matter of the controversy. 79  SDHTEC

We took cognizance of the petition, ruling foremost that

the Court has jurisdiction over the case by virtue of its "power
of judicial review under the Constitution:"
x x x [W]hen the judiciary mediates to allocate
constitutional boundaries, it does not assert any
superiority over the other departments; it does not in
reality nullify or invalidate an act of the legislature, but
only asserts the solemn and sacred obligation assigned
to it by the Constitution to determine conflicting claims
of authority under the Constitution and to establish for
the parties in an actual controversy the rights which
that instrument secures and guarantees to them. x x
x 80
In Angara, there was no dispute as to the facts. Petitioner
was allowed to file the petition for prohibition directly before us
because what was considered was the nature of the issue
involved in the case: a legal controversy between two
agencies of the government that called for the exercise of
the power of judicial review by the final arbiter of the
Constitution, the Supreme Court.
Several years later, another original action for prohibition
was filed directly before the Court, this time seeking to enjoin
certain members of the rival political party from "continuing to
usurp, intrude into and/or hold or exercise the said public
offices respectively being occupied by them in the Senate
Electoral Tribunal." In Tañada and Macapagal v. Cuenco, et
al.,  81 we were confronted with the issue of "whether the
election of Senators Cuenco and Delgado, by the Senate, as
members of the Senate Electoral Tribunal, upon nomination by
Senator Primicias — a member and spokesman of the party
having the largest number of votes in the Senate — on behalf
of its Committee on Rules, contravenes the constitutional
mandate that said members of the Senate Electoral Tribunal
shall be chosen "upon nomination x x x of the party having the
second largest number of votes. x x x."" 82 There, this Court
proceeded to resolve the constitutional issue raised without
inquiring into the propriety of direct recourse to us. Similar
with Angara, the question before us, then, was purely legal.
The Angara model of direct recourse would be followed
and allowed by the Court in Bengzon Jr. v. Senate Blue Ribbon
Committee, 83 Francisco, Jr. v. Nagmamalasakit na mga
Manananggol ng mga Manggagawang Pilipino, Inc. 84 Province
of North Cotabato v. Government of the Republic of the
Philippines Peace Panel on Ancestral Domain
(GRP), 85 Macalintal v. Presidential Electoral
Tribunal, 86 Belgica v. Ochoa, 87 Imbong v.
Ochoa, Jr., 88 Araullo v. Aquino III, 89 Saguisag v. Ochoa,
Jr., 90 Padilla v. Congress of the Philippines, 91 to name a
few. To stress, the common denominator of all these cases
is that the threshold questions presented before us are
ones of law.

The transcendental importance doctrine

In 1949, the Court introduced a legal concept that will

later underpin most of the cases filed directly before us — the
doctrine of transcendental importance. Although this doctrine
was originally used to relax the rules on locus standi or legal
standing, its application would later be loosely extended as an
independent justification for direct recourse to this Court.
We first used the term "transcendental importance"
in Araneta v. Dinglasan. 92 Araneta involved five consolidated
petitions before the Court assailing the validity of the
President's orders issued pursuant to Commonwealth Act No.
671, or "An Act Declaring a State of Total Emergency as a
Result of War Involving the Philippines and Authorizing the
President to Promulgate Rules and Regulations to Meet such
Emergency." 93 Petitioners rested their case on the theory that
Commonwealth Act No. 671 had already ceased to have any
force and effect. 94 The main issues for resolution
in Araneta were: (1) whether Commonwealth Act No. 671 was
still in force; and relatedly, (2) whether the executive orders
issued pursuant thereto were valid. Specifically, the Court had
to resolve the issue of whether Commonwealth Act No. 671
(and the President's Emergency Powers) continued to be
effective after the opening of the regular session of Congress.
In overruling the objection to the personality or sufficiency
of the interest of petitioners in bringing the actions as
taxpayers, 95 this Court declared that "[a]bove all, the
transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing
aside, if we must, technicalities of procedure." 96 Thus, and
similar with Angara, direct recourse to the Court
in Araneta is justified because the issue to be resolved
there was one of law; there was no dispute as to any
underlying fact. Araneta has since then been followed by a
myriad of cases 97 where transcendental importance was cited
as basis for setting aside objections on legal standing.
It was in Chavez v. Public Estates Authority 98 when, for
the first time, it appeared that the transcendental importance
doctrine could, apart from its original purpose to overcome
objections to standing, stand as a justification for disregarding
the proscription against direct recourse to the Court. Chavez is
an original action for mandamus filed before the Court against
the Public Estates Authority (PEA). There, the petition sought,
among others, to compel the PEA to disclose all facts on the
PEA's then on-going renegotiations to reclaim portions of
Manila Bay. 99 On the issue of whether the non-observance of
the hierarchy of courts merits the dismissal of the petition, we
ruled that: 
AScHCD

x x x The principle of hierarchy of courts

applies generally to cases involving factual
questions. As it is not a trier of facts, the Court
cannot entertain cases involving factual issues.
The instant case, however, raises constitutional
issues of transcendental importance to the public.
The Court can resolve this case without determining
any factual issue related to the case. Also, the instant
case is a petition for mandamus which falls under
the original jurisdiction of the Court under Section 5,
Article VIII of the Constitution. We resolve to exercise
primary jurisdiction over the instant
case. 100 (Emphasis supplied; citation omitted.)
 D

The Court is not a trier of facts

In 1973, the dictum that the Supreme Court is not trier of

facts first appeared in jurisprudence through the concurring
opinion of then Chief Justice Querube Makalintal in Chemplex
(Philippines), Inc. v. Pamatian. 101 Chemplex involved a petition
for certiorari against an order recognizing the validity and
legitimacy of the election of directors on the board of a private
corporation. In his concurrence to the majority decision
dismissing the petition, Chief Justice Querube Makalintal wrote:
Judge Pamatian issued the order now
assailed herein after he heard the parties and
received relevant evidence bearing on the incident
before him, namely, the issuance of a writ of
preliminary injunction as prayed for by the
defendants. He issued the writ on the basis of the
facts as found by him, subject of course, as he himself
admitted, considering the interlocutory nature of the
injunction, to further consideration of the case on the
merits after trial. I do not see that his factual findings
are arbitrary or unsupported by the evidence. If
anything, they are circumspect, reasoned out and
arrived at after serious judicial inquiry.
This Court is not a trier of facts, and it is
beyond its function to make its own findings of
certain vital facts different from those of the trial
court, especially on the basis of the conflicting
claims of the parties and without the evidence
being properly before it. For this Court to make
such factual conclusions is entirely unjustified —
first, because if material facts are controverted, as in
this case, and they are issues being litigated before the
lower court, the petition for certiorari would not be in aid
of the appellate jurisdiction of this Court;
and, secondly, because it preempts the primary
function of the lower court, namely, to try the case
on the merits, receive all the evidence to be
presented by the parties, and only then come to a
 definite decision, including either the maintenance or
the discharge of the preliminary injunction it has issued.
The thousands of pages of pleadings,
memoranda, and annexes already before this Court
and the countless hours spent in discussing the
bare allegations of the parties — as to the factual
aspects of which the members are in sharp
disagreement — merely to resolve whether or not
to give due course to the petition, demonstrate
clearly why this Court, in a case like this, should
consider only one question, and no other, namely,
did the court below commit a grave abuse of
discretion in issuing the order complained of, and
should answer that question without searching the
pleadings for supposed facts still in dispute and not
those set forth in the order itself, and in effect deciding
the main case on the merits although it is yet in its
preliminary stages and has not entered the period of
trial. 102 (Emphasis and italics supplied.)
The maxim that the Supreme Court is not a trier of facts
will later find its way in the Court's majority opinion in Mafinco
Trading Corporation v. Ople. 103
Mafinco involved a special civil action for certiorari and
prohibition to annul a Decision of the Secretary of Labor, finding
that the old National Labor Relations Commission (NLRC) had
jurisdiction over the complaint filed against Mafinco Trading
Corporation for having dismissed two union members. The
crucial issue brought before the Court was whether an
employer-employee relationship existed between petitioner and
the private respondents. Before resolving the issue on the
basis of the parties' contracts, the Court made the following
pronouncements:
The parties in their pleadings and memoranda
injected conflicting factual allegations to support their
diametrically opposite contentions. From the factual
angle, the case has become highly controversial.
In a certiorari and prohibition case, like the
instant case, only legal issues affecting the
jurisdiction of the tribunal, board or officer involved
may be resolved on the basis of undisputed facts.
Sections 1, 2 and 3, Rule 65 of the Rules of Court
 require that in the verified petition
for certiorari, mandamus and prohibition the
petitioner should allege "facts with certainty."
In this case, the facts have become
uncertain. Controversial evidentiary facts have
been alleged. What is certain and indubitable is that
a notarized peddling contract was executed.
This Court is not a trier of facts. It would be
difficult, if not anomalous, to decide the
jurisdictional issue on the basis of the parties
contradictory factual submissions. The record has
become voluminous because of their efforts to
persuade this Court to accept their discordant
factual statements.
Pro hac vice the issue of whether Repomanta
and Moralde were employees of Mafinco or were
independent contractors should be resolved mainly in
the light of their peddling contracts. A different
approach would lead this Court astray into the field of
factual controversy where its legal pronouncements
would not rest on solid grounds. 104 (Emphasis
supplied.)
The Rules of Court referred to above is the 1964 Rules of
Court. Up to this date, the requirement of alleging facts with
certainty remains in Sections 1 to 3 of Rule 65 of the 1997
Revised Rules of Court.
Meanwhile, the Court, aware of its own limitations,
decreed in Section 2, Rule 3 of its Internal Rules 105 that it is
"not a trier of facts," viz.:
Sec. 2. The Court Not a Trier of Facts. — The
Court is not a trier of facts; its role is to decide cases
based on the findings of fact before it. Where the
Constitution, the law or the Court itself, in the exercise
of its discretion, decides to receive evidence, the
reception of evidence may be delegated to a member
of the Court, to either the Clerk of Court or one of the
Division Clerks of Court, or to one of the appellate
courts or its justices who shall submit to the Court a
report and recommendation on the basis of the
evidence presented.  AcICHD
 E

