G.R. No.

L-7899 June 23, 1955

ALFREDO MONTELIBANO, PASTOR MALLORCA, GONZALGO DE LA TORRE, and JOSE

ARTICULO, petitioners-appellants,
vs.
THE HONORABLE FELIX S. FERRER, as Judge of the Municipal Court of Bacolod, and JOSE F.
BENARES, respondents-appellees.

Arrieta and Nolan for appellants.

Parreño and Banzon for appellees.

CONCEPCION, J.:

The question involved in this case is one purely of law.

On June 13, 1953, respondent Jose F. Benares filed, with the Municipal Court of the City of Bacolod, a
criminal complaint, which was docketed as Case No. 2864 of said court, against petitioners herein,
Alfredo Montelibano, Pastor Mallorca, Gonzalgo de la Torre and Jose Articulo, charging them with the
crime of malicious mischief. It is alleged in said complaint:

That on or about the 5th, the 7th and the 8th of June, 1953, in the City of Bacolod, Philippines, and
within the jurisdiction of this court, Alfredo Montelibano, as author by inducement, Pastor Mallorca,
Gonzalo de la Torre and Jose Articulo, as authors by direct participations, conspiring and confederating
together and helping one another, did then and there, willfully, unlawfully and deliberately cause
damage to the sugarcane plantation belonging to Jose F. Benares, the offended party herein,
intentionally and using bulldozer and destroying completely eighteen (18) hectares of sugarcanes
obviously under the impulse of hatred and a desire for revenge, as the accused, Alfredo Montelibano,
failed in his attempt to have the herein offended party punished for contempt of Court in Civil Case No.
1896 of the Court of First Instance of Negros Occidental, thereby causing upon said Jose F. Benares
damage in the amount of more than P13,000.00.

Upon the filing of this complaint, due course was given thereto by the herein respondent, Hon. Felix S.
Ferrer, Municipal Judge of the City of Bacolod, who, likewise, issued the corresponding warrant of
arrest. On or about June 22, 1953, the aforementioned defendants (petitioners herein) filed a motion to
quash said warrant of arrest, as well as the complaint, upon several grounds, which may be reduced to
two, namely : (1) The only officer authorized by the Charter of the City of Bacolod to initiate criminal
cases in the courts thereof is its City Attorney, who is opposed to the institution of said Case No. 2864;
and (2) Said case involves a prejudicial question.

In this connection, petitioners alleged, and Benares has not denied, the following: Sometime in 1940,
the Capitol Subdivision Inc. (hereinafter referred to as the Subdivision), of which petitioner Alfredo
Montelibano is the president and general manager, leased Lot No. 1205-I-1 (which is the same property
involved in Case No. 2864) to Benares, for a period of five (5) crop years, ending in the crop-year 1944-
1945, with an option in favor of Benares, of another five (5) crop-years. On June 5, 1951, the Subdivision
instituted against Benares, unlawful detainer case No. 1896 of the Municipal Court of the City of
Bacolod, which, in due course, subsequently, rendered a decision ordering his ejectment from said lot.
Benares appealed to the Court of First Instance of Negros Occidental (in which it was docketed as Civil
Case No. 1896). On motion of the Subdivision, this court issued a writ of preliminary mandatory
injunction, commanding Benares to turn over the aforementioned lot to the Subdivision, which filed a
bond undertaking to pay to Benares "all damages which he may sustain" by reason of the issuance of
said writ, "if the court should finally decide that the plaintiff was not entitled thereto." Inasmuch as
Benares continued planting on Lot No. 1205-L-1, instead of delivering it to the Subdivision, the latter
filed a petition praying that the former be declared in contempt of court. This petition was denied, by an
order dated April 30, 1953, which however, required Benares to "immediately and promptly obey the
order of preliminary mandatory injunction." On June 5, 1953 the provincial sheriff delivered the land in
question to the Subdivision. Seemingly, acting upon instructions of petitioner Montelibano, his co-
petitioners thereupon cleared the land of the sugarcane planted therein by Benares. Hence, the criminal
complaint filed by the latter.

The Municipal Court denied the aforementioned motion to quash said complaint and the warrant of
arrest, as well as a subsequent motion for reconsideration, whereupon petitioners instituted the case at
bar, in the Court of First Instance of Negros Occidental, where it was docketed as Civil Case No. 2828,
against said Municipal Judge, and complainant Benares, for the purpose of securing a writ
of certiorari and mandamus — "annulling and vacating all the proceedings so far taken by respondent
Judge in said Case no. 2864" and "holding that said Judge had no jurisdiction to take cognizance of the
same" and "dismissing said case" — with a writ of preliminary injunction, enjoining respondent judge "to
desist from further proceedings in the case." The writ of preliminary injunction was issued by said court
of first instance, which, in due course, eventually rendered a decision, dismissing the petition
for certiorari and mandamus, and dissolving the writ of preliminary injunction, with costs against the
petitioners. The case is now before us on appeal taken, from said decision, by the aforementioned
petitioners, the defendants in said criminal case.

It is not disputed that the complaint in question was filed by Benares directly with the municipal court of
Bacolod, and that the City Attorney had, not only no intervention whatsoever therein, but, also,
expressed, in open court, his opposition thereto. The issue boils down to whether said municipal court
may entertain said complaint. Petitioners contend that it may not, relying upon section 22 of
Commonwealth Act No. 326, otherwise known as the Charter of the City of Bacolod, the pertinent part
of which provides:

. . . The City attorney . . . shall also have charge of the prosecution of all crimes, misdemeanors, and
violations of city ordinances, in the Court of First Instance and the Municipal Court of the city, and shall
discharge all the duties in respect to criminal prosecutions enjoined by law upon provincial fiscals.

The city attorney shall cause to be investigated all charges of crimes, misdemeanors, and violation of
ordinances, and have the necessary informations or complaints prepared or made against the persons
accused. . . ..

Upon the other hand, respondents argue that this provision is merely declaratory of the powers of the
City Attorney of Bacolod and does not preclude the application of Sec. 2 of Rule 106 of the Rules of
Court reading:

Complaint is a sworn written statement charging a person with an offense, subscribed by the offended
party, any peace officer or other employees of the government or governmental institution in charge of
the enforcement or execution of the law violated.
This was the very same provision invoked by the petitioner in the case of Espiritu vs. Dela Rosa (45 Off.
Gaz. 196), in which this Court refused to issue a writ of mandamus to compel the Court of First Instance
of Manila to accept a complaint filed, directly with said court, by the offended party in a given case,
without the intervention of the City Fiscal of Manila. In his concurring opinion therein, then Chief Justice
Moran had the following to say:

I concur upon the ground that Rule 108 section 4 does not apply in the City of Manila where the only
officer authorized by law to conduct preliminary investigation is the City Fiscal (sec. 2474, Adm. Code)
and therefore, all criminal complaints should be filed with that officer who in turn may, after
investigation, file the corresponding information with the Court of First Instance. The provisions of the
Administrative Code on this matter have not been repealed by the Rules of Court. (Hashim vs. Boncan,
40 Off. Gaz., p. 13.) (Emphasis supplied.)

