G.R. No.
L-63559 May 30, 1986 and corrective damages as the court may determine,
NEWSWEEK, INC., petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT, and
NATIONAL FEDERATION OF SUGARCANE
PLANTERS INC., BINALBAGAN-ISABELA
PLANTERS ASSOCIATION, INC., ASOCIACION
DE AGRICULTORES DE LA CARLOTA, LA
CASTELLANA y PONTEVEDRA, INC., DONEDCO
PLANTERS ASSOCIATION INC., ARMANDO
GUSTILO, ENRIQUE ROJAS, ALFREDO
MONTELIBANO, JR., PABLO SOLA, JOSE
MONTALVO, VICENTE GUSTILO, JOSEPH
MARANON, ROBERTO CUENCA, JOSE
SICANGCO, FLORENCIO ALONSO, MIGUEL
GATUSLAO, PEDRO YULO, MARINO RUBIN and
BENJAMIN BAUTISTA, respondents.
San Juan, Africa, Gonzales & San Agustin Law
Offices for private respondents.
FERIA, J.:
Petitioner, Newsweek, Inc., a foreign corporation
licensed to do business in the Philippines, in this
special action for certiorari, prohibition with
preliminary injunction, seeks to annul the decision of
the Intermediate Appellate Court dated December
17, 1982 sustaining the Order of the then Court of
First Instance of Bacolod City which denied
petitioner's Motion to Dismiss the complaint for libel
filed by private respondents (Civil Case No. 15812),
and the Resolution dated March 10, 1983 which
denied its Motion for Reconsideration.
It appears that on March 5, 1981, private
respondents, incorporated associations of
sugarcane planters in Negros Occidental claiming to
have 8,500 members and several individual sugar
planters, filed Civil Case No. 15812 in their own
behalf and/or as a class suit in behalf of all
sugarcane planters in the province of Negros
Occidental, against petitioner and two of petitioners'
non-resident correspondents/reporters Fred Bruning
and Barry Came. The complaint alleged that
petitioner and the other defendants committed libel
against them by the publication of the article "An
Island of Fear" in the February 23, 1981 issue of
petitioner's weekly news magazine Newsweek. The
article supposedly portrayed the island province of
Negros Occidental as a place dominated by big
landowners or sugarcane planters who not only
exploited the impoverished and underpaid
sugarcane workers/laborers, but also brutalized and
killed them with imprunity. Complainants therein
alleged that said article, taken as a whole, showed a
deliberate and malicious use of falsehood, slanted
presentation and/or misrepresentation of facts
intended to put them (sugarcane planters) in bad
light, expose them to public ridicule, discredit and
humiliation here in the Philippines and abroad, and
make them objects of hatred, contempt and hostility
of their agricultural workers and of the public in
general. They prayed that defendants be ordered to
pay them PlM as actual and compensatory
damages, and such amounts for moral, exemplary
plus expenses of litigation, attorney's fees and costs
of suit. A photo copy of the article was attached to
the complaint.
On November 5, 1981, petitioner filed a motion to
dismiss on the grounds that (1) the printed article
sued upon is not actionable in fact and in law; and
(2) the complaint is bereft of allegations that state,
much less support a cause of action. It pointed out
the non-libelous nature of the article and,
consequently, the failure of the complaint to state a
cause of action. Private respondents filed an
Opposition to the motion to dismiss and petitioner
filed a reply.
On March 17, 1982, the trial court denied the motion
to dismiss, stating that the grounds on which the
motion to dismiss are predicated are not indubitable
as the complaint on its face states a valid cause of
action; and the question as to whether the printed
article sued upon its actionable or not is a matter of
evidence. Petitioner's motion for reconsideration was
denied on May 28, 1982.
On June 18, 1982, petitioner filed a petition for
certiorari with respondent Court (CA-G. R. No.
14406) seeking the annulment of the aforecited trial
court's Orders for having been issued with such a
grave abuse of discretion as amounting to lack of
jurisdiction and praying for the dismissal of the
complaint for failure to state a cause of action.
As earlier stated, respondent Court affirmed the trial
court's Orders in a Decision dated December 17,
1982 and ordered the case to be tried on the merits
on the grounds that -(1) the complaint contains
allegations of fact which called for the presentation
of evidence; and (2) certiorari under Rule 65 cannot
be made to substitute for an appeal where an appeal
would lie at a proper time. Subsequently, on March
10, 1983, the respondent Court denied petitioner's
Motion for Reconsideration of the aforesaid decision,
hence this petition.
The proper remedy which petitioner should have
taken from the decision of respondent Court is an
appeal by certiorari under Rule 45 of the Rules of
Court and not the special civil action of certiorari and
prohibition under Rule 65 of said Rules. However,
since the petition was filed on time within fifteen
days from notice of the Resolution denying the
motion for reconsideration, we shall treat the same
as a petition for review on certiorari. The two (2)
issues raised in the petition are: (1) whether or not
the private respondents' complaint failed to state a
cause of action; and (2) whether or not the petition
for certiorari and prohibition is proper to question the
denial of a motion to dismiss for failure to state a
cause of action.
First, petitioner argues that private respondents'
complaint failed to state a cause of action because
the complaint made no allegation that anything
contained in the article complained of regarding
sugarcane planters referred specifically to any one
of the private respondents; that libel can be
committed only against individual reputation; and
that in cases where libel is claimed to have been
directed at a group, there is actionable defamation
only if the libel can be said to reach beyond the mere
collectivity to do damage to a specific, individual
group member's reputation.
We agree with petitioner.
In the case of Corpus vs. Cuaderno, Sr. (16 SCRA
807) this Court ruled that "in order to maintain a libel
suit, it is essential that the victim be identifiable
(People vs. Monton, L-16772, November 30, 1962),
although it is not necessary that he be named (19
A.L.R. 116)." In an earlier case, this Court declared
that" ... defamatory matter which does not reveal the
Identity of the person upon whom the imputation is
cast, affords no ground of action unless it be shown
that the readers of the libel could have Identified the
personality of the individual defamed." (Kunkle vs.
Cablenews-American and Lyons 42 Phil. 760).
This principle has been recognized to be of vital
importance, especially where a group or class of
persons, as in the case at bar, claim to have been
defamed, for it is evident that the larger the
collectivity, the more difficult it is for the individual
member to prove that the defamatory remarks apply
to him. (Cf. 70 ALR 2d. 1384).
In the case of Uy Tioco vs. Yang Shu Wen , 32 Phil.
624, this Court held as follows:
Defamatory remarks directed at a
class or group of persons in general
language only, are not actionable by
individuals composing the class or
group unless the statements are
sweeping; and it is very probable
that even then no action would lie
where the body is composed of so
large a number of persons that
common sense would tell those to
whom the publication was made that
there was room for persons
connected with the body to pursue
an upright and law abiding course
and that it would be unreasonable
and absurd to condemn all because
of the actions of a part. (supra p.
628).
It is evident from the above ruling that where the
defamation is alleged to have been directed at a
group or class, it is essential that the statement must
be so sweeping or all-embracing as to apply to every
individual in that group or class, or sufficiently
specific so that each individual in the class or group
can prove that the defamatory statement specifically
pointed to him, so that he can bring the action
separately, if need be.
We note that private respondents filed a "class suit"
in representation of all the 8,500 sugarcane planters
of Negros Occidental. Petitioner disagrees and
argues that the absence of any actionable basis in
the complaint cannot be cured by the filing of a class
suit on behalf of the aforesaid sugar planters.
We find petitioner's contention meritorious.
The case at bar is not a class suit. It is not a case
where one or more may sue for the benefit of all
(Mathay vs. Consolidated Bank and Trust Company,
58 SCRA 559) or where the representation of class
interest affected by the judgment or decree is
indispensable to make each member of the class an
actual party (Borlaza vs. Polistico, 47 Phil. 348). We
have here a case where each of the plaintiffs has a
separate and distinct reputation in the community.
They do not have a common or general interest in
the subject matter of the controversy.
The disputed portion of the article which refers to
plaintiff Sola and which was claimed to be libelous
never singled out plaintiff Sola as a sugar planter.
The news report merely stated that the victim had
been arrested by members of a special police unit
brought into the area by Pablo Sola, the mayor of
Kabankalan. Hence, the report, referring as it does
to an official act performed by an elective public
official, is within the realm of privilege and protected
by the constitutional guarantees of free speech and
press.
The article further stated that Sola and the
commander of the special police unit were arrested.
The Court takes judicial notice of this fact. (People
vs. Sola, 103 SCRA 393.)
The second issue to be resolved here is whether or
not the special civil action of certiorari or prohibition
is available to petitioner whose motion to dismiss the
complaint and subsequent motion for
reconsideration were denied.
As a general rule, an order denying a motion to
dismiss is merely interlocutory and cannot be subject
of appeal until final judgment or order is rendered.
(Sec. 2 of Rule 4 1). The ordinary procedure to be
followed in such a case is to file an answer, go to
trial and if the decision is adverse, reiterate the issue
on appeal from the final judgment. The same rule
applies to an order denying a motion to quash,
except that instead of filing an answer a plea is
entered and no appeal lies from a judgment of
acquittal.
This general rule is subject to certain exceptions. If
the court, in denying the motion to dismiss or motion
to quash, acts without or in excess of jurisdiction or
with grave abuse of discretion, then certiorari or
prohibition lies. The reason is that it would be unfair
to require the defendant or accused to undergo the
ordeal and expense of a trial if the court has no
jurisdiction over the subject matter or offense, or is
not the court of proper venue, or if the denial of the
motion to dismiss or motion to quash is made with
grave abuse of discretion or a whimsical and
capricious exercise of judgment. In such cases, the
ordinary remedy of appeal cannot be plain and
adequate. The following are a few examples of the
exceptions to the general rule.
In De Jesus vs. Garcia (19 SCRA 554), upon the
denial of a motion to dismiss based on lack of
jurisdiction over the subject matter, this Court
granted the petition for certiorari and prohibition
against the City Court of Manila and directed the
respondent court to dismiss the case.
In Lopez vs. City Judge (18 SCRA 616), upon the
denial of a motion to quash based on lack of
jurisdiction over the offense, this Court granted the
petition for prohibition and enjoined the respondent
court from further proceeding in the case.
In Enriquez vs. Macadaeg (84 Phil. 674), upon the
denial of a motion to dismiss based on improper
venue, this Court granted the petition for prohibition
and enjoined the respondent judge from taking
cognizance of the case except to dismiss the same.
In Manalo vs. Mariano (69 SCRA 80), upon the
denial of a motion to dismiss based on bar by prior
judgment, this Court granted the petition for certiorari
and directed the respondent judge to dismiss the
case.
exaggerated; but, paraphrasing the ruling in the Uy
Tioco case above quoted, it would be unreasonable
and absurd to condemn the majority of the
sugarcane planters, who have at heart the welfare of
their workers, because of the actions of a part.
Nonetheless, articles such as the one in question
may also serve to prick the consciences of those
who have but are not doing anything or enough for
those who do not have.
On the other hand, petitioner would do well to heed
the admonition of the President to media that they
should check the sources of their information to
ensure the publication of the truth. Freedom of the
press, like all freedoms, should be exercised with
responsibility.
WHEREFORE, the decision of the Intermediate
Appellate Court is reversed and the complaint in
Civil Case No. 15812 of the Court of First Instance of
Negros Occidental is dismissed, without
pronouncement as to costs.
SO ORDERED.

In Yuviengco vs. Dacuycuy (105 SCRA 668), upon

the denial of a motion to dismiss based on the
Statute of Frauds, this Court granted the petition for G.R. No. 152272               March 5, 2012
certiorari and dismissed the amended complaint.
JUANA COMPLEX I HOMEOWNERS
In Tacas vs. Cariaso (72 SCRA 527), this Court ASSOCIATION, INC., ANDRES C. BAUTISTA,
granted the petition for certiorari after the motion to BRIGIDO DIMACULANGAN, DOLORES P.
quash based on double jeopardy was denied by PRADO, IMELDA DE LA CRUZ, EDITHA C. DY,
respondent judge and ordered him to desist from FLORENCIA M. MERCADO, LEOVINO C.
further action in the criminal case except to dismiss DATARIO, AIDA A. ABAYON, NAPOLEON M.
the same. DIMAANO, ROSITA G. ESTIGOY and NELSON A.
LOYOLA, Petitioners,
In People vs. Ramos (83 SCRA 11), the order vs.
denying the motion to quash based on prescription FIL-ESTATE LAND, INC., FIL ESTATE
was set aside on certiorari and the criminal case was ECOCENTRUM CORPORATION, LA PAZ
dismissed by this Court. HOUSING AND DEVELOPMENT CORPORATION,
WARBIRD SECURITY AGENCY, ENRIQUE
Respondent Court correctly stated the general rule RIVILLA, MICHAEL E. JETHMAL and MICHAEL
and its exceptions. However, it ruled that none of the ALUNAN, Respondents.
exceptions is present in the case at bar and that the
case appears complex and complicated, x-----------------------x
necessitating a full-blown trial to get to the bottom of
the controversy. G. R. No. 152397

Petitioner's motion to dismiss is based on the ground FIL-ESTATE LAND, INC., FIL ESTATE
that the complaint states no cause of action against ECOCENTRUM CORPORATION, LA PAZ
it by pointing out the non-libelous nature of the HOUSING AND DEVELOPMENT CORPORATION,
article sued upon. There is no need of a trial in view WARBIRD SECURITY AGENCY, ENRIQUE
of the conclusion of this Court that the article in RIVILLA, MICHAEL E. JETHMAL and MICHAEL
question is not libelous. The specific allegation in the ALUNAN, Petitioners,
complaint, to the effect that the article attributed to vs.
the sugarcane planters the deaths and brutalization JUANA COMPLEX I HOMEOWNERS
of sugarcane workers, is not borne out by a perusal ASSOCIATION, INC., ANDRES C. BAUTISTA,
of the actual text. BRIGIDO DIMACULANGAN, DOLORES P.
PRADO, IMELDA DE LA CRUZ, EDITHA C. DY,
The complaint contains a recital of the favorable FLORENCIA M. MERCADO, LEOVINO C.
working conditions of the agricultural workers in the DATARIO, AIDA A. ABAYON, NAPOLEON M.
sugar industry and the various foundations and DIMAANO, ROSITA G. ESTIGOY and NELSON A.
programs supported by planters' associations for the LOYOLA, Respondents.
benefit of their workers. Undoubtedly, the statements
in the article in question are sweeping and DECISION
MENDOZA, J.:
Before the Court are two (2) consolidated petitions
assailing the July 31, 2001 Decision1 and February
21, 2002 Resolution2 of the Court of Appeals (CA) in
CA-G.R. SP No. 60543, which annulled and set
aside the March 3, 1999 Order3 of the Regional Trial
Court, Branch 25, Biñan, Laguna (RTC), granting the
application for the issuance of a writ of preliminary
injunction, and upheld the June 16, 2000 Omnibus
Order4 denying the motion to dismiss.
The Facts:
On January 20, 1999, Juana Complex I
Homeowners Association, Inc. (JCHA), together with
individual residents of Juana Complex I and other
neighboring subdivisions (collectively referred as
JCHA, et. al.), instituted a complaint5 for damages,
in its own behalf and as a class suit representing the
regular commuters and motorists of Juana Complex
I and neighboring subdivisions who were deprived of
the use of La Paz Road, against Fil-Estate Land, Inc.
(Fil-Estate), Fil-estate Ecocentrum Corporation
(FEEC), La Paz Housing & Development
Corporation (La Paz), and Warbird Security Agency
and their respective officers (collectively referred as
Fil-Estate, et al.).
The complaint alleged that JCHA, et al. were regular
commuters and motorists who constantly travelled
towards the direction of Manila and Calamba; that
they used the entry and exit toll gates of South
Luzon Expressway (SLEX) by passing through right-
of-way public road known as La Paz Road; that they
had been using La Paz Road for more than ten (10)
years; that in August 1998, Fil-estate excavated,
broke and deliberately ruined La Paz Road that led
to SLEX so JCHA, et al. would not be able to pass
through the said road; that La Paz Road was
restored by the residents to make it passable but Fil-
estate excavated the road again; that JCHA reported
the matter to the Municipal Government and the
Office of the Municipal Engineer but the latter failed
to repair the road to make it passable and safe to
motorists and pedestrians; that the act of Fil-estate
in excavating La Paz Road caused damage,
prejudice, inconvenience, annoyance, and loss of
precious hours to them, to the commuters and
motorists because traffic was re-routed to narrow
streets that caused terrible traffic congestion and
hazard; and that its permanent closure would not
only prejudice their right to free and unhampered
use of the property but would also cause great
damage and irreparable injury.
Accordingly, JCHA, et al. also prayed for the
immediate issuance of a Temporary Restraining
Order (TRO) or a writ of preliminary injunction (WPI)
to enjoin Fil-Estate, et al. from stopping and
intimidating them in their use of La Paz Road.
On February 10, 1999, a TRO was issued ordering
Fil-Estate, et al, for a period of twenty (20) days, to
stop preventing, coercing, intimidating or harassing
the commuters and motorists from using the La Paz
Road. 6
Subsequently, the RTC conducted several hearings
to determine the propriety of the issuance of a WPI.
On February 26, 1999, Fil-Estate, et al. filed a
motion to dismiss7 arguing that the complaint failed
to state a cause of action and that it was improperly
filed as a class suit. On March 5, 1999, JCHA, et al.
filed their comment8 on the motion to dismiss to
which respondents filed a reply.9
On March 3, 1999, the RTC issued an Order 10
granting the WPI and required JCHA, et al. to post a
bond.
On March 19, 1999, Fil-Estate, et al. filed a motion
for reconsideration11 arguing, among others, that
JCHA, et al. failed to satisfy the requirements for the
issuance of a WPI. On March 23, 1999, JCHA, et al.
filed their opposition to the motion.12
The RTC then issued its June 16, 2000 Omnibus
Order, denying both the motion to dismiss and the
motion for reconsideration filed by Fil-Estate, et al.
Not satisfied, Fil-Estate, et al. filed a petition for
certiorari and prohibition before the CA to annul (1)
the Order dated March 3, 1999 and (2) the Omnibus
Order dated June 16, 2000. They contended that the
complaint failed to state a cause of action and that it
was improperly filed as a class suit. With regard to
the issuance of the WPI, the defendants averred that
JCHA, et al. failed to show that they had a clear and
unmistakable right to the use of La Paz Road; and
further claimed that La Paz Road was a torrens
registered private road and there was neither a
voluntary nor legal easement constituted over it.13
On July 31, 2001, the CA rendered the decision
partially granting the petition, the dispositive portion
of which reads:
WHEREFORE, the petition is hereby partially
GRANTED. The Order dated March 3, 1999 granting
the writ of preliminary injunction is hereby
ANNULLED and SET ASIDE but the portion of the
Omnibus Order dated June 16, 2000 denying the
motion to dismiss is upheld.
SO ORDERED.14
The CA ruled that the complaint sufficiently stated a
cause of action when JCHA, et al. alleged in their
complaint that they had been using La Paz Road for
more than ten (10) years and that their right was
violated when Fil-Estate closed and excavated the
road. It sustained the RTC ruling that the complaint
was properly filed as a class suit as it was shown
that the case was of common interest and that the
individuals sought to be represented were so
numerous that it was impractical to include all of
them as parties. The CA, however, annulled the WPI
for failure of JCHA, et al. to prove their clear and
present right over La Paz Road. The CA ordered the
remand of the case to the RTC for a full-blown trial
on the merits.
Hence, these petitions for review.
In G.R. No. 152272, JCHA, et al. come to this Court,
raising the following issues:
(A)
THE HONORABLE COURT OF APPEALS, IN
HOLDING THAT A FULL-BLOWN TRIAL ON THE
MERITS IS REQUIRED TO DETERMINE THE
NATURE OF THE LA PAZ ROAD, HAD DEPARTED
FROM THE ACCEPTED AND USUAL COURSE OF
JUDICIAL PROCEEDINGS AS TO CALL FOR AN
EXERCISE OF THE POWER OF SUPERVISION.
(B)
THE HONORABLE COURT OF APPEALS, IN
HOLDING THAT THE PETITIONERS FAILED TO
SATISFY THE REQUIREMENTS FOR THE
ISSUANCE OF A WRIT OF PRELIMINARY
INJUNCTION, HAD DECIDED NOT IN ACCORD
WITH LAW AND WITH THE APPLICABLE
DECISIONS OF THE SUPREME COURT.15
In G.R. No. 152397, on the other hand, Fil-Estate, et
al. anchor their petition on the following issues:
I.
The Court of Appeals’ declaration that
respondents’ Complaint states a cause of
action is contrary to existing law and
jurisprudence.
II.
The Court of Appeals’ pronouncement that
respondents’ complaint was properly filed as
a class suit is contrary to existing law and
jurisprudence.
III.
The Court of Appeals’ conclusion that full
blown trial on the merits is required to
determine the nature of the La Paz Road is
contrary to existing laws and
jurisprudence.16
JCHA, et al. concur with the CA that the complaint
sufficiently stated a cause of action. They, however,
disagree with the CA’s pronouncement that a full-
blown trial on the merits was necessary. They claim
that during the hearing on the application of the writ
of injunction, they had sufficiently proven that La Paz
Road was a public road and that commuters and
motorists of their neighboring villages had used this
road as their means of access to the San Agustin
Church, Colegio De San Agustin and to SLEX in
going to Metro Manila and to Southern Tagalog
particularly during the rush hours when traffic at
Carmona Entry/Exit and Susana Heights Entry/Exit
was at its worst.
JCHA, et al. argue that La Paz Road has attained
the status and character of a public road or
burdened by an apparent easement of public right of
way. They point out that La Paz Road is the widest
road in the neighborhood used by motorists in going
to Halang Road and in entering the SLEX-Halang toll
gate and that there is no other road as wide as La
Paz Road existing in the vicinity. For residents of
San Pedro, Laguna, the shortest, convenient and
safe route towards SLEX Halang is along Rosario
Avenue joining La Paz Road.
Finally, JCHA, et al. argue that the CA erred when it
voided the WPI because the public nature of La Paz
Road had been sufficiently proven and, as residents
of San Pedro and Biñan, Laguna, their right to use
La Paz Road is undeniable.
In their Memorandum,17 Fil-Estate, et al. explain
that La Paz Road is included in the parcels of land
covered by Transfer Certificates of Title (TCT) Nos.
T-120008, T-90321 and T-90607, all registered in
the name of La Paz. The purpose of constructing La
Paz Road was to provide a passageway for La Paz
to its intended projects to the south, one of which
was the Juana Complex I. When Juana Complex I
was completed, La Paz donated the open spaces,
drainage, canal, and lighting facilities inside the
Juana Complex I to the Municipality of Biñan. The
streets within the subdivisions were then converted
to public roads and were opened for use of the
general public. The La Paz Road, not being part of
the Juana Complex I, was excluded from the
donation. Subsequently, La Paz became a
shareholder of FEEC, a consortium formed to
develop several real properties in Biñan, Laguna,
known as Ecocentrum Project. In exchange for
shares of stock, La Paz contributed some of its real
properties to the Municipality of Biñan, including the
properties constituting La Paz Road, to form part of
the Ecocentrum Project.
Fil-Estate, et al. agree with the CA that the
annulment of the WPI was proper since JCHA, et al.
failed to prove that they have a clear right over La
Paz Road. Fil-Estate, et al. assert that JCHA, et al.
failed to prove the existence of a right of way or a
right to pass over La Paz Road and that the closure
of the said road constituted an injury to such right.
According to them, La Paz Road is a torrens
registered private road and there is neither a
voluntary nor legal easement constituted over it.
They claim that La Paz Road is a private property
registered under the name of La Paz and the
beneficial ownership thereof was transferred to
FEEC when La Paz joined the consortium for the
Ecocentrum Project.
Fil-Estate, et al., however, insist that the complaint
did not sufficiently contain the ultimate facts to show
a cause of action. They aver the bare allegation that
one is entitled to something is an allegation of a
conclusion which adds nothing to the pleading.
They likewise argue that the complaint was
improperly filed as a class suit for it failed to show
that JCHA, et al. and the commuters and motorists
they are representing have a well-defined
community of interest over La Paz Road. They claim
that the excavation of La Paz Road would not
necessarily give rise to a common right or cause of
action for JCHA, et al. against them since each of
them has a separate and distinct purpose and each
may be affected differently than the others.
The Court’s Ruling
The issues for the Court’s resolution are: (1) whether
or not the complaint states a cause of action; (2)
whether the complaint has been properly filed as a
class suit; and (2) whether or not a WPI is
warranted.
Section 2, Rule 2 of the Rules of Court defines a
cause of action as an act or omission by which a
party violates the right of another. A complaint states
a cause of action when it contains three (3) essential
elements of a cause of action, namely:
(1) the legal right of the plaintiff,
(2) the correlative obligation of the
defendant, and
(3) the act or omission of the defendant in
violation of said legal right.18
The question of whether the complaint states a
cause of action is determined by its averments
regarding the acts committed by the defendant.19
Thus, it must contain a concise statement of the
ultimate or essential facts constituting the plaintiff’s
cause of action.20 To be taken into account are only
the material allegations in the complaint; extraneous
facts and circumstances or other matters aliunde are
not considered.21
The test of sufficiency of facts alleged in the
complaint as constituting a cause of action is
whether or not admitting the facts alleged, the court
could render a valid verdict in accordance with the
prayer of said complaint.22 Stated differently, if the
allegations in the complaint furnish sufficient basis
by which the complaint can be maintained, the same
should not be dismissed regardless of the defense
that may be asserted by the defendant.23
In the present case, the Court finds the allegations in
the complaint sufficient to establish a cause of
action. First, JCHA, et al.’s averments in the
complaint show a demandable right over La Paz
Road. These are: (1) their right to use the road on
the basis of their allegation that they had been using
the road for more than 10 years; and (2) an
easement of a right of way has been constituted
over the said roads. There is no other road as wide
as La Paz Road existing in the vicinity and it is the
shortest, convenient and safe route towards SLEX
Halang that the commuters and motorists may use.
Second, there is an alleged violation of such right
committed by Fil-Estate, et al. when they excavated
the road and prevented the commuters and
motorists from using the same. Third, JCHA, et al.
consequently suffered injury and that a valid
judgment could have been rendered in accordance
with the relief sought therein.
With respect to the issue that the case was
improperly instituted as a class suit, the Court finds
the opposition without merit.
Section 12, Rule 3 of the Rules of Court defines a
class suit, as follows:
Sec. 12. Class suit. – When the subject matter of the
controversy is one of common or general interest to
many persons so numerous that it is impracticable to
join all as parties, a number of them which the court
finds to be sufficiently numerous and representative
as to fully protect the interests of all concerned may
sue or defend for the benefit of all. Any party in
interest shall have the right to intervene to protect
his individual interest.
The necessary elements for the maintenance of a
class suit are: 1) the subject matter of controversy is
one of common or general interest to many persons;
2) the parties affected are so numerous that it is
impracticable to bring them all to court; and 3) the
parties bringing the class suit are sufficiently
numerous or representative of the class and can
fully protect the interests of all concerned.24
In this case, the suit is clearly one that benefits all
commuters and motorists who use La Paz Road. As
succinctly stated by the CA:
The subject matter of the instant case, i.e., the
closure and excavation of the La Paz Road, is
initially shown to be of common or general interest to
many persons. The records reveal that numerous
individuals have filed manifestations with the lower
court, conveying their intention to join private
respondents in the suit and claiming that they are
similarly situated with private respondents for they
were also prejudiced by the acts of petitioners in
closing and excavating the La Paz Road. Moreover,
the individuals sought to be represented by private
respondents in the suit are so numerous that it is
impracticable to join them all as parties and be
named individually as plaintiffs in the complaint.
These individuals claim to be residents of various
barangays in Biñan, Laguna and other barangays in
San Pedro, Laguna.
Anent the issue on the propriety of the WPI, Section
3, Rule 58 of the Rules of Court lays down the rules
for the issuance thereof. Thus:
(a) That the applicant is entitled to the relief
demanded, and the whole or part of such
relief consists in restraining the commission
or continuance of the acts complained of, or
in the performance of an act or acts, either
for a limited period or perpetually;
(b) That the commission, continuance or
non-performance of the act or acts
 complained of during the litigation would Moreover, the quantum of evidence required for one
probably work injustice to the applicant; or is different from that for the other.32

(c) That a party, court, or agency or a WHEREFORE, the petitions are DENIED.
person is doing, threatening, or attempting Accordingly, the July 31, 2001 Decision and
to do, or is procuring or suffering to be done, February 21, 2002 Resolution of the Court of
some act or acts probably in violation of the Appeals in CA-G.R. SP No. 60543 are AFFIRMED.
rights of the applicant respecting the subject
of the action or proceeding, and tending to SO ORDERED.
render the judgment ineffectual.

