G.R. No.
226645 of one (1) month and one (1) day to four (4) months of arresto mayor in its minimum
ISABEL G. RAMONES, Petitioner
vs.
SPOUSES TEODORICO GUIMOC, JR. and ELENITA GUIMOC, Respondents
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Amended Decision2 dated
March 21, 2016 and the Resolution3 dated August 23, 2016 of the Court of Appeals
(CA) in CA-G.R. SP No. 131201, deleting the portion of the Judgment4 dated April 16,
2012 of the Regional Trial Court of Bataan, Branch 4 (RTC) in Criminal Case No. ML-
4095 which ordered Spouses Teodorico Guimoc, Jr. (Teodorico) and Elenita Guimoc
(Elenita; collectively, respondents) to pay petitioner Isabel G. Ramones (petitioner)
the amounts of ₱60,000.00 and ₱507,000.00, respectively, representing their civil
liabilities.
The Facts
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
1
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:
2
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.
3
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.
xxxx
x 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.
xxxx
Since 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.

4
G.R. No. 152272               March 5, 2012
JUANA COMPLEX I HOMEOWNERS ASSOCIATION, INC., ANDRES C.
BAUTISTA, BRIGIDO DIMACULANGAN, DOLORES P. PRADO, IMELDA DE LA
CRUZ, EDITHA C. DY, FLORENCIA M. MERCADO, LEOVINO C. DATARIO, AIDA
A. ABAYON, NAPOLEON M. DIMAANO, ROSITA G. ESTIGOY and NELSON A.
LOYOLA, Petitioners,
vs.
FIL-ESTATE LAND, INC., FIL ESTATE ECOCENTRUM CORPORATION, LA PAZ
HOUSING AND DEVELOPMENT CORPORATION, WARBIRD SECURITY
AGENCY, ENRIQUE RIVILLA, MICHAEL E. JETHMAL and MICHAEL
ALUNAN, Respondents.
x-----------------------x
G. R. No. 152397
FIL-ESTATE LAND, INC., FIL ESTATE ECOCENTRUM CORPORATION, LA PAZ
HOUSING AND DEVELOPMENT CORPORATION, WARBIRD SECURITY
AGENCY, ENRIQUE RIVILLA, MICHAEL E. JETHMAL and MICHAEL
ALUNAN, Petitioners,
vs.
JUANA COMPLEX I HOMEOWNERS ASSOCIATION, INC., ANDRES C.
BAUTISTA, BRIGIDO DIMACULANGAN, DOLORES P. PRADO, IMELDA DE LA
CRUZ, EDITHA C. DY, FLORENCIA M. MERCADO, LEOVINO C. DATARIO, AIDA
A. ABAYON, NAPOLEON M. DIMAANO, ROSITA G. ESTIGOY and NELSON A.
LOYOLA, Respondents.
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.).
5
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.
6
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
7
(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 probably work injustice to the applicant; or
(c) That a party, court, or agency or a person is doing, threatening, or attempting to
do, or is procuring or suffering to be done, some act or acts probably in violation of
the rights of the applicant respecting the subject of the action or proceeding, and
tending to 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 which must be shown to
be clear and positive.27 This means that the persons applying for the writ must show
that they have an ostensible right to the final relief prayed for in their complaint.28

In the case at bench, JCHA, et al. failed to establish a prima facie proof of violation of
their right to justify the issuance of a WPI. Their right to the use of La Paz Road is
disputable since they have no clear legal right therein. As correctly ruled by the CA:

Here, contrary to the ruling of respondent Judge, private respondents failed to prove
as yet that they have a clear and unmistakable right over the La Paz Road – which
was sought to be protected by the injunctive writ. They merely anchor their purported
right over the La Paz Road on the bare allegation that they have been using the same
as public road right-of-way for more than ten years. A mere allegation does not meet
the standard of proof that would warrant the issuance of the injunctive writ. Failure to
establish the existence of a clear right which should be judicially protected through
the writ of injunction is a sufficient ground for denying the injunction.

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 Moreover, the quantum of evidence required
for one is different from that for the other.32

WHEREFORE, the petitions are DENIED. Accordingly, the July 31, 2001 Decision
and February 21, 2002 Resolution of the Court of Appeals in CA-G.R. SP No. 60543
are AFFIRMED.

SO ORDERED.

8
G.R. No. L-63559 May 30, 1986
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 and corrective damages as the
9
court may determine, 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
10
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.
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 certiorari and
dismissed the amended complaint.

In Tacas vs. Cariaso (72 SCRA 527), this Court granted the petition for certiorari after
the motion to quash based on double jeopardy was denied by respondent judge and
ordered him to desist from further action in the criminal case except to dismiss the
same.

In People vs. Ramos (83 SCRA 11), the order denying the motion to quash based on
prescription was set aside on certiorari and the criminal case was dismissed by this
Court.