As indicated in said decision, the same was based, partly, upon the rule laid down in Hashim vs. Boncan
(71 Phil. 216), which, in turn, was predicated upon earlier precedents (U. S. vs. Wilson, 4 Phil. 317; U.
S. vs. McGovern, 6 Phil. 621; U. S. vs. Ocampo, 18 Phil. 1; U. S. vs. Grant and Kennedy, 18 Phil. 122; U.
S. vs. Carlos, 21 Phil. 553).

In case of Sayo vs. Chief of Police (45 Off. Gaz. 4875) the language used by this Court was:

Under the law, a complaint charging a person with the commission of an offense cognizable by the
courts of Manila is not filed with the municipal court of First Instance of Manila, because as above
stated, the latter do not make or conduct a preliminary investigation proper. The complaint must be
made or filed with the city fiscal of Manila who, personally or through one of his assistance, makes the
investigation, not for the purpose of ordering the arrest of the accused, but of filing with the proper
court the necessary information against the accused if the result of the investigation so warrants, and
obtaining from the court a warrant of arrest or commitment of the accused.

xxx xxx xxx

In the City of Manila, where complaints are not filed directly with the municipal court or the Court of First
Instance, the officer or person making the arrest without warrant shall surrender or take the person
arrested to the city fiscal, and the latter shall make the investigation abovementioned and file, if proper,
the corresponding information without the time prescribed by section 125 of the Revised Penal Code, so
that the court may issue a warrant of commitment for the temporary detention of the accused. . . ..
(Emphasis supplied.)

It is clear, therefore, that, in the City of Manila, criminal complaints may be filed only with the City Fiscal,
who is thereby given, by implication, the exclusive authority to institute criminal cases in the different
courts of said city, under the provisions of its Charter, originally found in Section 39 of Act the pertinent
part of which we quote:

. . . The prosecuting attorney of the city of Manila shall have charge of the prosecution of all crimes,
misdemeanors, and violations of city ordinances, in the Court of First Instance and the municipal courts
of the city of Manila. He shall investigate all charges of crimes, misdemeanors, and violations of
ordinances, and prepare the necessary informations or make the necessary complaints against the
persons accused, and discharge all other duties in respect to criminal prosecutions enjoined upon
provincial fiscals . . ..
This provision was mutatis mutandis reproduced, firstly, in section 2437 of the Old Administrative Code
(Act No. 2657), then in section 2465 of the Revised Administrative Code, and lastly in section 38 of
Republic Act no. 409. We do not see, and respondents herein have not pointed out, any reason why the
above quoted provision of the Charter of the City of Bacolod, should be interpreted differently from said
sections of the Charter of the City of Manila, which are substantially identical thereto. On the contrary,
considering that said provisions of the Charter of the City of Manila had been consistently construed in
the manner above indicated, before being incorporated in the Charter of the City of Bacolod, the
conclusion is inevitable that the framers of the latter had reproduced the former with intent of
adopting, also its settled interpretation by the judicial department (In re Dick, 38 Phil. 41, 77).

In the interpretation of reenacted statutes the court will follow the construction which they received
when previously in force. The legislature will be presumed to know the effect which such status
originally had, and by reenactment to intend that they should again have the same effect. . . . It is not
necessary that a statute should be reenacted in identical words in order that the rule may apply. It is
sufficient if it is reenacted in substantially the same words. . . . The rule has been held to apply to the
reenactment of a statute which received a practical construction on the part of those who are called
upon to execute it. The Supreme Court of Nebraska says : "Where the legislature in framing an act
resorts to language similar in its import to the language of other acts which have received a practical
construction by the executive departments and by the legislature itself, it is fair to presume that the
language was used in the later act with a view to the construction so given the earlier." . . . (Sutherland
Statutory Construction, Vol. II, 2d. ed., section 403

. . . two statutes with a parallel scope, purpose and terminology should, each in its own field, have a like
interpretation, unless in particular instances there is something peculiar in the question under
consideration, or dissimilar in the terms of the act relating thereto, requiring a different conclusion. (50
Am. Jur. 343)

. . . Since it may be presumed that the legislature knew a construction, long acquieced in, which had
been given by the courts to a statute re-enacted by the legislature, there is a presumption of an
intention to adopt the construction as well as the language of the prior enactment. It is accordingly a
settled rule of statutory construction that when a statute or a clause or provision thereof has been
construed by a court of last resort, and the same is substantially re-enacted, the legislature may be
regarded as adopting such construction. (50 Am. Jur. 461)

In view of the foregoing, the decision appealed from must be, as it is hereby, reversed and another one
shall be entered annulling the warrant of arrest issued by respondent Judge and enjoining the latter to
refrain from entertaining the complaint aforementioned and to dismiss the same. With cost against
respondent Jose F. Benares. It is so ordered.
G.R. No. 82670 September 15, 1989

DOMETILA M. ANDRES, doing business under the name and style "IRENE'S WEARING
APPAREL," petitioner,
vs.
MANUFACTURERS HANOVER & TRUST CORPORATION and COURT OF APPEALS, respondents.

Roque A. Tamayo for petitioner.

Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for private respondent.

CORTES, J.:

Assailed in this petition for review on certiorari is the judgment of the Court of Appeals, which, applying
the doctrine of solutio indebiti, reversed the decision of the Regional Trial Court, Branch CV, Quezon City
by deciding in favor of private respondent.

Petitioner, using the business name "Irene's Wearing Apparel," was engaged in the manufacture of
ladies garments, children's wear, men's apparel and linens for local and foreign buyers. Among its
foreign buyers was Facets Funwear, Inc. (hereinafter referred to as FACETS) of the United States.

In the course of the business transaction between the two, FACETS from time to time remitted certain
amounts of money to petitioner in payment for the items it had purchased. Sometime in August 1980,
FACETS instructed the First National State Bank of New Jersey, Newark, New Jersey, U.S.A. (hereinafter
referred to as FNSB) to transfer $10,000.00 to petitioner via Philippine National Bank, Sta. Cruz Branch,
Manila (hereinafter referred to as PNB).

Acting on said instruction, FNSB instructed private respondent Manufacturers Hanover and Trust
Corporation to effect the above- mentioned transfer through its facilities and to charge the amount to
the account of FNSB with private respondent. Although private respondent was able to send a telex to
PNB to pay petitioner $10,000.00 through the Pilipinas Bank, where petitioner had an account, the
payment was not effected immediately because the payee designated in the telex was only "Wearing
Apparel." Upon query by PNB, private respondent sent PNB another telex dated August 27, 1980 stating
that the payment was to be made to "Irene's Wearing Apparel." On August 28, 1980, petitioner received
the remittance of $10,000.00 through Demand Draft No. 225654 of the PNB.