A writ of preliminary injunction is available to prevent

a threatened or continuous irremediable injury to
parties before their claims can be thoroughly studied
and adjudicated.25 The requisites for its issuance
are: (1) the existence of a clear and unmistakable
right that must be protected; and (2) an urgent and
paramount necessity for the writ to prevent serious
damage.26 For the writ to issue, the right sought to
be protected must be a present right, a legal right G.R. No. 226645
which must be shown to be clear and positive.27
This means that the persons applying for the writ ISABEL G. RAMONES, Petitioner
must show that they have an ostensible right to the vs.
final relief prayed for in their complaint.28 SPOUSES TEODORICO GUIMOC, JR. and
ELENITA GUIMOC, Respondents
In the case at bench, JCHA, et al. failed to establish
a prima facie proof of violation of their right to justify DECISION
the issuance of a WPI. Their right to the use of La
Paz Road is disputable since they have no clear
PERLAS-BERNABE, J.:
legal right therein. As correctly ruled by the CA:

Assailed in this petition for review on certiorari1 are

Here, contrary to the ruling of respondent Judge,
the Amended Decision2 dated March 21, 2016 and
private respondents failed to prove as yet that they
the Resolution3 dated August 23, 2016 of the Court
have a clear and unmistakable right over the La Paz
of Appeals (CA) in CA-G.R. SP No. 131201, deleting
Road – which was sought to be protected by the
the portion of the Judgment4 dated April 16, 2012 of
injunctive writ. They merely anchor their purported
the Regional Trial Court of Bataan, Branch 4 (RTC)
right over the La Paz Road on the bare allegation
in Criminal Case No. ML-4095 which ordered
that they have been using the same as public road
Spouses Teodorico Guimoc, Jr. (Teodorico) and
right-of-way for more than ten years. A mere
Elenita Guimoc (Elenita; collectively, respondents) to
allegation does not meet the standard of proof that
pay petitioner Isabel G. Ramones (petitioner) the
would warrant the issuance of the injunctive writ.
amounts of ₱60,000.00 and ₱507,000.00,
Failure to establish the existence of a clear right
respectively, representing their civil liabilities.
which should be judicially protected through the writ
of injunction is a sufficient ground for denying the
injunction. The Facts

Consequently, the case should be further heard by
the RTC so that the parties can fully prove their
respective positions on the issues.1âwphi1
Due process considerations dictate that the assailed
injunctive writ is not a judgment on the merits but
merely an order for the grant of a provisional and
ancillary remedy to preserve the status quo until the
merits of the case can be heard. The hearing on the
application for issuance of a writ of preliminary
injunction is separate and distinct from the trial on
the merits of the main case. 29 The evidence
submitted during the hearing of the incident is not
conclusive or complete for only a "sampling" is
needed to give the trial court an idea of the
justification for the preliminary injunction pending the
decision of the case on the merits.30 There are vital
facts that have yet to be presented during the trial
which may not be obtained or presented during the
hearing on the application for the injunctive writ.31
This case stemmed from an Information5 filed on
June 30, 2006 before the Municipal Trial Court of
Mariveles, Bataan (MTC), docketed as Criminal
Case No. 06-8539, charging respondents with the
crime of Other Forms of Swindling under Article 316
(2) of the Revised Penal Code (RPC), the
accusatory portion of which reads:
That on or about June 09, 2005, in Mariveles,
Bataan, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused,
conspiring, confederating together and mutually
aiding one another, did then and there willfully,
unlawfully and feloniously, with intent to defraud and
to cause damage to another, by means of deceit,
obtained money (loan) from Isabel Ramones in the
amount of ₱663,000.00 with the promise to sell their
house and lot to the latter, and in fact, the accused
executed a Deed of Sale of Residential Bldg. and
Transfer of Rights over the aforementioned house
and lot which they acknowledged before a Notary
Public, despite the accused knowing fully well that
said property was already mortgaged to a third
person, to the damage and prejudice of the said
Isabel Ramones.
CONTRARY TO LAW.6
After the said Information was filed by the Office of
the Provincial Prosecutor of Bataan to the MTC, the
latter's Clerk of Court wrote a letter7 to petitioner
requiring her to pay the amount of ₱500.00 as
docket fees. After petitioner's payment thereof,8 a
certification9 was later issued by the MTC Clerk of
Court reflecting the same.
Eventually, the case proceeded to trial, and
thereafter, the MTC, in a Judgment10 dated
September 21, 2011, acquitted Teodorico but found
Elenita guilty beyond reasonable doubt of the crime
of Other Forms of Swindling under Article 316 (2) of
the RPC, and accordingly, sentenced her to suffer
the penalty of imprisonment of one (1) month and
one (1) day to four (4) months of arresto mayor in its
minimum and medium periods, and ordered her to
pay a fine of ₱567,000.00 with subsidiary
imprisonment, as the case may be. In addition,
Elenita was ordered to pay the amount of
₱507,000.00, and despite his acquittal, Teodorico
was also directed to pay the amount of ₱60,000.00,
which amounts reflect their respective civil liabilities,
both with legal interest from December 13, 2006 until
fully paid.11
Aggrieved, respondents appealed12 to the RTC,
docketed as Criminal Case No. ML-4095.
Proceedings Before the RTC
In their Memorandum on Appeal13 filed before the
RTC on January 10, 2012, respondents argued that
the MTC did not acquire jurisdiction to award
damages in favor of petitioner for failure of the latter
to pay the correct amount of docket fees pursuant to
Supreme Court Administrative Circular No. 35-
200414 (SC Circular No. 35-2004), which provides
that the filing fees must be paid for money claims in
estafa cases. They claimed that due to petitioner's
failure to make an express reservation to separately
institute a civil action, her payment of filing fees in
the amount of ₱500.00 was deficient. The damages
sought was worth ₱663,000.00;15 thus, the correct
filing fees should have allegedly16 been around
₱9,960.00.
In her Reply,17 petitioner countered that based on
Rule 111 of the Rules· of Criminal Procedure, actual
damages are not included in the computation of the
filing fees in cases where the civil action is impliedly
instituted with the criminal action, and the filing fees
shall constitute a lien on the judgment.18
In a Judgment19 dated April 16, 2012, the RTC
affirmed the MTC ruling with modification, acquitting
Elenita on the ground of reasonable doubt, but still
maintaining respondents' civil liabilities.20 In so
ruling, the RTC declared that there was no intent to
defraud and no deceit was employed by Elenita to
obtain money from petitioner by selling the already
mortgaged subject property, since the said sale was
executed as payment for a pre-existing loan.21
Notably, however, the RTC did not rule upon the
issue of non-payment of correct filing fees.
Dissatisfied, Elenita moved for reconsideration,22
but the same was denied in an Order23 dated May
21, 2013. Hence, the matter was elevated24 to the
CA.
Proceedings Before the CA
In a Decision25 dated October 27, 2015, the CA
affirmed the RTC judgment and order.26 It ruled,
among others, that the failure to pay docket fees did
not preclude petitioner from recovering damages,
considering that Section 1, Rule 111 of the Rules of
Criminal Procedure does not require the payment of
filing fees for actual damages.27
Unperturbed, respondents moved for
reconsideration,28 and insisted that, contrary to the
finding of the CA, docket fees for claims of actual
damages should have been paid pursuant to SC
Circular No. 35-2004. In an Amended Decision29
dated March 21, 2016, the CA granted respondents'
motion for reconsideration and set aside its earlier
decision.30 It held that SC Circular No. 35-2004 was
in effect at the time petitioner filed the case against
respondents, and therefore, the court a quo erred
when it awarded damages in her favor.31
Consequently, the CA deleted the order directing
respondents to pay their respective civil liabilities.
Petitioner moved for reconsideration,32 but the
same was denied in a Resolution33 dated August
23, 2016. Among others, the CA observed that while
the issue of non-payment of docket fees had already
been raised during the MTC proceedings, the fact
that the MTC Clerk of Court assessed the amount of
₱500.00 as filing fees was belatedly interposed by
petitioner as a defense for the first time on appeal.34
Undaunted, petitioner filed the instant petition.
The Issue Before the Court
The issue for the Court's resolution is whether or not
the CA correctly deleted the award of damages.
The Court's Ruling
The petition is meritorious.
Rule 111 of the Rules of Criminal Procedure states
that "[e]xcept as otherwise provided in these Rules,
no filing fees shall be required for actual
damages."35
Among these exceptions, Section 21, Rule 141 of
the Rules of Court, as amended by A.M. No. 04-2-
04-SC36 - which guidelines were reflected in SC
Circular No. 35-2004 and was already in effect at the
time the Information was filed - states that the
payment of filing fees is required in estafa cases
under the following conditions:
SEC. 21. Other fees. - The following fees shall also
be collected by the clerks of court of the regional trial
courts or courts of the first level, as the case may be:
(a) In estafa cases where the offended party fails to
manifest within fifteen (15) days following the filing of
the information that the civil liability arising from the
crime has been or would be separately prosecuted,
or in violations of BP No. 22 if the amount involved
is:
xxxx
In the 1987 case of Manchester Development
Corporation v. CA (Manchester),37 the Court laid
down the general rule that "[a court] acquires
jurisdiction over any case only upon the payment of
the prescribed docket fee."38 In Manchester, the
Court upheld the CA's dismissal of the case filed
therein, based on the following circumstances:
The Court of Appeals therefore, aptly ruled in the
present case that the basis of assessment of the
docket fee should be the amount of damages sought
in the original complaint and not in the amended
complaint.
The Court cannot close this case without making the
observation that it frowns at the practice of counsel
who filed the original complaint in this case of
omitting any specification of the amount of damages
in the prayer although the amount of over :P78
million is alleged in the body of the complaint. This is
clearly intended for no other purpose than to evade
the payment of the correct filing fees if not to mislead
the docket clerk in the assessment of the filing fee.
This fraudulent practice was compounded when,
even as this Court had taken cognizance of the
anomaly and ordered an investigation, petitioner
through another counsel filed an amended
complaint, deleting all mention of the amount of
damages being asked for in the body of the
complaint. It was only when in obedience to the
order of this Court of October 18, 1985, the trial
court directed that the amount of damage be
specified in the amended complaint, that petitioners'
counsel wrote the damages sought in the much
reduced amount of ₱l0,000,000.00 in the body of the
complaint but not in the prayer thereof. The design
to avoid payment of the required docket fee is
obvious.
The Court serves warning that it will take drastic
action upon a repetition of this unethical
practice.1âwphi1
To put a stop to this irregularity, henceforth all
complaints, petitions, answers and other similar
pleadings should specify the amount of damages
being prayed for not only in the body of the pleading
but also in the prayer, and said damages shall be
considered in the assessment of the filing fees in
any case. Any pleading that fails to comply with this
requirement shall not be accepted nor admitted, or
shall otherwise be expunged from the record.
The Court acquires jurisdiction over any case only
upon the payment of the prescribed docket fee. An
amendment of the complaint or similar pleading will
not thereby vest jurisdiction in the Court, much less
the payment of the docket fee based on the amounts
sought in the amended pleading. xx x.39 (Emphasis
supplied)
Around two (2) years later, the Court, in Sun
Insurance Office, Ltd. v. Asuncion (Sun
Insurance),40 clarified that the ruling in Manchester
was made "due to the fraud committed on the
government";41 thus, it was explained that the court
a quo in Manchester "did not acquire jurisdiction
over the case and that the amended complaint could
not have been admitted inasmuch as the original
complaint was null and void. "42 In Sun Insurance,
however, the Court found that "a more liberal
interpretation of the rules [was] called for considering
that, unlike Manchester, [the] private respondent
[therein] demonstrated his willingness to abide by
the rules by paying the additional docket fees as
required."43 Nonetheless, the Court held that "the
clerk of court of the lower court and/or his duly
authorized docket clerk or clerk in-charge should
determine and, thereafter, if any amount is found
due, x x x must require the private respondent to pay
the same."44
Accordingly, subsequent decisions now uniformly
hold that "when insufficient filing fees are initially
paid by the plaintiffs and there is no intention to
defraud the government, the Manchester rule does
not apply."45
In line with this legal paradigm, prevailing case law
demonstrates that "[t]he non-payment of the
prescribed filing fees at the time of the filing of the
complaint or other initiatory pleading fails to vest
jurisdiction over the case in the trial court. Yet,
where the plaintiff has paid the amount of filing fees
assessed by the clerk of court, and the amount
paid turns out to be deficient, the trial court still
acquires jurisdiction over the case, subject to the
payment by the plaintiff of the deficiency
assessment."46 "The reason is that to penalize the
party for the omission of the clerk of court is not fair
if the party has acted. in good faith."47
Thus, in the cases of Rivera v. del Rosario,48 Fil-
Estate Golf and Development, Inc. v. Navarro,49
United Overseas Bank v. Ros50 (United Overseas
Bank), and The Heirs of Reinoso, Sr. v. CA,51 the
Court has consistently ruled that jurisdiction was
validly acquired by the courts a quo therein upon the
full payment of the docket fees as assessed by the
clerk of court. In these cases, the Court held that the
liberal doctrine in the matter of paying docket fees
enunciated in Sun Insurance, and not the strict
regulations set in Manchester, will apply in cases
where insufficient filing fees were paid based on the
assessment made by the clerk of court, provided
that there was no intention to defraud the
government. In so ruling, the Court explained that
when there is underpayment of docket fees, the
clerk of court or his duly authorized deputy has the
responsibility of making a deficiency assessment,
and the party filing the action would be required to
pay the deficiency which shall constitute a lien on
the judgment.52
In this case, it is undisputed that the amount of
₱500.00 paid by petitioner was insufficient to cover
the required filing fees for her estafa case under the
premises of Section 21, Rule 141 of the Rules of
Court, as amended by A.M. No. 04-2-04-SC.
Nonetheless, it is equally undisputed that she paid
the full amount of docket fees as assessed by the
Clerk of Court of the MTC, which is evidenced by a
certification dated April 11, 2016 issued therefor. In
addition, petitioner consistently manifested her
willingness to pay additional docket fees when
required. In her petition, she claims that she is "very
much willing to pay the correct docket fees which is
the reason why she immediately went to the clerks
of court[,] and records show that she paid the [MTC]
of the amount assessed from her."53 Indeed, the
foregoing actuations negate any bad faith on
petitioner's part, much more belie any intent to
defraud the government. As such, applying the
principles above-discussed, the Court holds that the
court a quo properly acquired jurisdiction over the
case. However, petitioner should pay the deficiency
that shall be considered as a lien on the monetary
awards in her favor pursuant to Section 2, Rule 141
of the Rules of Court, which states:
Section 2. Fees in lien. - Where the court in its final
judgment awards a claim not alleged, or a relief
different from, or more than that claimed in the
pleading, the party concerned shall pay the
additional fees which shall constitute a lien on the
judgment in satisfaction of said lien. The clerk of
court shall assess and collect the corresponding
fees.
Besides, the Court observes that if respondents
believed that the assessment of filing fees was
incorrect, then it was incumbent upon them to have
raised the same before the MTC. Instead, contrary
to the CA's assertion,54 records show that
respondents actively participated in the proceedings
before the MTC and belatedly questioned the
alleged underpayment of docket fees only for the
first time on appeal55 before the RTC, or five (5)
years later after the institution of the instant case.
The Court is aware that lack of jurisdiction, as a
ground to dismiss a complaint, may, as a general
rule, be raised at any stage of the proceedings.
However, in United Overseas Bank, the Court has
observed that the same is subject to the doctrine of
estoppel by laches, which squarely applies here. In
United Overseas Bank:
In its Order, the lower court even recognized the
validity of petitioner's claim of lack of jurisdiction had
it timely raised the issue.1awp++i1 It bears to stress
that the non-payment of the docket fees by private
respondent and the supposed lack of jurisdiction of
the Manila RTC over Civil Case No. 98-90089 was
raised by the petitioner only five years after
institution of the instant case and after one of the
private respondent's witnesses was directly
examined in open court. Not only that, the petitioner
even implored the court a quo's jurisdiction by filing
an Answer with Counterclaim praying that the
amount of ₱12,643,478.46 as deficiency claim of the
credit granted to private respondent and the sum
₱6,41l,786.19 as full payment of one of the Letters
of Credit, be awarded in its favor. Petitioner likewise
prayed for the award of exemplary damages in the
amount of ₱l,000,000.00, attorney's fees and cost of
the suit.
x x x xx x x It is incumbent upon the petitioner to file
a Motion to Dismiss at the earliest opportune time to
raise the issue of the court's lack of jurisdiction,
more so, that this issue is susceptible to !aches.
Petitioner's failure to seasonably raise the question
of jurisdiction leads us to the inevitable conclusion
that it is now barred by laches to assail the Manila
RTC's jurisdiction over the case. As defined in the
landmark case of Tijam v. Sibonghanoy [131 Phil.
556, 563 (1968)]:
Laches, in general sense, is failure or neglect, for an
unreasonable and unexplained length of time, to do
that which, by exercising due diligence, could or
should have been done earlier; it is negligence or
omission to assert a right within a reasonable length
of time, warranting a presumption that the party
entitled to assert it either has abandoned it or
declined to assert it.
It has been held that a party cannot invoke the
jurisdiction of a court to secure affirmative relief
against his opponent and, after obtaining or failing to
obtain such relief, repudiate or question that same
jurisdiction. By way of explaining the rule, it was
further said that the question of whether or not the
court had jurisdiction either over the subject matter
of the action or the parties is not important in such
cases because the party is barred from such
conduct, not because the judgment or the order of
the court is valid and conclusive as an adjudication,
but for the reason that such a practice cannot be
tolerated by reason of public policy.
x x x xSince the Manila RTC ruled that the petitioner
is now estopped by laches from questioning its
jurisdiction and considering that its Order denying
petitioner's Motion to Dismiss is not tainted with
grave abuse of discretion but wholly substantiated
by the evidence on the record, this Court would no
longer disturb said order.56
Accordingly, the Court sets aside the assailed CA
rulings. A new one is entered ordering Elenita and
Teodorico to pay petitioner the amounts of
₱507,000.00 and ₱60,000.00, respectively, both with
legal interest at the rate of twelve percent (12%) per
annum, reckoned not from December 13, 2006 as
ruled by the MTC, but from the time the Information
was filed on June 30, 2006, consistent with existing
jurisprudence on estafa cases,57 and six percent
(6%) per annum, from July 1, 2013 until full
satisfaction.58 Further, the MTC is directed to
determine the amount of deficient docket fees, which
shall constitute a lien on the aforementioned
monetary awards.
As a final note, it must be pointed out that this
Decision only relates to respondents' civil liabilities
as records are bereft of any showing that further
recourse was taken against the rulings of the courts
a quo on the criminal aspect of this case.
WHEREFORE, the petition is GRANTED. The
Amended Decision dated March 21, 2016 and the
Resolution dated August 23, 2016 of the Court of
Appeals in CA-G.R. SP No. 131201 are hereby SET
ASIDE. A new one is ENTERED, ordering:
(1) Respondents Elenita Guimoc and Teodorico
Guimoc, Jr. to pay petitioner Isabel G. Ramones the
amounts of ₱507,000.00 and ₱60,000.00,
respectively, both with legal interest at the rate of
twelve percent (12%) per annum, from June 30,
2006 until June 30, 2013, and six percent (6%) per
annum, from July 1, 2013 until full payment; and
(2) The Municipal Trial Court of Mariveles, Bataan to
determine the deficient docket fees in Criminal Case
No. 06-8539, which shall constitute a lien on the
aforementioned monetary awards.
SO ORDERED.
G.R. No. 180771               April 21, 2015
RESIDENT MARINE MAMMALS OF THE
PROTECTED SEASCAPE TAÑON STRAIT, e.g.,
TOOTHED WHALES, DOLPHINS, PORPOISES,
AND OTHER CETACEAN SPECIES, Joined in and
Represented herein by Human Beings Gloria
Estenzo Ramos and Rose-Liza Eisma-Osorio, In
Their Capacity as Legal Guardians of the Lesser
Life-Forms and as Responsible Stewards of
God's Creations, Petitioners,
vs.
SECRETARY ANGELO REYES, in his capacity as
Secretary of the Department of Energy (DOE),
SECRETARY JOSE L. ATIENZA, in his capacity
as Secretary of the Department of Environment
and Natural Resources (DENR), LEONARDO R.
SIBBALUCA, DENR Regional Director-Region VII
and in his capacity as Chairperson of the Tañon
Strait Protected Seascape Management Board,
Bureau of Fisheries and Aquatic Resources
(BFAR), DIRECTOR MALCOLM J. SARMIENTO,
JR., BFAR Regional Director for Region VII
ANDRES M. BOJOS, JAPAN PETROLEUM
EXPLORATION CO., LTD. (JAPEX), as
represented by its Philippine Agent, SUPPLY
OILFIELD SERVICES, INC. Respondents.
x-----------------------x
G.R. No. 181527
CENTRAL VISAYAS FISHERFOLK
DEVELOPMENT CENTER (FIDEC), CERILO D.
ENGARCIAL, RAMON YANONG, FRANCISCO
LABID, in their personal capacity and as
representatives of the SUBSISTENCE
FISHERFOLKS OF THE MUNICIPALITIES OF
ALOGUINSAN AND PINAMUNGAJAN, CEBU,
AND THEIR FAMILIES, AND THE PRESENT AND
FUTURE GENERATIONS OF FILIPINOS WHOSE
RIGHTS ARE SIMILARLY AFFECTED, Petitioners,
vs.
SECRETARY ANGELO REYES, in his capacity as
Secretary of the Department of Energy (DOE),
JOSE L. ATIENZA, in his capacity as Secretary of
the Department of Environment and Natural
Resources (DENR), LEONARDO R. SIBBALUCA,
in his capacity as DENR Regional Director-
Region VII and as Chairperson of the Tañon
Strait Protected Seascape Management Board,
ALAN ARRANGUEZ, in his capacity as Director -
Environmental Management Bureau-Region VII,
DOE Regional Director for Region VIII1 ANTONIO
LABIOS, JAPAN PETROLEUM EXPLORATION
CO., LTD. (JAPEX), as represented by its
Philippine Agent, SUPPLY OILFIELD SERVICES,
INC., Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
Before Us are two consolidated Petitions filed under
Rule 65 of the 1997 Rules of Court, concerning
Service Contract No. 46 (SC-46), which allowed the
exploration, development, and exploitation of
petroleum resources within Tañon Strait, a narrow
passage of water situated between the islands of
Negros and Cebu.2
The Petition docketed as G.R. No. 180771 is an
original Petition for Certiorari, Mandamus, and
Injunction, which seeks to enjoin respondents from
implementing SC-46 and to have it nullified for willful
and gross violation of the 1987 Constitution and
certain international and municipal laws.3
Likewise, the Petition docketed as G.R. No. 181527
is an original Petition for Certiorari, Prohibition, and
Mandamus, which seeks to nullify the Environmental
Compliance Certificate (ECC) issued by the
Environmental Management Bureau (EMB) of the
Department of Environment and Natural Resources
(DENR), Region VII in connection with SC-46; to
prohibit respondents from implementing SC-46; and
to compel public respondents to provide petitioners
access to the pertinent documents involving the
Tañon Strait Oil Exploration Project.4
ANTECEDENT FACTS AND PROCEEDINGS
Petitioners in G.R. No. 180771, collectively referred
to as the "Resident Marine Mammals" in the petition,
are the toothed whales, dolphins, porpoises, and
other cetacean species, which inhabit the waters in
and around the Tañon Strait. They are joined by
Gloria Estenzo Ramos (Ramos) and Rose-Liza
Eisma-Osorio (Eisma-Osorio) as their legal
guardians and as friends (to be collectively known as
"the Stewards") who allegedly empathize with, and
seek the protection of, the aforementioned marine
species. Also impleaded as an unwilling co-petitioner
is former President Gloria Macapagal-Arroyo, for her
express declaration and undertaking in the ASEAN
Charter to protect the Tañon Strait, among others.5
Petitioners in G.R. No. 181527 are the Central
Visayas Fisherfolk Development Center (FIDEC), a
non-stock, non-profit, non-governmental
organization, established for the welfare of the
marginal fisherfolk in Region VII; and Cerilo D.
Engarcial (Engarcial), Ramon Yanong (Yanong) and
Francisco Labid (Labid), in their personal capacities
and as representatives of the subsistence fisherfolk
of the municipalities of Aloguinsan and
Pinamungajan, Cebu.
Named as respondents in both petitions are the late
Angelo T. Reyes, as then Secretary of the
Department of Energy (DOE); Jose L. Atienza, as
then Secretary of the DENR; Leonardo R. Sibbaluca,
as then DENRRegional Director for Region VII and
Chairman of the Tañon Strait Protected Seascape
Management Board; Japan Petroleum Exploration
Co., Ltd. (JAPEX), a company organized and
existing under the laws of Japan with a Philippine
branch office; and Supply Oilfield Services, Inc.
(SOS), as the alleged Philippine agent of JAPEX.
In G.R. No. 181527, the following were impleaded as
additional public respondents: Alan C. Arranguez
(Arranguez) and Antonio Labios (Labios), in their
capacities as then Director of the EMB, Region VII
and then Regional Director of the DOE, Region VII,
respectively.6
On June 13, 2002, the Government of the
Philippines, acting through the DOE, entered into a
Geophysical Survey and Exploration Contract-I 02
(GSEC-102) with JAPEX. This contract involved
geological and geophysical studies of the Tañon
Strait. The studies included surface geology, sample
analysis, and reprocessing of seismic and magnetic
data. JAPEX, assisted by DOE, also conducted
geophysical and satellite surveys, as well as oil and
gas sampling in Tañon Strait.7
On December 21, 2004, DOE and JAPEX formally
converted GSEC-102 into SC-46 for the exploration,
development, and production of petroleum resources
in a block covering approximately 2,850 square
kilometers offshore the Tañon Strait.8
From May 9 to 18, 2005, JAPEX conducted seismic
surveys in and around the Tañon Strait. A multi-
channel sub-bottom profiling covering approximately
751 kilometers was also done to determine the
area's underwater composition.9
JAPEX committed to drill one exploration well during
the second sub-phase of the project. Since the well
was to be drilled in the marine waters of Aloguinsan
and Pinamungajan, where the Tañon Strait was
declared a protected seascape in 1988,10 JAPEX
agreed to comply with the Environmental Impact
Assessment requirements pursuant to Presidential
Decree No. 1586, entitled "Establishing An
Environmental Impact Statement System, Including
Other Environmental Management Related
Measures And For Other Purposes."11
On January 31, 2007, the Protected Area
Management Board12 of the Tañon Strait (PAMB-
Tañon Strait) issued Resolution No. 2007-001,13
wherein it adopted the Initial Environmental
Examination (IEE) commissioned by JAPEX, and
favorably recommended the approval of JAPEX's
application for an ECC.
On March 6, 2007, the EMB of DENR Region VII
granted an ECC to the DOE and JAPEX for the
offshore oil and gas exploration project in Tañon
Strait.14 Months later, on November 16, 2007,
JAPEX began to drill an exploratory well, with a
depth of 3,150 meters, near Pinamungajan town in
the western Cebu Province.15 This drilling lasted
until February 8, 2008.16
It was in view of the foregoing state of affairs that
petitioners applied to this Court for redress, via two
separate original petitions both dated December 1 7,
2007, wherein they commonly seek that respondents
be enjoined from implementing SC-46 for, among
others, violation of the 1987 Constitution.
On March 31, 2008, SOS filed a Motion to Strike17
its name as a respondent on the ground that it is not
the Philippine agent of JAPEX. In support of its
motion, it submitted the branch office application of
JAPEX,18 wherein the latter's resident agent was
clearly identified. SOS claimed that it had acted as a
mere logistics contractor for JAPEX in its oil and gas
exploration activities in the Philippines.
Petitioners Resident Marine Mammals and Stewards
opposed SOS' s motion on the ground that it was
premature, it was pro-forma, and it was patently
dilatory. They claimed that SOS admitted that "it is in
law a (sic) privy to JAPEX" since it did the drilling
and other exploration activities in Tañon Strait under
the instructions of its principal, JAPEX. They argued
that it would be premature to drop SOS as a party as
JAPEX had not yet been joined in the case; and that
it was "convenient" for SOS to ask the Court to
simply drop its name from the parties when what it
should have done was to either notify or ask JAPEX
to join it in its motion to enable proper substitution.
At this juncture, petitioners Resident Marine
Mammals and Stewards also asked the Court to"
implead JAPEX Philippines as a corespondent or as
a substitute for its parent company, JAPEX.19
On April 8, 2008, the Court resolved to consolidate
G.R. No. 180771 and G.R. No. 181527.
On May 26, 2008, the FIDEC manifested20 that they
were adopting in toto the Opposition to Strike with
Motion to Implead filed by petitioners Resident
Marine Mammals and Stewards in G.R. No. 180771.
On June 19, 2008, public respondents filed their
Manifestation21 that they were not objecting to
SOS's Motion to Strike as it was not JAPEX's
resident agent. JAPEX during all this time, did not
file any comment at all.
Thus, on February 7, 2012, this Court, in an effort to
ensure that all the parties were given ample chance
and opportunity to answer the issues herein, issued
a Resolution directing the Court's process servicing
unit to again serve the parties with a copy of the
September 23, 2008 Resolution of the Court, which
gave due course to the petitions in G.R. Nos.
180771 and 181527, and which required the parties
to submit their respective memoranda. The February
7, 2012 Resolution22 reads as follows:
G.R. No. 180771 (Resident Marine Mammals of the
Protected Seascape Tañon Strait, e.g., Toothed
Whales, Dolphins, Porpoises and Other Cetacean
Species, et al. vs. Hon. Angelo Reyes, in his
capacity as Secretary of the Department of Energy,
et al.) and G.R. No. 181527 (Central Visayas
Fisherfolk Development Center, et al. vs. Hon.
Angelo Reyes, et al.). - The Court Resolved to direct
the Process Servicing Unit to RE-SEND the
resolution dated September 23, 2008 to the following
parties and counsel, together with this resolution:
Atty. Aristeo O. Carino 20th Floor Pearlbank
Counsel for Respondent Centre
Supply 146 Valero Street
Oilfield Services, Inc. Salcedo Village,
Makati City
JAPEX Philippines Ltd. 20th Floor Pearlbank
Centre
146 Valero Street
Salcedo Village,
Makati City
JAPEX Philippines Ltd. 19th Floor Pearlbank
c/o Atty. Maria Farah Centre
Z.G. 146 Valero Street
Nicolas-Suchianco Salcedo Village,
Makati City
Atty. Maria Farah Z.G. Suite 2404 Discovery
Nicolas-Suchianco Centre
Resident Agent of 25 ADB Avenue
JAPEX Ortigas Center, Pasig
Philippines Ltd. City
This Resolution was personally served to the above
parties, at the above addresses on February 23,
2012. On March 20, 2012, JAPEX Philippines, Ltd.
(JAPEX PH), by way of special appearance, filed a
Motion to Admit23 its Motion for Clarification,24
wherein JAPEX PH requested to be clarified as to
whether or not it should deem the February 7, 2012
Resolution as this Court's Order of its inclusion in
the case, as it has not been impleaded. It also
alleged that JAPEX PH had already stopped
exploration activities in the Taft. on Strait way back
in 2008, rendering this case moot.
On March 22, 2012, JAPEX PH, also by special
appearance, filed a Motion for Extension of Time25
to file its Memorandum. It stated that since it
received the February 7, 2012 Resolution on
February 23, 2012, it had until March 22, 2012 to file
its Memorandum. JAPEX PH then asked for an
additional thirty days, supposedly to give this Court
some time to consider its Motion for Clarification.
On April 24, 2012, this Court issued a Resolution26
granting JAPEX PH's Motion to Admit its Motion for
Clarification. This Court, addressing JAPEX PH's
Motion for Clarification, held:
With regard to its Motion for Clarification (By Special
Appearance) dated March 19, 2012, this Court
considers JAPEX Philippines, Ltd. as a real party-in-
interest in these cases. Under Section 2, Rule 3 of
the 1997 Rules of Court, a real party-in-interest is
the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the
avails of the suit. Contrary to JAPEX Philippines,
Ltd. 's allegation that it is a completely distinct
corporation, which should not be confused with
JAPEX Company, Ltd., JAPEX Philippines, Ltd. is a
mere branch office, established by JAPEX
Company, Ltd. for the purpose of carrying out the
latter's business transactions here in the Philippines.
Thus, JAPEX Philippines, Ltd., has no separate
personality from its mother foreign corporation, the
party impleaded in this case.
Moreover, Section 128 of the Corporation Code
provides for the responsibilities and duties of a
resident agent of a foreign corporation:
SECTION 128. Resident agent; service of process. -
The Securities and Exchange Commission shall
require as a condition precedent to the issuance of
the license to transact business in the Philippines by
any foreign corporation that such corporation file
with the Securities and Exchange Commission a
written power of attorney designating some person
who must be a resident of the Philippines, on whom
any summons and other legal processes may be
served in all actions or other legal proceedings
against such corporation, and consenting that
service upon such resident agent shall be admitted
and held as valid as if served upon the duly
authorized officers of the foreign corporation at its
home office. Any such foreign corporation shall
likewise execute and file with the Securities and
Exchange Commission an agreement or stipulation,
executed by the proper authorities of said
corporation, in form and substance as follows:
"The (name of foreign corporation) does hereby
stipulate and agree, in consideration of its being
granted by the Securities and Exchange
Commission a license to transact business in the
Philippines, that if at any time said corporation shall
cease to transact business in the Philippines, or
shall be without any resident agent in the Philippines
on whom any summons or other legal processes
may be served, then in any action or proceeding
arising out of any business or transaction which
occurred in the Philippines, service of any summons
or other legal process may be made upon the
Securities and Exchange Commission and that such
service shall have the same force and effect as if
made upon the duly-authorized officers of the
corporation at its home office."
Whenever such service of summons or other
process shall be made upon the Securities and
Exchange Commission, the Commission shall, within
ten (10) days thereafter, transmit by mail a copy of
such summons or other legal process to the
corporation at its home or principal office. The
sending of such copy by the Commission shall be a
necessary part of and shall complete such service.
All expenses incurred by the Commission for such
service shall be paid in advance by the party at
whose instance the service is made.
In case of a change of address of the resident agent,
it shall be his or its duty to immediately notify in
writing the Securities and Exchange Commission of
the new address.
It is clear from the foregoing provision that the
function of a resident agent is to receive summons
or legal processes that may be served in all actions
or other legal proceedings against the foreign
corporation. These cases have been prosecuted in
the name of JAPEX Company, Ltd., and JAPEX
Philippines Ltd., as its branch office and resident
agent, had been receiving the various resolutions
from this Court, as evidenced by Registry Return
Cards signed by its representatives.
And in the interest of justice, this Court resolved to
grant JAPEX PH's motion for extension of time to file
its memorandum, and was given until April 21, 2012,
as prayed for, within which to comply with the
submission.27
Without filing its Memorandum, JAPEX PH, on May
14, 2012, filed a motion, asking this Court for an
additional thirty days to file its Memorandum, to be
counted from May 8, 2012. It justified its request by
claiming that this Court's April 24, 2012 Resolution
was issued past its requested deadline for filing,
which was on April 21, 2012.28
On June 19, 2012, this Court denied JAPEX PH's
second request for additional time to file its
Memorandum and dispensed with such filing.
Since petitioners had already filed their respective
memoranda,29 and public respondents had earlier
filed a Manifestation30 that they were adopting their
Comment dated March 31, 2008 as their
memorandum, this Court submitted the case for
decision.
Petitioners.' Allegations
Protesting the adverse ecological impact of JAPEX's
oil exploration activities in the Tañon Strait,
petitioners Resident Marine Mammals and Stewards
aver that a study made after the seismic survey
showed that the fish catch was reduced drastically
by 50 to 70 percent. They claim that before the
seismic survey, the average harvest per day would
be from 15 to 20 kilos; but after the activity, the
fisherfolk could only catch an average of 1 to 2 kilos
a day. They attribute this "reduced fish catch" to the
destruction of the ''payao," also known as the "fish
aggregating device" or "artificial reef."31 Petitioners
Resident Marine Mammals and Stewards also
impute the incidences of "fish kill"32 observed by
some of the local fisherfolk to the seismic survey.
And they further allege that the ECC obtained by
private respondent JAPEX is invalid because public
consultations and discussions with the affected
stakeholders, a pre-requisite to the issuance of the
ECC, were not held prior to the ECC's issuance.
In its separate petition, petitioner FIDEC confirms
petitioners Resident Marine Mammals and Stewards'
allegations of reduced fish catch and lack of public
consultations or discussions with the fisherfolk and
other stakeholders prior to the issuance of the ECC.
Moreover, it alleges that during the seismic surveys
and drilling, it was barred from entering and fishing
within a 7-kilometer radius from the point where the
oilrig was located, an area greater than the 1.5-
kilometer radius "exclusion zone" stated in the
IEE.33 It also agrees in the allegation that public
respondents DENR and EMB abused their discretion
when they issued an ECC to public respondent DOE
and private respondent JAPEX without ensuring the
strict compliance with the procedural and
substantive requirements under the Environmental
Impact Assessment system, the Fisheries Code, and
their implementing rules and regulations.34 It further
claims that despite several requests for copies of all
the documents pertaining to the project in Tañon
Strait, only copies of the P AMB-Tañon Strait
Resolution and the ECC were given to the
fisherfolk.35
Public Respondents' Counter-Allegations
Public respondents, through the Solicitor General,
contend that petitioners Resident Marine Mammals
and Stewards have no legal standing to file the
present petition; that SC-46 does not violate the
1987 Constitution and the various laws cited in the
petitions; that the ECC was issued in accordance
with existing laws and regulations; that public
respondents may not be compelled by mandamus to
furnish petitioners copies of all documents relating to
SC-46; and that all the petitioners failed to show that
they are entitled to injunctive relief. They further
contend that the issues raised in these petitions
have been rendered moot and academic by the fact
that SC-46 had been mutually terminated by the
parties thereto effective June 21, 2008.36
ISSUES
The following are the issues posited by petitioners
Resident Marine Mammals and Stewards in G.R.
No. 180771:
I. WHETHER OR NOT PETITIONERS
HAVE LOCUS STAND! TO FILE THE
INSTANT PETITION;
II. WHETHER OR NOT SERVICE
CONTRACT NO. 46 IS VIOLA T[IVE] OF
THE 1987 PHILIPPINE CONSTITUTION
AND STATUTES;
III. WHETHER OR NOT THE ON-GOING
EXPLORATION AND PROPOSED
EXPLOITATION FOR OIL AND NATURAL
GAS AT, AROUND, AND UNDERNEATH
THE MARINE WATERS OF THE TAÑON
STRAIT PROTECTED SEASCAPE IS
 INCONSISTENT WITH THE PHILIPPINE II. Main Issue: Legality of Service Contract No. 46.
COMMITMENTS TO INTERNATIONAL
ENVIRONMENTAL LAWS AND DISCUSSION
INSTRUMENTS; AND
At the outset, this Court makes clear that the "'moot
IV. WHETHER OR NOT THE ISSUANCE and academic principle' is not a magical formula that
OF THE ENVIRONMENTAL COMPLIANCE can automatically dissuade the courts in resolving a
CERTIFICATE (ECC) IN case." Courts have decided cases otherwise moot
ENVIRONMENTALLY CRITICAL AREAS and academic under the following exceptions:
AND HABITATS OF MARINE WILDLIFE
AND ENDANGERED SPECIES IS LEGAL 1) There is a grave violation of the
AND PROPER.37 Constitution;