Respondent Court correctly stated the general rule and its exceptions. However, it
ruled that none of the exceptions is present in the case at bar and that the case
appears complex and complicated, necessitating a full-blown trial to get to the bottom
of the controversy.

Petitioner's motion to dismiss is based on the ground that the complaint states no
cause of action against it by pointing out the non-libelous nature of the article sued
upon. There is no need of a trial in view of the conclusion of this Court that the article
in question is not libelous. The specific allegation in the complaint, to the effect that
the article attributed to the sugarcane planters the deaths and brutalization of
sugarcane workers, is not borne out by a perusal of the actual text.

The complaint contains a recital of the favorable working conditions of the agricultural
workers in the sugar industry and the various foundations and programs supported by
planters' associations for the benefit of their workers. Undoubtedly, the statements in
the article in question are sweeping and 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.

11
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.
CONCURRING OPINION
"Until one has loved an animal,
a part of one 's soul remains unawakened."
Anatole France
LEONEN, J.:
I concur in the result, with the following additional reasons.
12
I
In G.R. No. 180771, petitioners Resident Marine Mammals allegedly bring their case
in their personal capacity, alleging that they stand to benefit or be injured from the
judgment on the issues. The human petitioners implead themselves in a
representative capacity "as legal guardians of the lesser life-forms and as responsible
stewards of God's Creations."1 They use Oposa v. Factoran, Jr.2 as basis for their
claim, asserting their right to enforce international and domestic environmental laws
enacted for their benefit under the concept of stipulation pour autrui.3 As the
representatives of Resident Marine Mammals, the human petitioners assert that they
have the obligation to build awareness among the affected residents of Tañon Strait
as well as to protect the environment, especially in light of the government's failure,
as primary steward, to do its duty under the doctrine of public trust.4
Resident Marine Mammals and the human petitioners also assert that through this
case, this court will have the opportunity to lower the threshold for locus standi as an
exercise of "epistolary jurisdiction."5
The zeal of the human petitioners to pursue their desire to protect the environment
and to continue to define environmental rights in the context of actual cases is
commendable. However, the space for legal creativity usually required for advocacy
of issues of the public interest is not so unlimited that it should be allowed to
undermine the other values protected by current substantive and procedural laws.
Even rules of procedure as currently formulated set the balance between competing
interests. We cannot abandon these rules when the necessity is not clearly and
convincingly presented.
The human petitioners, in G.R. No. 180771, want us to create substantive and
procedural rights for animals through their allegation that they can speak for them.
Obviously, we are asked to accept the premises that (a) they were chosen by the
Resident Marine Mammals of Tañon Strait; (b) they were chosen by a representative
group of all the species of the Resident Marine Mammals; (c) they were able to
communicate with them; and (d) they received clear consent from their animal
principals that they would wish to use human legal institutions to pursue their
interests. Alternatively, they ask us to acknowledge through judicial notice that the
interests that they, the human petitioners, assert are identical to what the Resident
Marine Mammals would assert had they been humans and the legal strategies that
they invoked are the strategies that they agree with.
In the alternative, they want us to accept through judicial notice that there is a
relationship of guardianship between them and all the resident mammals in the
affected ecology.
Fundamental judicial doctrines that may significantly change substantive and
procedural law cannot be founded on feigned representation.
Instead, I agree that the human petitioners should only speak for themselves and
already have legal standing to sue with respect to the issue raised in their pleading.
The rules on standing have already been liberalized to take into consideration the
difficulties in the assertion of environmental rights. When standing becomes too
liberal, this can be the occasion for abuse.
II
Rule 3, Section 1 of the 1997 Rules of Civil Procedure, in part, provides:
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 Rules provide that parties may only be natural or juridical persons or entities that
may be authorized by statute to be parties in a civil action.
Basic is the concept of natural and juridical persons in our Civil Code:
ARTICLE 37. Juridical capacity, which is the fitness to be the subject of legal
relations, is inherent in every natural person and is lost only through death. Capacity
to act, which is the power to do acts with legal effect, is acquired and may be lost.
Article 40 further defines natural persons in the following manner:
ARTICLE 40. Birth determines personality; but the conceived child shall be
considered born for all purposes that are favorable to it, provided it be born later with
the conditions specified 'in the following article.
Article 44, on the other hand, enumerates the concept of a juridical person:
ARTICLE 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose, created
by law; their personality begins as soon as they have been constituted according to
law;
(3) Corporations, partnerships and associations for private interest or purpose to
which the law grants a juridical personality, separate and distinct from that of each
shareholder, partner or member.
Petitioners in G.R. No. 180771 implicitly suggest that we amend, rather than simply
construe, the provisions of the Rules of Court as well as substantive law to
accommodate Resident Marine Mammals or animals. This we cannot do.
Rule 3, Section 2 of the 1997 Rules of Civil Procedure further defines real party in
interest:
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. (2a)6
A litigant who stands to benefit or sustain an injury from the judgment of a case is a
real party in interest.7 When a case is brought to the courts, the real party in interest
13
must show that another party's act or omission has caused a direct injury, making his