Meanwhile, on August 25, 1980, after learning about the delay in the remittance of the money to
petitioner, FACETS informed FNSB about the situation. On September 8, 1980, unaware that petitioner
had already received the remittance, FACETS informed private respondent about the delay and at the
same time amended its instruction by asking it to effect the payment through the Philippine Commercial
and Industrial Bank (hereinafter referred to as PCIB) instead of PNB.

Accordingly, private respondent, which was also unaware that petitioner had already received the
remittance of $10,000.00 from PNB instructed the PCIB to pay $10,000.00 to petitioner. Hence, on
September 11, 1980, petitioner received a second $10,000.00 remittance.

Private respondent debited the account of FNSB for the second $10,000.00 remittance effected through
PCIB. However, when FNSB discovered that private respondent had made a duplication of the
remittance, it asked for a recredit of its account in the amount of $10,000.00. Private respondent
complied with the request.

Private respondent asked petitioner for the return of the second remittance of $10,000.00 but the latter
refused to pay. On May 12, 1982 a complaint was filed with the Regional Trial Court, Branch CV, Quezon
City which was decided in favor of petitioner as defendant. The trial court ruled that Art. 2154 of the
New Civil Code is not applicable to the case because the second remittance was made not by mistake
but by negligence and petitioner was not unjustly enriched by virtue thereof [Record, p. 234]. On
appeal, the Court of Appeals held that Art. 2154 is applicable and reversed the RTC decision. The
dispositive portion of the Court of Appeals' decision reads as follows:

WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE and another one entered in
favor of plaintiff-appellant and against defendant-appellee Domelita (sic) M. Andres, doing business
under the name and style "Irene's Wearing Apparel" to reimburse and/or return to plaintiff-appellant
the amount of $10,000.00, its equivalent in Philippine currency, with interests at the legal rate from the
filing of the complaint on May 12, 1982 until the whole amount is fully paid, plus twenty percent (20%)
of the amount due as attomey's fees; and to pay the costs.

With costs against defendant-appellee.

SO ORDERED. [Rollo, pp. 29-30.]

Thereafter, this petition was filed. The sole issue in this case is whether or not the private respondent
has the right to recover the second $10,000.00 remittance it had delivered to petitioner. The resolution
of this issue would hinge on the applicability of Art. 2154 of the New Civil Code which provides that:

Art. 2154. If something received when there is no right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises.

This provision is taken from Art. 1895 of the Spanish Civil Code which provided that:

Art. 1895. If a thing is received when there was no right to claim it and which, through an error, has
been unduly delivered, an obligation to restore it arises.

In Velez v. Balzarza, 73 Phil. 630 (1942), the Court, speaking through Mr. Justice Bocobo explained the
nature of this article thus:

Article 1895 [now Article 2154] of the Civil Code abovequoted, is therefore applicable. This legal
provision, which determines the quasi-contract of solution indebiti, is one of the concrete
manifestations of the ancient principle that no one shall enrich himself unjustly at the expense of
another. In the Roman Law Digest the maxim was formulated thus: "Jure naturae acquum est, neminem
cum alterius detrimento et injuria fieri locupletiorem." And the Partidas declared: "Ninguno non deue
enriquecerse tortizeramente con dano de otro." Such axiom has grown through the centuries in
legislation, in the science of law and in court decisions. The lawmaker has found it one of the helpful
guides in framing statutes and codes. Thus, it is unfolded in many articles scattered in the Spanish Civil
Code. (See for example, articles, 360, 361, 464, 647, 648, 797, 1158, 1163, 1295, 1303, 1304, 1893 and
1895, Civil Code.) This time-honored aphorism has also been adopted by jurists in their study of the
conflict of rights. It has been accepted by the courts, which have not hesitated to apply it when the
exigencies of right and equity demanded its assertion. It is a part of that affluent reservoir of justice
upon which judicial discretion draws whenever the statutory laws are inadequate because they do not
speak or do so with a confused voice. [at p. 632.]

For this article to apply the following requisites must concur: "(1) that he who paid was not under
obligation to do so; and, (2) that payment was made by reason of an essential mistake of fact" [City of
Cebu v. Piccio, 110 Phil. 558, 563 (1960)].

It is undisputed that private respondent delivered the second $10,000.00 remittance. However,
petitioner contends that the doctrine of solutio indebiti, does not apply because its requisites are
absent.

First, it is argued that petitioner had the right to demand and therefore to retain the second $10,000.00
remittance. It is alleged that even after the two $10,000.00 remittances are credited to petitioner's
receivables from FACETS, the latter allegedly still had a balance of $49,324.00. Hence, it is argued that
the last $10,000.00 remittance being in payment of a pre-existing debt, petitioner was not thereby
unjustly enriched.

The contention is without merit.

The contract of petitioner, as regards the sale of garments and other textile products, was with FACETS.
It was the latter and not private respondent which was indebted to petitioner. On the other hand, the
contract for the transmittal of dollars from the United States to petitioner was entered into by private
respondent with FNSB. Petitioner, although named as the payee was not privy to the contract of
remittance of dollars. Neither was private respondent a party to the contract of sale between petitioner
and FACETS. There being no contractual relation between them, petitioner has no right to apply the
second $10,000.00 remittance delivered by mistake by private respondent to the outstanding account of
FACETS.

Petitioner next contends that the payment by respondent bank of the second $10,000.00 remittance
was not made by mistake but was the result of negligence of its employees. In connection with this the
Court of Appeals made the following finding of facts:

The fact that Facets sent only one remittance of $10,000.00 is not disputed. In the written
interrogatories sent to the First National State Bank of New Jersey through the Consulate General of the
Philippines in New York, Adelaide C. Schachel, the investigation and reconciliation clerk in the said bank
testified that a request to remit a payment for Facet Funwear Inc. was made in August, 1980. The total
amount which the First National State Bank of New Jersey actually requested the plaintiff-appellant
Manufacturers Hanover & Trust Corporation to remit to Irene's Wearing Apparel was US $10,000.00.
Only one remittance was requested by First National State Bank of New Jersey as per instruction of
Facets Funwear (Exhibit "J", pp. 4-5).

That there was a mistake in the second remittance of US $10,000.00 is borne out by the fact that both
remittances have the same reference invoice number which is 263 80. (Exhibits "A-1- Deposition of Mr.
Stanley Panasow" and "A-2-Deposition of Mr. Stanley Panasow").