Meanwhile, in G.R. No. 181527, petitioner FIDEC 2) The exceptional character of the situation
presented the following issues for our consideration: and the paramount public interest is
involved;
I. WHETHER OR NOT SERVICE
CONTRACT NO. 46 EXECUTED 3) The constitutional issue raised requires
BETWEEN RESPONDENTS DOE AND formulation of controlling principles to guide
JAPEX SHOULD BE NULLIFIED AND SET the bench, the bar, and the public; and
ASIDE FOR BEING IN DIRECT VIOLATION
OF SPECIFIC PROVISIONS OF THE 1987
PHILIPPINE CONSTITUTION AND 4) The case is capable of repetition yet
APPLICABLE LAWS; evading review.39

II. WHETHER OR NOT THE OFF-SHORE
OIL EXPLORAT[I]ON CONTEMPLATED
UNDER SERVICE CONTRACT NO. 46 ·IS
LEGALLY PERMISSIBLE WITHOUT A LAW
BEING DULY PASSED EXPRESSLY FOR
THE PURPOSE;
III. WHETHER OR NOT THE OIL
EXPLORATION BEING CONDUCTED
WITHIN THE TAÑON STRAIT
PROTECTED SEASCAPE VIOLATES THE
RIGHTS AND LEGAL PROTECTION
GRANTED TO PETITIONERS UNDER THE
CONSTITUTION AND APPLICABLE LAWS.
In this case, despite the termination of SC-46, this
Court deems it necessary to resolve these
consolidated petitions as almost all of the foregoing
exceptions are present in this case. Both petitioners
allege that SC-46 is violative of the Constitution, the
environmental and livelihood issues raised
undoubtedly affect the public's interest, and the
respondents' contested actions are capable of
repetition.
Procedural Issues
Locus Standi of Petitioners Resident Marine
Mammals and Stewards