or her interest both material and based on an enforceable legal right.8
Representatives as parties, on the other hand, are parties acting in representation of
the real party in interest, as defined in Rule 3, Section 3 of the 1997 Rules of Civil
Procedure:
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 rust, 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.(3a)9
The rule is two-pronged. First, it defines .a representative as a party who is not bound
to directly or actually benefit or suffer from the judgment, but instead brings a case in
favor of an identified real party in interest.10 The representative is an outsider to the
cause of action. Second, the rule provides a list of who may be considered as
"representatives." It is not an exhaustive list, but the rule limits the coverage only to
those authorized by law or the Rules of Court.11
These requirements should apply even in cases involving the environment, which
means that for the Petition of the human petitioners to prosper, they must show that
(a) the Resident Marine Mammals are real parties in interest; and (b) that the human
petitioners are authorized by law or the Rules to act in a representative capacity.
The Resident Marine Mammals are comprised of "toothed whales, dolphins,
porpoises, and other cetacean species inhabiting Tañon Strait."12 While relatively new
in Philippine jurisdiction, the issue of whether animals have legal standing before
courts has been the subject of academic discourse in light of the emergence of
animal and environmental rights.
In the United States, anim4l rights advocates have managed to establish a system
which Hogan explains as the "guardianship model for nonhuman animals":13
Despite Animal Lovers, there exists a well-established system by which nonhuman
animals may obtain judicial review to enforce their statutory rights and protections:
guardianships. With court approval, animal advocacy organizations may bring suit on
behalf of nonhuman animals in the same way court-appointed guardians bring suit on
behalf of mentally-challenged humans who possess an enforceable right but lack the
ability to enforce it themselves.
In the controversial but pivotal Should Trees Have Standing?-Toward Legal Rights for
Natural Objects, Christopher D. Stone asserts that the environment should possess
the right to seek judicial redress even though it is incapable of representing itself.
While asserting the rights of
speechless entities such as the environment or nonhuman animals certainly poses
legitimate challenges - such as identifying the proper spokesman -the American legal
system is already well-equipped with a reliable mechanism by which nonhumans may
obtain standing via a judicially established guardianship. Stone notes that other
speechless - and nonhuman - entities such as corporations, states, estates, and
municipalities have standing to bring suit on their own behalf. There is little reason to
fear abuses under this regime as procedures for removal and substitution, avoiding
conflicts of interest, and termination of a guardianship are well established.
In fact, the opinion in Animal Lovers suggests that such an arrangement is indeed
possible. The court indicated that AL VA might have obtained standing in its own right
if it had an established history of dedication to the cause of the humane treatment of
animals. It noted that the Fund for Animals had standing and indicated that another
more well-known advocacy organization might have had standing as well. The court
further concluded that an organization's standing is more than a derivative of its
history, but history is a relevant consideration where organizations are not well-
established prior to commencing legal action. ALVA was not the proper plaintiff
because it could not identify previous activities demonstrating its recognized activism
for and commitment to the dispute independent of its desire to pursue legal action.
The court's analysis suggests that a qualified organization with a demonstrated
commitment to a cause could indeed bring suit on behalf of the speechless in the
form of a court-sanctioned guardianship.
This Comment advocates a shift in contemporary standing doctrine to empower non-
profit organizations with an established history of dedication to the cause and relevant
expertise to serve as official guardians ad !item on behalf of nonhuman animals
interests. The American legal system has numerous mechanisms for representing the
rights and interests of nonhumans; any challenges inherent in extending these pre-
existing mechanisms to nonhuman animals are minimal compared to an interest in
the proper administration of justice. To adequately protect the statutory rights of
nonhuman animals, the legal system must recognize those statutory rights
independent of humans and provide a viable means of enforcement. Moreover, the
idea of a guardianship for speechless plaintiffs is not new and has been urged on
behalf of the natural environment. 'Such a model is even more compelling as applied
to nonhuman animals, because they are sentient beings with the ability to feel pain
and exercise rational thought. Thus, animals are qualitatively different from other
legally protected nonhumans and therefore have interests deserving direct legal
protection.
Furthermore, the difficulty of enforcing the statutory rights of nonhuman animals
threatens the integrity of the federal statutes designed to protect them, essentially
rendering them meaningless. Sensing that laws protecting nonhuman animals would
be difficult to enforce, Congress provided for citizen suit provisions: the most well-
known example is found in the Endangered Species Act (ESA). Such provisions are
evidence of legislative intent to encourage civic participation on behalf of nonhuman
animals. Our law of standing should reflect this intent and its implication that humans
are suitable representatives of the natural environment, which includes nonhuman
animals.14 (Emphasis supplied, citation omitted)
14
When a court allows guardianship as a basis of representation, animals are
considered as similarly situated as individuals who have enforceable rights but, for a
legitimate reason (e.g., cognitive disability), are unable to bring suit for themselves.
They are also similar to entities that by their very nature are incapable of speaking for
themselves (e.g., corporations, states, and others).
In our jurisdiction, persons and entities are recognized both in law and the Rules of
Court as having standing to sue and, therefore, may be properly represented as real
parties in interest. The same cannot be said about animals.