Plaintiff-appellant made the second remittance on the wrong assumption that defendant-appellee did
not receive the first remittance of US $10,000.00. [Rollo, pp. 26-27.]
It is evident that the claim of petitioner is anchored on the appreciation of the attendant facts which
petitioner would have this Court review. The Court holds that the finding by the Court of Appeals that
the second $10,000.00 remittance was made by mistake, being based on substantial evidence, is final
and conclusive. The rule regarding questions of fact being raised with this Court in a petition
for certiorari under Rule 45 of the Revised Rules of Court has been stated in Remalante v. Tibe, G.R. No.
59514, February 25, 1988, 158 SCRA 138, thus:

The rule in this jurisdiction is that only questions of law may be raised in a petition for certiorari under
Rule 45 of the Revised Rules of Court. "The jurisdiction of the Supreme Court in cases brought to it from
the Court of Appeals is limited to reviewing and revising the errors of law imputed to it, its findings of
fact being conclusive" [Chan v. Court of Appeals, G.R. No. L-27488, June 30, 1970, 33 SCRA 737,
reiterating a long line of decisions]. This Court has emphatically declared that "it is not the function of
the Supreme Court to analyze or weigh such evidence all over again, its jurisdiction being limited to
reviewing errors of law that might have been committed by the lower court" [Tiongco v. De la Merced,
G.R. No. L-24426, July 25, 1974, 58 SCRA 89; Corona v. Court of Appeals, G.R. No. L-62482, April 28,
1983, 121 SCRA 865; Baniqued v. Court of Appeals, G. R. No. L-47531, February 20, 1984, 127 SCRA 596].
"Barring, therefore, a showing that the findings complained of are totally devoid of support in the
record, or that they are so glaringly erroneous as to constitute serious abuse of discretion, such findings
must stand, for this Court is not expected or required to examine or contrast the oral and documentary
evidence submitted by the parties" [Santa Ana, Jr. v. Hernandez, G.R. No. L-16394, December 17, 1966,
18 SCRA 9731. [at pp. 144-145.]

Petitioner invokes the equitable principle that when one of two innocent persons must suffer by the
wrongful act of a third person, the loss must be borne by the one whose negligence was the proximate
cause of the loss.

The rule is that principles of equity cannot be applied if there is a provision of law specifically applicable
to a case [Phil. Rabbit Bus Lines, Inc. v. Arciaga, G.R. No. L-29701, March 16, 1987,148 SCRA 433; Zabat,
Jr. v. Court of Appeals, G.R. No. L36958, July 10, 1986, 142 SCRA 587; Rural Bank of Paranaque, Inc. v.
Remolado, G.R. No. 62051, March 18, 1985, 135 SCRA 409; Cruz v. Pahati, 98 Phil. 788 (1956)]. Hence,
the Court in the case of De Garcia v. Court of Appeals, G.R. No. L-20264, January 30, 1971, 37 SCRA 129,
citing Aznar v. Yapdiangco, G.R. No. L-18536, March 31, 1965, 13 SCRA 486, held:

... The common law principle that where one of two innocent persons must suffer by a fraud
perpetrated by another, the law imposes the loss upon the party who, by his misplaced confidence, has
enabled the fraud to be committed, cannot be applied in a case which is covered by an express provision
of the new Civil Code, specifically Article 559. Between a common law principle and a statutory
provision, the latter must prevail in this jurisdiction. [at p. 135.]

Having shown that Art. 2154 of the Civil Code, which embodies the doctrine of solutio indebiti, applies in
the case at bar, the Court must reject the common law principle invoked by petitioner.

Finally, in her attempt to defeat private respondent's claim, petitioner makes much of the fact that from
the time the second $10,000.00 remittance was made, five hundred and ten days had elapsed before
private respondent demanded the return thereof. Needless to say, private respondent instituted the
complaint for recovery of the second $10,000.00 remittance well within the six years prescriptive period
for actions based upon a quasi-contract [Art. 1145 of the New Civil Code].
FACTS:
Andres, using the business name “Irene’s Wearing Apparel” was engaged in the manufacture of ladies garments, children’s wear, men’s apparel and linens for
local and foreign buyers. Among its foreign buyers was Facts of the United States.

Sometime in August 1980, Facts instructed the First National State Bank (FNSB) of New Jersey to transfer $10,000 to Irene’s Wearing Apparel via Philippine
National Bank (PNB) Sta. Cruz, Manila branch. FNSB instructed Manufacturers Hanover and Trust Corporation (Mantrust) to effect the transfer by charging the
amount to the account of FNSB with private respondent.
WHEREFORE,
After Mantrust effected the transfer, the payment was not effected immediately because the payee designated in the telex was only “Wearing Apparel.” Private
respondent sent PNBtheanother
petition is stating
telex DENIED thatand the decision
the payment was to of
be the
madeCourt of Appeals
to “Irene’s Wearing is hereby AFFIRMED.
Apparel.”

On August 28, 1980,

SO petitioner
ORDERED. received the remittance of $10,000.

After learning about the delay, Facets informed FNSB about the situation. Facts, unaware that petitioner had already received the remittance, informed private
Fernan, C.J., Gutierrez, Jr. and Bidin, JJ., concur.
respondent and amended its instruction y asking it to effect the payment to Philippine Commercial and Industrial Bank (PCIB) instead of PNB.
Feliciano,
Private respondent, J., isthat
also unaware onpetitioner
leave. had already received the remittance, instructed PCIB to pay $10,000 to petitioner. Hence, petitioner received
another $10,000 which was charged again to the account of Facets with FNSB.

FNSB discovered that private respondent had made a duplication of remittance. Private respondent asked petitioner to return the second remittance of $10,000
but the latter refused to do so contending that the doctrine of solution indebiti does not apply because there was negligence on the part of the respondents and
that they were not unjustly enriched since Facets still has a balance of $49,324.

ISSUE: Whether or not the private respondent has the right to recover the second $10,000 remittance it had delivered to petitioner

HELD: Yes. Art 2154G.R.ofNo. 100776

the New October
Civil Code 28, 1993
is applicable. For this article to apply, the following requisites must concur: 1) that he who paid was not under
obligation to do so; and 2) that payment was made by reason of an essential mistake of fact.
ALBINO S. CO, petitioner,
There was a mistake,
vs. not negligence, in the second remittance. It was evident by the fact that both remittances have the same reference invoice number.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

Antonio P. Barredo for petitioner.

The Solicitor General for the people.

NARVASA, C.J.:

In connection with an agreement to salvage and refloat asunken vessel — and in payment of his share of
the expenses of the salvage operations therein stipulated — petitioner Albino Co delivered to the
salvaging firm on September 1, 1983 a check drawn against the Associated Citizens' Bank, postdated
November 30, 1983 in the sum of P361,528.00.1 The check was deposited on January 3, 1984. It was
dishonored two days later, the tersely-stated reason given by the bank being: "CLOSED ACCOUNT."

A criminal complaint for violation of Batas Pambansa Bilang 222 was filed by the salvage company
against Albino Co with the Regional Trial Court of Pasay City. The case eventuated in Co's conviction of
the crime charged, and his being sentenced to suffer a term of imprisonment of sixty (60) days and to
indemnify the salvage company in the sum of P361,528.00.