IV. WHETHER OR NOT THE ISSUANCE
OF THE ENVIRONMENTAL COMPLIANCE
CERTIFICATE (ECC) FOR SUCH AN
ENVIRONMENTALLY CRITICAL PROJECT
INSIDE AN ENVIRONMENTALLY
CRITICAL AREA SUCH AS THE TAÑON
STRAIT PROTECTED SEASCAPE
CONFORMED TO LAW AND EXISTING
RULES AND REGULATIONS ON THE
MATTER.
V. WHETHER OR NOT THE
RESPONDENTS MAY BE COMPELLED BY
MANDAMUS TO FURNISH PETITIONERS
WITH COPIES OF THE DOCUMENTS
PERTAINING TO THE TAÑON STRAIT OIL
EXPLORATION PROJECT.38
In these consolidated petitions, this Court has
determined that the various issues raised by the
petitioners may be condensed into two primary
issues:
I. Procedural Issue: Locus Standi of the Resident
Marine Mammals and Stewards, petitioners in G.R.
No. 180771; and
The Resident Marine Mammals, through the
Stewards, "claim" that they have the legal standing
to file this action since they stand to be benefited or
injured by the judgment in this suit.40 Citing Oposa
v. Factoran, Jr.,41 they also assert their right to sue
for the faithful performance of international and
municipal environmental laws created in their favor
and for their benefit. In this regard, they propound
that they have the right to demand that they be
accorded the benefits granted to them in multilateral
international instruments that the Philippine
Government had signed, under the concept of
stipulation pour autrui.42
For their part, the Stewards contend that there
should be no question of their right to represent the
Resident Marine Mammals as they have stakes in
the case as forerunners of a campaign to build
awareness among the affected residents of Tañon
Strait and as stewards of the environment since the
primary steward, the Government, had failed in its
duty to protect the environment pursuant to the
public trust doctrine.43
Petitioners Resident Marine Mammals and Stewards
also aver that this Court may lower the benchmark in
locus standi as an exercise of epistolary
jurisdiction.44
In opposition, public respondents argue that the
Resident Marine Mammals have no standing
because Section 1, Rule 3 of the Rules of Court
requires parties to an action to be either natural or
juridical persons, viz.:
Section 1. Who may be parties, plaintiff and
defendant. - Only natural or juridical persons, or
entities authorized by law may be parties in a civil
action. The term "plaintiff' may refer to the claiming
party, the counter-claimant, the cross-claimant, or
the third (fourth, etc.)-party plaintiff. The term
"defendant" may refer to the original defending party,
the defendant in a counterclaim, the cross-
defendant, or the third (fourth, etc.)-party defendant.
The public respondents also contest the applicability
of Oposa, pointing out that the petitioners therein
were all natural persons, albeit some of them were
still unborn.45
As regards the Stewards, the public respondents
likewise challenge their claim of legal standing on
the ground that they are representing animals, which
cannot be parties to an action. Moreover, the public
respondents argue that the Stewards are not the real
parties-in-interest for their failure to show how they
stand to be benefited or injured by the decision in
this case.46 Invoking the alter ego principle in
political law, the public respondents claim that
absent any proof that former President Arroyo had
disapproved of their acts in entering into and
implementing SC-46, such acts remain to be her
own.47
The public respondents contend that since
petitioners Resident Marine Mammals and Stewards'
petition was not brought in the name of a real party-
in-interest, it should be dismissed for failure to state
a cause of action.48
The issue of whether or not animals or even
inanimate objects should be given legal standing in
actions before courts of law is not new in the field o f
animal rights and environmental law. Petitioners
Resident Marine Mammals and Stewards cited the
1972 United States case Sierra Club v. Rogers C.B.
Morton,49 wherein Justice William 0. Douglas,
dissenting to the conventional thought on legal
standing, opined:
The critical question of "standing" would be
simplified and also put neatly in focus if we
fashioned a federal rule that allowed environmental
issues to be litigated before federal agencies or
federal courts in the name of the inanimate object
about to be despoiled, defaced, or invaded by roads
and bulldozers and where injury is the subject of
public outrage. x x x. Inanimate objects are
sometimes parties in litigation. A ship has a legal
personality, a fiction found useful for maritime
purposes. The corporation sole - a creature of
ecclesiastical law - is an acceptable adversary and
large fortunes ride on its cases. The ordinary
corporation is a "person" for purposes of the
adjudicatory processes, whether it represents
proprietary, spiritual, aesthetic, or charitable causes.
So it should be as respects valleys, alpine meadows,
rivers, lakes, estuaries, beaches, ridges, groves of
trees, swampland, or even air that feels the
destructive pressures of modem technology and
modem life. The river, for example, is the living
symbol of all the life it sustains or nourishes-fish,
aquatic insects, water ouzels, otter, fisher, deer, elk,
bear, and all other animals, including man, who are
dependent on it or who enjoy it for its sight, its
sound, or its life. The river as plaintiff speaks for the
ecological unit of life that is part of it. Those people
who have a meaningful relation to that body of
water-whether it be a fisherman, a canoeist, a
zoologist, or a logger-must be able to speak for the
values which the river represents and which are
threatened with destruction.50 (Citations omitted.)
The primary reason animal rights advocates and
environmentalists seek to give animals and
inanimate objects standing is due to the need to
comply with the strict requirements in bringing a suit
to court. Our own 1997 Rules of Court demand that
parties to a suit be either natural or juridical persons,
or entities authorized by law. It further necessitates
the action to be brought in the name of the real
party-in-interest, even if filed by a representative,
viz.:
Rule 3
Parties to Civil Actions
Section 1. Who may be parties; plaintiff and
defendant. - Only natural or juridical persons, or
entities authorized by law may be parties in a civil
action. The term "plaintiff' may refer to the claiming
party, the counter-claimant, the cross-claimant, or
the third (fourth, etc.)-party plaintiff. The term
"defendant" may refer to the original defending party,
the defendant in a counterclaim, the cross-
defendant, or the third (fourth, etc.)-party defendant.
Sec. 2. Parties in interest. - A real party in interest is
the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the
avails of the suit. Unless otherwise authorized by law
or these Rules, every action must be prosecuted or
defended in the name of the real party in interest.
Sec. 3. Representatives as parties. - Where the
action is allowed to be prosecuted or defended by a
representative or someone acting in a fiduciary
capacity, the beneficiary shall be included in the title
of the case and shall be deemed to be the real party
in interest. A representative may be a trustee of an
express trust, a guardian, an executor or
administrator, or a party authorized by law or these
Rules. An agent acting in his own name and for the
benefit of an undisclosed principal may sue or be
sued without joining the principal except when the
contract involves things belonging to the principal.
It had been suggested by animal rights advocates
and environmentalists that not only natural and
juridical persons should be given legal standing
because of the difficulty for persons, who cannot
show that they by themselves are real parties-in-
interests, to bring actions in representation of these
animals or inanimate objects. For this reason, many
environmental cases have been dismissed for failure
of the petitioner to show that he/she would be
directly injured or affected by the outcome of the
case. However, in our jurisdiction, locus standi in
environmental cases has been given a more
liberalized approach. While developments in
Philippine legal theory and jurisprudence have not
progressed as far as Justice Douglas's paradigm of
legal standing for inanimate objects, the current
trend moves towards simplification of procedures
and facilitating court access in environmental cases.
Recently, the Court passed the landmark Rules of
Procedure for Environmental Cases,51 which allow
for a "citizen suit," and permit any Filipino citizen to
file an action before our courts for violations of our
environmental laws:
SEC. 5. Citizen suit. - Any Filipino citizen in
representation of others, including minors or
generations yet unborn, may file an action to enforce
rights or obligations under environmental laws. Upon
the filing of a citizen suit, the court shall issue an
order which shall contain a brief description of the
cause of action and the reliefs prayed for, requiring
all interested parties to manifest their interest to
intervene in the case within fifteen (15) days from
notice thereof. The plaintiff may publish the order
once in a newspaper of a general circulation in the
Philippines or furnish all affected barangays copies
of said order.
Citizen suits filed under R.A. No. 8749 and R.A. No.
9003 shall be governed by their respective
provisions.52 (Emphasis ours.)
Explaining the rationale for this rule, the Court, in the
Annotations to the Rules of Procedure for
Environmental Cases, commented:
Citizen suit. To further encourage the protection of
the environment, the Rules enable litigants enforcing
environmental rights to file their cases as citizen
suits. This provision liberalizes standing for all cases
filed enforcing environmental laws and collapses the
traditional rule on personal and direct interest, on the
principle that humans are stewards of nature. The
terminology of the text reflects the doctrine first
enunciated in Oposa v. Factoran, insofar as it refers
to minors and generations yet unborn.53 (Emphasis
supplied, citation omitted.) Although this petition was
filed in 2007, years before the effectivity of the Rules
of Procedure for Environmental Cases, it has been
consistently held that rules of procedure "may be
retroactively applied to actions pending and
undetermined at the time of their passage and will
not violate any right of a person who may feel that
he is adversely affected, inasmuch as there is no
vested rights in rules of procedure."54
Elucidating on this doctrine, the Court, in Systems
Factors Corporation v. National Labor Relations
Commission55 held that:
Remedial statutes or statutes relating to remedies or
modes of procedure, which do not create new or
take away vested rights, but only operate in
furtherance of the remedy or confirmation of rights
already existing, do not come within the legal
conception of a retroactive law, or the general rule
against retroactive operation of statutes. Statutes
regulating the procedure of the courts will be
construed as applicable to actions pending and
undetermined at the time of their passage.
Procedural laws are retroactive in that sense and to
that extent. x x x.
Moreover, even before the Rules of Procedure for
Environmental · Cases became effective, this Court
had already taken a permissive position on the issue
of locus standi in environmental cases. In Oposa, we
allowed the suit to be brought in the name of
generations yet unborn "based on the concept of
intergenerational responsibility insofar as the right to
a balanced and healthful ecology is concerned."56
Furthermore, we said that the right to a balanced
and healthful ecology, a right that does not even
need to be stated in our Constitution as it is
assumed to exist from the inception of humankind,
carries with it the correlative duty to refrain from
impairing the environment.57
In light of the foregoing, the need to give the
Resident Marine Mammals legal standing has been
eliminated by our Rules, which allow any Filipino
citizen, as a steward of nature, to bring a suit to
enforce our environmental laws. It is worth noting
here that the Stewards are joined as real parties in
the Petition and not just in representation of the
named cetacean species. The Stewards, Ramos
and Eisma-Osorio, having shown in their petition that
there may be possible violations of laws concerning
the habitat of the Resident Marine Mammals, are
therefore declared to possess the legal standing to
file this petition.
Impleading Former President Gloria Macapagal-
Arroyo
as an Unwilling Co-Petitioner
Petitioners Stewards in G.R. No. 180771 impleaded
as an unwilling co-petitioner former President Gloria
Macapagal-Arroyo for the following reasons, which
we quote:
Her Excellency Gloria Macapagal-Arroyo, also of
legal age, Filipino and resident of Malacailang
Palace, Manila Philippines. Steward Gloria
Macapagal-Arroyo happens to be the incumbent
President of the Philippine Islands. She is personally
impleaded in this suit as an unwilling co-petitioner by
reason of her express declaration and undertaking
under the recently signed ASEAN Charter to protect
Your Petitioners' habitat, among others. She is
meantime dominated as an unwilling co-petitioner
due to lack of material time in seeking her signature
and imprimatur hereof and due to possible legal
complications that may hereafter arise by reason of
her official relations with public respondents under
the alter ego principle in political law.58 This is
incorrect.
Section 10, Rule 3 of the Rules of Court provides:
Sec. 10. Unwilling co-plaintiff. - If the consent of any
party who should be joined as plaintiff can not be
obtained, he may be made a defendant and the
reason therefor shall be stated in the complaint.
Under the foregoing rule, when the consent of a
party who should be joined as a plaintiff cannot be
obtained, he or she may be made a party defendant
to the case. This will put the unwilling party under
the jurisdiction of the Court, which can properly
implead him or her through its processes. The
unwilling party's name cannot be simply included in
a petition, without his or her knowledge and consent,
as such would be a denial of due process.
Moreover, the reason cited by the petitioners
Stewards for including former President Macapagal-
Arroyo in their petition, is not sufficient to implead
her as an unwilling co-petitioner. Impleading the
former President as an unwilling co-petitioner, for an
act she made in the performance of the functions of
her office, is contrary to the public policy against
embroiling the President in suits, "to assure the
exercise of Presidential duties and functions free
from any hindrance or distraction, considering that
being the Chief Executive of the Government is a job
that, aside from requiring all of the office holder's
time, also demands undivided attention."59
Therefore, former President Macapagal-Arroyo
cannot be impleaded as one of the petitioners in this
suit. Thus, her name is stricken off the title of this
case.
The petitioners thus allege that the ruling in La
Bugal, which involved mining contracts under
Republic Act No. 7942, does not apply in this
case.63 The petitioners also argue that Presidential
Decree No. 87 or the Oil Exploration and
Development Act of 1972 cannot legally justify SC-
46 as it is deemed to have been repealed by the
1987 Constitution and subsequent laws, which
enunciate new policies concerning the
environment.64 In addition, petitioners in G.R. No.
180771 claim that paragraphs 2 and 3 of Section 2,
Article XII of the 1987 Constitution mandate the
exclusive use and enjoyment by the Filipinos of our
natural resources,65 and paragraph 4 does not
speak of service contracts but of FTAAs or Financial
Technical Assistance Agreements.66
The public respondents again controvert the
petitioners' claims and asseverate that SC-46 does
not violate Section 2, Article XII of the 1987
Constitution. They hold that SC-46 does not fall
under the coverage of paragraph 1 but instead,
under paragraph 4 of Section 2, Article XII of the
1987 Constitution on FTAAs. They also insist that
paragraphs 2 and 3, which refer to the grant of
exclusive fishing right to Filipinos, are not applicable
to SC-46 as the contract does not grant exclusive
fishing rights to JAPEX nor does it otherwise
impinge on the FIDEC's right to preferential use of
communal marine and fishing resources.67
Ruling of the Court
On the legality of Service Contract No. 46
vis-a-vis Section 2, Article XII of the 1987
Constitution
The petitioners insist that SC-46 is null and void for
having violated Section 2, Article XII of the 1987
Constitution, which reads as follows:

Main Issue: Section 2. All lands of the public domain, waters,

Legality of Service Contract No.
Service Contract No. 46 vis-a-vis
Section 2, Article XII of
1987 Constitution
Petitioners maintain that SC-46 transgresses the
Jura Regalia Provision or paragraph 1, Section 2,
Article XII of the 1987 Constitution because JAPEX
is 100% Japanese-owned.60 Furthermore, the
FIDEC asserts that SC-46 cannot be considered as
a technical and financial assistance agreement
validly executed under paragraph 4 of the same
provision.61 The petitioners claim that La Bugal-
B'laan Tribal Association, Inc. v. Ramos62 laid down
the guidelines for a valid service contract, one of
which is that there must exist a general law for oil
exploration before a service contract may be entered
into by the Government. The petitioners posit that
the service contract in La Bugal is presumed to have
complied with the requisites of (a) legislative
enactment of a general law after the effectivity of the
1987 Constitution (such as Republic Act No. 7942,
or the Philippine Mining Law of 1995, governing
mining contracts) and (b) presidential notification.
minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or
46
timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the
the
exception of agricultural lands, all other natural
resources shall not be alienated. The exploration,
development, and utilization of natural resources
shall be under the full control and supervision of the
State. The State may directly undertake such
activities, or it may enter into co-production, joint
venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at
least sixty per centum of whose capital is owned by
such citizens. Such agreements may be for a period
not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms
and conditions as may be provided by law. In cases
of water rights for irrigation, water supply, fisheries,
or industrial uses other than the development of
water power, beneficial use may be the measure
and limit of the grant.
The State shall protect the nation's marine wealth in
its archipelagic waters, territorial sea, and exclusive
economic zone, and reserve its use and enjoyment
exclusively to Filipino citizens. The Congress may,
by law, allow small-scale utilization of natural
resources by Filipino citizens, as well as cooperative
fish farming, with priority to subsistence fishermen
and fishworkers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with
foreign-owned corporations involving either technical
or financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum,
and other mineral oils according to the general terms
and conditions provided by law, based on real
contributions to the economic growth and general
welfare of the country. In such agreements, the
State shall promote the development and use of
local scientific and technical resources.
The President shall notify the Congress of every
contract entered into in accordance with this
provision, within thirty days from its execution.
(Emphases ours.)
This Court has previously settled the issue of
whether service contracts are still allowed under the
1987 Constitution. In La Bugal, we held that the
deletion of the words "service contracts" in the 1987
Constitution did not amount to a ban on them per se.
In fact, in that decision, we quoted in length, portions
of the deliberations of the members of the
Constitutional Commission (ConCom) to show that
in deliberating on paragraph 4, Section 2, Article XII,
they were actually referring to service contracts as
understood in the 1973 Constitution, albeit with
safety measures to eliminate or minimize the abuses
prevalent during the martial law regime, to wit:
Summation of the
ConCom Deliberations
At this point, we sum up the matters established,
based on a careful reading of the Con Com
deliberations, as follows:
In their deliberations on what was to become
paragraph 4, the framers used the term service
contracts in referring to agreements x x x involving
either technical or financial assistance.
They spoke of service contracts as the concept was
understood in the 1973 Constitution.
It was obvious from their discussions that they were
not about to ban or eradicate service contracts.
Instead, they were plainly crafting provisions to put
in place safeguards that would eliminate or minimize
the abuses prevalent during the marital law regime.
In brief, they were going to permit service contracts
with foreign corporations as contractors, but with
safety measures to prevent abuses, as an exception
to the general norm established in the first
paragraph of Section 2 of Article XII. This provision
reserves or limits to Filipino citizens -- and
corporations at least 60 percent of which is owned
by such citizens -- the exploration, development and
utilization of natural resources.
This provision was prompted by the perceived
insufficiency of Filipino capital and the felt need for
foreign investments in the EDU of minerals and
petroleum resources.
The framers for the most part debated about the sort
of safeguards that would be considered adequate
and reasonable. But some of them, having more
"radical" leanings, wanted to ban service contracts
altogether; for them, the provision would permit
aliens to exploit and benefit from the nation's natural
resources, which they felt should be reserved only
for Filipinos.
In the explanation of their votes, the individual
commissioners were heard by the entire body. They
sounded off their individual opinions, openly
enunciated their philosophies, and supported or
attacked the provisions with fervor. Everyone's
viewpoint was heard.
In the final voting, the Article on the National
Economy and Patrimony -- including paragraph 4
allowing service contracts with foreign corporations
as an exception to the general norm in paragraph 1
of Section 2 of the same article --was resoundingly
approved by a vote of 32 to 7, with 2 abstentions.
Agreements Involving Technical
Or Financial Assistance Are
Service Contracts with Safeguards
From the foregoing, we are impelled to conclude that
the phrase agreements involving either technical or
financial assistance, referred to in paragraph 4, are
in fact service contracts. But unlike those of the 1973
variety, the new ones are between foreign
corporations acting as contractors on the one hand;
and on the other, the government as principal or
"owner" of the works. In the new service contracts,
the foreign contractors provide capital, technology
and technical know-how, and managerial expertise
in the creation and operation of large-scale
mining/extractive enterprises; and the government,
through its agencies (DENR, MGB), actively
exercises control and supervision over the entire
operation.68
In summarizing the matters discussed in the
ConCom, we established that paragraph 4, with the
safeguards in place, is the exception to paragraph 1,
Section 2 of Article XII. The following are the
safeguards this Court enumerated in La Bugal:
Such service contracts may be entered into only with
respect to minerals, petroleum and other mineral
oils. The grant thereof is subject to several
safeguards, among which are these requirements:
(1) The service contract shall be crafted in
accordance with a general law that will set
standard or uniform terms, conditions and
requirements, presumably to attain a certain
uniformity in provisions and avoid the
possible insertion of terms disadvantageous
to the country.
 (2) The President shall be the signatory for
the government because, supposedly before
an agreement is presented to the President
for signature, it will have been vetted several
times over at different levels to ensure that it
conforms to law and can withstand public
scrutiny.
(3) Within thirty days of the executed
agreement, the President shall report it to
Congress to give that branch of government
an opportunity to look over the agreement
and interpose timely objections, if any.69
Adhering to the aforementioned guidelines, this
Court finds that SC-46 is indeed null and void for
noncompliance with the requirements of the 1987
Constitution.
1. The General Law on Oil Exploration
The disposition, exploration, development,
exploitation, and utilization of indigenous petroleum
in the Philippines are governed by Presidential
Decree No. 87 or the Oil Exploration and
Development Act of 1972. This was enacted by then
President Ferdinand Marcos to promote the
discovery and production of indigenous petroleum
through the utilization of government and/or local or
foreign private resources to yield the maximum
benefit to the Filipino people and the revenues to the
Philippine Government.70
Contrary to the petitioners' argument, Presidential
Decree No. 87, although enacted in 1972, before the
adoption of the 1987 Constitution, remains to be a
valid law unless otherwise repealed, to wit:
ARTICLE XVIII - TRANSITORY PROVISIONS
Section 3. All existing laws, decrees, executive
orders, proclamations, letters of instructions, and
other executive issuances not inconsistent with this
Constitution shall remain operative until amended,
repealed, or revoked.
If there were any intention to repeal Presidential
Decree No. 87, it would have been done expressly
by Congress. For instance, Republic Act No. 7160,
more popularly known as the Local Government
Code of 1991, expressly repealed a number of laws,
including a specific provision in Presidential Decree
No. 87, viz.:
SECTION 534. Repealing Clause. - (a) Batas
Pambansa Blg. 337, otherwise known as the "Local
Government Code," Executive Order No. 112
(1987), and Executive Order No. 319 (1988) are
hereby repealed.
(b) Presidential Decree Nos. 684, 1191,
1508 and such other decrees, orders,
instructions, memoranda and issuances
related to or concerning the barangay are
hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of
Republic Act No. 1939 regarding hospital
fund; Section 3, a (3) and b (2) of Republic
Act No. 5447 regarding the Special
Education Fund; Presidential Decree No.
144 as amended by Presidential Decree
Nos. 559 and 1741; Presidential Decree No.
231 as amended; Presidential Decree No.
436 as amended by Presidential Decree No.
558; and Presidential Decree Nos. 381, 436,
464, 477, 526, 632, 752, and 1136 are
hereby repealed and rendered of no force
and effect.
(d) Presidential Decree No. 1594 is hereby
repealed insofar as it governs locally-funded
projects.
(e) The following provisions are hereby
repealed or amended insofar as they are
inconsistent with the provisions of this Code:
Sections 2, 16 and 29 of Presidential Decree
No. 704; Section 12 of Presidential Decree
No. 87, as amended; Sections 52, 53, 66,
67, 68, 69, 70, 71, 72, 73, and 74 of
Presidential Decree No. 463, as amended;
and Section 16 of Presidential Decree No.
972, as amended, and
(f) All general and special laws, acts, city
charters, decrees, executive orders,
proclamations and administrative
regulations, or part or parts thereof which
are inconsistent with any of the provisions of
this Code are hereby repealed or modified
accordingly. (Emphasis supplied.)
This Court could not simply assume that while
Presidential Decree No. 87 had not yet been
expressly repealed, it had been impliedly repealed.
As we held in Villareña v. The Commission on
Audit,71 "[i]mplied repeals are not lightly presumed."
It is a settled rule that when laws are in conflict with
one another, every effort must be exerted to
reconcile them. In Republic of the Philippines v.
Marcopper Mining Corporation,72 we said:
The two laws must be absolutely incompatible, and a
clear finding thereof must surface, before the
inference of implied repeal may be drawn. The rule
is expressed in the maxim, interpretare et
concordare leqibus est optimus interpretendi, i.e.,
every statute must be so interpreted and brought
into accord with other laws as to form a uniform
system of jurisprudence. The fundament is that the
legislature should be presumed to have known the
existing laws on the subject and not have enacted
conflicting statutes. Hence, all doubts must be
resolved against any implied repeal, and all efforts
should be exerted in order to harmonize and give
effect to all laws on the subject. (Citation omitted.)
Moreover, in cases where the statute seems to be in
conflict with the Constitution, but a construction that
it is in harmony with the Constitution is also possible,
that construction should be preferred.73 This Court,
in Pangandaman v. Commission on Elections74
expounding on this point, pronounced:
It is a basic precept in statutory construction that a
statute should be interpreted in harmony with the
Constitution and that the spirit, rather than the letter
of the law determines its construction; for that
reason, a statute must be read according to its spirit
and intent. x x x. (Citation omitted.)
Consequently, we find no merit in petitioners'
contention that SC-46 is prohibited on the ground
that there is no general law prescribing the standard
or uniform terms, conditions, and requirements for
service contracts involving oil exploration and
extraction.
But note must be made at this point that while
Presidential Decree No. 87 may serve as the
general law upon which a service contract for
petroleum exploration and extraction may be
authorized, as will be discussed below, the
exploitation and utilization of this energy resource in
the present case may be allowed only through a law
passed by Congress, since the Tañon Strait is a
NIPAS75 area.
2. President was not the signatory to SC-46 and the
same was not submitted to Congress
While the Court finds that Presidential Decree No.
87 is sufficient to satisfy the requirement of a general
law, the absence of the two other conditions, that the
President be a signatory to SC-46, and that
Congress be notified of such contract, renders it null
and void.
As SC-46 was executed in 2004, its terms should
have conformed not only to the provisions of
Presidential Decree No. 87, but also to those of the
1987 Constitution. The Civil Code provides:
ARTICLE 1306. The contracting parties may
establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided
they are not contrary to law, morals, good customs,
public order, or public policy. (Italics ours.)
In Heirs of San Miguel v. Court of Appeals,76 this
Court held that:
It is basic that the law is deemed written into every
contract. Although a contract is the law between the
parties, the provisions of positive law which regulate
contracts are deemed written therein and shall limit
and govern the relations between the parties. x x x.
(Citations omitted.) Paragraph 4, Section 2, Article
XII of the 1987 Constitution requires that the
President himself enter into any service contract for
the exploration of petroleum. SC-46 appeared to
have been entered into and signed only by the DOE
through its then Secretary, Vicente S. Perez, Jr.,
contrary to the said constitutional requirement.
Moreover, public respondents have neither shown
nor alleged that Congress was subsequently notified
of the execution of such contract.
Public respondents' implied argument that based on
the "alter ego principle," their acts are also that of
then President Macapagal-Arroyo's, cannot apply in
this case. In Joson v. Torres,77 we explained the
concept of the alter ego principle or the doctrine of
qualified political agency and its limit in this wise:
Under this doctrine, which recognizes the
establishment of a single executive, all executive
and administrative organizations are adjuncts of the
Executive Department, the heads of the various
executive departments are assistants and agents of
the Chief Executive, and, except in cases where the
Chief Executive is required by the Constitution or law
to act in person or the exigencies of the situation
demand that he act personally, the multifarious
executive and administrative functions of the Chief
Executive are performed by and through the
executive departments, and the acts of the
Secretaries of such departments, performed and
promulgated in the regular course of business, are,
unless disapproved or reprobated by the Chief
Executive presumptively the acts of the Chief
Executive. (Emphasis ours, citation omitted.)
While the requirements in executing service
contracts in paragraph 4, Section 2 of Article XII of
the 1987 Constitution seem like mere formalities,
they, in reality, take on a much bigger role. As we
have explained in La Bugal, they are the safeguards
put in place by the framers of the Constitution to
"eliminate or minimize the abuses prevalent during
the martial law regime."78 Thus, they are not just
mere formalities, which will only render a contract
unenforceable but not void, if not complied with.
They are requirements placed, not just in an ordinary
statute, but in the fundamental law, the non-
observance of which will nullify the contract.
Elucidating on the concept of a "constitution," this
Court, in Manila Prince Hotel v. Government Service
Insurance System,79 held:
A constitution is a system of fundamental laws for
the governance and administration of a nation. It is
supreme, imperious, absolute and unalterable
except by the authority from which it emanates. It
has been defined as the fundamental and
paramount law of the nation. It prescribes the
permanent framework of a system of government,
assigns to the different departments their respective
powers and duties, and establishes certain fixed
principles on which government is founded. The
fundamental conception in other words is that it is a
supreme law to which all other laws must conform
and in accordance with which all private rights must
be determined and all public authority administered.
Under the doctrine of constitutional supremacy, if a
law or contract violates any norm of the constitution
that law or contract whether promulgated by the
legislative or by the executive branch or entered into
by private persons for private purposes is null and
void and without any force and effect. Thus, since
the Constitution is the fundamental, paramount and
supreme law of the nation, it is deemed written in
every statute and contract. (Emphasis ours.)
As this Court has held in La Bugal, our Constitution
requires that the President himself be the signatory
of service agreements with foreign-owned
corporations involving the exploration, development,
and utilization of our minerals, petroleum, and other
mineral oils. This power cannot be taken lightly.
In this case, the public respondents have failed to
show that the President had any participation in SC-
46. Their argument that their acts are actually the
acts of then President Macapagal-Arroyo, absent
proof of her disapproval, must fail as the requirement
that the President herself enter into these kinds of
contracts is embodied not just in any ordinary
statute, but in the Constitution itself. These service
contracts involving the exploitation, development,
and utilization of our natural resources are of
paramount interest to the present and future
generations. Hence, safeguards were put in place to
insure that the guidelines set by law are meticulously
observed and likewise to eradicate the corruption
that may easily penetrate departments and agencies
by ensuring that the President has authorized or
approved of these service contracts herself.
Even under the provisions of Presidential Decree
No. 87, it is required that the Petroleum Board, now
the DOE, obtain the President's approval for the
execution of any contract under said statute, as
shown in the following provision:
SECTION 5. Execution of contract authorized in this
Act. -Every contract herein authorized shall, subject
to the approval of the President, be executed by the
Petroleum Board created in this Act, after due public
notice pre-qualification and public bidding or
concluded through negotiations. In case bids are
requested or if requested no bid is submitted or the
bids submitted are rejected by the Petroleum Board
for being disadvantageous to the Government, the
contract may be concluded through negotiation.
In opening contract areas and in selecting the best
offer for petroleum operations, any of the following
alternative procedures may be resorted to by the
Petroleum Board, subject to prior approval of the
President[.]
Even if we were inclined to relax the requirement in
La Bugal to harmonize the 1987 Constitution with
the aforementioned provision of Presidential Decree
No. 87, it must be shown that the government
agency or subordinate official has been authorized
by the President to enter into such service contract
for the government. Otherwise, it should be at least
shown that the President subsequently approved of
such contract explicitly. None of these
circumstances is evident in the case at bar.
Service Contract No. 46 vis-a-vis Other Laws
Petitioners in G.R. No. 180771 claim that SC-46
violates Section 27 of Republic Act. No. 9147 or the
Wildlife Resources Conservation and Protection Act,
which bans all marine exploration and exploitation of
oil and gas deposits. They also aver that Section 14
of Republic Act No. 7586 or the National Integrated
Protected Areas System Act of 1992 (NIPAS Act),
which allows the exploration of protected areas for
the purpose of information-gathering, has been
repealed by Section 27 of Republic Act No. 914 7.
The said petitioners further claim that SC-46 is
anathema to Republic Act No. 8550 or the Philippine
Fisheries Code of 1998, which protects the rights of
the fisherfolk in the preferential use of municipal
waters, with the exception being limited only to
research and survey activities.80
The FIDEC, for its part, argues that to avail of the
exceptions under Section 14 of the NIP AS Act, the
gathering of information must be in accordance with
a DENR-approved program, and the exploitation and
utilization of energy resources must be pursuant to a
general law passed by Congress expressly for that
purpose. Since there is neither a DENR approved
program nor a general law passed by Congress, the
seismic surveys and oil drilling operations were all
done illegally.81 The FIDEC likewise contends that
SC-46 infringes on its right to the preferential use of
the communal fishing waters as it is denied free
access within the prohibited zone, in violation not
only of the Fisheries Code but also of the 1987
Constitutional provisions on subsistence fisherfolk
and social justice.82 Furthermore, the FIDEC
believes that the provisions in Presidential Decree
No. 87, which allow offshore drilling even in
municipal waters, should be deemed to have been
rendered inoperative by the provisions of Republic
Act No. 8550 and Republic Act No. 7160, which
reiterate the social justice provisions of the
Constitution.83
The public respondents invoke the rules on statutory
construction and argue that Section 14 of the NIP
AS Act is a more particular provision and cannot be
deemed to have been repealed by the more general
prohibition in Section 27 of Republic Act No. 9147.
They aver that Section 14, under which SC-46 falls,
should instead be regarded as an exemption to
Section 27.84 Addressing the claim of petitioners in
G.R. No. 180771 that there was a violation of
Section 27 of Republic Act No. 9147, the public
respondents assert that what the section prohibits is
the exploration of minerals, which as defined in the
Philippine Mining Act of 1995, exclude energy
materials such as coal, petroleum, natural gas,
radioactive materials and geothennal energy. Thus,
since SC-46 involves oil and gas exploration,
Section 27 does not apply.85
The public respondents defend the validity of SC-46
and insist that it does not grant exclusive fishing
rights to JAPEX; hence, it does not violate the rule
on preferential use of municipal waters. Moreover,
they allege that JAPEX has not banned fishing in the
project area, contrary to the FIDEC's claim. The
public respondents also contest the attribution of the
declining fish catch to the seismic surveys and aver
that the allegation is unfounded. They claim that
according to the Bureau of Fisheries and Aquatic
Resources' fish catch data, the reduced fish catch
started in the 1970s due to destructive fishing
practices.86
Ruling of the Court
On the legality of Service Contract No. 46
vis-a-vis Other Laws
Although we have already established above that
SC-46 is null and void for being violative of the 1987
Constitution, it is our duty to still rule on the legality
of SC-46 vis-a-vis other pertinent laws, to serve as a
guide for the Government when executing service
contracts involving not only the Tafion Strait, but also
other similar areas. While the petitioners allege that
SC-46 is in violation of several laws, including
international ones, their arguments focus primarily
on the protected status of the Tañon Strait, thus this
Court will concentrate on those laws that pertain
particularly to the Tañon Strait as a protected
seascape.
The Tañon Strait is a narrow passage of water
bounded by the islands of Cebu in the East and
Negros in the West. It harbors a rich biodiversity of
marine life, including endangered species of
dolphins and whales. For this reason, former
President Fidel V. Ramos declared the Tañon Strait
as a protected seascape in 1998 by virtue of
Proclamation No. 1234 -Declaring the Tañon Strait
situated in the Provinces of Cebu, Negros
Occidental and Negros Oriental as a Protected Area
pursuant to the NIP AS Act and shall be known as
Tañon Strait Protected Seascape. During former
President Joseph E. Estrada's time, he also
constituted the Tañon Strait Commission via
Executive Order No. 76 to ensure the optimum and
sustained use of the resources in that area without
threatening its marine life. He followed this with
Executive Order No. 177,87 wherein he included the
mayor of Negros Occidental Municipality/City as a
member of the Tañon Strait Commission, to
represent the LGUs concerned. This Commission,
however, was subsequently abolished in 2002 by
then President Gloria Macapagal-Arroyo, via
Executive Order No. 72.88
True to the constitutional policy that the "State shall
protect and advance the right of the people to a
balanced and healthful ecology in accord with the
rhythm and harmony of nature,"89 Congress
enacted the NIP AS Act to secure the perpetual
existence of all native plants and animals through
the establishment of a comprehensive system of
integrated protected areas. These areas possess
common ecological values that were incorporated
into a holistic plan representative of our natural
heritage. The system encompasses outstandingly
remarkable areas and biologically important public
lands that are habitats of rare and endangered
species of plants and animals, biogeographic zones
and related ecosystems, whether terrestrial, wetland,
or marine.90 It classifies and administers all the
designated protected areas to maintain essential
ecological processes and life-support systems, to
preserve genetic diversity, to ensure sustainable use
of resources found therein, and to maintain their
natural conditions to the greatest extent possible.91
The following categories of protected areas were
established under the NIPAS Act:
a. Strict nature reserve;
b. Natural park;
c. Natural monument;
d. Wildlife sanctuary;
e. Protected landscapes and seascapes;
f. Resource reserve;
g. Natural biotic areas; and
h. Other categories established by law,
conventions or international agreements
which the Philippine Government is a
signatory.92
Under Section 4 of the NIP AS Act, a protected area
refers to portions of land and water, set aside due to
their unique physical and biological significance,
managed to enhance biological diversity and
protected against human exploitation.
The Tañon Strait, pursuant to Proclamation No.
1234, was set aside and declared a protected area
under the category of Protected Seascape. The NIP
AS Act defines a Protected Seascape to be an area
of national significance characterized by the
harmonious interaction of man and land while
providing opportunities for public enjoyment through
recreation and tourism within the normal lifestyle and
economic activity of this areas;93 thus a
management plan for each area must be designed
to protect and enhance the permanent preservation
of its natural conditions.94 Consistent with this
endeavor is the requirement that an Environmental
Impact Assessment (EIA) be made prior to
undertaking any activity outside the scope of the
management plan. Unless an ECC under the EIA
system is obtained, no activity inconsistent with the
goals of the NIP AS Act shall be implemented.95
The Environmental Impact Statement System (EISS)
was established in 1978 under Presidential Decree
No. 1586. It prohibits any person, partnership or
corporation from undertaking or operating any
declared environmentally critical project or areas
without first securing an ECC issued by the
President or his duly authorized representative.96
Pursuant to the EISS, which called for the proper
management of environmentally critical areas,97
Proclamation No. 214698 was enacted, identifying
the areas and types of projects to be considered as
environmentally critical and within the scope of the
EISS, while DENR Administrative Order No. 2003-30
provided for its Implementing Rules and Regulations
(IRR).
DENR Administrative Order No. 2003-30 defines an
environmentally critical area as "an area delineated
as environmentally sensitive such that significant
environmental impacts are expected if certain types
of proposed projects or programs are located,
developed, or implemented in it";99 thus, before a
project, which is "any activity, regardless of scale or
magnitude, which may have significant impact on the
environment,"100 is undertaken in it, such project
must undergo an EIA to evaluate and predict the
likely impacts of all its stages on the
environment.101 An EIA is described in detail as
follows:
h. Environmental Impact Assessment (EIA) -
process that involves evaluating and predicting the
likely impacts of a project (including cumulative
impacts) on the environment during construction,
commissioning, operation and abandonment. It also
includes designing appropriate preventive, mitigating
and enhancement measures addressing these
consequences to protect the environment and the
community's welfare. The process is undertaken by,
among others, the project proponent and/or EIA
Consultant, EMB, a Review Committee, affected
communities and other stakeholders.102
Under Proclamation No. 2146, the Tañon Strait is an
environmentally critical area, having been declared
as a protected area in 1998; therefore, any activity
outside the scope of its management plan may only
be implemented pursuant to an ECC secured after
undergoing an EIA to determine the effects of such
activity on its ecological system.
The public respondents argue that they had
complied with the procedures in obtaining an
ECC103 and that SC-46 falls under the exceptions
in Section 14 of the NIP AS Act, due to the following
reasons:
1) The Tañon Strait is not a strict nature
reserve or natural park;
2) Exploration is only for the purpose of
gathering information on possible energy
resources; and 3) Measures are undertaken
to ensure that the exploration is being done
with the least damage to surrounding
areas.104
We do not agree with the arguments raised by the
public respondents.
Sections 12 and 14 of the NIPAS Act read:
SECTION 12. Environmental Impact Assessment. -
Proposals for activities which are outside the scope
of the management plan for protected areas shall be
subject to an environmental impact assessment as
required by law before they are adopted, and the
results thereof shall be taken into consideration in
the decision-making process.
No actual implementation of such activities shall be
allowed without the required Environmental
Compliance Certificate (ECC) under the Philippine
Environmental Impact Assessment (EIA) system. In
instances where such activities are allowed to be
undertaken, the proponent shall plan and carry them
out in such manner as will minimize any adverse
effects and the preventive and remedial action when
appropriate. The proponent shall be liable for any
damage due to lack of caution or indiscretion.
SECTION 14. Survey for Energy Resources. -
Consistent with the policies declared in Section 2
hereof, protected areas, except strict nature
reserves and natural parks, may be subjected to
exploration only for the purpose of gathering
information on energy resources and only if such
activity is carried out with the least damage to
surrounding areas. Surveys shall be conducted only
in accordance with a program approved by the
DENR, and the result of such surveys shall be made
available to the public and submitted to the
President for recommendation to Congress. Any
exploitation and utilization of energy resources found
within NIP AS areas shall be allowed only through a
law passed by Congress.
It is true that the restrictions found under the NIP AS
Act are not without exceptions. However, while an
exploration done for the purpose of surveying for
energy resources is allowed under Section 14 of the
NIP AS Act, this does not mean that it is exempt
from the requirement to undergo an EIA under
Section 12. In Sotto v. Sotto,105 this Court
explained why a statute should be construed as a
whole:
A statute is passed as a whole and not in parts or
sections and is animated by one general purpose
and intent. Consequently each part or section should
be construed in connection with every other part or
section and so as to produce a harmonious whole. It
is not proper to confine the attention to the one
section to be construed. It is always an unsafe way
of construing a statute or contract to divide it by a
process of etymological dissection, into separate
words, and then apply to each, thus separated from
its context, some particular definition given by
lexicographers, and then reconstruct the instrument
upon the basis of these definitions. An instrument
must always be construed as a whole, and the
particular meaning to be attached to any word or
phrase is usually to be ascertained from the context,
the nature of the subject treated of and the purpose
or intention of the parties who executed the contract,
or of the body which enacted or framed the statute
or constitution. x x x.
Surveying for energy resources under Section 14 is
not an exemption from complying with the EIA
requirement in Section 12; instead, Section 14
provides for additional requisites before any
exploration for energy resources may be done in
protected areas.
The rationale for such additional requirements are
incorporated m Section 2 of the NIP AS Act, to wit:
SECTION 2. Declaration of Policy - Cognizant of the
profound impact of man's activities on all
components of the natural environment particularly
the effect of increasing population, resource
exploitation and industrial advancement and
recognizing the critical importance of protecting and
maintaining the natural biological and physical
diversities of the environment notably on areas with
biologically unique features to sustain human life
and development, as well as plant and animal life, it
is hereby declared the policy of the State to secure
for the Filipino people of present and future
generations the perpetual existence of all native
plants and animals through the establishment of a
comprehensive system of integrated protected areas
within the classification of national park as provided
for in the Constitution.
It is hereby recognized that these areas, although
distinct in features, possess common ecological
values that may be incorporated into a holistic plan
representative of our natural heritage; that effective
administration of this area is possible only through
cooperation among national government, local
government and concerned private organizations;
that the use and enjoyment of these protected areas
must be consistent with the principles of biological
diversity and sustainable development.
To this end, there is hereby established a National
Integrated Protected Areas System (NIPAS), which
shall encompass outstandingly remarkable areas
and biologically important public lands that are
habitats of rare and endangered species of plants
and animals, biogeographic zones and related
ecosystems, whether terrestrial, wetland or marine,
all of which shall be designated as "protected areas."
The public respondents themselves admitted that
JAPEX only started to secure an ECC prior to the
second sub-phase of SC-46, which required the
drilling of an oil exploration well. This means that
when the seismic surveys were done in the Tañon
Strait, no such environmental impact evaluation was
done. Unless seismic surveys are part of the
management plan of the Tañon Strait, such surveys
were done in violation of Section 12 of the NIPAS
Act and Section 4 of Presidential Decree No. 1586,
which provides:
Section 4. Presidential Proclamation of
Environmentally Critical Areas and Projects. - The
President of the Philippines may, on his own
initiative or upon recommendation of the National
Environmental Protection Council, by proclamation
declare certain projects, undertakings or areas in the
country as environmentally critical. No person,
partnership or corporation shall undertake or operate
any such declared environmentally critical project or
area without first securing an Environmental
Compliance Certificate issued by the President or
his duly authorized representative. For the proper
management of said critical project or area, the
President may by his proclamation reorganize such
government offices, agencies, institutions,
corporations or instrumentalities including the re-
alignment of government personnel, and their
specific functions and responsibilities.
For the same purpose as above, the Ministry of
Human Settlements shall: (a) prepare the proper
land or water use pattern for said critical project(s) or
area(s); (b) establish ambient environmental quality
standards; (c) develop a program of environmental
enhancement or protective measures against
calamitous factors such as earthquakes, floods,
water erosion and others, and (d) perform such other
functions as may be directed by the President from
time to time.
The respondents' subsequent compliance with the
EISS for the second sub-phase of SC-46 cannot and
will not cure this violation. The following penalties
are provided for under Presidential Decree No. 1586
and the NIPAS Act.
Section 9 of Presidential Decree No. 1586 provides
for the penalty involving violations of the ECC
requirement:
Section 9. Penalty for Violation. - Any person,
corporation or partnership found violating Section 4
of this Decree, or the terms and conditions in the
issuance of the Environmental Compliance
Certificate, or of the standards, rules and regulations
issued by the National Environmental Protection
Council pursuant to this Decree shall be punished by
the suspension or cancellation of his/its certificates
and/or a fine in an amount not to exceed Fifty
Thousand Pesos (₱50,000.00) for every violation
thereof, at the discretion of the National
Environmental Protection Council. (Emphasis
supplied.)
Violations of the NIP AS Act entails the following
fines and/or imprisonment under Section 21:
SECTION 21. Penalties. - Whoever violates this Act
or any rules and regulations issued by the
Department pursuant to this Act or whoever is found
guilty by a competent court of justice of any of the
offenses in the preceding section shall be fined in
the amount of not less than Five thousand pesos
(₱5,000) nor more than Five hundred thousand
pesos (₱500,000), exclusive of the value of the thing
damaged or imprisonment for not less than one (1)
year but not more than six (6) years, or both, as
determined by the court: Provided, that, if the area
requires rehabilitation or restoration as determined
by the court, the offender shall be required to restore
or compensate for the restoration to the damages:
Provided, further, that court shall order the eviction
of the offender from the land and the forfeiture in
favor of the Government of all minerals, timber or
any species collected or removed including all
equipment, devices and firearms used in connection
therewith, and any construction or improvement
made thereon by the offender. If the offender is an
association or corporation, the president or manager
shall be directly responsible for the act of his
employees and laborers: Provided, finally, that the
DENR may impose administrative fines and
penalties consistent with this Act. (Emphases
supplied.) Moreover, SC-46 was not executed for the
mere purpose of gathering information on the
possible energy resources in the Tañon Strait as it
also provides for the parties' rights and obligations
relating to extraction and petroleum production
should oil in commercial quantities be found to exist
in the area. While Presidential Decree No. 87 may
serve as the general law upon which a service
contract for petroleum exploration and extraction
may be authorized, the exploitation and utilization of
this energy resource in the present case may be
allowed only through a law passed by Congress,
since the Tañon Strait is a NIPAS area.106 Since
there is no such law specifically allowing oil
exploration and/or extraction in the Tañon Strait, no
energy resource exploitation and utilization may be
done in said protected seascape.
In view of the foregoing premises and conclusions, it
is no longer necessary to discuss the other issues
raised in these consolidated petitions.
WHEREFORE, the Petitions in G.R. Nos. 180771
and 181527 are GRANTED, Service Contract No. 46
is hereby declared NULL AND VOID for violating the
1987 Constitution, Republic Act No. 7586, and
Presidential Decree No. 1586.
SO ORDERED.
G.R. No. 171456             August 9, 2007
UNIWIDE HOLDINGS, INC., petitioner,
vs.
ALEXANDER M. CRUZ, respondent.
DECISION
CARPIO MORALES, J.:
Petitioner, Uniwide Holdings, Inc. (UHI), whose
principal office is located in Parañaque City, entered
into a Franchise Agreement1 (the agreement)
granting respondent, Alexander M. Cruz (Cruz), a
five-year franchise to adopt and use the "Uniwide
Family Store System" for the establishment and
operation of a "Uniwide Family Store" along Marcos
Highway, Sta. Cruz, Cogeo, Marikina City.
Article 10.22 of the agreement called for Cruz as
franchisee to pay UHI a monthly service fee of
P50,000 or three percent of gross monthly
purchases, whichever is higher, payable within five
days after the end of each month without need of
formal billing or demand from UHI. In case of any
delay in the payment of the monthly service fee,
Cruz would, under Article 10.3 3 of the agreement, be
liable to pay an interest charge of three percent per
month.
It appears that Cruz had purchased goods from
UHI’s affiliated companies First Paragon Corporation
(FPC) and Uniwide Sales Warehouse Club, Inc.
(USWCI).
In August 2002, FPC and USWCI executed Deeds
of Assignment4 in favor of UHI assigning all their
rights and interests over Cruz’s accounts payable to
them.
As of August 13, 2002, Cruz had outstanding
obligations with UHI, FPC, and USWCI in the total
amount of P1,358,531.89, drawing UHI to send him
a letter of even date for the settlement thereof in five
days. His receipt of the letter notwithstanding, Cruz’s
accounts remained unsettled.
Thus UHI filed a complaint5 for collection of sum of
money before the Regional Trial Court (RTC) of
Parañaque docketed as Civil Case No. 04-0278
against Cruz on the following causes of action:
First Cause of Action
10. Being entitled to the payment of
monthly service fee pursuant to the FA,
which defendant failed to pay despite
demand, plaintiff suffered actual
damages in the amount of Phil. Peso: One
Million Three Hundred Twenty Seven
Thousand Six Hundred Sixty Nine & 83/100
(P1,327,669.83), computed as of 05 April
2004, for which defendant should be held
liable together with legal interest thereon
from the date of filing of this Complaint, until
fully paid.
Second Cause of Action
11. Being the assignee of the receivable
of FPC, which receivable defendant failed
to pay despite demand, plaintiff suffered
actual damages in the amount of Phil.
Peso: Sixty Four Thousand One Hundred
Sixty Five & 96/100 (P64,165.96) for which
defendant should be held liable together
with the legal interest thereon computed
from date of receipt of plaintiff’s demand
letter, or on August 16, 2002 to be exact,
until fully paid.
Third Cause of Action
12. Being the assignee of the receivable
of USWCI, which receivable defendant
failed to pay despite demand, plaintiff
suffered actual damages in the total
amount of Phil. Peso: One Million Five
Hundred Seventy Nine Thousand Sixty One
& 36/100 (P1,579,061.36), computed as of
05 April 2004, inclusive of the two and a half
percent (2.5%) monthly interest, as and by
way of penalty, and the three (3%) annual
interest on the unpaid amount, for which