Animals play an important role in households, communities, and the environment.
While we, as humans, may feel the need to nurture and protect them, we cannot go
as far as saying we represent their best interests and can, therefore, speak for them
before the courts. As humans, we cannot be so arrogant as to argue that we know the
suffering of animals and that we know what remedy they need in the face of an injury.
Even in Hogan's discussion, she points out that in a case before the United States
District Court for the Central District of California, Animal Lovers Volunteer Ass'n v.
Weinberger,15 the court held that an emotional response to what humans perceive to
be an injury inflicted on an animal is not within the "zone-of-interest" protected by
law.16 Such sympathy cannot stand independent of or as a substitute for an actual
injury suffered by the claimant.17 The ability to represent animals was further limited in
that case by the need to prove "genuine dedication" to asserting and protecting
animal rights:
What ultimately proved fatal to ALVA 's claim, however, was the court's assertion that
standing doctrine further required ALVA to differentiate its genuine dedication to the
humane treatment of animals from the general disdain for animal cruelty shared by
the public at large. In doing so, the court found ALVA 's asserted organizational injury
to be abstract and thus relegated ALVA to the ranks of the "concerned bystander. "
....
In fact, the opinion in Animal Lovers suggests that such an arrangement is indeed
possible. The court indicated that ALVA might have obtained standing in its own right
if it had an established history of dedication to the cause of the humane treatment of
animals. It noted that the Fund for Animals had standing and indicated that another
more well-known advocacy organization might have had standing as well. The court
further concluded that an organization's standing is more than a derivative of its
history, but history is a relevant consideration where organizations are not well-
established prior to commencing legal action. ALVA was not the proper plaintiff
because it could not identify previous activities demonstrating its recognized activism
for and commitment to the dispute independent of its desire to pursue legal action.
The court's analysis suggests that a qualified organization with a demonstrated
commitment to a cause could indeed bring suit on behalf of the speechless in the
form of a court-sanctioned guardianship.18 (Emphasis supplied, citation omitted)
What may be argued as being parallel to this concept of guardianship is the principle
of human stewardship over the environment in a citizen suit under the Rules of
Procedure for Environmental Cases. A citizen suit allows any Filipino to act as a
representative of a party who has enforceable rights under environmental laws before
Philippine courts, and is defined in Section 5: .
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.
There is no valid reason in law or the practical requirements of this case to implead
and feign representation on behalf of animals. To have done so betrays a very
anthropocentric view of environmental advocacy. There is no way that we, humans,
can claim to speak for animals let alone present that they would wish to use our court
system, which is designed to ensure that humans seriously carry their responsibility
including ensuring a viable ecology for themselves, which of course includes
compassion for all living things.
Our rules on standing are sufficient and need not be further relaxed.
In Arigo v. Swift,19 I posed the possibility of further reviewing the broad interpretation
we have given to the rule on standing. While representatives are not required to
establish direct injury on their part, they should only be allowed to represent after
complying with the following: [I]t is imperative for them to indicate with certainty the
injured parties on whose behalf they bring the suit. Furthermore, the interest of those
they represent must be based upon concrete legal rights. It is not sufficient to draw
out a perceived interest from a general, nebulous idea of a potential "injury."20
I reiterate my position in Arigo v. Swift and in Paje v. Casiño21 regarding this rule
alongside the appreciation of legal standing in Oposa v. Factoran22 for environmental
cases. In Arigo, I opined that procedural liberality, especially in cases brought by
representatives, should be used with great caution:
Perhaps it is time to revisit the ruling in Oposa v. Factoran.
That case was significant in that, at that time, there was need to call attention to
environmental concerns in light of emerging international legal principles. While
"intergenerational responsibility" is a noble principle, it should not be used to obtain
judgments that would preclude future generations from making their own assessment
based on their actual concerns. The present generation must restrain itself from
assuming that it can speak best for those who will exist at a different time, under a
different set of circumstances. In essence, the unbridled resort to representative suit
will inevitably result in preventing future generations from protecting their own rights
and pursuing their own interests and decisions. It reduces the autonomy of our
children and our children 's children. Even before they are born, we again restricted
their ability to make their own arguments.
15
It is my opinion that, at best, the use of the Oposa doctrine in environmental cases
should be allowed only when a) there is a clear legal basis for the representative suit;
b) there are actual concerns based squarely upon an existing legal right; c) there is
no possibility of any countervailing interests existing within the population represented
or those that are yet to be born; and d) there is an absolute necessity for such
standing because there is a threat of catastrophe so imminent that an immediate
protective measure is necessary. Better still, in the light of its costs and risks, we
abandon the precedent all together.23 (Emphasis in the original)
Similarly, in Paje:
A person cannot invoke the court's jurisdiction if he or she has no right or interest to
protect. He or she who invokes the court's jurisdiction must be the "owner of the right
sought to be enforced." In other words, he or she must have a cause of action. An
action may be dismissed on the ground of lack of cause of action if the person who
instituted it is not the real party in interest.24 The term "interest" under the Rules of
Court must refer to a material interest that is not merely a curiosity about or an