The doctrine of hierarchy of courts

Starting in 1987, the Court, in two cases, addressed the

penchant of litigants to seek direct recourse to it from decisions
originating even from the municipal trial courts and city courts.
In Vergara, Sr. v. Suelto, 106 the Court's original
jurisdiction over special civil actions for mandamus was invoked
to compel a Municipal Trial Court (MTC) to issue summary
judgment in a case for illegal detainer. There, we declared in no
uncertain terms that:
x x x As a matter of policy[,] such a direct
recourse to this Court should not be allowed. The
Supreme Court is a court of last resort, and must
so remain if it is to satisfactorily perform the
functions assigned to it by the fundamental charter
and immemorial tradition. It cannot and should not
be burdened with the task of dealing with causes in
the first instance. Its original jurisdiction to issue
the so-called extraordinary writs should be
exercised only where absolutely necessary or
where serious and important reasons exist
therefor[.] Hence, that jurisdiction should generally be
exercised relative to actions or proceedings before the
Court of Appeals, or before constitutional or other
tribunals, bodies or agencies whose acts for some
reason or another, are not controllable by the Court of
Appeals. Where the issuance of an extraordinary
writ is also within the competence of the Court of
Appeals or a Regional Trial Court, it is in either of
these courts that the specific action for the writ's
procurement must be presented. This is and should
continue to be the policy in this regard, a policy
that courts and lawyers must strictly
observe. 107 (Emphasis supplied.)
This so-called "policy" was reaffirmed two years later
in People v. Cuaresma, 108 which involved a petition
for certiorari challenging the quashal by the City Fiscal of an
Information for defamation on the ground of prescription. In
dismissing the petition, this Court reminded litigants to refrain
from directly filing petitions for extraordinary writs before the
Court, unless there were special and important reasons
therefor. We then introduced the concept of "hierarchy of
courts," to wit:
x x x This Court's original jurisdiction to issue
writs of certiorari (as well as
prohibition, mandamus, quo warranto, habeas
corpus and injunction) is not exclusive. It is shared by
this Court with Regional Trial Courts (formerly Courts of
First Instance), which may issue the writ, enforceable in
any part of their respective regions. It is also shared by
this Court, and by the Regional Trial Court, with the
Court of Appeals (formerly, Intermediate Appellate
Court), although prior to the effectivity of Batas
Pambansa Bilang 129 on August 14, 1981, the latter's
competence to issue the extraordinary writs was
restricted to those "in aid of its appellate
jurisdiction." This concurrence of jurisdiction is not,
however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application
therefor will be directed. There is after all a
hierarchy of courts. That hierarchy is determinative
of the venue of appeals, and should also serve as a
general determinant of the appropriate forum for
petitions for the extraordinary writs. A becoming
regard for that judicial hierarchy most certainly
indicates that petitions for the issuance of
extraordinary writs against first level ("inferior")
courts should be filed with the Regional Trial Court,
and those against the latter, with the Court of
Appeals. A direct invocation of the Supreme
Court's original jurisdiction to issue these writs
should be allowed only when there are special and
important reasons therefor, clearly and specifically
set out in the petition. This is established policy. x x
x
The Court feels the need to reaffirm that
policy at this time, and to enjoin strict adherence
thereto in the light of what it perceives to be a
growing tendency on the part of litigants and
lawyers to have their applications for the so-called
 extraordinary writs, and sometime even their
appeals, passed upon and adjudicated directly and
immediately by the highest tribunal of the land. x x
x 109 (Emphasis and underscoring supplied; citation
omitted.)
This doctrine of hierarchy of courts guides litigants as to
the proper venue of appeals and/or the appropriate forum for
the issuance of extraordinary writs. Thus, although this Court,
the CA, and the RTC have concurrent original
jurisdiction 110 over petitions for certiorari,
prohibition, mandamus, quo warranto, and habeas corpus,
parties are directed, as a rule, to file their petitions before the
lower-ranked court. Failure to comply is sufficient cause for the
dismissal of the petition. 111
This Court has interchangeably referred to the hierarchy
of courts as a "principle," 112 a "rule," 113 and a
"doctrine." 114 For purposes for this discussion, however, we
shall refer to it as a doctrine. 
ICHDca

The Court's expanded jurisdiction, social rights, and the

Court's
constitutional rule-making power under the 1987
Constitution

With the 1987 Philippine Constitution came significant

developments in terms of the Court's judicial and rule-making
powers.
First, judicial power is no longer confined to its traditional
ambit of settling actual controversies involving rights that were
legally demandable and enforceable. 115 The second paragraph
of Section 1, Article VIII of the 1987 Constitution provides that
judicial power also includes the duty of the courts "x x x to
determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the government." In Araullo
v. Aquino III, former Associate (now Chief) Justice Bersamin
eruditely explained:
 The Constitution states that judicial power
includes the duty of the courts of justice not only "to
settle actual controversies involving rights which are
legally demandable and enforceable" but also "to
determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality
of the Government." It has thereby expanded the
concept of judicial power, which up to then was
confined to its traditional ambit of settling actual
controversies involving rights that were legally
demandable and enforceable.

xxx xxx xxx

With respect to the Court, however, the

remedies of certiorari and prohibition are necessarily
broader in scope and reach, and the writ of certiorari or
prohibition may be issued to correct errors of
jurisdiction committed not only by a tribunal,
corporation, board or officer exercising judicial, quasi-
judicial or ministerial functions but also to set right,
undo and restrain any act of grave abuse of discretion
amounting to lack or excess of jurisdiction by any
branch or instrumentality of the Government, even if
the latter does not exercise judicial, quasi-judicial or
ministerial functions. This application is expressly
authorized by the text of the second paragraph of
Section 1, supra. 116 (Italics supplied.)
It must be stressed, however, that this grant of expanded
power of judicial review did not result to the abandonment of
the Angara model. 117 Direct recourse to the Court, on grounds
of grave abuse of discretion, was still allowed only when the
questions presented were legal.
Second, in addition to providing for "self-executory and
ready for use" 118 civil and political rights, the 1987 Constitution
also contained provisions pertaining to what has been termed
as "social rights." Esteemed constitutionalist and member of the
1987 Constitutional Commission Father Joaquin G. Bernas, SJ,
explained:
 x x x But as will be seen, the 1987 Constitution
advances beyond what was in previous Constitutions in
that it seeks not only economic social justice but also
political social justice.
x x x The guarantees of civil and political rights
found principally in the Bill of Rights are self-executory
and ready for use. One can assert those rights in a
court of justice. Social rights are a different
phenomenon. Except to the extent that they prohibit the
government from embarking in activity contrary to the
ideals of social justice, they generally are not rights in
the strict sense that the rights in the Bill of Rights are. x
x x In legal effectiveness, they are primarily in the
nature of claims of demands which people expect
government to satisfy, or they are ideals which
government is expected to respect. x x x 119
This, in turn, gave rise to a slew of litigation invoking
these so-called "social rights." 120 In Oposa v. Factoran,
Jr., 121 for example, this Court famously recognized an
enforceable right to a balanced and healthful ecology under
Section 16, Article II of the 1987 Constitution.
Third, the Supreme Court's rule-making power was
enhanced under the new Constitution, to wit:

xxx xxx xxx

Section 5. The Supreme Court shall have the

following powers:

xxx xxx xxx

(5) Promulgate rules concerning the protection

and enforcement of constitutional rights, pleading,
practice and procedure in all courts, the admission to
the practice of law, the Integrated Bar, and legal
assistance to the underprivileged. Such rules shall
provide a simplified and inexpensive procedure for the
speedy disposition of cases, shall be uniform for all
courts of the same grade, and shall not diminish,
increase, or modify substantive rights. Rules of
 procedure of special courts and quasi-judicial bodies
shall remain effective unless disapproved by the
Supreme Court. 122 (Italics in the original) 
TCAScE

For the first time, the Court was granted with the
following: (1) the power to promulgate rules concerning the
protection and enforcement of constitutional rights; and (2) the
power to disapprove rules of procedure of special courts and
quasi-judicial bodies. The 1987 Constitution also took away the
power of Congress to repeal, alter, or supplement rules
concerning pleading, practice and procedure. 123
Pursuant to its constitutional rule-making power, 124 the
Court promulgated new sets of rules which effectively increased
its original and concurrent jurisdiction with the RTC and the CA:
(1) A.M. No. 07-9-12-SC or the Rule on the Writ
of Amparo; 125 (2) A.M. No. 08-1-16-SC or the Rule on the Writ
of Habeas Data; 126 and (3) A.M. No. 09-6-8-SC or the Rules of
Procedure for Environmental Cases. 127
Under these Rules, litigants are allowed to seek direct
relief from this Court, regardless of the presence of questions
which are heavily factual in nature. In the same vein, judgments
in petitions for writ of amparo, writ of habeas data, and writ
of kalikasan rendered by lower-ranked courts can be appealed
to the Supreme Court on questions of fact, or law, or both, via a
petition for review on certiorari under Rule 45 of the 1997 Rules
of Court. 128
In practice, however, petitions for writ of amparo, writ
of habeas data, and writ of kalikasan which were originally filed
before this Court invariably found their way to the CA for
hearing and decision, with the CA's decision to be later on
brought before us on appeal. Thus, in Secretary of National
Defense v. Manalo, 129 the first ever amparo petition, this Court
ordered the remand of the case to the CA for the conduct of
hearing, reception of evidence, and decision. 130 We also did
the same in: (1) Rodriguez v. Macapagal-Arroyo; 131 (2) Saez v.
Macapagal-Arroyo; 132 and (3) International Service for the
Acquisition of Agri-Biotech Applications, Inc., v. Greenpeace
Southeast Asia (Philippines). 133 The consistent practice of the
Court in these cases (that is, referring such petitions to the CA
for the reception of evidence) is a tacit recognition by the Court
itself that it is not equipped to be a trier of facts.
 Notably, our referral of the case to the CA for hearing,
reception of evidence, and decision is in consonance with
Section 2, Rule 3 of our Internal Rules which states that if the
Court, in the exercise of its discretion, decides to receive
evidence, it may delegate the same to one of the appellate
courts for report and recommendation.

Exceptions to the doctrine of hierarchy of courts

Aside from the special civil actions over which it has

original jurisdiction, the Court, through the years, has allowed
litigants to seek direct relief from it upon allegation of "serious
and important reasons." The Diocese of Bacolod v.
Commission on Elections 134 (Diocese) summarized these
circumstances in this wise:
(1) when there are genuine issues of constitutionality
that must be addressed at the most immediate time;
(2) when the issues involved are of transcendental
importance;
(3) cases of first impression;
(4) the constitutional issues raised are better decided
by the Court;
(5) exigency in certain situations;
(6) the filed petition reviews the act of a constitutional
organ;
(7) when petitioners rightly claim that they had no other
plain, speedy, and adequate remedy in the ordinary
course of law that could free them from the injurious
effects of respondents' acts in violation of their right to
freedom of expression; [and]
(8) the petition includes questions that are "dictated by
public welfare and the advancement of public policy, or
demanded by the broader interest of justice, or the
orders complained of were found to be patent nullities,
or the appeal was considered as clearly an
inappropriate remedy." 135
 A careful examination of the jurisprudential bases 136 of
the foregoing exceptions would reveal a common denominator
— the issues for resolution of the Court are purely legal.
Similarly, the Court in Diocese decided to allow direct recourse
in said case because, just like Angara, what was involved was
the resolution of a question of law, namely, whether the
limitation on the size of the tarpaulin in question violated the
right to free speech of the Bacolod Bishop.
We take this opportunity to clarify that the presence of
one or more of the so-called "special and important reasons" is
not the decisive factor considered by the Court in deciding
whether to permit the invocation, at the first instance, of its
original jurisdiction over the issuance of extraordinary
writs. Rather, it is the nature of the question raised by the
parties in those "exceptions" that enabled us to allow the
direct action before us.
As a case in point, we shall focus our discussion on
transcendental importance. Petitioner after all argues that its
direct resort to us is proper because the issue raised (that is,
whether the bundling of the Projects violates the constitutional
proscription on monopoly and restraint of trade) is one of
transcendental importance or of paramount public interest.  cTDaEH