defendant should be held liable, with legal
interest thereon from the date of filing of this
Complaint, until fully paid.
Fourth Cause of Action
13. By reason of defendant’s obstinate
refusal or failure to pay his indebtedness,
plaintiff was constrained to file this
Complaint and in the process incur
expenses by way of attorney’s fees, which
could be reasonably estimated to reach at
least Phil. Peso: Two Hundred Fifty
Thousand (P250,000.00) and for which
defendant should be held answerable for. 6
(Emphasis and underscoring supplied)
To the complaint Cruz filed a motion to dismiss 7 on
the ground of improper venue, he invoking Article
27.5 of the agreement which reads:
27.5 Venue Stipulation – The Franchisee consents
to the exclusive jurisdiction of the courts of
Quezon City, the Franchisee waiving any other
venue.8 (Emphasis supplied)
Branch 258 of the Parañaque RTC, by
Order9 of December 12, 2005, granted
Cruz’s motion to dismiss.
Hence, the present petition before this Court, raising
the sole legal issue of:
WHETHER A CASE BASED ON SEVERAL
CAUSES OF ACTION IS DISMISSIBLE ON
THE GROUND OF IMPROPER VENUE
WHERE ONLY ONE OF THE CAUSES OF
ACTION ARISES FROM A CONTRACT
WITH EXCLUSIVE VENUE
STIPULATION.10 (Underscoring supplied)
Petitioner contends that nowhere in the agreement is
there a mention of FPC and USWCI, and neither are
the two parties thereto, hence, they cannot be bound
to the stipulation on "exclusive venue."
The petition is impressed with merit.
The general rule on venue of personal actions, as in
petitioner’s complaint for collection of sum of money,
is embodied in Section 2, Rule 4 of the Rules of
Court which provides:
Sec. 2. Venue of personal actions. – All
other actions may be commenced and
tried where the plaintiff or any of the
principal plaintiffs resides, or where the
defendant or any of the principal defendants
resides, or in the case of a nonresident
defendant, where he may be found, at the
election of the plaintiff. (Emphasis and
underscoring supplied)
The afore-quoted provision is, however, qualified by
Section 4 of the same rule which allows parties,
before the filing of the action, to validly agree in
writing on an exclusive venue.11
The forging of a written agreement on an exclusive
venue of an action does not, however, preclude
parties from bringing a case to other venues.
Where there is a joinder of causes of action between
the same parties one of which does not arise out of
the contract where the exclusive venue was
stipulated upon, the complaint, as in the one at bar,
may be brought before other venues provided that
such other cause of action falls within the jurisdiction
of the court and the venue lies therein.12
Based on the allegations in petitioner’s complaint,
the second and third causes of action are based on
the deeds of assignment executed in its favor by
FPC and USWCI. The deeds bear no exclusive
venue stipulation with respect to the causes of action
thereunder. Hence, the general rule on venue
applies – that the complaint may be filed in the place
where the plaintiff or defendant resides.13
It bears emphasis that the causes of action on the
assigned accounts are not based on a breach of the
agreement between UHI and Cruz. They are based
on separate, distinct and independent contracts-
deeds of assignment in which UHI is the assignee of
Cruz’s obligations to the assignors FPC and USWCI.
Thus, any action arising from the deeds of
assignment cannot be subjected to the exclusive
venue stipulation embodied in the agreement. So
San Miguel Corporation v. Monasterio14 enlightens:
Exclusive venue stipulation embodied in a
contract restricts or confines parties thereto
when the suit relates to breach of said
contract. But where the exclusivity clause
does not make it necessarily
encompassing, such that even those not
related to the enforcement of the contract
should be subject to the exclusive venue,
the stipulation designating exclusive
venues should be strictly confined to the
specific undertaking or agreement.
Otherwise, the basic principles of freedom to
contract might work to the great
disadvantage of a weak party-suitor who
ought to be allowed free access to courts of
justice.15 (Emphasis and underscoring
supplied)
In fine, since the other causes of action in
petitioner’s complaint do not relate to a breach of the
agreement it forged with Cruz embodying the
exclusive venue stipulation, they should not be
subjected thereto. As San Miguel further enlightens:
Restrictive stipulations are in derogation of
the general policy of making it more
convenient for the parties to institute actions
arising from or in relation to their
agreements. Thus, the restriction should be
strictly construed as relating solely to the
agreement for which the exclusive venue
stipulation is embodied. Expanding the
scope of such limitation on a contracting
party will create unwarranted restrictions
which the parties might find unintended or
worse, arbitrary and oppressive.16
(Underscoring supplied)
WHEREFORE, the petition is GRANTED. The
December 12, 2005 Order of Regional Trial Court of
Parañaque City, Branch 258 in Civil Case No. 04-
0278 is SET ASIDE. The case is REMANDED to
said court which is directed to reinstate the case to
its docket and conduct further proceedings thereon
with dispatch.
SO ORDERED.
G.R. No. 207914
FCD PAWNSHOP AND MERCHANDISING
COMPANY, FORTUNATO C. DIONISIO, JR., and
FRANKLIN C. DIONISIO, Petitioners,
vs.
UNION BANK OF THE PHILIPPINES, ATTY.
NORMAN R. GABRIEL, ATTY. ENGRACIO M.
ESCASINAS, JR., and THE REGISTRY OF DEEDS
FOR MAKATI CITY, Respondents.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1are
the February 28, 2013 Decision2 of the Court of
Appeals (CA) dismissing the herein petitioners'
Petition for Certiorari3in CA-,G.R. SP. No. 126075,
and its June 28, 2013 Resolution 4 denying their
Motion for Reconsideration5 in said case.
Factual Antecedents
Together with Felicitas Dionisio-Juguilon and
Adelaida Dionisio, petitioners Fortunato C. Dionisio,
Jr, (Fortunato) and Franklin C. Dionisio (Franklin)
owned FCD Pawnshop and Merchandising
Company, which in turn was the registered owner of
a pared of fond in Makati under Transfer Certificate
of Title No. (168302) S-3664, or TCT (168302) S-
3664.
In 2009, Fortunato and Franklin entrusted the
original owner's copy of TCT (168302) S-3664 to
Atty. Rowena Dionisio. It was later discovered that
the said title was used as collateral by Sunyang
Mining Corporation (Sunyang) to obtain a ₱20
million loan from from respondent Union Bank of the
Philippines (UBP).
Civil Case No. 11-116 - for annulment of
mortgage
On February 9, 2011, Fortunato and Franklin filed
against UBP, Sunyang, the Registry of Deeds of
Makati, and several others Civil Case No. 11-116, a
Petition6 to annul the Sunyang mortgage and claim
for damages, based on the premise that TCT
(168302) S-3664 was fraudulently mortgaged. The
case was assigned to Branch 57 of the Regional
Trial Court (RTC) of Makati (Branch 57).
Meanwhile, UBP caused the extrajudicial foreclosure
of the subject property, and it bought the same at the
auction sale. In the Notice of Extrajudicial Sale 7
published prior to the auction sale, however, the title
to the subject property was at one point erroneously
indicated as "Transfer Certificate of Title No. 163302
(S-3664);" but elsewhere in the notice, the title was
correctly indicated as "Transfer Certificate of Title
No. 168302 (S-3664)." The publisher later circulated
an Erratum8 admitting its mistake, and it made the
corresponding correction.
Civil Case No. 11-1192 - for annulment of
foreclosure sale and certificate of sale
On account of perceived irregularities in the
foreclosure and sale proceedings, Fortunato and
Franklin filed in December 2011 a Complaint9
against UBP, the Registry of Deeds of Makati, and
several others for annulment of the extrajudicial
foreclosure and certificate of sale issued, with
injunctive relief The case was docketed as Civil
Case No. l 1 -1192 and assigned to Branch 133 of
the Makati RTC (Branch 133).
In a written opposition, UBP claimed that the filing of
Civil Case No. 11-1192 violated the rule against
forum shopping.
Ruling of the Regional Trial Court in Civil Case
No. l1-1192
On March 26, 2012, Branch 133 issued an Order10
dismissing Civil Case No. 11-1192 on the ground of
forum shopping. It held:
The instant case involves the Annulment of Extra-
Judicial Foreclosure Sale and Certificate of Sale with
Prayer for Temporary Restraining Order and
Preliminary Injunction, and Damages. However, a
case for Annulment of Mortgage is still pending
before the Regional Trial Court Makati City, Branch
57. The Annulment of Extra-Judicial Foreclosure
Sale and the Annulment of Mortgage involves (sic)
the same subject property described in the Transfer
Certificate of Title No. (168302)-S-3664. While the
plaintiffs alleged that the issue in the case before
HTC 57 deals with the validity of the mortgage and
the issue in the instant case deals with the validity of
the foreclosure sale, this Court finds the same to be
interrelated. The ruling on the validity of the
Foreclosure Sale would also deal with the validity of
the mortgage. Thus, there would be a possibility that
the ruling on the said validity by this Court would be
in conflict with ruling on the Annulment of Mortgage
case which is now pending before the RTC Makati
Branch 57.
As the Supreme Court consistently held x x x there
is forum shopping when a party repetitively avails of
several judicial remedies in different courts,
simultaneously or successively, all substantially
founded on the same transactions and the same
essential facts and circumstances, and all raising
substantially the same issues either pending in or
already resolved adversely by some other court,'
Hence, there is a clear showing of forum shopping
which is a ground for the dismissal of this case.
WHEREFORE, in view of the foregoing[,] the instant
case is hereby DISMISSED on the ground of forum
shopping.
SO ORDERED.11
Fortunato and Franklin moved to reconsider, but the
trial court, in a June 14, 2012 Order,12 held its
ground, stating among others that-
In the present case, there is no dispute that the
plaintiffs clearly violated Section 4, Rule 2, of the
Rules of Court apparently for splitting a cause of
action by filing separately and independently the
instant action which can be best pleaded in the
annulment of mortgage earlier lodged.
Certainly, it would be for the best interest and benefit
of the parties herein if the present action (annulment
of foreclosure proceeding) is just pleaded as
plaintiff's cause of action in the annulment of
mortgage first lodged and now pending before RTC
Branch 57, instead of being filed separately to save
time and effort. x x x
xxxx
In the final analysis, although it may seem that the
two cases contain two separate remedies that arc
both available to the plaintiffs, it cannot be said that
the two remedies which arose from one wrongful act
can be pursued in two different cases.
The rule against splitting a cause of action is
intended to prevent repeated litigation between the
same parties in regard to the same subject of
controversy, to protect the defendant from
unnecessary vexation; and to avoid the costs and
expenses incident to numerous suits. It comes from
the old maxim nemo debet bis vexari, pro una et
eadem causa (no man shall be twice vexed for one
and the same cause).13
Ruling of the Court of Appeals
Petitioners filed an original Petition for
Certiorari14before the CA docketed as CA-G.R. SP.
No. l26075. Claiming that there is no forum
shopping, they argued that Civil Case No. 11-116
(annulment of mortgage) and Civil Case No. 11-
1192 (annulment of foreclosure and sale
proceedings) involve different subject matters; in the
first, the subject is the mortgage constituted on the
property and its validity, while the second covers the
foreclosure and sale thereof, as well as the validity
thereof; that the evidence required to prove the first
case is not the same as that which must prove the
second; that judgments obtained in the two cases
will not be inconsistent with each other; and that the
causes of action in both cases are not the same, as
in fact the cause of action in the second case did not
exist yet when they filed the first, but accrued only
later. They added that there is no splitting of a single
cause of action, and that as between the two cases,
there is no identity of reliefs sought.
On February 28, 2013, the CA rendered the assailed
Decision dismissing the Petition, stating thus -
In sum, the lone issue to be resolved is whether
petitioners Fortunato and Franklin were guilty of
forum-shopping when they successively filed the
Annulment of Mortgage case mid Annulment of
Foreclosure Sale case.
xxxx
Given the foregoing considerations, We hold that
petitioners Fortunato and Franklin clearly violated
the rule on forum-shopping as the elements of litis
pendentia are present in the case at bench.
Consider the following:
Firstly, it is undisputed that there is identity of parties
representing the same interests in the two cases,
both involving petitioners x x x and private
respondent Bank. Notwithstanding that in the first
case, FCD Pawnshop x x x was not indicated as a
party and respondent Sunyang was not impleaded
therein, it is evident that the primary litigants in the
two actions are the same.
Secondly, in finding that the other elements of litis
pendentia were present in the instant case, We
deem it necessary the case of Goodland Company,
Inc. vs. Asia United Bank, et al.15
In Goodland, petitioner initially filed a Complaint for
Annulment of Mortgage on the ground that the Real
Estate Mortgage (REM) contract was falsified and
irregularly executed. Subsequently, it filed a second
case where it prayed for injunctive relief and/or
nullification of the extrajudicial foreclosure sale by
reason of, among others, defective publication of the
Notice of Sale and falsification of the REM contract
which was the basis of foreclosure, thus, rendering
the latter as similarly null and void. The High Court
found petitioner guilty of forum-shopping
ratiocinating that there can be no detem1ination of
the validity of the extrajudicial foreclosure and the
propriety of the injunction in the Injunction case
without necessarily ruling on the validity of the REM.
We stress, however, that unlike the Goodland case,
the instant controversy involved a situation wherein
the allegations in the Complaint for Annulment of
Foreclosure did not explicitly and categorically raise
the falsification of the REM contract as one of the
grounds for declaring the annulment of the said
foreclosure sale. Here, petitioners anchored their
arguments on the alleged irregularities in the
foreclosure proceedings, i.e., different title numbers
in the documents used or issued in the auction sale
and that the Petition for Extrajudicial Foreclosure
Sale was filed without authority. Nonetheless, after a
careful study of the Goodland case, We are ever
more convinced that the same is still instructive on
the issue at hand. Consider the following pertinent
portions of the case:
'x x x There can be no dispute that the prayer for
relief in the two cases was based on the same
attendant facts in the execution of REMs over
petitioner's properties in favor of AUB. While the
extrajudicial foreclosure of mortgage,
consolidation of ownership in AUB and issuance
of title in the latter's name were set forth only in
the second case x x x, these were simply the
expected consequences of the REM transaction
in the first case x x x. These eventualities are
precisely what petitioner sought to avert when it
filed the first case. Undeniably then, the
injunctive relief sought against the extrajudicial
foreclosure, as well as the cancellation of the
new title in the name of the creditor- mortgagee
AUB, were all premised on the alleged nullity of
the REM due to its allegedly fraudulent and
irregular execution and registration - the same
facts set forth in the first case. In both cases,
petitioner asserted its right as owner of the
property subject of the REM, while AUB invoked
the rights of a foreclosing creditor-mortgagee , x
xx
x x x In the first case, petitioner alleged the
fraudulent and irregular execution and
registration of the REM which violated its right
as owner who did not consent thereto, while in
the second case petitioner cited further violation
of its right as owner when AUB foreclosed the
property, consolidated its ownership and
obtained a new TCT in its name. Considering
that the aforesaid violations of petitioner's right
as owner in the two cases both hinge on the
binding effect of the REM, i.e., both cases will
rise or fall on the issue of the validity of the REM,
it follows that the same evidence will support
and establish the first and second causes of
action. The procedural infirmities or non-compliance
with legal requirements for extrajudicial foreclosure
raised in second case were but additional grounds in
support of the injunctive relief sought against the
foreclosure which was, in the first place, illegal on
account of the mortgage contract's nullity. Evidently,
petitioner never relied solely on the alleged
procedural irregularities in the extrajudicial
foreclosure when it sought the reliefs in the second
case. x x x'
While in the instant case, the Annulment of
Foreclosure Sale was merely founded on
irregularities in the foreclosure proceedings, witl1out
deliberately raising the alleged nullity of the REM,
the foregoing clearly suggests that in resolving the
said Annulment of Foreclosure Sale case, its
determination will still be anchored upon and
premised on the issue of the validity of REM.
Parenthetically, should it be found that the mortgage
contract is null and void, the proceedings based
thereon shall likewise become ineffectual. The
resolution of the Annulment of Foreclosure Sale
case, therefore, is inevitably dependent on the
effectivity of the REM transaction, thus, it can be
said that both cases shall be substantially founded
on the same transactions, same essential facts and
circumstances.
In addition, as correctly pointed out by the private
respondent Bank, a careful scrutiny of the Complaint
for Annulment of Foreclosure shows petitioners
Fortunato and Franklin's repeated reference to the
subject property as unlawfully and fraudulently
mortgaged. As such, insofar as the determination of
the validity of foreclosure proceedings is concerned,
same evidence will have to be utilized as the
antecedent facts that gave rise to both cases were
the same.
xxxx
Thirdly, a judgment in the Annulment of Mortgage
case will amount to res judicata in the Annulment of
Foreclosure Sale case. It is a principle in res
judicata that once a final judgment has been
rendered, the prevailing party also has an interest in
the stability of that judgment. To allow relitigation
creates the risk of inconsistent results and presents
the embarrassing problem of determining which of
two conflicting decisions is to be preferred. Here,
conflicting decisions may result should the
Annulment of Foreclosure case be allowed to
proceed.
To stress once again, should RTC Br. 57 rule that
the REM contract is null and void, the proceedings
based thereon shall likewise become
ineffectual.1âwphi1 Considering that both RTC Brs.
57 and 133 will be confronted (sic) to discuss or
make any pronouncement regarding the validity of
the REM, the possibility of conflicting rulings or
decisions may be rendered with respect to the said
issue. With that, We deem it proper that petitioners
Fortunato and Franklin should have just amended
their Complaint for Annulment of Mortgage, pleading
therein the subsequent extrajudicial foreclosure and
include in the prayer the nullification of the said
extrajudicial foreclosure.
In view of the foregoing, no grave abuse of
discretion can be imputed to public respondent RTC
Br. 133 in finding that petitioners Fortunato and
Franklin committed forum-shopping. The instant
petition, therefore, indubitably warrants denial.
WHEREFORE, the petition is DENIED. The a5sailed
Orders dated March 26, 2012 and June 14, 2012 of
the x x x Regional Trial Court of Makati City, Branch
133, in Civil Case No. 11-1192, are hereby
AFFIRMED.
Costs against petitioners.
SO ORDERED.16 (Emphasis in the original)
A Motion for Reconsideration was filed, but the same
was denied in a June 28, 2013 Resolution of the CA.
Hence, the present Petition.
In a September 1, 2014 Resolution, 17 the Court
resolved to give due course to the instant
Petition.1âwphi1
Issues
Petitioners essentially point out that in maintaining
Civil Case Nos. 11-116 and 11-1192, they are not
guilty of forum shopping, nor did they violate the rule
on litis pendentia.
Petitioners' Arguments
In praying that the assailed CA dispositions be set
aside, petitioners in their Petition and Reply18
reiterate the arguments in their CA Petition that, as
between Civil Case No. 11-116 (annulment of
mortgage) and Civil Case No. 11-1192 (annulment
of foreclosure and sale proceedings), there is no
identity of causes of action, subject matter, issues,
and reliefs sought; that both cases require different
evidence as proof; and that judgments obtained in
the two cases will not be inconsistent with each
other, and any decision obtained in one will not
constitute res judicata on the other.
Respondent UBP's Arguments
Respondent UBP, on the other hand, essentially
argues in its Comment19 that the Petition should be
denied, for being a mere rehash of the arguments in
petitioners' CA Petition which have been thoroughly
passed upon by the appellate court; that as correctly
held by the CA, Civil Case No. 11-1192 (annulment
of foreclosure and sale proceedings) is anchored on
a determination of the validity or binding effect of the
real estate mortgage in Civil Case No. 11-116
(annulment of mortgage case), and both cases are
supported by, and will rise and fall on, the same
evidence; that the necessary consequence of Civil
Case No. 11-1192 is determined solely by the
decision in Civil Case No. 11-116 in that if it is found
that the mortgage is null and void, then the
foreclosure arid sale proceedings bas thereon would
likewise become ineffectual; that the grow1ds for
annulment of the foreclosure and sale proceedings
merely constitute additional reasons for seeking
injunctive relief: if any, in the annulment of mortgage
case, but cannot form the basis of a separate cause
of action; and that a judgment in Civil Case No. 11-
116 on the validity of the mortgage should thus
amount to res judicata in Civil Case No. 11-1192 on
the effect of the foreclosure and sale, but with the
pendency of both cases, a possibility of conflicting
rulings by different courts on the validity of the
mortgage exists.
Our Ruling
The Court denies the Petition.
This ponente has had the occasion to rule on a
case20 where a party instituted two cases against
the same set of defendants - one for the annulment
of a real estate mortgage, and a second for
injunction and nullification of the extrajudicial
foreclosure and consolidation of title, rooted in the
same real estate mortgage - who moved to dismiss
the second case on the ground of forum shopping,
claiming that both cases relied on a determination of
the same issue: that is, the validity of the real estate
mortgage. The trial court dismissed the second
case, but the CA ordered its reinstatement. This
ponente affirmed the trial court, declaring as follows:
There is forum shopping 'when a party repetitively
avails of several judicial remedies in different courts,
simultaneously or successively, all substantially
founded on the same transactions and the same
essential facts and circumstances, and all raising
substantially the same issues either pending in or
already resolved adversely by some other court.'
The different ways by which forum shopping may be
committed were explained in Chua v. Metropolitan
Bank & Trust Company:
Forum shopping can be committed in three ways: (1)
filing multiple cases based on the same cause of
action and with the same prayer, the previous case
not having been resolved yet (where the ground for
dismissal is litis pendentia); (2) filing multiple cases
based on the same cause of action and the same
prayer, the previous case having been finally
resolved (where the ground for dismissal is res
judicata); and (3) filing multiple cases based on
the same cause of action but with different
prayers (splitting causes of action, where the
ground for dismissal is also either litis pendentia
or res judicata).
Common in these types of forum shopping is the
identity of the cause of action in the different cases
filed. Cause of action is defined as 'the act or
omission by which a party violates the right of
another.’
The cause of action in the earlier Annulment
Case is the alleged nullity of the REM (due to its
allegedly falsified or spurious nature) which is
allegedly violative of Goodland's right to the
mortgaged property. It serves as the basis for
the prayer for the nullification of the REM. The
Injunction Case involves the same cause of
action, inasmuch as it also invokes the nullity of
the REM as the basis for the prayer for the
nullification of the extrajudicial foreclosure and
for injunction against consolidation of title.
While the main relief sought in the Annulment
Case (nullification of the REM) is ostensibly
different from the main relief sought in the
Injunction Case (nullification of the extrajudicial
foreclosure and injunction against consolidation
of title), the cause of action which serves as the
basis for the said reliefs remains the same - the
alleged nullity of the REM. Thus, what is involved
here is the third way of committing forum
shopping, i.e., filing multiple cases based on the
same cause of action, but with different prayers.
As previously held by the Court, there is still forum
shopping even if the reliefs prayed for in the two
cases are different, so long as both cases raise
substantially the same issues.
There can be no determination of the validity of
the extrajudicial foreclosure and the propriety of
injunction in the Injunction Case without
necessarily ruling on the validity of the REM,
which is already the subject of the Annulment
Case. The identity of the causes of action in the two
cases entails that the validity of the mortgage will be
ruled upon in both, and creates a possibility that
the two rulings will conflict with each other. This
is precisely what is sought to be avoided by the
rule against forum shopping.
The substantial identity of the two cases remains
even if the parties should add different grounds or
legal theories for the nullity of the REM or should
alter the designation or form of the action. The well-
entrenched rule is that 'a party cannot, by
varying the form of action, or adopting a
different method of presenting his case, escape
the operation of the principle that one and the
same cause of action shall not be twice
litigated.'21 (Emphasis supplied)
The foregoing view was reiterated in a subsequent
pronouncement,22 which happens to form the
underlying premise of the CA's disposition.
The factual milieu in the present case is the same as
in the above-cited cases. The plaintiffs in both cases
first filed a case for annulment of the mortgage,
followed by the case for annulment of the
foreclosure proceedings. For this reason, the
underlying principle in these previously decided
cases must apply equally to the instant case. Thus,
the Court completely agrees with the CA's findings
that in the event that the court in Civil Case No. 11-
116 (annulment of mortgage case) should nullify the
Sunyang mortgage, then subsequent proceedings
based thereon, including the foreclosure, shall also
be nullified. Notably as well, the CA's observation in
Civil Case No. 11-1192 (case for annulment of
foreclosure and sale) - that since the complaint
therein repeatedly makes reference to an "unlawful"
and "fraudulent" Sunyang mortgage, then the same
evidence in Civil Case No. 11-116 will have to be
utilized- is well-taken.
Petitioners maintain that Civil Case No. 11-1192
(case for annulment of foreclosure and sale) is
grounded on specific irregularities committed during
the foreclosure proceedings. However, their
Complaint in said case reiterates the supposed
illegality of the Sunyang mortgage, thus presenting
the court in said case with the opportunity and
temptation to resolve the issue of validity of the
mortgage. There is therefore a danger that a
decision might be rendered by the court in Civil Case
No. 11-1192 that contradicts the eventual ruling in
Civil Case No. 11-116, or the annulment of mortgage
case.
The rules of procedure are geared toward securing a
just, speedy, and inexpensive disposition of every
action and proceeding.23 "Procedural law has its
own rationale in the orderly administration of justice,
namely, to ensure the effective enforcement of
substantive rights by providing for a system that
obviates arbitrariness, caprice, despotism, or
whimsicality in the settlement of disputes."24 With
these principles in mind, the Court would rather have
petitioners try their cause of action in Civil Case No.
11-116, rather than leave the trial court in danger of
committing error by issuing a decision or resolving
an issue in Civil Case No. 11-1192 that should
properly be rendered or resolved by the court trying
Civil Case No. 11-116.
WHEREFORE, the Petition is DENIED. The
February 28, 2013 Decision and June 28, 2013
Resolution of the Court of Appeals in CA-G.R. SP.
No. 126075 are AFFIRMED.
SO ORDERED.
G.R. No. 150135             October 30, 2006
SPOUSES ANTONIO F. ALGURA and
LORENCITA S.J. ALGURA, petitioners,
vs.
THE LOCAL GOVERNMENT UNIT OF THE CITY
OF NAGA, ATTY. MANUEL TEOXON, ENGR.
LEON PALMIANO, NATHAN SERGIO and
BENJAMIN NAVARRO, SR., respondents.
DECISION
VELASCO, JR., J.:
Anyone who has ever struggled with poverty
knows how extremely expensive it is to be poor.
–– James Baldwin
The Constitution affords litigants—moneyed or poor
—equal access to the courts; moreover, it
specifically provides that poverty shall not bar any
person from having access to the courts. 1
Accordingly, laws and rules must be formulated,
interpreted, and implemented pursuant to the intent
and spirit of this constitutional provision. As such,
filing fees, though one of the essential elements in
court procedures, should not be an obstacle to poor
litigants' opportunity to seek redress for their
grievances before the courts.
The Case
This Petition for Review on Certiorari seeks the
annulment of the September 11, 2001 Order of the
Regional Trial Court (RTC) of Naga City, Branch 27,
in Civil Case No. 99-4403 entitled Spouses Antonio
F. Algura and Lorencita S.J. Algura v. The Local
Government Unit of the City of Naga, et al.,
dismissing the case for failure of petitioners Algura
spouses to pay the required filing fees.2 Since the
instant petition involves only a question of law based
on facts established from the pleadings and
documents submitted by the parties, 3 the Court gives
due course to the instant petition sanctioned under
Section 2(c) of Rule 41 on Appeal from the RTCs,
and governed by Rule 45 of the 1997 Rules of Civil
Procedure.
The Facts
On September 1, 1999, spouses Antonio F. Algura
and Lorencita S.J. Algura filed a Verified Complaint
dated August 30, 19994 for damages against the
Naga City Government and its officers, arising from
the alleged illegal demolition of their residence and
boarding house and for payment of lost income
derived from fees paid by their boarders amounting
to PhP 7,000.00 monthly.
Simultaneously, petitioners filed an Ex-Parte Motion
to Litigate as Indigent Litigants, 5 to which petitioner
Antonio Algura's Pay Slip No. 2457360 (Annex "A"
of motion) was appended, showing a gross monthly
income of Ten Thousand Four Hundred Seventy
Four Pesos (PhP 10,474.00) and a net pay of Three
Thousand Six Hundred Sixteen Pesos and Ninety
Nine Centavos (PhP 3,616.99) for [the month of]
July 1999.6 Also attached as Annex "B" to the motion
was a July 14, 1999 Certification7 issued by the
Office of the City Assessor of Naga City, which
stated that petitioners had no property declared in
their name for taxation purposes.
Finding that petitioners' motion to litigate as indigent
litigants was meritorious, Executive Judge Jose T.
Atienza of the Naga City RTC, in the September 1,
1999 Order,8 granted petitioners' plea for exemption
from filing fees.
Meanwhile, as a result of respondent Naga City
Government's demolition of a portion of petitioners'
house, the Alguras allegedly lost a monthly income
of PhP 7,000.00 from their boarders' rentals. With
the loss of the rentals, the meager income from
Lorencita Algura's sari-sari store and Antonio
Algura's small take home pay became insufficient for
the expenses of the Algura spouses and their six (6)
children for their basic needs including food, bills,
clothes, and schooling, among others.
On October 13, 1999, respondents filed an Answer
with Counterclaim dated October 10, 1999, 9 arguing
that the defenses of the petitioners in the complaint
had no cause of action, the spouses' boarding house
blocked the road right of way, and said structure was
a nuisance per se.
Praying that the counterclaim of defendants
(respondents) be dismissed, petitioners then filed
their Reply with Ex-Parte Request for a Pre-Trial
Setting10 before the Naga City RTC on October 19,
1999. On February 3, 2000, a pre-trial was held
wherein respondents asked for five (5) days within
which to file a Motion to Disqualify Petitioners as
Indigent Litigants.
On March 13, 2000, respondents filed a Motion to
Disqualify the Plaintiffs for Non-Payment of Filing
Fees dated March 10, 2000.11 They asserted that in
addition to the more than PhP 3,000.00 net income
of petitioner Antonio Algura, who is a member of the
Philippine National Police, spouse Lorencita Algura
also had a mini-store and a computer shop on the
ground floor of their residence along Bayawas St.,
Sta. Cruz, Naga City. Also, respondents claimed that
petitioners' second floor was used as their residence
and as a boarding house, from which they earned
more than PhP 3,000.00 a month. In addition, it was
claimed that petitioners derived additional income
from their computer shop patronized by students and
from several boarders who paid rentals to them.
Hence, respondents concluded that petitioners were
not indigent litigants.
On March 28, 2000, petitioners subsequently
interposed their Opposition to the Motion 12 to
respondents' motion to disqualify them for non-
payment of filing fees.
On April 14, 2000, the Naga City RTC issued an
Order disqualifying petitioners as indigent litigants on
the ground that they failed to substantiate their claim
for exemption from payment of legal fees and to
comply with the third paragraph of Rule 141, Section
18 of the Revised Rules of Court—directing them to
pay the requisite filing fees.13
On April 28, 2000, petitioners filed a Motion for
Reconsideration of the April 14, 2000 Order. On May
8, 2000, respondents then filed their
Comment/Objections to petitioner's Motion for
Reconsideration.
On May 5, 2000, the trial court issued an Order 14
giving petitioners the opportunity to comply with the
requisites laid down in Section 18, Rule 141, for
them to qualify as indigent litigants.
On May 13, 2000, petitioners submitted their
Compliance15 attaching the affidavits of petitioner
Lorencita Algura16 and Erlinda Bangate,17 to comply
with the requirements of then Rule 141, Section 18
of the Rules of Court and in support of their claim to
be declared as indigent litigants.
In her May 13, 2000 Affidavit, petitioner Lorencita
Algura claimed that the demolition of their small
dwelling deprived her of a monthly income
amounting to PhP 7,000.00. She, her husband, and
their six (6) minor children had to rely mainly on her
husband's salary as a policeman which provided
them a monthly amount of PhP 3,500.00, more or
less. Also, they did not own any real property as
certified by the assessor's office of Naga City. More
so, according to her, the meager net income from
her small sari-sari store and the rentals of some
boarders, plus the salary of her husband, were not
enough to pay the family's basic necessities.
To buttress their position as qualified indigent
litigants, petitioners also submitted the affidavit of
Erlinda Bangate, who attested under oath, that she
personally knew spouses Antonio Algura and
Lorencita Algura, who were her neighbors; that they
derived substantial income from their boarders; that
they lost said income from their boarders' rentals
when the Local Government Unit of the City of Naga,
through its officers, demolished part of their house
because from that time, only a few boarders could
be accommodated; that the income from the small
store, the boarders, and the meager salary of
Antonio Algura were insufficient for their basic
necessities like food and clothing, considering that
the Algura spouses had six (6) children; and that she
knew that petitioners did not own any real property.
Thereafter, Naga City RTC Acting Presiding Judge
Andres B. Barsaga, Jr. issued his July 17, 2000 18
Order denying the petitioners' Motion for
Reconsideration.
Judge Barsaga ratiocinated that the pay slip of
Antonio F. Algura showed that the "GROSS
INCOME or TOTAL EARNINGS of plaintiff Algura
[was] ₧10,474.00 which amount [was] over and
above the amount mentioned in the first paragraph
of Rule 141, Section 18 for pauper litigants residing
outside Metro Manila."19 Said rule provides that the
gross income of the litigant should not exceed PhP
3,000.00 a month and shall not own real estate with
an assessed value of PhP 50,000.00. The trial court
found that, in Lorencita S.J. Algura's May 13, 2000
Affidavit, nowhere was it stated that she and her
immediate family did not earn a gross income of PhP
3,000.00.
The Issue
Unconvinced of the said ruling, the Alguras instituted
the instant petition raising a solitary issue for the
consideration of the Court: whether petitioners
should be considered as indigent litigants who
qualify for exemption from paying filing fees.
The Ruling of the Court
The petition is meritorious.
A review of the history of the Rules of Court on suits
in forma pauperis (pauper litigant) is necessary
before the Court rules on the issue of the Algura
spouses' claim to exemption from paying filing fees.
When the Rules of Court took effect on January 1,
1964, the rule on pauper litigants was found in Rule
3, Section 22 which provided that:
Section 22. Pauper litigant.—Any court may
authorize a litigant to prosecute his action or
defense as a pauper upon a proper showing
that he has no means to that effect by
affidavits, certificate of the corresponding
provincial, city or municipal treasurer, or
otherwise. Such authority[,] once given[,]
shall include an exemption from payment of
legal fees and from filing appeal bond,
printed record and printed brief. The legal
fees shall be a lien to any judgment
rendered in the case [favorable] to the
pauper, unless the court otherwise provides.
From the same Rules of Court, Rule 141 on Legal
Fees, on the other hand, did not contain any
provision on pauper litigants.
On July 19, 1984, the Court, in Administrative Matter
No. 83-6-389-0 (formerly G.R. No. 64274), approved
the recommendation of the Committee on the
Revision of Rates and Charges of Court Fees,
through its Chairman, then Justice Felix V. Makasiar,
to revise the fees in Rule 141 of the Rules of Court
to generate funds to effectively cover administrative
costs for services rendered by the courts.20 A
provision on pauper litigants was inserted which
reads:
Section 16. Pauper-litigants exempt from
payment of court fees.—Pauper-litigants
include wage earners whose gross income
do not exceed P2,000.00 a month or
P24,000.00 a year for those residing in
Metro Manila, and P1,500.00 a month or
P18,000.00 a year for those residing outside
Metro Manila, or those who do not own real
property with an assessed value of not more
than P24,000.00, or not more than
P18,000.00 as the case may be.
Such exemption shall include exemption
from payment of fees for filing appeal bond,
printed record and printed brief.
The legal fees shall be a lien on the
monetary or property judgment rendered in
favor of the pauper-litigant.
To be entitled to the exemption herein
provided, the pauper-litigant shall execute
an affidavit that he does not earn the gross
income abovementioned, nor own any real
property with the assessed value afore-
mentioned [sic], supported by a certification
to that effect by the provincial, city or town
assessor or treasurer.
When the Rules of Court on Civil Procedure were
amended by the 1997 Rules of Civil Procedure
(inclusive of Rules 1 to 71) in Supreme Court
Resolution in Bar Matter No. 803 dated April 8,
1997, which became effective on July 1, 1997, Rule
3, Section 22 of the Revised Rules of Court was
superseded by Rule 3, Section 21 of said 1997
Rules of Civil Procedure, as follows:
Section 21. Indigent party.—A party may be
authorized to litigate his action, claim or
defense as an indigent if the court, upon an
ex parte application and hearing, is satisfied
that the party is one who has no money or
property sufficient and available for food,
shelter and basic necessities for himself and
his family.
Such authority shall include an exemption
from payment of docket and other lawful
fees, and of transcripts of stenographic
notes which the court may order to be
furnished him. The amount of the docket
and other lawful fees which the indigent was
exempted from paying shall be a lien on any
judgment rendered in the case favorable to
the indigent, unless the court otherwise
provides.
Any adverse party may contest the grant of
such authority at any time before judgment
is rendered by the trial court. If the court
should determine after hearing that the party
declared as an indigent is in fact a person
with sufficient income or property, the proper
docket and other lawful fees shall be
assessed and collected by the clerk of court.
If payment is not made within the time fixed
by the court, execution shall issue for the
payment thereof, without prejudice to such
other sanctions as the court may impose.
At the time the Rules on Civil Procedure were
amended by the Court in Bar Matter No. 803,
however, there was no amendment made on Rule
141, Section 16 on pauper litigants.
On March 1, 2000, Rule 141 on Legal Fees was
amended by the Court in A.M. No. 00-2-01-SC,
whereby certain fees were increased or adjusted. In
this Resolution, the Court amended Section 16 of
Rule 141, making it Section 18, which now reads:
Section 18. Pauper-litigants exempt from
payment of legal fees.—Pauper litigants (a)
whose gross income and that of their
immediate family do not exceed four
thousand (P4,000.00) pesos a month if
residing in Metro Manila, and three thousand
(P3,000.00) pesos a month if residing
outside Metro Manila, and (b) who do not
own real property with an assessed value of
more than fifty thousand (P50,000.00) pesos
shall be exempt from the payment of legal
fees.
The legal fees shall be a lien on any
judgment rendered in the case favorably to
the pauper litigant, unless the court
otherwise provides.
To be entitled to the exemption herein
provided, the litigant shall execute an
affidavit that he and his immediate family do
not earn the gross income abovementioned,
nor do they own any real property with the
assessed value aforementioned, supported
by an affidavit of a disinterested person
attesting to the truth of the litigant's affidavit.
Any falsity in the affidavit of a litigant or
disinterested person shall be sufficient
cause to strike out the pleading of that party,
without prejudice to whatever criminal
liability may have been incurred.
It can be readily seen that the rule on pauper
litigants was inserted in Rule 141 without revoking
or amending Section 21 of Rule 3, which provides
for the exemption of pauper litigants from payment of
filing fees. Thus, on March 1, 2000, there were two
existing rules on pauper litigants; namely, Rule 3,
Section 21 and Rule 141, Section 18.
On August 16, 2004, Section 18 of Rule 141 was
further amended in Administrative Matter No. 04-2-
04-SC, which became effective on the same date. It
then became Section 19 of Rule 141, to wit:
Sec. 19. Indigent litigants exempt from
payment of legal fees.– INDIGENT
LITIGANTS (A) WHOSE GROSS INCOME
AND THAT OF THEIR IMMEDIATE
FAMILY DO NOT EXCEED AN AMOUNT
DOUBLE THE MONTHLY MINIMUM
WAGE OF AN EMPLOYEE AND (B) WHO
DO NOT OWN REAL PROPERTY WITH A
FAIR MARKET VALUE AS STATED IN THE
CURRENT TAX DECLARATION OF MORE
THAN THREE HUNDRED THOUSAND
(P300,000.00) PESOS SHALL BE EXEMPT
FROM PAYMENT OF LEGAL FEES.
The legal fees shall be a lien on any