"interest in the question involved." The interest must be present and substantial. It is
not a mere expectancy or a future, contingent interest.
A person who is not a real party in interest may institute an action if he or she is suing
as representative of a .real party in interest. When an action is prosecuted or
defended by a representative, that representative is not and does not become the real
party in interest. The person represented is deemed the real party in interest. The
representative remains to be a third party to the action instituted on behalf of another.
....
To sue under this rule, two elements must be present: "(a) the suit is brought on
behalf of an identified party whose right has been violated, resulting in some form of
damage, and (b) the representative authorized by law or the Rules of Court to
represent the victim."
The Rules of Procedure for Environmental Cases allows filing of a citizen's suit. A
citizen's suit under this rule allows any Filipino citizen to file an action for the
enforcement of environmental law on behalf of minors or generations yet unborn. It is
essentially a representative suit that allows persons who are not real parties in
interest to institute actions on behalf of the real party in interest.
The expansion of what constitutes "real party in interest" to include minors and
generations yet unborn is a recognition of this court's ruling in Oposa v. Factoran.
This court recognized the capacity of minors (represented by their parents) to file a
class suit on behalf of succeeding generations based on the concept of
intergenerational responsibility to ensure the future generation's access to and
enjoyment of [the] country's natural resources.
To allow citizen's suits to enforce environmental rights of others, including future
generations, is dangerous for three reasons:
First, they run the risk of foreclosing arguments of others who are unable to take part
in the suit, putting into. question its representativeness. Second, varying interests may
potentially result in arguments that are bordering on political issues, the resolutions of
which do not fall upon this court. Third, automatically allowing a class or citizen's suit
on behalf of minors and generations yet unborn may result in the oversimplification of
what may be a complex issue, especially in light of the impossibility of determining
future generation's true interests on the matter.
In citizen's suits, persons who may have no interest in the case may file suits for
others. Uninterested persons will argue for the persons they represent, and the court
will decide based on their evidence and arguments. Any decision by the court will be
binding upon the beneficiaries, which in this case are the minors and the future
generations. The court's decision will be res judicata upon them and conclusive upon
the issues presented.25
The danger in invoking Oposa v. Factoran to justify all kinds of environmental claims
lies in its potential to diminish the value of legitimate environmental rights. Extending
the application of "real party in interest" to the Resident Marine Mammals, or animals
in general, through a judicial pronouncement will potentially result in allowing petitions
based on mere concern rather than an actual enforcement of a right. It is impossible
for animals to tell humans what their concerns are. At best, humans can only surmise
the extent of injury inflicted, if there be any. Petitions invoking a right and seeking
legal redress before this court cannot be a product of guesswork, and representatives
have the responsibility to ensure that they bring "reasonably cogent, rational,
scientific, well-founded arguments"26 on behalf of those they represent.
Creative approaches to fundamental problems should be welcome. However, they
should be considered carefully so that no unintended or unwarranted consequences
should follow. I concur with the approach of Madame Justice Teresita J. Leonardo-De
Castro in her brilliant ponencia as it carefully narrows down the doctrine in terms of
standing. Resident Marine Mammals and the human petitioners have no legal
standing to file any kind of petition.
However, I agree that petitioners in G.R. No. 181527, namely, Central Visayas
Fisherfolk Development Center,. Engarcial, Yanong, and Labid, have standing both
as real parties in interest and as representatives of subsistence fisherfolks of the
Municipalities of Aloguinsan and Pinamungahan, Cebu, and their families, and the
present and future generations of Filipinos whose rights are similarly affected. The
activities undertaken under Service Contract 46 (SC-46) directly affected their source
of livelihood, primarily felt through the significant reduction of their fish harvest.27 The
actual, direct, and material damage they suffered, which has potential long-term
effects transcending generations, is a proper subject of a legal suit.
III
In our jurisdiction, there is neither reason nor any legal basis for the concept of
implied petitioners, most especially when the implied petitioner was a sitting President
of the Republic of the Philippines. In G.R. No. 180771, apart from adjudicating unto
themselves the status of "legal guardians" of whales, dolphins, porpoises, and other
cetacean species, human petitioners also impleaded Former President Gloria
16
Macapagal-Arroyo as "unwilling co-petitioner" for "her express declaration and
undertaking in the ASEAN Charter to protect Tañon Strait."28
No person may implead any other person as a co-plaintiff or co-petitioner without his
or her consent. In our jurisdiction, only when there is a party that should have been a
necessary party but was unwilling to join would there be an allegation as to why that
party has been omitted. In Rule 3, Section 9 of the 1997 Rules of Civil Procedure:
SEC. 9. Non-joinder of necessary parties to be pleaded. -Whenever in any pleading in
which a claim is asserted a necessary party is not joined, the pleader shall set forth
his name, if known, and shall state why he is omitted. Should the court find the reason
for the omission unmeritorious, it may order the inclusion of the omitted necessary
party if jurisdiction over his person may be obtained.
The failure to comply with the order for his inclusion, without justifiable cause, shall be
deemed a waiver of the claim against such party.
The non-inclusion of a necessary party does not prevent the court from proceeding in
the action, and the judgment rendered therein shall be without prejudice to the rights
of such necessary party.29
A party who should have been a plaintiff or petitioner but whose consent cannot be