An examination of the cases wherein this Court used

"transcendental importance" of the constitutional issue raised to
excuse violation of the principle of hierarchy of courts would
show that resolution of factual issues was not necessary for the
resolution of the constitutional issue/s. These cases
include Chavez v. Public Estates Authority, 137 Agan, Jr. v.
Philippine International Air Terminals Co., Inc., 138 Jaworski v.
Philippine Amusement and Gaming Corporation, 139 Province
of Batangas v. Romulo, 140 Aquino III v. Commission on
Elections, 141 Department of Foreign Affairs v.
Falcon, 142 Capalla v. Commission on Elections, 143 Kulayan v.
Tan, 144 Funa v. Manila Economic & Cultural Office, 145 Ferrer,
Jr. v. Bautista, 146 and Ifurung v. Carpio-Morales. 147 In all
these cases, there were no disputed facts and the issues
involved were ones of law.
In Agan, we stated that "[t]he facts necessary to resolve
these legal questions are well established and, hence, need not
be determined by a trial court." 148 In Jaworski, the issue is
whether Presidential Decree No. 1869 authorized the Philippine
Amusement and Gaming Corporation to contract any part of its
franchise by authorizing a concessionaire to operate internet
gambling. 149 In Romulo, we declared that the facts necessary
to resolve the legal question are not disputed. 150 In Aquino III,
the lone issue is whether RA No. 9716, which created an
additional legislative district for the Province of Camarines Sur,
is constitutional. 151 In Falcon, the threshold issue is whether an
information and communication technology project, which does
not conform to our traditional notion of the term "infrastructure,"
is covered by the prohibition against the issuance of court
injunctions under RA No. 8975. 152 Similarly, in Capalla, the
issue is the validity and constitutionality of the Commission on
Elections' Resolutions for the purchase of precinct count optical
scanner machines as well as the extension agreement and the
deed of sale covering the same. 153 In Kulayan, the issue is
whether Section 465 in relation to Section 16 of the Local
Government Code authorizes the respondent governor to
declare a state of national emergency and to exercise the
powers enumerated in his Proclamation No. 1-09. 154 In Funa,
the issue is whether the Commission on Audit is, under
prevailing law, mandated to audit the accounts of the Manila
Economic and Cultural Office. 155 In Ferrer, the issue is the
constitutionality of the Quezon City ordinances imposing
socialized housing tax and garbage fee. 156 In Ifurung, the issue
is whether Section 8 (3) of RA No. 6770 or the Ombudsman Act
of 1989 is constitutional. 157
More recently, in Aala v. Uy, 158 the Court En Banc,
dismissed an original action for certiorari, prohibition,
and mandamus, which prayed for the nullification of an
ordinance for violation of the equal protection clause, due
process clause, and the rule on uniformity in taxation. We
stated that, not only did petitioners therein fail to set forth
exceptionally compelling reasons for their direct resort to the
Court, they also raised factual issues which the Court deems
indispensable for the proper disposition of the case. We
reiterated the time-honored rule that we are not a trier of facts:
"[T]he initial reception and appreciation of evidence are
functions that [the] Court cannot perform. These are functions
best left to the trial courts." 159
To be clear, the transcendental importance doctrine does
not clothe us with the power to tackle factual questions and play
the role of a trial court. The only circumstance when we may
take cognizance of a case in the first instance, despite the
presence of factual issues, is in the exercise of our
constitutionally-expressed task to review the sufficiency of the
factual basis of the President's proclamation of martial law
under Section 18, Article VII of the 1987 Constitution. 160 The
case before us does not fall under this exception.

Hierarchy of courts is a constitutional imperative

Strict observance of the doctrine of hierarchy of courts

should not be a matter of mere policy. It is a constitutional
imperative given (1) the structure of our judicial system and (2)
the requirements of due process.
First. The doctrine of hierarchy of courts recognizes the
various levels of courts in the country as they are established
under the Constitution and by law, their ranking and effect of
their rulings in relation with one another, and how these
different levels of court interact with one another. 161 It
determines the venues of appeals and the appropriate forum for
the issuance of extraordinary writs. 162
Since the creation of the Court in 1901, 163 and save for
certain exceptions, it does not, as a rule, retry questions of
facts. 164 Trial courts such as the MTCs and the RTCs, on the
other hand, routinely decide questions of fact and law at the
first instance, in accordance with the jurisdiction granted to
them by law. 165 While the CA and other intermediate courts
can rule on both questions of fact and law, the Supreme Court,
in stark contrast, generally decides only questions of law. This
is because the Court, whether in the exercise of its original or
appellate jurisdiction, is not equipped to receive and evaluate
evidence in the first instance. Our sole role is to apply the law
based on the findings of facts brought before us. 166 Notably,
from the 1901 Rules 167 until the present 1997 Revised Rules of
Court, 168 the power to ascertain facts and receive and evaluate
evidence in relation thereto is lodged with the trial courts. 
cSaATC

In Alonso v. Cebu Country Club, Inc. (Alonso), 169 this

Court had occasion to articulate the role of the CA in the judicial
hierarchy, viz.:
 The hierarchy of courts is not to be lightly
regarded by litigants. The CA stands between the
RTC and the Court, and its establishment has been
precisely to take over much of the work that used
to be done by the Court. Historically, the CA has
been of the greatest help to the Court in
synthesizing the facts, issues, and rulings in an
orderly and intelligible manner and in identifying
errors that ordinarily might escape detection. The
Court has thus been freed to better discharge its
constitutional duties and perform its most
important work, which, in the words of Dean Vicente
G. Sinco, "is less concerned with the decision of cases
that begin and end with the transient rights and
obligations of particular individuals but is more
intertwined with the direction of national policies,
momentous economic and social problems, the
delimitation of governmental authority and its impact
upon fundamental rights." 170 (Emphasis supplied;
citations omitted.)
Accordingly, when litigants seek relief directly from the
Court, they bypass the judicial structure and open themselves
to the risk of presenting incomplete or disputed facts. This
consequently hampers the resolution of controversies before
the Court. Without the necessary facts, the Court cannot
authoritatively determine the rights and obligations of the
parties. The case would then become another addition to the
Court's already congested dockets. Thus, as we explained
in Alonso:
x x x Their non-observance of the hierarchy of
courts has forthwith enlarged the docket of the Court by
one more case, which, though it may not seem
burdensome to the layman, is one case too much to
the Court, which has to devote time and effort in poring
over the papers submitted herein, only to discover in
the end that a review should have first been made by
the CA. The time and effort could have been dedicated
to other cases of importance and impact on the lives
and rights of others. 171
Second. Strict adherence to the doctrine of hierarchy of
courts also proceeds from considerations of due process. While
the term "due process of law" evades exact and concrete
definition, this Court, in one of its earliest decisions, referred to
it as a law which hears before it condemns which proceeds
upon inquiry and renders judgment only after trial. It means that
every citizen shall hold his life, liberty, property, and immunities
under the protection of the general rules which govern
society. 172 Under the present Rules of Court, which governs
our judicial proceedings, warring factual allegations of parties
are settled through presentation of evidence. Evidence is the
means of ascertaining, in a judicial proceeding, the truth
respecting a matter of fact. 173 As earlier demonstrated, the
Court cannot accept evidence in the first instance. By directly
filing a case before the Court, litigants necessarily deprive
themselves of the opportunity to completely pursue or defend
their causes of actions. Their right to due process is effectively
undermined by their own doing.
Objective justice also requires the ascertainment of all
relevant facts before the Court can rule on the issue brought
before it. Our pronouncement in Republic v.
Sandiganbayan  174 is enlightening:
The resolution of controversies is, as
everyone knows, the raison d'etre of courts. This
essential function is accomplished by first, the
ascertainment of all the material and relevant facts
from the pleadings and from the evidence adduced
by the parties, and second, after that determination of
the facts has been completed, by the application of the
law thereto to the end that the controversy may be
settled authoritatively, definitely and finally.
It is for this reason that a substantial part of
the adjective law in this jurisdiction is occupied
with assuring that all the facts are indeed
presented to the Court; for obviously, to the extent
that adjudication is made on the basis of
incomplete facts, to that extent there is faultiness
in the approximation of objective justice. It is thus
the obligation of lawyers no less than of judges to see
that this objective is attained; that is to say, that there
no suppression, obscuration, misrepresentation or
distortion of the facts; and that no party be unaware of
any fact material and relevant to the action, or
surprised by any factual detail suddenly brought to his
attention during the trial. 175 (Emphasis supplied.)
 I

The doctrine of hierarchy of courts as a filtering

mechanism

The doctrine of hierarchy of courts operates to: (1)

prevent inordinate demands upon the Court's time and attention
which are better devoted to those matters within its exclusive
jurisdiction; 176 (2) prevent further over-crowding of the Court's
docket; 177 and (3) prevent the inevitable and resultant delay,
intended or otherwise, in the adjudication of cases which often
have to be remanded or referred to the lower court as the
proper forum under the rules of procedure, or as the court
better equipped to resolve factual questions. 178 cHDAIS

Strict adherence to the doctrine of hierarchy of courts is

an effective mechanism to filter the cases which reach the
Court. As of December 31, 2016, 6,526 new cases were filed to
the Court. Together with the reinstated/revived/reopened cases,
the Court has a total of 14,491 cases in its docket. Of the new
cases, 300 are raffled to the Court En Banc and 6,226 to the
three Divisions of the Court. The Court En Banc disposed of
105 cases by decision or signed resolution, while the Divisions
of the Court disposed of a total of 923 by decision or signed
resolution. 179
These, clearly, are staggering numbers. The Constitution
provides that the Court has original jurisdiction over five
extraordinary writs and by our rule-making power, we created
four more writs which can be filed directly before us. There is
also the matter of appeals brought to us from the decisions of
lower courts. Considering the immense backlog facing the
court, this begs the question: What is really the Court's work?
What sort of cases deserves the Court's attention and time?
We restate the words of Justice Jose P. Laurel
in Angara that the Supreme Court is the final arbiter of the
Constitution. Hence, direct recourse to us should be allowed
only when the issue involved is one of law. However, and as
former Associate Justice Vicente V. Mendoza reminds, the
Court may still choose to avoid passing upon constitutional
questions which are confessedly within its jurisdiction if there is
some other ground on which its decision may be based. 180 The
so-called "seven pillars of limitations of judicial review" 181 or
the "rules of avoidance" enunciated by US Supreme Court
Justice Brandeis in his concurring opinion in Ashwander v.
Tennessee Valley Authority  182 teaches that:
1. The Court will not pass upon the constitutionality of
legislation in a friendly, non-adversary proceeding,
declining because to decide such questions "is
legitimate only in the last resort, and as a necessity in
the determination of real, earnest and vital controversy
between individuals. It never was the thought that, by
means of a friendly suit, a party beaten in the
legislature could transfer to the courts an inquiry as to
the constitutionality of the legislative act."
2. The Court will not "anticipate a question of
constitutional law in advance of the necessity of
deciding it." "It is not the habit of the Court to decide
questions of a constitutional nature unless absolutely
necessary to a decision of the case."
3. The Court will not "formulate a rule of constitutional
law broader than is required by the precise facts to
which it is to be applied."
4. The Court will not pass upon a constitutional
question, although properly presented by the record, if
there is also present some other ground upon which
the case may be disposed of. This rule has found most
varied application. Thus, if a case can be decided on
either of two grounds, one involving a constitutional
question, the other a question of statutory construction
or general law, the Court will decide only the latter.
Appeals from the highest court of a state challenging its
decision of a question under the Federal Constitution
are frequently dismissed because the judgment can be
sustained on an independent state ground.
5. The Court will not pass upon the validity of a statute
upon complaint of one who fails to show that he is
injured by its operation. Among the many applications
of this rule, none is more striking than the denial of the
right of challenge to one who lacks a personal or
property right. Thus, the challenge by a public official
interested only in the performance of his official duty
will not be entertained. In Fairchild v. Hughes, the
Court affirmed the dismissal of a suit brought by a
 citizen who sought to have the Nineteenth Amendment
declared unconstitutional. In Massachusetts v. Mellon,
the challenge of the federal Maternity Act was not
entertained although made by the Commonwealth on
behalf of all its citizens.
6. The Court will not pass upon the constitutionality of a
statute at the instance of one who has availed himself
of its benefits.
7. "When the validity of an act of the Congress is drawn
in question, and even if a serious doubt of
constitutionality is raised, it is a cardinal principle that
this Court will first ascertain whether a construction of
the statute is fairly possible by which the question may
be avoided." 183 (Citations omitted.)
Meanwhile, in Francisco, Jr. v. Nagmamalasakit na mga
Manananggol ng mga Manggagawang Pilipino, Inc., 184 the
Court summarized the foregoing "pillars" into six categories and
adopted "parallel guidelines" in the exercise of its power of
judicial review, to wit:
The foregoing "pillars" of limitation of judicial
review, summarized in Ashwander v. Tennessee Valley
Authority from different decisions of the United States
Supreme Court, can be encapsulated into the following
categories:
1. that there be absolute necessity of deciding a
case
2. that rules of constitutional law shall be
formulated only as required by the facts of
the case
3. that judgment may not be sustained on some
other ground
4. that there be actual injury sustained by the
party by reason of the operation of the
statute
5. that the parties are not in estoppel
6. that the Court upholds the presumption of
constitutionality. ISHCcT
 As stated previously, parallel guidelines have
been adopted by this Court in the exercise of judicial
review:
1. actual case or controversy calling for the
exercise of judicial power;
2. the person challenging the act must have
"standing" to challenge; he must have a
personal and substantial interest in the
case such that he has sustained, or will
sustain, direct injury as a result of its
enforcement;
3. the question of constitutionality must be raised
at the earliest possible opportunity;
4. the issue of constitutionality must be the very lis
mota of the case. 185 (Citations omitted.)
Thus, the exercise of our power of judicial review is
subject to these four requisites and the further requirement that
we can only resolve pure questions of law. These limitations,
when properly and strictly observed, should aid in the
decongestion of the Court's workload.
To end, while reflective deliberation is necessary in the
judicial process, there is simply no ample time for it given this
Court's massive caseload. 185 In fact, we are not unaware of the
proposals to radically reform the judicial structure in an attempt
to relieve the Court of its backlog of cases. 186 Such proposals
are, perhaps, borne out of the public's frustration over the slow
pace of decision-making. With respect, however, no overhaul
would be necessary if this Court commits to be more judicious
with the exercise of its original jurisdiction by strictly
implementing the doctrine of hierarchy of courts.
Accordingly, for the guidance of the bench and the
bar, we reiterate that when a question before the Court
involves determination of a factual issue indispensable to
the resolution of the legal issue, the Court will refuse to
resolve the question regardless of the allegation or
invocation of compelling reasons, such as the
transcendental or paramount importance of the case. Such
question must first be brought before the proper trial
courts or the CA, both of which are specially equipped to
try and resolve factual questions.
 WHEREFORE, PREMISES CONSIDERED, the petition
is DISMISSED.
SO ORDERED.
Bersamin, C.J., Peralta, Del Castillo, Perlas-Bernabe,
Caguioa, A.B. Reyes, Jr., Gesmundo, J.C. Reyes, Jr.,
Hernando, Carandang and Lazaro-Javier, JJ., concur.
Carpio, J., I concur to J. Leonen. We do not abandon
here the doctrine of transcendental importance.
Leonen, J., see separate concurring opinion.
Separate Opinions
LEONEN, J., concurring:

I agree with the disposition of this case as proposed in

the Decision written by Associate Justice Francis H. Jardeleza.
To clarify the reasons for my vote, I add the following brief
points.

Indeed, the claims made by petitioner GIOS-SAMAR, Inc.

require a more contextual appreciation of the evidence that it
may present to support its claims. The nature of its various
allegations requires the presentation of evidence and
inferences, which should, at first instance, be done by a trial
court. 1
Monopolization should not be lightly inferred especially
since efficient business organizations are rewarded by the
market with growth. Due to the high barriers to economic entry
and long gestation periods, it is reasonable for the government
to bundle infrastructure projects. There is, indeed, a difference
between abuse of dominant position in a relevant market 2 and
combinations in restraint of trade. 3 The Petition seems to have
confused these two (2) competition law concepts and it has not
made clear which concept it wished to apply.
Further, broad allegations amounting to a generalization
that certain corporations allow themselves to serve as dummies
for cartels or foreigners cannot hold ground in this Court. These
constitute criminal acts. The Constitution requires that judicial
action proceed carefully and always from a presumption of
innocence. Tall tales of conspiratorial actions — though they
may be salacious, make for interesting fiction, and are fodder
for social media — do not deserve any judicial action. Broad
generalizations of facts without corresponding evidence border
on the contemptuous.
Although the Constitution grants original and concurrent
jurisdiction with the Regional Trial Courts and the Court of
Appeals over actions for certiorari, prohibition, mandamus, quo
warranto, and habeas corpus, this Court generally does not
receive evidence, and thus, rarely makes findings of facts
contested by the parties at first instance. In The Diocese of
Bacolod v. Commission on Elections, 4 this Court held:
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
confusions 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. 5 (Citation omitted)
This is true whether the remedy used is the original
action for certiorari or prohibition, regardless of whether this is
brought under Rule 65 of the Rules of Court or the expanded
power to examine if there has been grave abuse of discretion
by any government branch or instrumentality, 6 as held
in Araullo v. Aquino III, 7 among others.  CAacTH

Through the classic eloquence of the ponente, this case

reiterates the doctrine that the finding of grave abuse of
discretion made by this Court in its original jurisdiction is
generally only over cases where the material facts are not
contested. Further, this case highlights that petitioners bear the
burden of clearly and convincingly elaborating on why the
doctrine of respect for the hierarchy of courts may have been
apparently violated. 8
Reiterating these rules is important. A single instance
when a ruling is laid means mere ratio decidendi. Ratio
decidendi, when repeated in several various compositions of
this Court, endows it with the status of an evolving doctrine.
When reiterated in a number of cases over the years, an
evolving doctrine becomes canon. The ratio decidendi, baring
other factors, is strengthened with reiteration and reexamination
of its rationale in subsequent cases.
However, to be more precise, I propose that we clarify
that even if the issues raised are questions of law, this Court is
not devoid of its discretion to deny addressing the constitutional
issues entirely.
This means restating the difference between the concept
of jurisdiction and justiciability in constitutional adjudication.
 II

Jurisdiction is the competence "to hear, try[,] and decide

a case." 9 It is a power that is granted by the Constitution and
by law. 10 In situations where several courts may exercise
jurisdiction either originally or on an appeal, the court that first
seized of the issues holds jurisdiction over the case, to the
exclusion of the rest. 11
Jurisdiction, or the competence to proceed with the case,
requires several elements. To determine jurisdiction, courts
assess: (1) the remedy or the procedural vehicle for raising the
issues; 12 (2) the subject matter of the controversy; 13 (3) the
issues as framed by the parties; 14 and (4) the processes
served on the parties themselves vis-à-vis the constitutional or
law provisions that grant competence. 15
Related to jurisdiction is our application of the doctrine of
granting the primary administrative jurisdiction, when statutorily
warranted, to the executive department. 16 This is different from
the rule on exhaustion of administrative remedies 17 or the
doctrine of respect for the hierarchy of courts, 18 which are
matters of justiciability, not jurisdiction.
Jurisdiction, once acquired, cannot be waived. 19
Determining whether the case, or any of the issues
raised, is justiciable is an exercise of the power granted to a
court with jurisdiction over a case that involves constitutional
adjudication. Thus, even if this Court has jurisdiction, the
canons of constitutional adjudication in our jurisdiction allow us
to disregard the questions raised at our discretion.
The general rule with respect to justiciability is one of
constitutional avoidance. That is, before we proceed with even
considering how a word or phrase in the Constitution is
violated, we first examine whether there is an actual case or
controversy. The justiciability of a controversy is often couched
in four (4) elements: (1) that there is an actual case or
controversy; 20 (2) that the party raising the issues has locus
standi; 21 (3) that the case is ripe for adjudication; 22 and (4) that
the constitutional issue is the very lis mota of the case. 23
The third element may be rephrased into two (2) queries.
The court considers whether the case has already become
moot, 24 or whether the issues that call for constitutional
interpretation are prematurely raised. 25
The doctrine of avoidance is palpable when we refuse to
decide on the constitutional issue by ruling that the parties have
not exhausted administrative remedies, 26 or that they have
violated the doctrine of respect for the hierarchy of
courts. 27 These are specific variants or corollaries of the rule
that the case should be ripe for constitutional adjudication.
The fourth element allows this Court to grant or deny the
reliefs prayed for by any petitioner if there is a statutory or
procedural rule that can be applied to resolve the issues raised,
rather than deal with the interpretation of a constitutional
issue. 28
Angara v. Electoral Commission 29 imbues these rules
with its libertarian character. Principally, Angara emphasized
the liberal deference to another constitutional department or
organ given the majoritarian and representative character of the
political deliberations in their forums. It is not merely a judicial
stance dictated by courtesy, but is rooted on the very nature of
this Court. Unless congealed in constitutional or statutory text
and imperatively called for by the actual and non-controversial
facts of the case, this Court does not express policy. This Court
should channel democratic deliberation where it should take
place.
When interpretations of a constitutional provision are
equally valid but lead to contrary results, this Court should
exercise judicial restraint and allow the political forces to shed
light on a choice. This Court steps in only when it discerns clear
fallacies in the application of certain norms or their
interpretation. Judicial restraint requires that this Court does not
involve itself into matters in which only those who join in
democratic political deliberation should participate. As
magistrates of the highest court, we should distinguish our role
from that of an ordinary citizen who can vote.
Judicial restraint is also founded on a policy of conscious
and deliberate caution. This Court should refrain from
speculating on the facts of a case and should allow parties to
shape their case instead. Likewise, this Court should avoid
projecting hypothetical situations where none of the parties can
fully argue simply because they have not established the facts
or are not interested in the issues raised by the hypothetical
situations. 30 In a way, courts are mandated to adopt an attitude
of judicial skepticism. What we think may be happening may
not at all be the case. Therefore, this Court should always await
the proper case to be properly pleaded and proved.
Plainly put, majority opinions that rule on constitutional
issues as obiter dictum is dangerous not only because it is
injudicious, but also because it undermines the constitutional
framework of governance.  IAETDc

III

Thus, I propose that we further tame the concept that a

case's "transcendental importance" 31 creates exceptions to
justiciability. The elements supported by the facts of an actual
case, and the imperatives of our role as the Supreme Court
within a specific cultural or historic context, must be made clear.
They should be properly pleaded by the petitioner so that
whether there is any transcendental importance to a case is
made an issue. That a case has transcendental importance, as
applied, may have been too ambiguous and subjective that it
undermines the structural relationship that this Court has with
the sovereign people and other departments under the
Constitution. Our rules on jurisdiction and our interpretation of
what is justiciable, refined with relevant cases, may be enough.
However, consistent with this opinion, we cannot wholly
abandon the doctrinal application of cases with transcendental
importance. 32 That approach just does not apply in this case.
Here, we have just established that cases calling for questions
of fact generally cannot be cases from which we establish
transcendental importance. Generally, we follow the doctrine of
respect for hierarchy of courts for matters within our concurrent
original jurisdiction.

IV

Critically, the nuances of the cases we find justiciable

signal our philosophy of adjudication. Even as we try to filter out
and dispose of the cases pending in our docket, this Court's
role is not simply to settle disputes. This Court also performs
the important public function of clarifying the values embedded
in our legal order anchored on the Constitution, laws, and other
issuances by competent authorities.
As this Court finds ways to dispose of its cases, it should
be sensitive to the quality of the doctrines it emphasizes and
the choice of cases on which it decides. Both of these will
facilitate the vibrant democracy and achievement of social
justice envisioned by our Constitution.
Every case filed before this Court has the potential of
undoing the act of a majority in one (1) of the political and co-
equal departments of our government. Our Constitution allows
that its congealed and just values be used by a reasonable
minority to convince this Court to undo the majority's action. In
doing so, this Court is required to make its reasons precise,
transparent, and responsive to the arguments pleaded by the
parties. The trend, therefore, should be to clarify broad
doctrines laid down in the past. The concept of a case with
transcendental importance is one (1) of them.
Our democracy, after all, is a reasoned democracy: one
with a commitment not only to the majority's rule, but also to
fundamental and social rights.
Even as we recall the canonical doctrines that inform the
structure of our Constitution, we should never lose sight of the
innovations that our fundamental law has introduced. We have
envisioned a more engaged citizenry and political forums that
welcome formerly marginalized communities and identities.
Hence, we have encoded the concepts of social justice,
acknowledged social and human rights, and expanded the
provisions in our Bill of Rights.
We should always be careful that in our desire to achieve
judicial efficiency, we do not filter cases that bring out these
values.
This Court, therefore, has a duty to realize this vision.
The more guarded but active part of judicial review pertains to
situations where there may have been a deficit in democratic
participation, especially where the hegemony or patriarchy
ensures the inability of discrete and insular minorities to
participate fully. While this Court should presume
representation in the deliberative and political forums, it should
not be blind to present realities.
 Certainly, this case falls woefully short of these noble
expectations.
ACCORDINGLY, I vote to DISMISS the Petition.
 