judgment rendered in the case favorable to
the indigent litigant unless the court
otherwise provides.
To be entitled to the exemption herein
provided, the litigant shall execute an
affidavit that he and his immediate family
do not earn a gross income
abovementioned, and they do not own
any real property with the fair value
aforementioned, supported by an
affidavit of a disinterested person
attesting to the truth of the litigant's
affidavit. The current tax declaration, if any,
shall be attached to the litigant's affidavit.
Any falsity in the affidavit of litigant or
disinterested person shall be sufficient
cause to dismiss the complaint or action or
to strike out the pleading of that party,
without prejudice to whatever criminal
liability may have been incurred. (Emphasis
supplied.)
Amendments to Rule 141 (including the amendment
to Rule 141, Section 18) were made to implement
RA 9227 which brought about new increases in filing
fees. Specifically, in the August 16, 2004
amendment, the ceiling for the gross income of
litigants applying for exemption and that of their
immediate family was increased from PhP 4,000.00
a month in Metro Manila and PhP 3,000.00 a month
outside Metro Manila, to double the monthly
minimum wage of an employee; and the maximum
value of the property owned by the applicant was
increased from an assessed value of PhP 50,000.00
to a maximum market value of PhP 300,000.00, to
be able to accommodate more indigent litigants and
promote easier access to justice by the poor and the
marginalized in the wake of these new increases in
filing fees.
Even if there was an amendment to Rule 141 on
August 16, 2004, there was still no amendment or
recall of Rule 3, Section 21 on indigent litigants.
With this historical backdrop, let us now move on to
the sole issue—whether petitioners are exempt from
the payment of filing fees.
It is undisputed that the Complaint (Civil Case No.
99-4403) was filed on September 1, 1999. However,
the Naga City RTC, in its April 14, 2000 and July 17,
2000 Orders, incorrectly applied Rule 141,
Section 18 on Legal Fees when the applicable
rules at that time were Rule 3, Section 21 on
Indigent Party which took effect on July 1, 1997 and
Rule 141, Section 16 on Pauper Litigants which
became effective on July 19, 1984 up to February
28, 2000.
The old Section 16, Rule 141 requires applicants to
file an ex-parte motion to litigate as a pauper litigant
by submitting an affidavit that they do not have a
gross income of PhP 2,000.00 a month or PhP
24,000.00 a year for those residing in Metro Manila
and PhP 1,500.00 a month or PhP 18,000.00 a year
for those residing outside Metro Manila or those who
do not own real property with an assessed value of
not more than PhP 24,000.00 or not more than PhP
18,000.00 as the case may be. Thus, there are two
requirements: a) income requirement—the
applicants should not have a gross monthly income
of more than PhP 1,500.00, and b) property
requirement––they should not own property with an
assessed value of not more than PhP 18,000.00.
In the case at bar, petitioners Alguras submitted the
Affidavits of petitioner Lorencita Algura and neighbor
Erlinda Bangate, the pay slip of petitioner Antonio F.
Algura showing a gross monthly income of PhP
10,474.00,21 and a Certification of the Naga City
assessor stating that petitioners do not have
property declared in their names for taxation. 22
Undoubtedly, petitioners do not own real property as
shown by the Certification of the Naga City assessor
and so the property requirement is met. However
with respect to the income requirement, it is clear
that the gross monthly income of PhP 10,474.00 of
petitioner Antonio F. Algura and the PhP 3,000.00
income of Lorencita Algura when combined, were
above the PhP 1,500.00 monthly income threshold
prescribed by then Rule 141, Section 16 and
therefore, the income requirement was not satisfied.
The trial court was therefore correct in disqualifying
petitioners Alguras as indigent litigants although the
court should have applied Rule 141, Section 16
which was in effect at the time of the filing of the
application on September 1, 1999. Even if Rule 141,
Section 18 (which superseded Rule 141, Section 16
on March 1, 2000) were applied, still the application
could not have been granted as the combined PhP
13,474.00 income of petitioners was beyond the PhP
3,000.00 monthly income threshold.
Unrelenting, petitioners however argue in their
Motion for Reconsideration of the April 14, 2000
Order disqualifying them as indigent litigants23 that
the rules have been relaxed by relying on Rule 3,
Section 21 of the 1997 Rules of Civil procedure
which authorizes parties to litigate their action as
indigents if the court is satisfied that the party is "one
who has no money or property sufficient and
available for food, shelter and basic necessities for
himself and his family." The trial court did not give
credence to this view of petitioners and simply
applied Rule 141 but ignored Rule 3, Section 21 on
Indigent Party.
The position of petitioners on the need to use Rule
3, Section 21 on their application to litigate as
indigent litigants brings to the fore the issue on
whether a trial court has to apply both Rule 141,
Section 16 and Rule 3, Section 21 on such
applications or should the court apply only Rule 141,
Section 16 and discard Rule 3, Section 21 as having
been superseded by Rule 141, Section 16 on Legal
Fees.
The Court rules that Rule 3, Section 21 and Rule
141, Section 16 (later amended as Rule 141,
Section 18 on March 1, 2000 and subsequently
amended by Rule 141, Section 19 on August 16,
2003, which is now the present rule) are still valid
and enforceable rules on indigent litigants.
For one, the history of the two seemingly conflicting
rules readily reveals that it was not the intent of the
Court to consider the old Section 22 of Rule 3, which
took effect on January 1, 1994 to have been
amended and superseded by Rule 141, Section 16,
which took effect on July 19, 1984 through A.M. No.
83-6-389-0. If that is the case, then the Supreme
Court, upon the recommendation of the Committee
on the Revision on Rules, could have already
deleted Section 22 from Rule 3 when it amended
Rules 1 to 71 and approved the 1997 Rules of Civil
Procedure, which took effect on July 1, 1997. The
fact that Section 22 which became Rule 3, Section
21 on indigent litigant was retained in the rules of
procedure, even elaborating on the meaning of an
indigent party, and was also strengthened by the
addition of a third paragraph on the right to contest
the grant of authority to litigate only goes to show
that there was no intent at all to consider said rule as
expunged from the 1997 Rules of Civil Procedure.
Furthermore, Rule 141 on indigent litigants was
amended twice: first on March 1, 2000 and the
second on August 16, 2004; and yet, despite these
two amendments, there was no attempt to delete
Section 21 from said Rule 3. This clearly evinces the
desire of the Court to maintain the two (2) rules on
indigent litigants to cover applications to litigate as
an indigent litigant.
It may be argued that Rule 3, Section 21 has been
impliedly repealed by the recent 2000 and 2004
amendments to Rule 141 on legal fees. This position
is bereft of merit. Implied repeals are frowned upon
unless the intent of the framers of the rules is
unequivocal. It has been consistently ruled that:
(r)epeals by implication are not favored, and
will not be decreed, unless it is manifest that
the legislature so intended. As laws are
presumed to be passed with deliberation
and with full knowledge of all existing ones
on the subject, it is but reasonable to
conclude that in passing a statute[,] it was
not intended to interfere with or abrogate
any former law relating to same matter,
unless the repugnancy between the two is
not only irreconcilable, but also clear and
convincing, and flowing necessarily from the
language used, unless the later act fully
embraces the subject matter of the earlier,
or unless the reason for the earlier act is
beyond peradventure removed. Hence,
every effort must be used to make all acts
stand and if, by any reasonable construction
they can be reconciled, the later act will not
operate as a repeal of the earlier.24
(Emphasis supplied).
Instead of declaring that Rule 3, Section 21 has
been superseded and impliedly amended by Section
18 and later Section 19 of Rule 141, the Court finds
that the two rules can and should be harmonized.
The Court opts to reconcile Rule 3, Section 21 and
Rule 141, Section 19 because it is a settled principle
that when conflicts are seen between two provisions,
all efforts must be made to harmonize them. Hence,
"every statute [or rule] must be so construed and
harmonized with other statutes [or rules] as to form a
uniform system of jurisprudence."25
In Manila Jockey Club, Inc. v. Court of Appeals, this
Court enunciated that in the interpretation of
seemingly conflicting laws, efforts must be made to
first harmonize them. This Court thus ruled:
Consequently, every statute should be
construed in such a way that will harmonize
it with existing laws. This principle is
expressed in the legal maxim 'interpretare et
concordare leges legibus est optimus
interpretandi,' that is, to interpret and to do it
in such a way as to harmonize laws with
laws is the best method of interpretation.26
In the light of the foregoing considerations, therefore,
the two (2) rules can stand together and are
compatible with each other. When an application to
litigate as an indigent litigant is filed, the court shall
scrutinize the affidavits and supporting documents
submitted by the applicant to determine if the
applicant complies with the income and property
standards prescribed in the present Section 19 of
Rule 141—that is, the applicant's gross income and
that of the applicant's immediate family do not
exceed an amount double the monthly minimum
wage of an employee; and the applicant does not
own real property with a fair market value of more
than Three Hundred Thousand Pesos (PhP
300,000.00). If the trial court finds that the applicant
meets the income and property requirements, the
authority to litigate as indigent litigant is
automatically granted and the grant is a matter of
right.
However, if the trial court finds that one or both
requirements have not been met, then it would set a
hearing to enable the applicant to prove that the
applicant has "no money or property sufficient and
available for food, shelter and basic necessities for
himself and his family." In that hearing, the adverse
party may adduce countervailing evidence to
disprove the evidence presented by the applicant;
after which the trial court will rule on the application
depending on the evidence adduced. In addition,
Section 21 of Rule 3 also provides that the adverse
party may later still contest the grant of such
authority at any time before judgment is rendered by
the trial court, possibly based on newly discovered
evidence not obtained at the time the application
was heard. If the court determines after hearing, that
the party declared as an indigent is in fact a person
with sufficient income or property, the proper docket
and other lawful fees shall be assessed and
collected by the clerk of court. If payment is not
made within the time fixed by the court, execution
shall issue or the payment of prescribed fees shall
be made, without prejudice to such other sanctions
as the court may impose.
The Court concedes that Rule 141, Section 19
provides specific standards while Rule 3, Section 21
does not clearly draw the limits of the entitlement to
the exemption. Knowing that the litigants may abuse
the grant of authority, the trial court must use sound
discretion and scrutinize evidence strictly in granting
exemptions, aware that the applicant has not
hurdled the precise standards under Rule 141. The
trial court must also guard against abuse and misuse
of the privilege to litigate as an indigent litigant to
prevent the filing of exorbitant claims which would
otherwise be regulated by a legal fee requirement.
Thus, the trial court should have applied Rule 3,
Section 21 to the application of the Alguras after
their affidavits and supporting documents showed
that petitioners did not satisfy the twin requirements
on gross monthly income and ownership of real
property under Rule 141. Instead of disqualifying the
Alguras as indigent litigants, the trial court should
have called a hearing as required by Rule 3, Section
21 to enable the petitioners to adduce evidence to
show that they didn't have property and money
sufficient and available for food, shelter, and basic
necessities for them and their family. 27 In that
hearing, the respondents would have had the right to
also present evidence to refute the allegations and
evidence in support of the application of the
petitioners to litigate as indigent litigants. Since this
Court is not a trier of facts, it will have to remand the
case to the trial court to determine whether
petitioners can be considered as indigent litigants
using the standards set in Rule 3, Section 21.
Recapitulating the rules on indigent litigants,
therefore, if the applicant for exemption meets the
salary and property requirements under Section 19
of Rule 141, then the grant of the application is
mandatory. On the other hand, when the application
does not satisfy one or both requirements, then the
application should not be denied outright; instead,
the court should apply the "indigency test" under
Section 21 of Rule 3 and use its sound discretion in
determining the merits of the prayer for exemption.
Access to justice by the impoverished is held
sacrosanct under Article III, Section 11 of the 1987
Constitution. The Action Program for Judicial
Reforms (APJR) itself, initiated by former Chief
Justice Hilario G. Davide, Jr., placed prime
importance on 'easy access to justice by the poor' as
one of its six major components. Likewise, the
judicial philosophy of Liberty and Prosperity of Chief
Justice Artemio V. Panganiban makes it imperative
that the courts shall not only safeguard but also
enhance the rights of individuals—which are
considered sacred under the 1987 Constitution.
Without doubt, one of the most precious rights which
must be shielded and secured is the unhampered
access to the justice system by the poor, the
underprivileged, and the marginalized.
WHEREFORE, the petition is GRANTED and the
April 14, 2000 Order granting the disqualification of
petitioners, the July 17, 2000 Order denying
petitioners' Motion for Reconsideration, and the
September 11, 2001 Order dismissing the case in
Civil Case No. RTC-99-4403 before the Naga City
RTC, Branch 27 are ANNULLED and SET ASIDE.
Furthermore, the Naga City RTC is ordered to set
the "Ex-Parte Motion to Litigate as Indigent Litigants"
for hearing and apply Rule 3, Section 21 of the 1997
Rules of Civil Procedure to determine whether
petitioners can qualify as indigent litigants.
No costs.
SO ORDERED.
G.R. No. 132765            January 31, 2003
GLICERIO R. BRIOSO, substituted by FELICIDAD
Z. BRIOSO, BENER Z. BRIOSO, JULITO Z.
BRIOSO, GLICERIO Z. BRIOSO, JR., and
ERNESTO Z. BRIOSO, CONCEPCION B.
NOLASCO, MARCOS NOLASCO and SALVADOR
Z. BRIOSO, petitioners,
vs.
SALVADORA RILI-MARIANO and LEONARDO C.
MARIANO, respondents.
CARPIO, J.:
The Case
This petition for review on certiorari 1 seeks to
reverse the Decision2 of the Court of Appeals dated
September 2, 1997 in CA-G.R. CV No. 51347, as
well as the Resolution dated January 21, 1998
denying the motion for reconsideration. The Court of
Appeals in its assailed Decision affirmed the
Decision3 of the Regional Trial Court, Branch 29,
Libmanan, Camarines Sur. The trial court ordered
petitioners to turn over possession of certain
properties to respondents and to pay respondents
damages and attorney's fees.
The Facts
On February 1, 1975, the Spouses Salvadora Rili-
Mariano and Leonardo C. Mariano ("Spouses
Mariano" for brevity), through the Land Bank of the
Philippines ("Land Bank" for brevity), repurchased
the property that they previously sold to Glicerio
Brioso ("Glicerio" for brevity) within the period
specified in the parties' pacto de retro sale. Despite
repeated demands, however, Glicerio refused to
deliver the entire property to the Spouses Mariano.
Thus, on May 27, 1977, the Spouses Mariano filed a
complaint4 for recovery of possession of real
property against Glicerio, Ernesto Brioso ("Ernesto"
for brevity), Concepcion Brioso-Nolasco
("Concepcion" for brevity), Eusebio Nocedal
("Eusebio" for brevity) and Salvador Brioso
("Salvador" for brevity). The Spouses Mariano
sought to repossess Lots 715, 716, 718, 722, 724
and 725 ("Properties" for brevity), which constitute
portions of a riceland containing an area of 19.5229
hectares and situated at Potot, Libmanan,
Camarines Sur.
Defendants, through their counsels, Augusto
Pardalis ("Atty. Pardalis" for brevity) and Salvador,
asserted that the Spouses Mariano had no cause of
action against Glicerio because the latter had
already lost all interest in the land. Defendants
claimed that Glicerio installed his son Ernesto, his
daughter Concepcion and his employee Eusebio as
tenants of the property before the repurchase,
therefore, they were bona fide cultivators-
possessors of the land. Defendants also averred that
the titles to the Properties had already been
transferred to the Land Bank. Defendants added that
the complaint was defective as it failed to implead
Land Bank and Concepcion's husband as
indispensable parties. As part of their counterclaim,
defendants alleged that the Spouses Mariano failed
to comply with their obligation to replace the Land
Bank bonds (which Spouses Mariano used to partly
pay the repurchase price) with cash.
Subsequently, Spouses Mariano amended their
complaint to implead Land Bank and Concepcion
spouse, Marcos Nolasco ("Marcos" for brevity).5
During the pre-trial, upon the Spouses Mariano's
motion, the complaint was dismissed against Land
Bank, Ernesto and Eusebio.6 Thereafter, trial against
the remaining defendants, namely, Glicerio,
Concepcion, Marcos and Salvador, ensued.
On August 30, 1987, Glicerio died. Accordingly,
defendants, through Atty. Pardalis, filed a Notice of
Death of Glicerio Brioso.7 Subsequently, the
Spouses Mariano's counsel filed a Motion for
Substitution of Deceased Defendant8 which Atty.
Pardalis received. Acting on the motion for
substitution, the trial court issued an Order 9 which
reads:
"The motion of Atty. Grageda to substitute
the deceased defendant Glicerio Brioso is
hereby admitted.
SO ORDERED."
Trial on the merits continued. Accordingly,
defendants adduced their evidence. Part of
defendants' evidence consisted of the testimonies of
Salvador, Concepcion and Ernesto.10
On July 14, 1995, the trial court rendered a decision,
the dispositive portion of which reads:
"WHEREFORE, premises considered, after
proper evaluation of the evidence presented
by both parties, this Court finds and holds
that the preponderance of evidence is in
favor of the plaintiffs. Hence, judgment is
rendered in favor of the plaintiffs and against
the defendants Concepcion Brioso-Nolasco
and her husband,11 Salvador Brioso and the
 substitute defendants for deceased
defendant Glicerio Brioso who are ordered
to pay the plaintiffs, jointly and severally, in
the proportion stated earlier:
a) P303,972.46, for actual damages;
b) P147,000.00 for transportation,
hotel and representation expenses;
c) P95,000.00 for income loss from
employment and business activities;
d) P20,000.00 for attorney's fees;
e) P150,000.00 for moral damages;
f) P50,000.00 for exemplary
damages; and
g) to pay the cost.
All these amounts shall earn interest at 6%
per annum until fully paid by the defendants.
The defendants are also directed to
immediately turn over the physical and
material possession of Lots 716, 722 and
725 to the plaintiffs as reflected in Exh. D.
SO ORDERED."12
Dissatisfied with the adverse decision, Marcos and
Glicerio's heirs, namely, Felicidad Z. Brioso
("Felicidad" for brevity), Bener Z. Brioso ("Bener" for
brevity), Julito Z. Brioso ("Julito" for brevity), Glicerio
Z. Brioso, Jr. ("Glicerio, Jr." for brevity), Ernesto,
Concepcion and Salvador filed an appeal with the
Court of Appeals.
In the Court of Appeals, petitioners presented,
among others, the issue of whether there was a valid
substitution of the deceased party, the main issue
presented in the instant petition. Petitioners
maintained that the substitution of Glicerio was
invalid as the trial court failed to comply with the
Rules of Court on the substitution of a deceased
party. Considering that the substitution was null and
void, petitioners alleged that the trial court did not
acquire jurisdiction over their persons. Hence, the
entire proceedings in the trial court and the judgment
rendered by the trial court were void.
The Ruling of the Court of Appeals
The Court of Appeals sustained the decision of the
trial court. In ruling that there was a valid substitution
of the deceased party, the Court of Appeals quoted
Section 17, Rule 3 of the old Rules of Court. The
Court of Appeals held that the trial court acquired
jurisdiction over the persons of the petitioners. Thus,
the decision of the trial court is valid and binding
upon all of the petitioners. The Court of Appeals
anchored its ruling on the following factual findings:
"In this case, the records show that on
September 23, 1987, Atty. Augusto
Pardales(sic), counsel for defendants, filed a
notice of death informing the court that
defendant Glicerio R. Brioso died on August
30, 1987 (p. 316, Records). Counsel for the
plaintiffs accordingly filed a Motion for
Substitution of Deceased Defendant on
October 5, 1987 (p. 318, Records). The trial
court on October 8, 1987 issued an Order
which reads:
xxx           xxx           xxx
Subsequently, the heirs of Glicerio Brioso, namely:
Mrs. Felicidad Z. Brioso, Benet(sic) Z. Brioso, Julito
Z. Brioso, Glicerio Z. Brioso, Jr., Ernesto Z. Brioso,
Concepcion Brioso-Nolasco, and Salvador Z. Brioso,
were made substitute defendants in the case. Their
counsels were definitely aware of such substitution.
In fact, one of them, Atty. Salvador Z. Brioso, was
one of the counsels of the defendants. It was the
duty of said counsels to inform the heirs of the
substitution after the court had issued the order
granting the motion of the plaintiffs.
Moreover, Ernesto Brioso cannot deny the fact that
he knew of the pendency of the action and the
substitution of the heirs because he participated as a
witness for the defendants even after the case
against him was earlier dismissed. Undoubtedly, the
court had acquired jurisdiction over the persons of
the heirs and the judgment is thereby binding upon
all of them."13
Petitioners filed a Motion for Reconsideration of the
above decision. Finding no new issues or arguments
raised in the motion, the Court of Appeals denied the
same.14
Hence, this petition.
The Issues
Petitioners posed these "two-fold issues" 15 for
resolution:
1. Whether there was a valid substitution of
deceased Glicerio; and
2. Whether the trial court acquired
jurisdiction over the persons of the
petitioners.
The Court's Ruling
The petition is partly meritorious.
Petitioners assert that the trial court failed to comply
with the clear language of Section 17, Rule 3 of the
old Rules of Court which provides as follows:
"Death of a party. After a party dies and the
claim is not thereby extinguished, the court
shall order, upon proper notice, the legal
representative of the deceased, within a
 period of thirty (30) days, or within such time
as may be granted. If the legal
representative fails to appear within said
time, the court may order the opposing party
to procure the appointment of a legal
representative of the deceased within a time
to be specified by the court, and the
representative shall immediately appear for
and on behalf of the interest of the
deceased. The court charges involved in
procuring such appointment, if defrayed by
the opposing party, may be recovered as
costs. The heirs of the deceased may be
allowed to be substituted for the deceased,
without requiring the appointment of an
executor or administrator and the court may
appoint guardian ad litem for the minor
heirs."16
Petitioners allege that, as there was no appointed
administrator for the estate of the deceased
defendant, the trial court should have ordered the
heirs to appear personally before it and manifest
whether they were willing to substitute Glicerio.
Petitioners further aver that if none of the heirs
appeared or manifested to act as substitutes, the
trial court should have ordered the adverse party to
procure the appointment of a legal representative of
the deceased who should appear for and on behalf
of the deceased's interest.
Petitioners also harp on their failure to receive a
copy of the Spouses Mariano's motion for
substitution of Glicerio as well as the Order of the
trial court admitting the motion. Petitioners argue
that, even if they received a copy of the Order, the
same did not grant the Spouses Mariano's motion
for substitution. Since they were not aware of the
purported substitution because of the lack of service
on them of the motion and the Order, petitioners
insist that the entire proceedings in the trial court
were void for lack of jurisdiction over their persons.
It must be pointed out that, contrary to the Spouses
Mariano's view, their complaint for recovery of
possession of real property is an action which
survives the death of a party. 17 Such being the case,
the rule on substitution of a deceased party is clearly
applicable.
Under the express terms of Section 17 of the old
Rules, in case of the death of a party and due notice
is given to the trial court, it is the duty of the court to
order the deceased's legal representative or heir to
appear for the deceased.18 Otherwise, "the trial held
by the court without appearance of the deceased's
legal representative or substitution of heirs and the
judgment rendered after trial, are null and void."19
Non-compliance with the rule on substitution of a
deceased party renders the proceedings and
judgment of the trial court infirm because the court
acquired no jurisdiction over the persons of the legal
representatives or of the heirs on whom the trial and
the judgment would be binding. In other words, a
party's right to due process is at stake, as we
enunciated in Vda. de Salazar v. Court of Appeals,20
thus —
"We should not lose sight of the principle underlying
the general rule that formal substitution of heirs must
be effectuated for them to be bound by a
subsequent judgment. Such had been the general
rule established not because the rule on substitution
of heirs and that on appointment of a legal
representative are jurisdictional requirements per se
but because non-compliance therewith results in the
undeniable violation of the right to due process of
those who, though not duly notified of the
proceedings, are substantially affected by the
decision rendered therein." (Emphasis supplied.)
In the instant case, it is true that the trial court, after
receiving a notice of Glicerio's death, failed to order
the appearance of his legal representative or heirs.
Instead, the trial court issued an Order merely
admitting respondents' motion for substitution. There
was no court order for Glicerio's legal representative
to appear, nor did any such legal representative ever
appear in court to be substituted for Glicerio. Neither
did the respondents ever procure the appointment of
such legal representative, nor did Glicerio's heirs
ever ask to be substituted for Glicerio. Clearly, the
trial court failed to observe the proper procedure in
substituting Glicerio. As a result, contrary to the
Court of Appeals' decision, no valid substitution
transpired in the present case.21
Thus, we rule that the proceedings and judgment of
the trial court are void as to Felicidad, Glicerio, Jr.,
Bener and Julito. There is no iota of proof that they
were apprised of the litigation against Glicerio. There
is no indication that they authorized Atty. Pardalis to
represent them or any showing that they appeared in
the proceedings. Given these facts, the trial court
clearly did not acquire jurisdiction over their persons.
Such being the case, these heirs cannot be bound
by the judgment of the trial court, as we have
pronounced in Ferreria, et al. v. Vda. de Gonzales,
et al.,22 thus —
"Inasmuch as Manolita Gonzales was never validly
served a copy of the order granting the substitution
and that furthermore, a valid substitution was never
effected, consequently, the court never acquired
jurisdiction over Manolita Gonzales for the purpose
of making her a party to the case and making the
decision binding upon her, either personally or as
legal representative of the estate of her mother
Manuela."
However, despite the trial court's failure to adhere to
the rule on substitution of a deceased party, its
judgment remains valid and binding on the following
heirs, namely, Salvador, Concepcion and Ernesto.
Formal substitution of heirs is not necessary when
the heirs themselves voluntarily appeared, shared in
the case and presented evidence in defense of
deceased defendant.23 This is precisely because,
despite the court's non-compliance with the rule on
substitution, the heirs' right to due process was
obviously not impaired.24 In other words, the purpose
of the rule on substitution of a deceased party was
already achieved. The following facts indicate plainly
that there was active participation of these heirs in
the defense of Glicerio after his death.
First, Salvador and Concepcion were among the
original defendants in the case. Needless to state,
the trial court, even before Glicerio's death, already
acquired jurisdiction over the persons of these heirs.
Hence, the rule on substitution of a deceased party
is no longer required as to Salvador and Concepcion
because they were already impleaded as
defendants. In fact, Salvador, a lawyer son of
Glicerio, was also one of the counsels for
defendants.
Second, the lengthy testimonies of Salvador,
Concepcion and Ernesto show that they defended
their deceased father. Both Concepcion and
Salvador testified in defense not only of themselves
but also of their deceased father. As to Ernesto,
while he was dropped as a defendant, he testified
and admitted that he was one of the substitutes of
Glicerio, thus —
"INTERPRETER: Please state your name
and other personal circumstances.
WITNESS: ERNESTO BRIOSO, 45 years
old, widower, farmer and residing at Puro-
Batia, Libmanan, Camarines Sur.
INTERPRETER: Your witness is now ready.
ATTY. PARDALIS: With the permission of
the Honorable Court.
COURT: Proceed.
Q:         Are you one of the defendants in
this case who was substituted for the late
Glicerio R. Brioso?
A:         Yes sir.
xxx           xxx           xxx" 25
This shows that Ernesto understood that he was a
substitute defendant in the case.
Third, Atty. Pardalis continued to represent Glicerio
even after the latter's demise. Acting on Glicerio's
behalf, Atty. Pardalis presented the testimonies of
Salvador, Concepcion and Ernesto, to prove, among
others, that Glicerio no longer had any interest in the
Properties. These pieces of evidence clearly negate
petitioners' contention that Atty. Pardalis ceased to
be Glicerio's counsel upon the latter's death.
Assuming that Atty. Pardalis no longer represented
Glicerio after his death, he remained as counsel for
Salvador, Concepcion and Marcos. He should have
questioned immediately the validity of the
proceedings absent any formal substitution of
Glicerio. Yet, despite the court's alleged lack of
jurisdiction over the persons of his clients, Atty.
Pardalis never bothered to challenge the same, not
until after the trial court rendered its adverse
decision.
Lastly, Atty. Pardalis received a copy of
respondents' motion for substitution and the trial
court's Order admitting the motion. Upon receipt of
the motion and the Order, Atty. Pardalis should have
immediately opposed the same for failure to comply
with the rule on substitution. However, Atty. Pardalis
did not question the motion and the Order, not until
after the trial court rendered its decision. His long
silence, which certainly binds his clients, can be
construed as defendants' submission to the court's
jurisdiction. The acquiescence of defendants and
their counsel on the trial court's jurisdiction
effectively precluded them from questioning the
proceedings in the trial court.
In Ferreria et al. v. Vda. de Gonzales, et al.,26
Manolita Gonzales (one of the heirs of deceased
defendant) was not served notice and, more
importantly, never appeared in court, unlike
Salvador, Concepcion and Ernesto who appeared
and even testified regarding their father's interest in
the Properties. In sum, with the active participation
of Salvador, Concepcion and Ernesto, the trial court
acquired jurisdiction over their persons. Accordingly,
the proceedings and the decision of the trial court
are valid with respect to these heirs.
As regards Marcos Nolasco, he was impleaded as a
defendant primarily because he and Concepcion
were among the actual possessors of the Properties.
It was even defendants' contention that the
complaint was defective for failure to implead
Marcos as he was an indispensable party.27
Accordingly, the Spouses Mariano impleaded
Marcos as a defendant, without whom no final
determination can be had of the action. 28 With
Marcos' inclusion as a party, it is beyond dispute that
the trial court acquired jurisdiction over his person.
Therefore, the proceedings and judgment of the trial
court are valid and binding upon Marcos.
WHEREFORE, the instant petition is partly
GRANTED. The Decision of the Court of Appeals
dated September 2, 1997 is MODIFIED. As to Bener
Brioso, Julito Brioso and Glicerio Brioso, Jr., the
Decision of the Regional Trial Court, Branch 29,
Libmanan, Camarines Sur, is void for lack of
jurisdiction. As to Felicidad Brioso, Concepcion B.
Nolasco, Marcos Nolasco, Salvador Brioso and
Ernesto Brioso, the Decision of the Regional Trial
Court, Branch 29, Libmanan, Camarines Sur, is
valid.
SO ORDERED.
G.R. No. 173292               September 1, 2010
MEMORACION Z. CRUZ, represented by
EDGARDO Z. CRUZ, Petitioner,
vs.
OSWALDO Z. CRUZ, Respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the Court of Appeals’
(CA) Decision2 dated 20 December 2005 and
Resolution dated 21 June 2006 in CA-G.R. CV No.
80355. The CA affirmed with modification the Order 3
dated 2 June 1997 of the Regional Trial Court of the
National Capital Judicial Region, Branch 30, Manila
(RTC).
The Antecedent Facts
The undisputed facts, as summarized by the Court
of Appeals, are as follows:
On October 18, 1993, Memoracion Z. Cruz filed with
the Regional Trial Court in Manila a Complaint
against her son, defendant-appellee Oswaldo Z.
Cruz, for "Annulment of Sale, Reconveyance and
Damages."
Memoracion claimed that during her union with her
common-law husband (deceased) Architect Guido
M. Cruz, she acquired a parcel of land located at
Tabora corner Limay Streets, Bo. Obrero, Tondo
Manila; that the said lot was registered in her name
under TCT No. 63467 at the Register of Deeds of
Manila; that sometime in July 1992, she discovered
that the title to the said property was transferred by
appellee and the latter’s wife in their names in
August 1991 under TCT No. 0-199377 by virtue of a
Deed of Sale dated February 12, 1973; that the said
deed was executed through fraud, forgery,
misrepresentation and simulation, hence, null and
void; that she, with the help of her husband’s
relatives, asked appellee to settle the problem; that
despite repeated pleas and demands, appellee
refused to reconvey to her the said property; that
she filed a complaint against appellee before the
office of the Barangay having jurisdiction over the
subject property; and that since the matter was
unsettled, the barangay x x x issued x x x a
certification to file [an] action in court, now the
subject of controversy.
After Memoracion x x x finished presenting her
evidence in chief, she died on October 30, 1996.
Through a Manifestation, Memoracion’s counsel,
Atty. Roberto T. Neri, notified the trial court on
January 13, 1997 of the fact of such death,
evidenced by a certificate thereof.
For his part, appellee filed a Motion to Dismiss on
the grounds that (1) the plaintiff’s reconveyance
action is a personal action which does not survive a
party’s death, pursuant to Section 21, Rule 3 of the
Revised Rules of Court, and (2) to allow the case to
continue would result in legal absurdity whereby one
heir is representing the defendant [and is a] co-
plaintiff in this case.
On June 2, 1997, the trial court issued the appealed
Order in a disposition that reads:
"Wherefore, in view of the foregoing, this case is
ordered dismissed without prejudice to the
prosecution thereof in the proper estate
proceedings."
On October 17, 1997, Memoracion’s son-heir,
Edgardo Z. Cruz, manifested to the trial court that he
is retaining the services of Atty. Neri for the plaintiff.
Simultaneously, Atty. Neri filed a Motion for
Reconsideration of the June 2, 1997 Order.
However, the said motion was subsequently denied
by Acting Presiding Judge Cielito N. Mindaro-Grulla
[on October 31, 2000].
Thereafter, Edgardo Cruz, as an heir of Memoracion
Cruz, filed a notice of appeal in behalf of the
deceased plaintiff, signed by Atty. Neri, but the
appeal was dismissed by Judge Mindaro-Grulla,
[stating that] the proper remedy being certiorari
under Rule 65 of the Rules of Court. On appellant’s
motion for reconsideration, Judge Lucia Pena
Purugganan granted the same, stating that the
remedy under the circumstances is ordinary appeal.4
The Court of Appeals’ Ruling
Petitioner Memoracion Z. Cruz, represented by
Edgardo Z. Cruz, filed with the Court of Appeals a
Petition for Review under Rule 45 of the 1997
Revised Rules of Civil Procedure. On 20 December
2005, the CA rendered judgment affirming with
modification the RTC decision. We quote the
dispositive portion of the CA’s decision below.
WHEREFORE, the appealed Order is AFFIRMED,
with MODIFICATION. The trial court’s directive as to
the prosecution of the action in the proper estate
proceedings is DELETED.
SO ORDERED.5
Petitioner’s Motion for Reconsideration was denied
by the CA in its Resolution of 21 June 2006.6
Hence, this appeal.
The Issues
The issues for resolution in this case are:
1. Whether the Court of Appeals erred in
ruling that Memoracion Z. Cruz’s Petition for
Annulment of Deed of Sale, Reconveyance
and Damages is a purely personal action
which did not survive her death; and
2. Whether the Court of Appeals erred in
affirming with modification the RTC Order
dismissing the Petition for Annulment of
Deed of Sale, Reconveyance and Damages.
The Court’s Ruling
We find the appeal meritorious.
The Petition for Annulment of Sale, Reconveyance
and Damages survived the death of petitioner
The criterion for determining whether an action
survives the death of a petitioner was elucidated in
Bonilla v. Barcena,7 to wit:
The question as to whether an action survives or not
depends on the nature of the action and the damage
sued for. In the causes of action which survive, the
wrong complained [of] affects primarily and
principally property and property rights, the injuries
to the person being merely incidental, while in the
causes of action which do not survive, the injury
complained of is to the person, the property and
rights of property affected being incidental.8
If the case affects primarily and principally property
and property rights, then it survives the death of the
plaintiff or petitioner. In Sumaljag v. Literato,9 we
held that a Petition for Declaration of Nullity of Deed
of Sale of Real Property is one relating to property
and property rights, and therefore, survives the
death of the petitioner. Accordingly, the instant case
for annulment of sale of real property merits survival
despite the death of petitioner Memoracion Z. Cruz.
The CA erred in affirming RTC’s dismissal of the
Petition for Annulment of Deed of Sale,
Reconveyance and Damages
When a party dies during the pendency of a case,
Section 16, Rule 3 of the 1997 Revised Rules of
Civil Procedure necessarily applies, viz:
Sec. 16. Death of party; duty of counsel. - Whenever
a party to a pending action dies, and the claim is not
thereby extinguished, it shall be the duty of his
counsel to inform the court within thirty (30) days
after such death of the fact thereof, and to give the
name and address of his legal representative or
representatives. Failure of counsel to comply with
this duty shall be a ground for disciplinary action.
The heirs of the deceased may be allowed to be
substituted for the deceased, without requiring the
appointment of an executor or administrator and the
court may appoint a guardian ad litem for the minor
heirs.
The court shall forthwith order said legal
representative or representatives to appear and be
substituted within a period of thirty (30) days from
notice.
If no legal representative is named by the counsel
for the deceased party, or if the one so named shall
fail to appear within the specified period, the court
may order the opposing party, within a specified
time, to procure the appointment of an executor or
administrator for the estate of the deceased and the
latter shall immediately appear for and on behalf of
the deceased. The court charges in procuring such
appointment, if defrayed by the opposing party, may
be recovered as costs.
The foregoing section is a revision of Section 17,
Rule 3 of the old Rules of Court:
SEC. 17. Death of party. - After a party dies and the
claim is not thereby extinguished, the court shall
order, upon proper notice, the legal representative of
the deceased to appear and to be substituted for the
deceased, within a period of thirty (30) days, or
within such time as may be granted. If the legal
representative fails to appear within said time, the
court may order the opposing party to procure the
appointment of a legal representative of the
deceased within a time to be specified by the court,
and the representative shall immediately appear for
and on behalf of the interest of the deceased. The
court charges involved in procuring such
appointment, if defrayed by the opposing party, may
be recovered as costs. The heirs of the deceased
may be allowed to be substituted for the deceased,
without requiring the appointment of an executor or
administrator and the court may appoint guardian ad
litem for the minor heirs.
If the action survives despite death of a party, it is
the duty of the deceased’s counsel to inform the
court of such death, and to give the names and
addresses of the deceased’s legal representatives.
The deceased may be substituted by his heirs in the
pending action. As explained in Bonilla:
x x x Article 777 of the Civil Code provides "that the
rights to the succession are transmitted from the
moment of the death of the decedent." From the
moment of the death of the decedent, the heirs
become the absolute owners of his property, subject
to the rights and obligations of the decedent, and
they cannot be deprived of their rights thereto except
by the methods provided for by law. The moment of
death is the determining factor when the heirs
acquire a definite right to the inheritance whether
such right be pure or contingent. The right of the
heirs to the property of the deceased vests in them
even before judicial declaration of their being heirs in
the testate or intestate proceedings. When [plaintiff],
therefore, died[,] her claim or right to the parcels of
land x x x was not extinguished by her death but was
transmitted to her heirs upon her death. Her heirs
have thus acquired interest in the properties in
litigation and became parties in interest in the case.
There is, therefore, no reason for the respondent
Court not to allow their substitution as parties in
interest for the deceased plaintiff.10
If no legal representative is named by the counsel of
the deceased, or the legal representative fails to
appear within a specified period, it is the duty of the
court where the case is pending to order the
opposing party to procure the appointment of an
executor or administrator for the estate of the
deceased. The reason for this rule is to protect all
concerned who may be affected by the intervening
death, particularly the deceased and his
estate.111avvphi1
In the instant case, petitioner (plaintiff) Memoracion
Z. Cruz died on 30 October 1996. Her counsel, Atty.
Roberto T. Neri, notified the trial court of such death
on 13 January 1997, through a Manifestation stating
thus:
to the Regional Trial Court of the National Capital
Judicial Region, Branch 30, Manila, for further
proceedings.
SO ORDERED.