obtained should be impleaded as a defendant in the nature of an unwilling co-plaintiff
under Rule 3, Section 10 of the 1997 Rules of Civil Procedure:
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.30
The reason for this rule is plain: Indispensable party plaintiffs who should be part of
the action but who do not consent should be put within the jurisdiction of the court
through summons or other court processes. Petitioners. should not take it upon
themselves to simply imp lead any party who does not consent as a petitioner. This
places the unwilling co-petitioner at the risk of being denied due process.
Besides, Former President Gloria Macapagal-Arroyo cannot be a party to this suit. As
a co-equal constitutional department, we cannot assume that the President needs to
enforce policy directions by suing his or her alter-egos. The procedural situation
caused by petitioners may have gained public attention, but its legal absurdity borders
on the contemptuous. The Former President's name should be stricken out of the title
of this case.
IV
I also concur with the conclusion that SC-46 is both. illegal and unconstitutional.
SC-46 is illegal because it violates Republic Act No. ·7586 or the National Integrated
Protected Areas System Act of 1992, and Presidential Decree No. 1234,31 which
declared Tañon Strait as a protected seascape. It is unconstitutional because it
violates the fourth paragraph of Article XII, Section 2 of the Constitution.
V I agree that fully foreign-owned corporations may participate in the exploration,
Petitioner Central Visayas Fisherfolk Development Center asserts that SC-46 violated
Article XII, Section 2, paragraph 1 of the .1987 Constitution because Japan Petroleum
Exploration Co., Ltd. (JAPEX) is 100% Japanese-owned.32 It further asserts that SC-
46 cannot be validly classified as a technical and financial assistance agreement
executed under Article XII, Section 2, paragraph 4 of the 1987 Constitution.33 Public
respondents counter that SC-46 does not fall under the coverage of paragraph 1, but
is a validly executed contract under paragraph 4.34· Public respondents further aver
that SC-46 neither granted exclusive fishing rights to JAPEX nor violated Central
Visayas Fisherfolk Development Center's right to preferential use of communal
marine and fishing resources.35
VI
Article XII, Section 2 of the 1987 Constitution states:
Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora
and fauna, and other natural resources are owned by the State. With 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 fish-workers 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. (Emphasis supplied)
17
development, and use of natural resources, but only through either financial
agreements or technical ones. This is the clear import of the words "either financial or
technical assistance agreements." This is also
the clear result if we compare the 1987 constitutional provision with the versions in
the 1973 and 1935 Constitution:
1973 CONSTITUTION
ARTICLE XIV
THE NATIONAL ECONOMY AND THE PATRIMONY OF THE NATION
SEC. 9. The disposition, exploration, development, of exploitation, or utilization of any
of the natural resources of the Philippines shall be limited to citizens of the
Philippines, or to corporations or association at least sixty per centum of the capital of
which is owned by such citizens. The Batasang Pambansa, in the national interest,
may allow such citizens, corporations, or associations to enter into service contracts
for financial, technical, management, or other forms of assistance with any foreign
person or entity for the exploitation, development, exploitation, or utilization of any of
the natural resources. Existing valid and binding service contracts for financial, the
technical, management, or other forms of assistance are hereby recognized as such.
(Emphasis supplied)
1935 CONSTITUTION
ARTICLE XIII
CONSERVATION AND UTILIZATION OF NATURAL RESOURCES
SECTION 1. All agricultural timber, and mineral. lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and
other natural resources of the Philippines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to citizens of the Philippines,
or to corporations or associations at least sixty per centum of the capital of which is
owned by such citizens, subject to any existing right, grant, lease, or concession at
the time of the inauguration of the Government established under this Constitution.
Natural resources, with the exception of public agricultural land, shall not be
alienated, and no license, concession, or lease for the exploitation, development, or
utilization of any of the natural resources shall be granted for a period exceeding
twenty-five years, renewable for another twenty-five years, except as to water rights
for irrigation, water supply, fisheries, or industrial uses other than the development of
water power, in which cases beneficial use may be the measure and the limit of the
grant.
The clear text of the Constitution in light of its history prevails over any attempt to infer
interpretation from the Constitutional Commission deliberations. The constitutional
texts are the product of a full sovereign act: deliberations in a constituent assembly
and ratification. Reliance on recorded discussion of Constitutional Commissions, on
the other hand, may result in dependence on incomplete authorship; Besides, it
opens judicial review to further subjectivity from those who spoke during the
Constitutional Commission deliberations who may not have predicted how their words
will be used. It is safer that we use the words already in the Constitution. The
Constitution was their product. Its words were read by those who ratified it. The
Constitution is what society relies upon even at present.
SC-46 is neither a financial assistance nor a technical assistance agreement.
Even supposing for the sake of argument that it is, it could not be declared valid in
light of the standards set forth in La Bugal-B'laan Tribal Association, Inc. v. Ramos:36
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 m 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.37 (Emphasis in the original, citation
omitted)
Based on the standards pronounced in La Bugal, SC-46' S validity must be tested
against three important points: (a) whether SC-46 was crafted in accordance with a
general law that provides standards, terms, and conditions; (b) whether SC-46 was
signed by the President for and on behalf of the government; and (c) whether it was
reported by the President to Congress within 30 days of execution.
VII
The general law referred to as a possible basis for SC-46's validity is Presidential