Footnotes

1. Renamed as Department of Transportation under Section 15 of Republic

Act No. 10844 or the Department of Information and Communications
Technology Act of 2015.
2. Rollo, p. 17.
3. Id. at 4.
4. See Invitation to Pre-qualify and Bid. Id.
5. Rollo, p. 17.
6. An Act Authorizing the Financing, Construction, Operation and
Maintenance of Infrastructure Projects by the Private Sector, and for
Other Purposes.
7. An Act Amending Certain Sections of Republic Act No. 6957, entitled "An
Act Authorizing the Financing, Construction, Operation and
Maintenance of Infrastructure Projects by the Private Sector, and for
Other Purposes."
8. Rollo, p. 17
9. Id. at 18-107.
10. Id. at 24.
11. Id.
12. Rollo, p. 35.
13. Id. at 6.
14. Id. at 3-16.
15. Id. at 3.
16. Id. at 7.
17. Sec. 11. No franchise, certificate, or any other form of authorization for
the operation of a public utility shall be granted except to citizens of
the Philippines or to corporations or associations organized under the
laws of the Philippines at least sixty per centum of whose capital is
owned by such citizens, nor shall such franchise, certificate, or
 authorization be exclusive in character or for a longer period than fifty
years. Neither shall any such franchise or right be granted except
under the condition that it shall be subject to amendment, alteration,
or repeal by the Congress when the common good so requires. The
State shall encourage equity participation in public utilities by the
general public. The participation of foreign investors in the governing
body of any public utility enterprise shall be limited to their
proportionate share in its capital, and all the executive and managing
officers of such corporation or association must be citizens of the
Philippines.
18.Rollo, p. 10.
19.Id. at 10-11.
20.Id. at 12.
21.Id.
22.Id.
23.Rollo, p. 13.
24.Id. at 13-14.
25.Id. at 214-229.
26.Id. at 218-219.
27.Id. at 241-244.
28.Id. at 244-245.
29.Id. at 271-280, 284-286.
30.Id. at 271.
31.Id. at 274.
32.Id. at 284. Emphasis omitted.
33.Id. at 285.
34.G.R. Nos. 124360 & 127867, November 5, 1997, 281 SCRA 330.
35.Id. at 357.
36.G.R. Nos. L-54958 & L-54966, September 2, 1983, 124 SCRA 494, 522.
37.G.R. Nos. L-54958 & L-54966, September 2, 1983, 124 SCRA 494. See
also Section 3 of Republic Act No. 6957, as amended by Republic
Act No. 7718, and Section 2.2 of the Revised Implementing Rules
and Regulations of the BOT Law, as amended.
38.Tatad v. Secretary of the Department of Energy, supra note 33 at 355.
39.Art. 186. Monopolies and Combinations in Restraint of Trade. — The
penalty of prision correccional in its minimum period or a fine ranging
from 200 to 6,000 pesos, or both, shall be imposed upon:
   1. Any person who shall enter into any contract or agreement or shall take
part in any conspiracy or combination in the form of a trust or
otherwise, in restraint of trade or commerce or to prevent by artificial
means free competition in the market;
   2. Any person who shall monopolize any merchandise or object of trade
or commerce, or shall combine with any other person or persons to
monopolize said merchandise or object in order to alter the price
thereof by spreading false rumors or making use of any other artifice
to restrain free competition in the market;
   3. Any person who, being a manufacturer, producer, or processor of any
merchandise or object of commerce or an importer of any
merchandise or object of commerce from any foreign country, either
as principal or agent, wholesaler or retailer, shall combine, conspire
or agree in any manner with any person likewise engaged in the
manufacture, production, processing, assembling or importation of
such merchandise or object of commerce or with any other persons
not so similarly engaged for the purpose of making transactions
prejudicial to lawful commerce, or of increasing the market price in
any part of the Philippines, of any such merchandise or object of
commerce manufactured, produced, processed, assembled in or
imported into the Philippines, or of any article in the manufacture of
which such manufactured, produced, or imported merchandise or
object of commerce is used.
   If the offense mentioned in this article affects any food substance, motor
fuel or lubricants, or other articles of prime necessity, the penalty
shall be that of prision mayor in its maximum and medium periods it
being sufficient for the imposition thereof that the initial steps have
been taken toward carrying out the purposes of the combination.
   Any property possessed under any contract or by any combination
mentioned in the preceding paragraphs, and being the subject
thereof, shall be forfeited to the Government of the Philippines.
   Whenever any of the offenses described above is committed by a
corporation or association, the president and each one of its agents
or representatives in the Philippines in case of a foreign corporation
or association, who shall have knowingly permitted or failed to
 prevent the commission of such offense, shall be held liable as
principals thereof.
40.See Sections 2 (c) and 55 (a) of Republic Act No. 10667.
41.Sec. 4. Definition of Terms. — As used in this Act:

xxx xxx xxx

   (k) Relevant market refers to the market in which a particular good or

service is sold and which is a combination of the relevant product
market and the relevant geographic market, defined as follows:
   (1) A relevant product market comprises all those goods and/or services
which are regarded as interchangeable or substitutable by the
consumer or the customer, by reason of the goods and/or services'
characteristics, their prices and their intended use; and
   (2) The relevant geographic market comprises the area in which the entity
concerned is involved in the supply and demand of goods and
services, in which the conditions of competition are sufficiently
homogenous and which can be distinguished from neighboring areas
because the conditions of competition are different in those areas.
42.Sec. 24. Relevant Market. — For purposes of determining the relevant
market, the following factors, among others, affecting the
substitutability among goods or services constituting such market and
the geographic area delineating the boundaries of the market shall be
considered:
   (a) The possibilities of substituting the goods or services in question, with
others of domestic or foreign origin, considering the technological
possibilities, extent to which substitutes are available to consumers
and time required for such substitution;
   (b) The cost of distribution of the good or service, its raw materials, its
supplements and substitutes from other areas and abroad,
considering freight, insurance, import duties and non-tariff
restrictions; the restrictions imposed by economic agents or by their
associations; and the time required to supply the market from those
areas;
   (c) The cost and probability of users or consumers seeking other markets;
and
   (d) National, local or international restrictions which limit access by users
or consumers to alternate sources of supply or the access of
suppliers to alternate consumers.
43.Sec. 15. Abuse of Dominant Position. — It shall be prohibited for one or
more entities to abuse their dominant position by engaging in conduct
that would substantially prevent, restrict or lessen competition:
   (a) Selling goods or services below cost with the object of driving
competition out of the relevant market: Provided, That in the
Commission's evaluation of this fact, it shall consider whether the
entity or entities have no such object and the price established was in
good faith to meet or compete with the lower price of a competitor in
the same market selling the same or comparable product or service
of like quality;
   (b) Imposing barriers to entry or committing acts that prevent competitors
from growing within the market in an anti-competitive manner except
those that develop in the market as a result of or arising from a
superior product or process, business acumen, or legal rights or laws;
   (c) Making a transaction subject to acceptance by the other parties of
other obligations which, by their nature or according to commercial
usage, have no connection with the transaction;
   (d) Setting prices or other terms or conditions that discriminate
unreasonably between customers or sellers of the same goods or
services, where such customers or sellers are contemporaneously
trading on similar terms and conditions, where the effect may be to
lessen competition substantially: Provided, that the following shall be
considered permissible price differentials:
   (1) Socialized pricing for the less fortunate sector of the economy;
   (2) Price differential which reasonably or approximately reflect differences
in the cost of manufacture, sale, or delivery resulting from differing
methods, technical conditions, or quantities in which the goods or
services are sold or delivered to the buyers or sellers;
   (3) Price differential or terms of sale offered in response to the competitive
price of payments, services or changes in the facilities furnished by a
competitor; and
   (4) Price changes in response to changing market conditions,
marketability of goods or services, or volume;
   (e) Imposing restrictions on the lease or contract for sale or trade of goods
or services concerning where, to whom, or in what forms goods or
 services may be sold or traded, such as fixing prices, giving
preferential discounts or rebate upon such price, or imposing
conditions not to deal with competing entities, where the object or
effect of the restrictions is to prevent, restrict or lessen competition
substantially: Provided, That nothing contained in this Act shall
prohibit or render unlawful:
   (1) Permissible franchising, licensing, exclusive merchandising or
exclusive distributorship agreements such as those which give each
party the right to unilaterally terminate the agreement; or
   (2) Agreements protecting intellectual property rights, confidential
information, or trade secrets;
   (f) Making supply of particular goods or services dependent upon the
purchase of other goods or services from the supplier which have no
direct connection with the main goods or services to be supplied;
   (g) Directly or indirectly imposing unfairly low purchase prices for the
goods or services of, among others, marginalized agricultural
producers, fisherfolk, micro-, small-, medium-scale enterprises, and
other marginalized service providers and producers;
   (h) Directly or indirectly imposing unfair purchase or selling price on their
competitors, customers, suppliers or consumers, provided that prices
that develop in the market as a result of or due to a superior product
or process, business acumen or legal rights or laws shall not be
considered unfair prices; and
   (i) Limiting production, markets or technical development to the prejudice
of consumers, provided that limitations that develop in the market as
a result of or due to a superior product or process, business acumen
or legal rights or laws shall not be a violation of this Act:

xxx xxx xxx

44.G.R. No. 197380, October 8, 2014, 738 SCRA 33.

45.Id. at 45. Emphasis and citation omitted.
46.Id.
47.Republic Act No. 10667, Sec. 4 (b). Emphasis supplied.
48.Under Republic Act No. 10667, the Congress created the Philippine
Competition Commission (PCC), an independent quasi-judicial body
(Section 5), which it vested with original and primary jurisdiction over
 the enforcement and implementation of the Philippine Competition
Act. The PCC was granted the express power to conduct inquiry,
investigate, and hear and decide on cases involving any violation of
the Act motu proprio or upon complaint of an interested party or
referral by a regulatory agency (Section 12).
49.Roque, Jr. v. Commission on Elections, G.R. No. 188456, September 10,
2009, 599 SCRA 69, 147.
50.Id. at 147-148.
51.Promulgating the Eleventh Regular Foreign Investment Negative List,
issued on October 29, 2018 by President Rodrigo R. Duterte.
52.Sec. 11. No franchise, certificate, or any other form of authorization for
the operation of a public utility shall be granted except to citizens of
the Philippines or to corporations or associations organized under the
laws of the Philippines at least sixty per centum of whose capital is
owned by such citizens, nor shall such franchise, certificate, or
authorization be exclusive in character or for a longer period than fifty
years. Neither shall any such franchise or right be granted except
under the condition that it shall be subject to amendment, alteration,
or repeal by the Congress when the common good so requires. The
State shall encourage equity participation in public utilities by the
general public. The participation of foreign investors in the governing
body of any public utility enterprise shall be limited to their
proportionate share in its capital, and all the executive and managing
officers of such corporation or association must be citizens of the
Philippines.
53.Rollo, p. 274.
54.Sec. 5.4 (c) of the Implementing Rules and Regulations (IRR) of the BOT
Law requires, for purposes of pre-qualification, proof of the
companies' or consortia's net worth or a letter testimonial from a
domestic universal/commercial bank or an international bank with a
subsidiary/branch in the Philippines or any internal bank recognized
by the Bangko Sentral ng Pilipinas attesting that the prospective
project proponent and/or members of the consortium are banking with
them, and that they are in good financial standing and/or qualified to
obtain credit accommodations from such banks to finance the
projects.
55.Article VIII, Section 5 (1) of the 1987 Constitution and Sections 9 (1) and
21 (1) of Batas Pambansa Bilang 129 or The Judiciary
Reorganization Act of 1980.
56.Sec. 18.