COMES NOW the undersigned counsel and to this

Honorable Court respectfully gives notice that the
plaintiff, Memoracion Z. Cruz, died on October 30,
1996, in Manila as shown by a Certificate of Death, a
certified true copy of which is hereto attached as
Annex "A" hereof.

The legal representative of the deceased plaintiff is

her son EDGARDO CRUZ whose address is at No.
3231-E Tabora St., Bo. Obrero, Tondo, Manila.

x x x x12

On 24 January 1997, respondent (defendant)

Oswaldo Z. Cruz moved to dismiss the case alleging
that it did not survive Memoracion’s death. The RTC
granted the motion to dismiss in the assailed Order
dated 2 June 1997.

We rule that it was error for the RTC to dismiss the

case. As mentioned earlier, the petition for
annulment of deed of sale involves property and
property rights, and hence, survives the death of
petitioner Memoracion. The RTC was informed,
albeit belatedly,13 of the death of Memoracion, and
was supplied with the name and address of her legal
representative, Edgardo Cruz. What the RTC could
have done was to require Edgardo Cruz to appear in
court and substitute Memoracion as party to the
pending case, pursuant to Section 16, Rule 3 of the
1997 Revised Rules of Civil Procedure, and
established jurisprudence.

We note that on 17 October 1997, Edgardo Cruz

filed with the RTC a Manifestation, stating that he is
retaining the services of Atty. Roberto T. Neri. We
quote:14

UNDERSIGNED HEIR of the late Memoracion Z.

Cruz respectfully manifests that he is retaining the
services of ATTY. ROBERTO T. NERI as counsel
for the plaintiff.

(Sgd.) EDGARDO Z. CRUZ

Plaintiff

Consistent with our ruling in Heirs of Haberer v.

Court of Appeals,15 we consider such Manifestation,
signed by Memoracion’s heir, Edgardo Cruz, and
retaining Atty. Neri’s services as counsel, a formal
substitution of deceased Memoracion by her heir,
Edgardo Cruz. It also needs mention that Oswaldo
Cruz, although also an heir of Memoracion, should
be excluded as a legal representative in the case for
being an adverse party therein.16

WHEREFORE, we GRANT the petition. We

REVERSE the Court of Appeals’ Decision dated 20
December 2005 and Resolution dated 21 June 2006
in CA-G.R. CV No. 80355. We REMAND this case