Co appealed to the Court of Appeals. There he sought exoneration upon the theory that it was reversible
error for the Regional Trial Court to have relied, as basis for its verdict of conviction, on the ruling
rendered on September 21, 1987 by this Court in Que v. People, 154 SCRA 160 (1987)3 — i.e., that a
check issued merely to guarantee the performance of an obligation is nevertheless covered by B.P. Blg.
22. This was because at the time of the issuance of the check on September 1, 1983, some four (4) years
prior to the promulgation of the judgment in Que v. People on September 21, 1987, the delivery of a
"rubber" or "bouncing" check as guarantee for an obligation was not considered a punishable offense,
an official pronouncement made in a Circular of the Ministry of Justice. That Circular (No. 4),
dated December 15, 1981, pertinently provided as follows:

2.3.4. Where issuance of bouncing check is neither estafa nor violation of B.P. Blg. 22.
Where the check is issued as part of an arrangement to guarantee or secure the payment of an
obligation, whether pre-existing or not, the drawer is not criminally liable for either estafa or violation of
B.P. Blg. 22 (Res. No. 438, s. 1981, Virginia Montano vs. Josefino Galvez, June 19, 1981; Res. No. 707, s.
1989; Alice Quizon vs. Lydia Calingo, October 23, 1981, Res. No. 769, s. 1981, Alfredo Guido vs. Miguel A.
Mateo, et. al., November 17, 1981; Res. No. 589, s. 1981, Zenaida Lazaro vs. Maria Aquino, August 7,
1981).

This administrative circular was subsequently reversed by another issued on August 8, 1984 (Ministry
Circular No. 12) — almost one (1) year after Albino Co had delivered the "bouncing" check to the
complainant on September 1, 1983. Said Circular No. 12, after observing inter alia that Circular No. 4 of
December 15, 1981 appeared to have been based on "a misapplication of the deliberation in the
Batasang Pambansa, . . . (or) the explanatory note on the original bill, i.e. that the intention was not to
penalize the issuance of a check to secure or guarantee the payment of an obligation," as follows:4

Henceforth, conforming with the rule that an administrative agency having interpreting authority may
reverse its administration interpretation of a statute, but that its review interpretation applies only
prospectively (Waterbury Savings Bank vs. Danaher, 128 Conn., 476; 20 a2d 455 (1941), in all cases
involving violation of Batas Pambansa Blg. 22 where the check in question is issued after this date, the
claim that the check is issued as a guarantee or part of an arrangement to secure an obligation collection
will no longer be considered a valid defense.

Co's theory was rejected by the Court of Appeals which affirmed his conviction. Citing Senarillos
v. Hermosisima, 101 Phil. 561, the Appellate Court opined that the Que doctrine did not amount to the
passage of new law but was merely a construction or interpretation of a pre-existing one, i.e., BP 22,
enacted on April 3, 1979.

From this adverse judgment of the Court of Appeals, Albino Co appealed to this Court
on certiorari under Rule 45 of the Rules of Court. By Resolution dated September 9, 1991, the Court
dismissed his appeal. Co moved for reconsideration under date of October 2, 1991. The Court required
comment thereon by the Office of the Solicitor General. The latter complied and, in its comment dated
December 13, 1991, extensively argued against the merits of Albino Co's theory on appeal, which was
substantially that proffered by him in the Court of Appeals. To this comment, Albino Co filed a reply
dated February 14, 1992. After deliberating on the parties' arguments and contentions, the Court
resolved, in the interests of justice, to reinstate Albino Co's appeal and adjudicate the same on its
merits.

Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal
system of the Philippines," according to Article 8 of the Civil Code. "Laws shall have no retroactive effect,
unless the contrary is provided," declares Article 4 of the same Code, a declaration that is echoed by
Article 22 of the Revised Penal Code: "Penal laws shall have, a retroactive effect insofar as they favor the
person guilty of a felony, who is not a habitual criminal . . .5

The principle of prospectivity of statutes, original or amendatory, has been applied in many cases. These
include: Buyco v. PNB, 961 2 SCRA 682 (June 30, 1961), holding that Republic Act No. 1576 which
divested the Philippine National Bank of authority to accept back pay certificates in payment of loans,
does not apply to an offer of payment made before effectivity of the act; Largado v. Masaganda, et al.,
5 SCRA 522 (June 30, 1962), ruling that RA 2613, s amended by RA 3090 on June, 1961, granting to
inferior courts jurisdiction over guardianship cases, could not be given retroactive effect, in the absence
of a saving clause; Larga v. Ranada, Jr., 64 SCRA 18, to the effect that Sections 9 and 10 of Executive
Order No. 90, amending Section 4 of PD 1752, could have no retroactive application; People v. Que Po
Lay, 94 Phil. 640, holding that a person cannot be convicted of violating Circular No. 20 of the Central,
when the alleged violation occurred before publication of the Circular in the Official Gazette; Baltazar
v. C.A., 104 SCRA 619, denying retroactive application to P.D. No. 27 decreeing the emancipation of
tenants from the bondage of the soil, and P.D. No. 316 prohibiting ejectment of tenants from rice and
corn farmholdings, pending the promulgation of rules and regulations implementing P.D. No. 27; Nilo
v. Court of Appeals, 128 SCRA 519, adjudging that RA 6389 whichremoved "personal cultivation" as a
ground for the ejectment of a tenant cannot be given retroactive effect in the absence of a statutory
statement for retroactivity; Tac-An v. CA, 129 SCRA 319, ruling that the repeal of the old Administrative
Code by RA 4252 could not be accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA 500, holding
that RA 6389 should have only prospective application; (see also Bonifacio v. Dizon, 177 SCRA 294 and
Balatbat v. CA, 205 SCRA 419).

The prospectivity principle has also been made to apply to administrative rulings and circulars, to
wit: ABS-CBN Broadcasting Corporation v. CTA, Oct. 12, 1981, 108 SCRA 142, holding that a circular or
ruling of the Commissioner of Internal Revenue may not be given retroactive effect adversely to a
taxpayer: Sanchez v. COMELEC, 193 SCRA 317, ruling that Resolution No. 90-0590 of the Commission on
Elections, which directed the holding of recall proceedings, had no retroactive application; Romualdez
v. CSC, 197 SCRA 168, where it was ruled that CSC Memorandum Circular No. 29, s. 1989 cannot be
given retrospective effect so as to entitle to permanent appointment an employee whose temporary
appointment had expired before the Circular was issued.

The principle of prospectivity has also been applied to judicial decisions which, "although in themselves
not laws, are nevertheless evidence of what the laws mean, . . . (this being) the reason whyunder Article
8 of the New Civil Code, 'Judicial decisions applying or interpreting the laws or the Constitution shall
form a part of the legal system . . .'"