xxx xxx xxx

   The Supreme Court may review, in an appropriate proceeding filed by any

citizen, the sufficiency of the factual basis of the proclamation of
martial law or the suspension of the privilege of the writ or the
extension thereof, and must promulgate its decision thereon within
thirty days from its filing.

xxx xxx xxx

57.See Southern Luzon Drug Corporation v. Department of Social Welfare

and Development, G.R. No. 199669, April 25, 2017, citing Mangaliag
v. Catubig-Pastoral, G.R. No. 143951, October 25, 2005, 474 SCRA
153, 160-162. See also Tuna Processing, Inc. v. Philippine Kingford,
Inc., G.R. No. 185582, February 29, 2012, 667 SCRA 287,
308; Chua v. Ang, G.R. No. 156164, September 4, 2009, 598 SCRA
229, 238-239; Agan, Jr. v. Philippine International Air Terminals Co.,
Inc., G.R. No. 155001, January 21, 2004, 420 SCRA 575,
584; Chavez v. Public Estates Authority, G.R. No. 133250, July 9,
2002, 384 SCRA 152, 179.
58.Angara v. Electoral Commission, 63 Phil. 139 (1936).
59.G.R. No. 205728, January 21, 2015, 747 SCRA 1.
60.David Cecil Johnson, Courts in the Philippines, Old: New, Michigan Law
Review, Vol. 14, No. 4 (Feb. 1916) p. 314.
61.Act No. 136, Sec. 2.
62.Act No. 190 or An Act Providing a Code of Procedure in Civil Actions and
Special Proceedings in the Philippine Islands, enacted on August 7,
1901 and became effective on September 1, 1901.
63.See CODE OF CIVIL PROCEDURES, Sections 514, 515, 516, 519, and
526.
64.See CODE OF CIVIL PROCEDURES, Sections 514, 515, 516, and 519.
65.An Act Temporarily to Provide for The Administration of the Affairs of
Civil Government in the Philippine Islands, and for Other Purposes.
66.David Cecil Johnson, Courts in the Philippines, Old: New, Michigan Law
Review, Vol. 14., No. 4 (Feb. 1916) p. 316.
67.Philippine Bill of 1902, Sec. 9. That the Supreme Court and the Courts of
First Instance of the Philippine Islands shall possess and exercise
jurisdiction as heretofore provided, and such additional jurisdiction as
shall hereafter be prescribed by the Government of said Islands,
subject to the power of said Government to change the practice and
method of procedure. x x x
68.11 Phil. 340 (1908).
69.Act No. 2711 or An Act Amending the Administrative Code.
70.REVISED ADMINISTRATIVE CODE, Sec. 138.
71.CONSTITUTION (1935), Art. VIII, Sec. 3, as amended.
72.CONSTITUTION (1935), Art. VIII, Sec. 2.
73.An Act to Amend Certain Provisions of the Revised Administrative Code
on the Judiciary, by Reducing the Number of Justices of the Supreme
Court and Creating the Court of Appeals and Defining Their
Respective Jurisdictions, Appropriating Funds Therefor, and for Other
Purposes.
74.Commonwealth Act No. 3, Sec. 3, as amended.
75.See Section 2 of Republic Act No. 5440 or An Act Amending Sections
Nine and Seventeen of the Judiciary Act of 1948.
76.Batas Pambansa Bilang 129, Sec. 47.
77.Batas Pambansa Bilang 129, Sec. 9 (i).
78.Supra note 57.
79.Angara averred that the Supreme Court has jurisdiction over the case
because it involves the interpretation of the Constitution. The Solicitor
General, appearing on behalf of the Electoral Commission, asserted
that the Electoral Commission cannot be the subject of a writ of
prohibition because it is not an inferior tribunal, corporation, or person
within the purview of Sections 226 and 516 of the 1901 Rules. Pedro
Ynsua raised the same argument. Id. at 153-155.
80.Id. at 158.
81.103 Phil. 1051 (1957).
82.Id. at 1068. Italics in the original.
83.G.R. No. 89914, November 20, 1991, 203 SCRA 767. The issues before
us are: (1) whether the Court has jurisdiction to inquire into the
motives of the lawmakers in conducting legislative investigations
 under the doctrine of separation of powers; and (2) whether the
Senate Blue Ribbon Committee has power under Section 21, Article
VI of the 1987 Constitution to conduct inquiries into private affairs in
purported aid of legislation. Id. at 774-777.
84.G.R. No. 160261, November 10, 2003, 415 SCRA 44. The issues before
us are: (1) whether the filing of the second impeachment complaint
against Chief Justice Hilario G. Davide, Jr. with the House of
Representatives falls within the one-year bar provided in the
Constitution; and (2) whether this is a political question that is beyond
the ambit of judicial review. Id. at 105, 120-126.
85.G.R. No. 183591, October 14, 2008, 568 SCRA 402. The substantive
issues are: (1) whether the respondents violated constitutional and
statutory provisions on public consultation and the right to information
(under Article III, Section 7 of the 1987 Constitution) when they
negotiated and later initialed the MOA-AD; and (2) whether the
Memorandum of Agreement on Ancestral Domain violate the
Constitution and the laws (i.e., Sections 1, 15, and 20, Article X of the
1987 Constitution; Section 3, Article 10 of Republic Act No. 9054 or
the Organic Act of Autonomous Region of Muslim Mindanao; Section
52 of Republic Act No. 8371 or The Indigenous Peoples' Rights Act of
1997). Id. at 465-582.
86.G.R. No. 191618, November 23, 2010, 635 SCRA 783. The issue is
whether the constitution of the PET, composed of the Members of the
Supreme Court, is unconstitutional, and violates Section 4, Article VII
and Section 12, Article VIII of the 1987 Constitution. Id. at 790, 817.
87.G.R. No. 208566, November 19, 2013, 710 SCRA 1. The substantive
issues are: (1) As to Congressional Pork Barrel — whether the 2013
Priority Development Assistance Fund Article and all other
Congressional Pork Barrel Laws similar thereto are unconstitutional
considering that they violate the principles of/constitutional provisions
on (a) separation of powers; (b) non-delegability of legislative power;
(c) checks and balances; (d) accountability; (e) political dynasties;
and (f) local autonomy; and (2) As to Presidential Pork Barrel —
Whether or not the phrases (a) "and for such other purposes as may
be hereafter directed by the President" under Section 8 of
Presidential Decree No. 910, relating to the Malampaya Funds, and
(b) "to finance the priority infrastructure development projects and to
finance the restoration of damaged or destroyed facilities due to
calamities, as may be directed and authorized by the Office of the
President of the Philippines" under Section 12 of Presidential Decree
No. 1869, as amended by Presidential Decree No. 1993, relating to
 the Presidential Social Fund, are unconstitutional insofar as they
constitute undue delegations of legislative power. Id. at 88, 106-108.
88.G.R. No. 204819, April 8, 2014, 721 SCRA 146. The substantive issue is
whether the RH law is unconstitutional because it violates the
following rights provided under the 1987 Constitution: (1) right to life;
(2) right to health; (3) freedom of religion and the right to free speech;
(4) the family; (5) freedom of expression and academic freedom; (6)
due process; (7) equal protection; (8) involuntary servitude; (9)
delegation of authority to the Food and Drugs Administration; and
(10) autonomy of local governments/Autonomous Region of Muslim
Mindanao. Id. at 274.
89.G.R. No. 209287, July 1, 2014, 728 SCRA 1. The substantive issues are:
(1) whether the Disbursement Acceleration Program (DAP) violates
Section 29, Article VI of the 1987 Constitution, which provides: "No
money shall be paid out of the Treasury except in pursuance of an
appropriation made by law."
    (2) whether the DAP, National Budget Circular No. 541, and all other
executive issuances allegedly implementing the DAP violate Section
25 (5), Article VI of the 1987 Constitution insofar as (a) they treat the
unreleased appropriations and unobligated allotments withdrawn from
government agencies as "savings" as the term is used in Section 25
(5), in relation to the provisions of the General Appropriations Acts
(GAAs) of 2011, 2012 and 2013; (b) they authorize the disbursement
of funds for projects or programs not provided in the GAAs for the
Executive Department; and (c) they "augment" discretionary lump
sum appropriations in the GAAs.
   (3) whether or not the DAP violates: (a) the Equal Protection Clause; (b)
the system of checks and balances; and (c) the principle of public
accountability enshrined in the 1987 Constitution considering that it
authorizes the release of funds upon the request of legislators. Id. at
59-60.
90.G.R. Nos. 212426 & 212444, January 12, 2016, 779 SCRA 241, 321-
333. The issues are: (1) whether the President may enter into an
executive agreement on foreign military bases, troops, or facilities
under Article XVIII, Section 25 of the 1987 Constitution; and (2)
whether the provisions under Enhanced Defense Cooperation
Agreement are consistent with the Constitution, as well as with
existing laws and treaties (i.e., the Mutual Defense Treaty and the
Visiting Forces Agreement). Id. at 337.
91.G.R. No. 231671, July 25, 2017. The issue is whether or not under Article
VII, Section 18 of the 1987 Constitution, it is mandatory for the
Congress to automatically convene in joint session in the event that
the President proclaims a state of martial law and/or suspends the
privilege of the writ of habeas corpus in the Philippines or any part
thereof.
92.84 Phil. 368 (1949).
93.Id. at 374.
94.Id.
95.Id.
96.Id. at 373.
97.See Social Justice Society (SJS) Officers v. Lim, G.R. No. 187836,
November 25, 2014, 742 SCRA 1; Biraogo v. Philippine Truth
Commission of 2010, G.R. No. 192935, December 7, 2010, 637
SCRA 78; Chavez v. Gonzales, G.R. No. 168338, February 15, 2008,
545 SCRA 441; Automotive Industry Workers Alliance (AIWA) v.
Romulo, G.R. No. 157509, January 18, 2005, 449 SCRA 1; Bayan
(Bagong Alyansang Makabayan) v. Zamora, G.R. Nos. 138570,
138572, 138587, 138680 & 138698, October 10, 2000, 342 SCRA
449; Integrated Bar of the Philippines v. Zamora, G.R. No. 141284,
August 15, 2000, 338 SCRA 81; Guingona, Jr. v. Gonzales, G.R. No.
106971, October 20, 1992, 214 SCRA 789; Solicitor General v.
Metropolitan Manila Authority, G.R. No. 102782, December 11, 1991,
204 SCRA 837; Osmeña v. Commission on Elections, G.R. No.
100318, July 30, 1991, 199 SCRA 750; Association of Small
Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform, G.R. No. 78742, July 14, 1989, 175 SCRA 343; Gonzales v.
Commission on Elections, G.R. No. L-27833, April 18, 1969, 27
SCRA 835. See also Padilla v. Congress, G.R. No. 231671, July 25,
2017; Ocampo v. Mendoza, G.R. No. 190431, January 31, 2017, 816
SCRA 300; Intellectual Property Association of the Philippines v.
Ochoa, G.R. No. 204605, July 19, 2016, 797 SCRA 134; Funa v.
Manila Economic & Cultural Office, G.R. No. 193462, February 4,
2014, 715 SCRA 247; Liberal Party v. Commission on Elections, G.R.
No. 191771, May 6, 2010, 620 SCRA 393; Guingona, Jr. v.
Commission on Elections, G.R. No. 191846, May 6, 2010, 620 SCRA
448; Francisco, Jr. v. Desierto, G.R. No. 154117, October 2, 2009,
602 SCRA 50; Social Justice Society (SJS) v. Dangerous Drugs
Board, G.R. No. 157870, November 3, 2008, 570 SCRA
410; Province of North Cotabato v. Government of the Republic of
 the Philippines Peace Panel on Ancestral Domain (GRP), supra note
84; Lim v. Executive Secretary, G.R. No. 151445, April 11, 2002, 380
SCRA 739; Matibag v. Benipayo, G.R. No. 149036, April 2, 2002, 380
SCRA 49; Nazareno v. Court of Appeals, G.R. No. 111610, February
27, 2002, 378 SCRA 28; and De Guia v. Commission on Elections,
G.R. No. 104712, May 6, 1992, 208 SCRA 420.
98.G.R. No. 133250, July 9, 2002, 384 SCRA 152.
99.Id. at 170-171.
100.Id. at 179.
101.G.R. No. L-37427, June 25, 1974, 57 SCRA 408.
102.Id. at 412-413, Concurring Opinion of CJ Querube Makalintal.
103.G.R. No. L-37790, March 25, 1976, 70 SCRA 139, 161.
104.Id. at 160-161.
105.Administrative Matter No. 10-4-20-SC, May 4, 2010.
106.G.R. No. L-74766, December 21, 1987, 156 SCRA 753.