Decree No. 87 or the Oil Exploration and Development Act of 1972.1âwphi1 It is my
opinion that this law is unconstitutional in that it allows service contracts, contrary to
Article XII, Section 2 of the 1987 Constitution:
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.
(Emphasis supplied)
18
The deletion of service contracts from the enumeration of the kind of agreements the
President may enter into with foreign-owned corporations for exploration and
utilization of resources means that service contracts are no longer allowed by the
Constitution. Pursuant to Article XVIII, Section 3 of the 1987 Constitution,38 this
inconsistency renders the law invalid and ineffective.
SC-46 suffers from the lack of a special law allowing its activities. The Main Opinion
emphasizes an important point, which is that SC-46 did not merely involve exploratory
activities, but also provided the rights and obligations of the parties should it be
discovered that there is oil in commercial quantities in the area. The Tañon Strait
being a protected seascape under Presidential Decree No. 123439 requires that the
exploitation and utilization of energy resources from that area are explicitly covered
by a law passed by Congress specifically for that purpose, pursuant to Section 14 of
Republic Act No. 7586 or the National Integrated Protected Areas System Act of
1992:
SEC. 14. Survey for Energy R6'sources. - 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.40 (Emphasis supplied)
No law was passed by Congress specifically providing the standards, terms, and
conditions of an oil exploration, extraction, and/or utilization for Tañon Strait and,
therefore, no such activities could have been validly undertaken under SC-46. The
National Integrated Protected Areas System Act of 1992 is clear that exploitation and
utilization of energy resources in a protected seascape such as Tañon Strait shall
only be allowed through a specific law.
VIII
Former President Gloria Macapagal-Arroyo was not the signatory to SC-46, contrary
to the requirement set by paragraph 4 of Article XII, Section 2 for service contracts
involving the exploration of petroleum. SC-46 was entered into by then Department of
Energy Secretary Vicente S. Perez, Jr., on behalf of the government. I agree with the
Main Opinion that in cases where the Constitution or law requires the President to act
personally on the matter, the duty cannot be delegated to another public official.41 La
Bugal highlights the importance of the President's involvement, being one of the
constitutional safeguards against abuse and corruption, as not mere formality:
At this point, we sum up the matters established, based on a careful reading of the
ConCom 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 m minimize the abuses prevalent during the marital law
regime.42 (Emphasis in the original)
Public respondents failed to show that. Former President Gloria Macapagal-Arroyo
was involved in the signing or execution of SC-46. The failure to comply with this
constitutional requirement renders SC-46 null and void.
IX
Public respondents also failed to show that Congress was subsequently informed of
the execution and existence of SC-46. The reporting requirement is an equally
important requisite to the validity of any service contract involving the exploration,
development, and utilization of Philippine petroleum. Public respondents' failure to
report to Congress about SC-46 effectively took away any opportunity for the
legislative branch to scrutinize its terms and conditions.
In sum, SC-46 was executed and implemented absent all the requirements provided
under paragraph 4 of Article XII, Section 2. It is, therefore, null and void.
X
I am of the view that SC-46, aside from not having complied with the 1987
Constitution, is also null and void for being violative of environmental laws protecting
Tañon Strait. In particular, SC-46 was implemented despite falling short of the
requirements of the National Integrated Protected Areas System Act of 1992.
As a protected seascape under Presidential Decree No. 1234,43 Tañon Strait is
covered by the National Integrated Protected Areas System Act of 1992. This law
declares as a matter of policy:
SEC. 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 these areas is possible only
19
through cooperation among national government, local 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 outstanding 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."44 (Emphasis
supplied)
Pursuant to this law, any proposed activity in Tañon Strait must undergo an
Environmental Impact Assessment:
SEC. 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.45 (Emphasis supplied)
The same provision further requires that an Environmental Compliance Certificate be
secured under the Philippine Environmental Impact Assessment System before arty
project is implemented:
No actual implementation of such activities shall be allowed without the required
Environmental Compliance Certificate (ECC) under the Philippine Environment
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 take preventive and remedial action when
appropriate. The proponent shall be liable for any damage due to lack of caution or
indiscretion.46 (Emphasis supplied)
In projects involving the exploration or utilization of energy resources, the National
Integrated Protected Areas System Act of 1992 additionally requires that a program
be approved by the Department of Environment and Natural Resources, which shall
be publicly accessible. The program shall also be submitted to the President, who in
turn will recommend the program to Congress. Furthermore, Congress must enact a
law specifically allowing the exploitation of energy resources found within a protected
area such as Tañon Strait:
SEC. 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 NIPAS areas shall be
allowed only through a taw passed by Congress.47 (Emphasis supplied)
Public respondents argue that SC-46 complied with the procedural requirements of MARVIC M.V.F. LEONEN
obtaining an Environmental Compliance Certificate.48 At any rate, they assert that the Associate Justice
activities covered by SC-46 fell under Section 14 of the National Integrated Protected
Areas System Act of 1992, which they interpret to be an exception to Section 12.
They argue that the Environmental Compliance Certificate is not a strict requirement
for the validity of SC-46 since (a) the Tañon Strait is not a nature' reserve or natural
park; (b) the exploration was merely for gathering information; and ( c) measures
were in place to ensure that the exploration caused the least possible damage to the
area.49