So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:

It will be noted that when appellant was appointed Secret Agent by the Provincial Government in 1962,
and Confidential Agent by the Provincial commander in 1964, the prevailing doctrine on the matter was
that laid down by Us in People v. Macarandang (1959) and People v. Lucero (1958).6 Our decision
in People v. Mapa,7 reversing the aforesaid doctrine, came only in 1967. The sole question in this appeal
is: should appellant be acquitted on the basis of Our rulings in Macarandang and Lucero, or should his
conviction stand in view of the complete reverse of the Macarandang and Lucero doctrine in Mapa? . . .

Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the laws
mean, and this is the reason why under Article 8 of the New Civil Code, "Judicial decisions applying or
interpreting the laws or the Constitution shall form a part of the legal system . . ."The interpretation
upon a law by this Court constitutes, in a way, a part of the law as of the date that law was originally
passed, since this Court's construction merely establishes the contemporaneous legislative intent that
the law thus construed intends to effectuate. The settled rule supported by numerous authorities is a
restatement of the legal maxim "legis interpretation legis vim obtinet" — the interpretation placed upon
the written law by a competent court has the force of law. The doctrine laid down
in Lucero and Macarandang was part of the jurisprudence, hence, of the law, of the land, at the time
appellant was found in possession of the firearm in question and where he was arraigned by the trial
court. It is true that the doctrine was overruled in the Mapa case in 1967, but when a doctrine of this
Court is overruled and a different view is adopted, the new doctrine should be applied prospectively,
and should not apply to parties who had relied on, the old doctrine and acted on the faith thereof. This
is especially true in the construction and application of criminal laws, where it is necessary that the
punishment of an act be reasonably foreseen for the guidance of society.

So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan v. Court of Appeals, et al. (G.R.
No. 97973) and Development Bank of the Philippines v. Court of Appeals, et al (G.R. No 97998), Jan. 27,
1992, 205 SCRA 515, 527-528:8

We sustain the petitioners' position, It is undisputed that the subject lot was mortgaged to DBP on
February 24, 1970. It was acquired by DBP as the highest bidder at a foreclosure sale on June 18, 1977,
and then sold to the petitioners on September 29, 1979.

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that
enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP
are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial decisions applying or
interpreting the laws or the Constitution shall form a part of the legal system of the Philippines." But
while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code
which provides that "laws shall have no retroactive effect unless the contrary is provided." This is
expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The
rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests
rights that have already become vested or impairs the obligations of contract and hence, is
unconstitutional (Francisco vs. Certeza, 3 SCRA 565 [1061]).

The same consideration underlies our rulings giving only prospective effect to decisions enunciating new
doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974]" . . . when a doctrine of this
Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and
should not apply to parties who had relied on the old doctrine and acted on the faith thereof.

A compelling rationalization of the prospectivity principle of judicial decisions is well set forth in the oft-
cited case of Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]. The Chicot
doctrine advocates the imperative necessity to take account of the actual existence of a statute prior to
its nullification, as an operative fact negating acceptance of "a principle of absolute retroactive
invalidity.

Thus, in this Court's decision in Tañada v. Tuvera,9 promulgated on April 24, 1985 — which declared
"that presidential issuances of general application, which have not been published,shall have no force
and effect," and as regards which declaration some members of the Court appeared "quite
apprehensive about the possible unsettling effect . . . (the) decision might have on acts done in reliance
on the validity of these presidential decrees . . ." — the Court said:

. . . . The answer is all too familiar. In similar situation is in the past this Court, had taken the pragmatic
and realistic course set forth in Chicot County Drainage District vs. Baxter Bank (308 U.S. 371, 374) to
wit:
The courts below have proceeded on the theory that the Act of Congress, having found to be
unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and
hence affording no basis for the challenged decree. Norton vs. Shelby County, 118 US 425, 442; Chicago,
I. & L. Ry. Co. v. Hackett, 228 U. S. 559, 566. It is quite clear, however, that such broad statements as to
the effect of a determination of unconstitutionality must be taken with qualifications. The actual
existence of a statute, prior to such a determination, is an operative fact and may have consequences
which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The
effect of the subsequent ruling as to invalidity may have to be considered in various aspects — with
respect to particular conduct, private and official. Questions of rights claimed to have become vested, of
status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in
the light of the nature both of the statute and of its previous application, demand examination. These
questions are among the most difficult of those who have engaged the attention of courts, state and
federal, and it is manifest from numerous decisions that an all-inclusive statement of a principle of
absolute retroactive invalidity cannot be justified.

Much earlier, in De Agbayani v. PNB, 38 SCRA 429 — concerning the effects of the invalidation of
"Republic Act No. 342, the moratorium legislation, which continued Executive Order No. 32, issued by
the then President Osmeña, suspending the enforcement of payment of all debts and other monetary
obligations payable by war sufferers," and which had been "explicitly held in Rutter v. Esteban (93 Phil.
68 [1953] 10 . . . (to be) in 1953 'unreasonable and oppressive, and should not be prolonged a minute
longer . . ." — the Court made substantially the same observations, to wit:11

. . . . The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter
an executive order or a municipal ordinance likewise suffering from that infirmity, cannot be the source
of any legal rights or duties. Nor can it justify any official act taken under it. Its repugnancy to the
fundamental law once judicially declared results in its being to all intents and purposes amere scrap of
paper. . . . It is understandable why it should be so, the Constitution being supreme and paramount. Any
legislative or executive act contrary to its terms cannot survive.

Such a view has support in logic and possesses the merit of simplicity. lt may not however be sufficiently
realistic. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or
executive act must have been in force and had to be compiled with. This is so as until after the judiciary,
in an appropriate case, declares its invalidity,, it is entitled to obedience and respect. Parties may have
acted under it and may have changed theirpositions, what could be more fitting than that in a
subsequent litigation regard be had to what has been done while such legislative or executive act was in
operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being
nullified, its existence is a fact must be reckoned with. This is merely to reflect awareness that precisely
because the judiciary is the governmental organ which has the final say on whether or not a legislative
or executive measure is valid, a, period of time may have elapsed before it can exercise the power of
judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of
fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.

In the language of an American Supreme Court decision: 'The actual existence of a statute, prior to such
a determination [of unconstitutionality], is an operative fact and may have consequences which cannot
justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in various aspects, — with respect to
particular relations, individual and corporate, and particular conduct, private and official (Chicot County
Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This language has been quoted with
approval in a resolution in Araneta v. Hill (93 Phil. 1002 [1953]) and the decision in Manila Motor Co. Inc.
v. Flores (99 Phil. 738 [1956]). An even more recent instance is the opinion of Justice Zaldivar speaking
for the Court in Fernandez v. Cuerva and Co. (L-21114, Nov. 28, 1967, 21 SCRA 1095).