107.Id. at 766.
108.G.R. No. 67787, April 18, 1989, 172 SCRA 415.
109.Id. at 423-424.
110.Article VIII, Section 5 (1) of the 1987 Constitution and Sections 9 (1)
and 21 (1) of Batas Pambansa Bilang 129.
111.Heirs of Bertuldo Hinog v. Melicor, G.R. No. 140954, April 12, 2005, 455
SCRA 460, 472.
112.See Intramuros Administration v. Offshore Construction Development
Co., G.R. No. 196795, March 7, 2018; Rama v. Moises, G.R. No.
197146 (Resolution), August 8, 2017; Southern Luzon Drug
Corporation v. Department of Social Welfare and
Development, supra note 56; Dynamic Builders & Construction Co.
(Phil.), Inc. v. Presbitero, Jr., G.R. No. 174202, April 7, 2015, 755
SCRA 90, 107.
113.See Provincial Bus Operators Association of the Philippines v.
Department of Labor and Employment, G.R. No. 202275, July 17,
2018; Mercado v. Lopena, G.R. No. 230170, June 6, 2018; De Lima
v. Guerrero, G.R. No. 229781, October 10, 2017; Roy III v. Herbosa,
G.R. No. 207246, November 22, 2016, 810 SCRA 1, 93.
114.See Alliance of Quezon City Homeowners' Association, Inc. v. Quezon
City Government, G.R. No. 230651, September 18, 2018; Ifurung v.
Carpio-Morales, G.R. No. 232131, April 24, 2018; Trillanes IV v.
Castillo-Marigomen, G.R. No. 223451, March 14, 2018; Bureau of
Customs v. Gallegos, G.R. No. 220832 (Resolution), February 28,
2018.
115.Araullo v. Aquino III, supra note 88 at 67-68.
116.Id. at 67-68, 74.
117.Id. at 70-78.
118.Bernas, the 1987 Constitution of the Republic of the Philippines: A
Commentary, 2005, Ed. p. 1192.
119. Id.
120.See Knights of Rizal v. DMCI Homes, Inc., G.R. No. 213948, April 25,
2017; Espina v. Zamora, Jr., G.R. No. 143855, September 21, 2010,
631 SCRA 17; Tondo Medical Center Employees Association v.
Court of Appeals, G.R. No. 167324, July 17, 2007, 527 SCRA
746; Manila Prince Hotel v. Government Service Insurance System,
G.R. No. 122156, February 3, 1997, 267 SCRA 408; Basco v. Phil.
Amusements and Gaming Corporation, G.R. No. 91649, May 14,
1991, 197 SCRA 52.
121. G.R. No. 101083, July 30, 1993, 224 SCRA 792.
122. Echegaray v. Secretary of Justice, G.R. No. 132601, January 19, 1999,
301 SCRA 96, 111.
123. Id. at 112.
124. CONSTITUTION, Art. VIII, Sec. 5 (5).
125. A petition for a writ of amparo is a remedy available to any person
whose right to life, liberty and security is violated or threatened with
violation by an unlawful act or omission of a public official or
employee, or of a private individual or entity. It may be filed with the
Regional Trial Court of the place where the threat, act or omission
was committed or any of its elements occurred, or with the
Sandiganbayan, the Court of Appeals, the Supreme Court, or any
justice of such courts, (Sections 1 and 3.)
126. This is a remedy available to any person whose right to privacy in life,
liberty or security is violated or threatened by an unlawful act or
omission of a public official or employee, or of a private individual or
entity engaged in the gathering, collecting or storing of data or
 information regarding the person, family, home and correspondence
of the aggrieved party. It may be filed directly with the Supreme
Court, the Court of Appeals, or the Sandiganbayan when the action
concerns public data filed of government offices. (Sections 1 and 3,
par. 2.)
127. Two remedies may be availed of under this Rule: a writ
of kalikasan and a writ for continuing mandamus. The former is a
remedy available to a natural or juridical person, entity authorized by
law, people's organization, non-governmental organization, or any
public interest group accredited by or registered with any government
agency, on behalf of persons whose constitutional right to a balanced
and healthful ecology is violated, or threatened with violation by an
unlawful act or omission of a public official or employee, or private
individual or entity, involving environmental damage of such
magnitude as to prejudice the life, health or property of inhabitants in
two or more cities or provinces. A petition for the issuance of this writ
may be filed with the Supreme Court or with any stations of the Court
of Appeals. (Sections 1 and 3, Rule 7.)
   A writ of continuing mandamus, on the other hand, may be issued when
"any agency or instrumentality of the government or officer thereof
unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust or station
in connection with the enforcement or violation of an environmental
law rule or regulation or a right therein, or unlawfully excludes another
from the use or enjoyment of such right and there is no other plain,
speedy and adequate remedy in the ordinary course of law." A
petition for its issuance may be filed with the Regional Trial Court
exercising jurisdiction over the territory where the actionable neglect
or omission occurred or with the Court of Appeals or this Court.
(Sections 1 and 2, Rule 8.)
128. See Section 19 of The Rules on the Writ of Amparo and Habeas
Data and Rule 7, Section 16 of the Rules of Procedure for
Environmental Cases.
129. G.R. No. 180906, October 7, 2008, 568 SCRA 1.
130. Id. at 12. See also Lozada, Jr. v. Macapagal-Arroyo, G.R. Nos.
184379-80, April 24, 2012, 670 SCRA 545, 552-553.
131. G.R. No. 191805 & G.R. No. 193160, November 15, 2011, 660 SCRA
84, 96-97.
132. G.R. No. 183533, September 25, 2012, 681 SCRA 678.
133. G.R. No. 209271, December 8, 2015, 776 SCRA 434.
134. Supra note 58.
135. Id. at 45-50.
136. The first exception referred to Aquino III v. Commission on
Elections (COMELEC), G.R. No. 189793, April 7, 2010, 617 SCRA
623, and Magallona v. Ermita, G.R. No. 187167, August 16, 2011,
655 SCRA 476. In Aquino III v. COMELEC, the issue is whether
Republic Act No. 9716, which created an additional legislative district
for the Province of Camarines Sur, is constitutional. In Magallona v.
Ermita, the issue is the constitutionality of Republic Act No. 9522
adjusting the country's archipelagic baselines and classifying the
baseline regime of nearby territories. Both presented questions of
law.
   The second exception was based on Agan, Jr. v. Philippine International
Air Terminals Co., Inc., G.R. No. 155001, May 5, 2003, 402 SCRA
612, and Initiatives for Dialogue and Empowerment Through
Alternative Legal Services, Inc. (IDEALS, INC.) v. Power Sector
Assets and Liabilities Management (PSALM), G.R. No. 192088,
October 9, 2012, 682 SCRA 602. In Agan, we noted that the facts
necessary to resolve the legal questions are well established and,
hence, need not be determined by a trial court. In IDEALS, INC., the
issue was the validity of the award by the Power Sector Assets and
Liabilities Management of the Angat Hydro-Electric Power Plant to
Korea Water Resources Corporation.
   The third exception was based on Government of the United States of
America v. Purganan, G.R. No. 148571, September 24, 2002, 389
SCRA 623; Mallion v. Alcantara, G.R. No. 141528, October 31, 2006,
506 SCRA 336; and Soriano v. Laguardia, G.R. No. 164785, April 29,
2009, 587 SCRA 79. In Purganan, the issue is whether prospective
extradites are entitled to a notice and hearing before warrants for
their arrest can be issued, and whether they are entitled to bail and
provisional liberty while the extradition proceedings are pending.
Significantly, the Court declared that the issues raised are pure
questions of law. The issue in Mallion is whether a previous final
judgment denying a petition for declaration of nullity on the ground of
psychological incapacity bars a subsequent petition for declaration of
nullity on the ground of lack of marriage license. While in Soriano, the
issue is whether the Movie and Television Review and Classification
Board has the power to issue preventive suspension under
Presidential Decree No. 1986 or The Law Creating the Movie and
 Television Review and Classification Board. Both cases presented
questions of law.
   The fourth exception cited Drilon v. Lim, G.R. No. 112497, August 4,
1994, 235 SCRA 135, which involves the constitutionality of Section
187 of the Local Government Code, also a question of law.
   The fifth exception did not cite any jurisprudential antecedent.
   The sixth exception referred to Albano v. Arranz, G.R. No. L-19260,
January 31, 1962, 4 SCRA 386, where the sole issue is whether
respondent Judge Manuel Arranz committed grave abuse of
discretion in issuing a preliminary injunction ordering the Board of
Canvassers and the Provincial Treasurer to refrain from bringing the
questioned returns to Manila, as instructed by the Commission on
Elections, also a question of law.
   The seventh exception did not provide for a jurisprudential basis.
   The eighth exception cited Chavez v. Romulo, G.R. No. 157036, June 9,
2004, 431 SCRA 534; Commission on Elections v. Quijano-Padilla,
G.R. No. 151992, September 18, 2002, 389 SCRA 353; and Buklod
ng Kawaning EIIB v. Zamora, G.R. Nos. 142801-802, July 10, 2001,
360 SCRA 718. Chavez dealt with the constitutionality of the
"Guidelines in the Implementation of the Ban on the Carrying of
Firearms Outside of Residence." In Quijano-Padilla, the issue is
whether a successful bidder may compel a government agency to
formalize a contract with it notwithstanding that its bid exceed the
amount appropriated by Congress for the project. In Buklod, the
issues are whether Executive Order Nos. 191 and 223 violated
Buklod members' right to security of tenure and whether then
President Joseph Estrada usurped the power of Congress to abolish
public office. All these cases presented questions of law.
137. Supra note 56 at 179.
138. Agan, Jr. v. Philippine International Air Terminals Co., Inc., supra note
135 at 646.
139. G.R. No. 144463, January 14, 2004, 419 SCRA 317, 323-324.
140. G.R. No. 152774, May 27, 2004, 429 SCRA 736, 757.
141. Aquino III v. Commission on Elections, supra note 135.
142. G.R. No. 176657, September 1, 2010, 629 SCRA 644, 669-670.
143. G.R. No. 201112, June 13, 2012, 673 SCRA 1, 238.
144. G.R. No. 187298, July 3, 2012, 675 SCRA 482, 493-494.
145. Supra note 96.
146. G.R. No. 210551, June 30, 2015, 760 SCRA 652.
147. Supra note 113.
148. Agan, Jr. v. Philippine International Air Terminals Co., Inc., supra note
135 at 646.
149. Supra note 138 at 321.
150. Supra note 139 at 756-757.
151. Aquino III v. Commission on Elections, supra note 135 at 630.
152. Supra note 141 at 669.
153. Supra note 142 at 46.
154. Supra note 143 at 492.
155. Supra note 96 at 272.
156. Supra note 145 at 667.
157. Supra note 113.
158. G.R. No. 202781, January 10, 2017, 814 SCRA 41.
159. Id. at 66.
160. Lagman v. Medialdea, G.R. No. 231658, July 4, 2017, 829 SCRA 1.
See also Marcos v. Manglapus, G.R. No. 88211, September 15,
1989, 177 SCRA 668, where we looked into whether or not there
exist factual bases for the President to conclude that it was in the
national interest to bar the return of the Marcoses to the Philippines.
(Id. at 697) Albeit, we resolved the issue by merely considering the
pleadings filed by the parties, their oral arguments, and the facts
revealed during the briefing in chambers by the Chief of Staff of the
Armed Forces of the Philippines and the National Security Adviser,
wherein petitioners and respondents were represented.
161. Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) v.
GCC Approved Medical Centers Association, Inc., G.R. Nos. 207132
& 207205, December 6, 2016, 812 SCRA 452, 499.
162. See People v. Cuaresma, supra note 107 at 424.
163. In the case of Guico v. Mayuga, G.R. Nos. L-45274 and 45275, August
21, 1936, 63 Phil. 328, we held that:
   Our appellate jurisdiction in this case is limited to reviewing and
examining the errors of law incurred by the Court of Appeals, in
accordance with the provisions of Section 138, No. 6, of the
Administrative Code, as amended by Commonwealth Act No. 3.