Section 14 is not an exception to Section 12, but instead provides additional

requirements for cases involving Philippine energy resources. The National Integrated
Protected Areas System Act of 1992 was enacted to recognize the importance of
protecting the environment in light of resource exploitation, among others.50 Systems
are put in place to secure for Filipinos local resources under the most favorable
conditions. With the status of Tañon Strait as a protected seascape, the institution of
additional legal safeguards is even more significant.

Public respondents did not validly obtain an Environmental Compliance Certificate for
SC-46. Based on the records, JAPEX commissioned an environmental impact
evaluation only in the second subphase of its project, with the Environmental
Management .Bureau of Region

VII granting the project an Environmental Compliance Certificate on March 6, 2007.51

Despite its scale, the seismic surveys from May 9 to 18, 2005 were conducted without
any environmental assessment contrary to Section 12 of the National Integrated
Protected Areas System Act of 1992.

XI

Finally, we honor every living creature when we take care of our environment. As
sentient species, we do not lack in the wisdom or sensitivity to realize that we only
borrow the resources that we use to survive and to thrive. We are not incapable of
mitigating the greed that is slowly causing the demise of our planet. Thus, there is no
need for us to feign representation of any other species or some imagined unborn
generation in filing any action in our courts of law to claim any of our fundamental
rights to a healthful ecology. In this way and with candor and courage, we fully
shoulder the responsibility deserving of the grace and power endowed on our
species.

ACCORDINGLY, I vote:

(a) to DISMISS G.R. No. 180771 for lack of standing and STRIKE OUT the name of
Former President Gloria Macapagal-Arroyo from the title of this case;

(b) to GRANT G.R. No. 181527; and

(c) to DECLARE SERVICE CONTRACT 46 NULL AND VOID for violating the 1987
Constitution, Republic Act No. 7586, and Presidential Decree No. 1234.

20
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.
2
Article 10.2  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 10.33 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.
5
Thus UHI filed a complaint  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
21
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 dismiss7 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
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.

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)

22
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
23
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.
24
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 x x
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.
25
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
26
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.

27
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.
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]
28
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
Motion12 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 Order14 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, 200018 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
29
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.
30
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
31
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
32
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.

33
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 certiorari1 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.
34
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 Order9 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
35
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
36
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 WHEREFORE, the instant petition is partly GRANTED. The Decision of the Court of
Glicerio R. Brioso? 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,
A:         Yes sir. 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.
xxx           xxx           xxx"25
SO ORDERED.
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.

37
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 Order3 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.
38
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.
39
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 CV No. 80355. We REMAND this case to the Regional Trial Court of the National
deceased and his estate.111avvphi1 Capital Judicial Region, Branch 30, Manila, for further proceedings.

In the instant case, petitioner (plaintiff) Memoracion Z. Cruz died on 30 October 1996. SO ORDERED.
Her counsel, Atty. Roberto T. Neri, notified the trial court of such death on 13 January
1997, through a Manifestation stating thus:

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.
40