Again, treating of the effect that should be given to its decision in Olaguer v. Military Commission No
34, 12 — declaring invalid criminal proceedings conducted during the martial law regime against civilians,
which had resulted in the conviction and incarceration of numerous persons — this Court, in Tan
vs. Barrios, 190 SCRA 686, at p. 700, ruled as follows:

In the interest of justice and consistently, we hold that Olaguer should, in principle, be applied
prospectively only to future cases and cases still ongoing or not yet final when that decision was
promulgated. Hence, there should be no retroactive nullification of final judgments, whether of
conviction or acquittal, rendered by military courts against civilians before the promulgation of the
Olaguer decision. Such final sentences should not be disturbed by the State. Only in particular cases
where the convicted person or the State shows that there was serious denial of constitutional rights of
the accused, should the nullity of the sentence be declared and a retrial be ordered based on the
violation of the constitutional rights of the accused and not on the Olaguer doctrine. If a retrial is no
longer possible, the accused should be released since judgment against him is null on account of the
violation of his constitutional rights and denial of due process.

xxx xxx xxx

The trial of thousands of civilians for common crimes before the military tribunals and commissions
during the ten-year period of martial rule (1971-1981) which were created under general orders issued
by President Marcos in the exercise of his legislative powers is an operative fact that may not just be
ignored. The belated declaration in 1987 of the unconstitutionality and invalidity of those proceedings
did not erase the reality of their consequences which occurred long before our decision in Olaguer was
promulgated and which now prevent us from carrying Olaguer to the limit of its logic. Thus did this Court
rule in Municipality of Malabang v. Benito, 27 SCRA 533, where the question arose as to whether the
nullity of creation of a municipality by executive order wiped out all the acts of the local government
abolished. 13

It would seem then, that the weight of authority is decidedly in favor of the proposition that the Court's
decision of September 21, 1987 in Que v. People, 154 SCRA 160 (1987) 14 that a check issued merely to
guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22 — should not be
given retrospective effect to the prejudice of the petitioner and other persons situated, who relied on
the official opinion of the Minister of Justice that such a check did not fall within the scope of B.P. Blg.
22.

Inveighing against this proposition, the Solicitor General invokes U.S. v. Go Chico, 14 Phil. 128, applying
the familiar doctrine that in crimes mala prohibita, the intent or motive of the offender is
inconsequential, the only relevant inquiry being, "has the law been violated?" The facts in Go Chico are
substantially different from those in the case at bar. In the former, there was no official issuance by the
Secretary of Justice or other government officer construing the special law violated; 15 and it was there
observed, among others, that "the defense . . . (of) an honest misconstruction of the law under legal
advice" 16 could not be appreciated as a valid defense. In the present case on the other hand, the
defense is that reliance was placed, not on the opinion of a private lawyer but upon an official
pronouncement of no less than the attorney of the Government, the Secretary of Justice, whose
opinions, though not law, are entitled to great weight and on which reliance may be placed by private
individuals is reflective of the correct interpretation of a constitutional or statutory provision; this,
particularly in the case of penal statutes, by the very nature and scope of the authority that resides in as
regards prosecutions for their violation.17 Senarillos vs. Hermosisima, supra, relied upon by the
respondent Court of Appeals, is crucially different in that in said case, as in U.S. v. Go Chico, supra, no
administrative interpretation antedated the contrary construction placed by the Court on the law
invoked.

This is after all a criminal action all doubts in which, pursuant to familiar, fundamental doctrine, must be
resolved in favor of the accused. Everything considered, the Court sees no compelling reason why the
doctrine of mala prohibita should override the principle of prospectivity, and its clear implications as
herein above set out and discussed, negating criminal liability.

WHEREFORE, the assailed decisions of the Court of Appeals and of the Regional Trial Court are reversed
and set aside, and the criminal prosecution against the accused-petitioner is DISMISSED, with costs de
oficio.

SO ORDERED.

Padilla, Regalado, Nocon and Puno, JJ., concur.

# Footnotes

1 As found by the Court of Appeals, the agreement was between Co, representing Mayflower Shipping
Corporation, and Geronimo B. Bella, representing Tans-Pacific Towage, Inc. The expenses for refloating
were apportioned chiefly between FGU Insurance and Development Bank of the Philippines, which
respectively contributed P2,329,022.00 and P1,579,000.00. SEE Rollo, pp. 9, 20-21.

2 Otherwise known as the "Bouncing Checks Law".

3 The ruling is contained in an extended resolution on a motion for reconsideration, promulgated by the
Special Former Second Division of the Court on September 21, 1987, written for the division by Paras, J.,
with whom concurred Fernan, Gutierrez, Jr., Padilla, Bidin and Cortes, JJ. In that resolution, the Court
gave its "stamp of approval" on the decision of the Court of Appeals holding inter alia that "It is now
settled that Batas Pambansa Bilang 22 applies even in cases where dishonored checks are issued merely
in the form of a deposit or a guarantee."

4 Emphasis supplied.

5 Exceptions to the rule of prospectivity are collated, e.g., in the textbook of retired Justice Edgardo A.
Paras (Civil Code of the Philippines Annotated, 1984 ed., Vol. 1, pp. 22-23) viz : 1) laws remedial in
nature; 2) penal law favorable to accused, if ; after not habitual delinquent; 3) laws of emergency nature
under police power : e.g., tenancy relations (Vda. de Ongsiako v. Gamboa, 47 O.G. 4259, Valencia et al.
v. Surtida et al., May 31, 1961); 4) curative laws; 5) substantive right declared for first time unless vested
 rights impaired (Unson v. del Rosario, Jan. 29, 1953; Belen v. Belen, 49 O.G. 997; Peo v. Alejaga, 49 OG
2833).

6 106 Phil. 713 and 103 Phil. 500, respectively, both involving prosecutions for illegal possession of
firearms, and both holding that appointment by the Provincial Governor or Provincial Commander of a
person as a "secret agent" or "confidential agent" "sufficiently placed him under the category of a
'peace officer' . . . who under section 879 of the Revised Administrative Code is exempted from the
requirements relating to the issuance of license to possess firearm.

7 SEE Ilagan v. People, Jan. 29, 1974, 55 SCRA 361.

8 The title of the cited Monge case is Monge, et al. v. Angeles, et al., and is reported in 101 Phil., 563
[1957], while that of the cited Tupas case is Tupas v. Damasco, et al., reported in 132 SCRA 593 [1984].

9 136 SCRA 27, 40-41.

10 And several other rulings set forth in a corresponding footnote in the text of the decision.

11 SEE also Olaguer v. Military Commission No. 34, 150 SCRA 144 (1987) (Citing Municipality of
Malabang v. Benito, 27 SCRA 533 where the question arose as to whether the judicial nullification of an
executive order creating a municipality wiped out all the acts of the local government abolished); Tan v.
Barrios, 190 SCRA 686 (1990); Drilon v. Court of Appeals, 202 SCRA 378 (1991); Union of Filipino
Employees v. Vivar, Jr., 205 SCRA 200 (1992); Peralta v. Civil Service Commission, 212 SCRA 425.

12 150 SCRA 144 (1987).

13 SEE also Cruz v. Enrile, 160 SCRA 700 [1988] and Res. of February 26, 1991; and Drilon v. Court of
Appeals, 202 SCRA 378 [1991].