   xxx xxx xxx

   Rule 47 (a) of the Rules of the Supreme Court provides, in respect to

cases brought to it in connection with its appellate jurisdiction,
that only questions of law may be raised therein and that the
court has the power to order motu proprio the dismissal thereof if in
its opinion they are without merit. Id. at 331. (Emphasis supplied.)
164. CODE OF CIVIL PROCEDURE. Sec. 497. Hearings Confined to
Matters of Law, with Certain Exceptions. — In hearings upon bills of
exception, in civil actions and special proceedings, the Supreme
Court shall not review the evidence taken in the court below, nor
retry the questions of fact, except as in this section hereafter
provided; but shall determine only questions of law raised by
the bill of exceptions. But the Supreme Court may review the
evidence taken in the court below, and affirm, reverse, or modify the
judgment there rendered, as justice may require, in the following
cases:
   1. If assessors sat with the judge in the hearing in the court below, and
both the assessors were of the opinion that the findings of the facts
and judgment in the action are wrong and have certified in writing
their dissent therefrom, and their reasons for such dissent, the
Supreme Court may in connection with the hearing on the bill of
exceptions, review the facts upon the evidence adduced in the court
below, and shall give to the dissent aforesaid such weight as in the
opinion of the judges of the Supreme Court it is entitled to, and upon
such review shall render such judgment as is found just;
   2. If before the final determination of an action pending in the Supreme
Court on bill of exceptions, new and material evidence be discovered
by either party, which could not have been discovered before the trial
in the court below, by the exercise of due diligence, and which is of
such a character as probably to change the result, the Supreme
Court may receive and consider such new evidence, together with
that adduced on the trial below, and may grant or refuse a new trial,
or render such other judgment as ought, in view of the whole case, to
be rendered, upon such terms as it may deem just. The party seeking
 a new trial, or a reversal of the judgment on the ground of newly
discovered evidence, may petition the Supreme Court for such new
trial, and shall attach to the petition affidavits showing the facts
entitling him to a new trial and the newly discovered evidence. Upon
the filing of such petition in the Supreme Court, the court shall, on
notice to both parties, make such order as to taking further testimony
by each party, upon the petition, either orally in court, or by
depositions, upon notice, as it may deem just. The petition, with the
evidence, shall be heard at the same time as the bill of exceptions;
   3. If the excepting party filed a motion in the Court of First Instance for a
new trial, upon the ground that the findings of fact were plainly and
manifestly against the weight of evidence, and the judge overruled
said motion, and due exception was taken to his overruling the same,
the Supreme Court may review the evidence and make such findings
upon the facts, and render such final judgment, as justice and equity
require. But, if the Supreme Court shall be of the opinion that this
exception is frivolous and not made in good faith, it may impose
double or treble additional costs upon the excepting party, and may
order them to be paid by the counsel prosecuting the bill of
exceptions, if in its opinion justice so requires. (Emphasis supplied.)
165. Supra note 161 at 423-424.
166. Aspacio v. Inciong, No. L-49893, May 9, 1988, 161 SCRA 180, 184.
167. CODE OF CIVIL PROCEDURE, Secs. 56 and 132.
168. REVISED RULES OF COURT, Rule 30, Sec. 5 and Rule 5, Sec. 1.
169. G.R. No. 188471, April 20, 2010, 618 SCRA 619.
170. Id. at 627-628.
171. Id. at 627.
172. United States v. Ling Su Fan, G.R. No. 3962, 10 Phil. 104, 111 (1908).
173. RULES OF COURT, Rule 128, Sec. 1.
174. G.R. No. 90478, November 21, 1991, 204 SCRA 212.
175. Id. at 221.
176. People v. Cuaresma, supra note 107 at 424.
177. Id.
178. Santiago v. Vasquez, G.R. Nos. 99289-90, January 27, 1993, 217
SCRA 633, 652.
179. The Judiciary Annual Report of 2016 to June 2017, p. 13. The US
Supreme Court, in contrast, received 6,305 filings in its 2016 term,
heard only 71 cases in arguments, and disposed 68 cases in 61
signed opinions. (2017 Year-end Report on the Federal Judiciary, p.
13, accessed at <https://www.supremecourt.gov/publicinfo/year-
end/20l7year-endreport.pdf>) This to us shows the US Court's
impressive control over its case docket through a judicious use of its
discretionary authority. With particular application to cases invoking
the US Court's original jurisdiction, it appears that the so-called
"appropriateness test" is being judiciously applied to sift through the
cases filed before it. (See Louisiana v. Mississippi, 488 U.S. 990
(1988); California v. West Virginia, 454 U.S. 1027 (1981); Arizona v.
New Mexico, 425 U.S. 794 (1976); Illinois v. City of Milwaukee, 406
U.S. 91 (1972).
180. Ret. Associate Justice Vicente V. Mendoza, Judicial Review of
Constitutional Questions (2004), p. 89, citing Ashwander v.
Tennessee Valley Authority, 297 U.S. 288 (1936).
181. Francisco, Jr. v. Nagmamalasakit na mga Manananggol ng mga
Manggagawang Pilipino, Inc., supra note 83 at 160.
182. 297 U.S. 288 (1936).
183. Id. at 347-348.
184. Supra note 83.
185. Id. at 161-162. See also Saguisag v. Ochoa, Jr., supra note 89 at 324-
325.
185. n Philip B. Kurland, Jurisdiction of the United States Supreme Court:
Time for a Change, 59 Cornell L. Rev. 616, 620 (1974), accessed on
March 7, 2019 at
<https://scholarship.law.cornell.edu/clr/vol59/iss4/3/.>.
186. See Vicente V. Mendoza, Proposed judicial revisions will weaken
judiciary, Philippine Daily Inquirer, October 29, 2018, accessed on
January 28, 2019 at <https://opinion.inquirer.net/117068/proposed-
judicial-revisions-will-weaken judiciary.>.
LEONEN, J., concurring:
1. See Knights of Rizal v. DMCI Homes, Inc., G.R. No. 213948, April 25,
2017, 824 SCRA 327, 404-405 [Per J. Carpio, En Banc].
2. Rep. Act No. 10667 (2015), ch. III, sec. 15.
3. CONST., art. XII, sec. 19.
4. 751 Phil. 301 (2015) [Per J. Leonen, En Banc].
5. Id. at 329-330.
6. CONST., art. VIII, sec. 1.
7. 737 Phil. 457 (2014) [Per J. Bersamin, En Banc].
8. See Review Center Association of the Philippines v. Ermita, 602 Phil.
342, 360 (2009) [Per J. Carpio, En Banc]; Bagabuyo v. Commission
on Elections, 593 Phil. 678, 689 (2008) [Per J. Brion, En Banc];
and Civil Service Commission v. Department of Budget and
Management, 502 Phil. 372, 384 (2005) [Per J. Carpio Morales, En
Banc].
9. Land Bank of the Philippines v. Dalauta, G.R. No. 190004, August 8,
2017, <http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2017/august2017/190004.pdf> 8 [Per J. Mendoza,
En Banc].
10. Id.
11. See Laquian v. Baltazar, 142 Phil. 531 (1970) [Per C.J. Concepcion,
Second Division].
12. The City of Lapu-Lapu v. Philippine Economic Zone Authority, 748 Phil.
473, 517 (2014) [Per J. Leonen, Second Division].
13. Id. at 515.
14. Dy v. Yu, 763 Phil. 491, 518 (2015) [Per J. Perlas-Bernabe, First
Division].
15. The City of Lapu-Lapu v. Philippine Economic Zone Authority, 748 Phil.
473, 516 (2014) [Per J. Leonen, Second Division].
16. The Provincial Bus Operators Association of the Philippines v.
Department of Labor and Employment, G.R. No. 202275, July 17,
2018, <http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2018/july2018/202275.pdf> 18 [Per J. Leonen, En
Banc].
17. Id. at 19.
18. The Diocese of Bacolod v. Commission on Elections, 751 Phil. 301, 329-
330 (2015) [Per J. Leonen, En Banc].
19.Nippon Express (Philippines) Corporation v. Commissioner of Internal
Revenue, 706 Phil. 442, 450 (2013) [Per J. Mendoza, Third Division].
20.The Provincial Bus Operators Association of the Philippines v.
Department of Labor and Employment, G.R. No. 202275, July 17,
2018, <http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2018/july2018/202275.pdf> 24 [Per J. Leonen, En
Banc].
21.Id.
22.Id.
23.Id.
24.Baldo, Jr. v. Commission on Elections, 607 Phil. 281 (2009) [Per J.
Chico-Nazario, En Banc].
25.See Corales v. Republic, 716 Phil. 432 (2013) [Per J. Perez, En Banc].
26.Aala v. Uy, G.R. No. 202781, January 10, 2017, 814 SCRA 41, 66 [Per J.
Leonen, En Banc].
27.Id. at 60.
28.See General v. Urro, 662 Phil. 132 (2011) [Per J. Brion, En Banc].
29.63 Phil. 139 (1936) [Per J. Laurel, En Banc].
30.See The Provincial Bus Operators Association of the Philippines v.
Department of Labor and Employment, G.R. No. 202275, July 17,
2018, <http://sc.judiciary.gov.ph/pdf/web/viewer.html?
file=/jurisprudence/2018/july2018/202275.pdf> [Per J. Leonen, En
Banc]; Republic v. Roque, 718 Phil. 294 (2013) [Per J. Perlas-
Bernabe, En Banc]; and Southern Hemisphere Engagement
Network, Inc. v. Anti-Terrorism Council, 646 Phil. 452 (2010) [Per J.
Carpio-Morales, En Banc].
31.See Araneta v. Dinglasan, 84 Phil. 368, 373 (1949) [Per J. Tuason, En
Banc] involving the Emergency Power Act. This Court took
cognizance of the cases in Araneta, saying for the first time that "the
transcendental importance to the public of these cases demands that
they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure."
32.See The Province of Batangas v. Hon. Romulo, 473 Phil. 806, 827
(2004) [Per J. Callejo, Sr., En Banc]; Senator Jaworski v. Philippine
Amusement and Gaming Corporation, 464 Phil. 375, 285 (2004) [Per
J. Ynares-Santiago, En Banc]; and Agan, Jr. v. Philippine
International Air Terminals, Co., Inc., 450 Phil. 744, 805 (2003) [Per
J. Puno, En Banc].
 n Note from the Publisher: Copied verbatim from the official copy. Irregular
numerical sequence.

 (Gios-Samar, Inc. v. Department of Transportation and Communications, G.R. No.

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217158, [March 12, 2019])