14 SEE footnote 3, supra.

15 Act No. 1696 of the Philippine Commission punishing any person who shall expose, or cause or
permit to be exposed, to public view . . . any flag, banner, emblem, or device used during the late
FACTS:
insurrection in the Philippine Islands to designate or identify those in armed rebellion against the United
States, . . .
A criminal complaint for violation of Batas Pambansa Bilang 22 was filed by the salvage company against petitioner with the Regional Trial Court.
16 14inPhil.
The case eventuated 128, 133-134.
petitioner’s conviction of the crime charged on the basis that a check issued merely to guarantee the performance of an
obligation is nevertheless covered by B.P. Blg. 22. Pending litigation, Ministry of Justice Circular No. 4 (which excludes guarantee check from
application of B.P.
17 Blg. 22) was
Estrella subsequently
vs. Orendain, 37reversed
SCRA 640; by Ministry
Noblejas Circular No. 12
vs. Salas, 67which
SCRAruled
47. that a check issued merely to guarantee the
performance of an obligation is nevertheless covered by B.P. Blg. 22. Petitioner appealed to the Court of Appeals. There he sought exoneration upon
the theory that it was reversible error for the Regional Trial Court but the Court of Appeals affirmed his conviction.

ISSUE:

Whether or not Ministry Circular No. 12 dated August 8, 1984 declaring the guarantee check will no longer be considered as a valid defense be
retroactively applied.

HELD:

NO. Decision of the Court of Appeals and RTC were set aside. Criminal prosecution against accused-petitioner was dismissed.

RATIO:

It would seem that the weight of authority is decidedly in favor of the proposition that the Court’s decision of September 21, 1987 in Que v. People,
154 SCRA 160 (1987) that a check issued merely to guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22 — should
not be given retrospective effect to the prejudice of the petitioner and other persons situated, who relied on the official opinion of the Minister of
Justice that such a check did not fall within the scope of B.P. Blg. 22.

This is after all a criminal action all doubts in which, pursuant to familiar, fundamental doctrine, must be resolved in favor of the accused. Everything
considered, the Court sees no compelling reason why the doctrine of mala prohibita should override the principle of prospectivity, and its clear
implications as herein above set out and discussed, negating criminal liability.
G.R. No. 136368 January 16, 2002

JAIME TAN, JR., as Judicial Administrator of the Intestate Estate of Jaime C. Tan, petitioner,
vs.
HON. COURT OF APPEALS (Ninth Special Div.) and JOSE A. MAGDANGAL and ESTRELLA
MAGDANGAL, respondents.

PUNO, J.:

This is a petition for review of the Decision of the Court of Appeals dated July 15, 19981 and its
Resolution dated November 9, 19982 denying petitioner's motion for reconsideration in CA-G.R. SP-
41738.

The facts are as stated in the impugned Decision, viz:

"Involved in this case is a parcel of land, designated as Lot No. 645-C, with an area of 34,829 square
meters, more or less, situated in Bunawan, Davao City. The lot was once covered by TCT No. T-72067 of
the Registry of Deeds of Davao City in the name of the late Jaime C. Tan (Tan, for short) married to
Praxedes V. Tan.

From the petition, the motion to dismiss petition, their respective annexes and other pleadings, we
gather the following factual antecedents:

On January 22, 1981, Tan, for a consideration of P59,200.00, executed a deed of absolute sale over the
property in question in favor of spouses Jose Magdangal and Estrella Magdangal. Simultaneous with
the execution of this deed, the same contracting parties entered into another agreement whereunder
Tan given one (1) year within which to redeem or repurchase the property.

Albeit given several opportunities and/or extensions to exercise the option, Tan failed to redeem the
property until his death on January 4, 1988.

On May 2, 1988, Tan's heirs filed before the Regional Trial Court at Davao City a suit against the
Magdangals for reformation of instrument. Docketed as CIVIL CASE NO. 19049-88, the complaint alleged
that, while Tan and the Magdangals denominated their agreement as deed of absolute sale, their real
intention was to conclude an equitable mortgage.

Barely hours after the complaint was stamped 'received,' the Magdangals were able to have Tan's title
over the lot in question canceled and to secure in their names TCT No. T-134470. This development
prompted the heirs of Tan, who were to be later substituted by Jaime V. Tan, Jr. (Tan, Jr.) as plaintiff, to
file a supplemental complaint.

The intervening legal tussles are not essential to this narration. What is material is that on June 4, 1991,
Branch 11 of the Regional Trial Court of Davao City rendered judgment finding for Tan, Jr., as plaintiff
therein. The dispositive portion of the decision reads:.

'WHEREFORE, judgment is rendered:

1. The Deed of Absolute Sale (Exhibits B, B-1) is, in accordance with the true intention of the parties,
hereby declared and reformed an equitable mortgage;
2. The plaintiff is ordered to pay the defendants within 120 days after the finality of this
decision P59,200 plus interest at the rate of 12% per annum from May 2, 1988, the date the complaint
was filed, until paid;

3. In order to avoid multiplicity of suits and to fully give effect to the true intention of the parties, upon
the payment of the aforesaid amount, TCT No. T-134470 in the name of defendants Jose Magdangal and
Estrella Magdangal (Exh. 13) and shall be deemed canceled and null and void and TCT No. T-72067 in the
name of Jaime C. Tan and Praxedes Valles Tan (Exh. A) be reinstated).

No pronouncement as to costs.

SO ORDERED. (Annex 'B', Petition; Emphasis added).'

From the above, the Magdangals appealed to this Court in CA-G.R. CV No. 33657.

In a decision promulgated on September 28, 1995, this Court, thru its then Special Third Division,
affirmed in toto the appealed decision of the lower court. Copy of this affirmatory judgment was each
received by the Magdangals and Tan, Jr. on October 5, 1995.

On March 13, 1996, the Clerk of this Court entered in the Book of Entries of Judgment the Decision in
CA-G.R. CV No. 33657 and issued the corresponding Entry of Judgment which, on its face, stated that the
said Decision 'has on October 21, 1995 become final and executory' (Annex 'L', Petition; Emphasis
added).

On March 21, 1996, the Magdangals filed in the lower court a MOTION FOR CONSOLIDATION AND WRIT
OF POSSESSION, therein alleging that they did not appeal from the aforesaid decision of this Court,
adding '[T]hat the appealed judgment of the Court of Appeals has become final and executory 15 days
from October 5, 1995 or up to October 20, 1995, which the 120 days redemption period commences.
And noting that the redemption period has expired without Tan, Jr. exercising his option, the
Magdangals thus prayed that the title 'in the name of Jaime C. Tan and Praxedes Tan be consolidated
and confirmed in the name of the (Magdangals) x x x and pending such issuance, a writ of possession be
ordered issued (Annex "C", Petition).1âwphi1.nêt

In opposition to this motion (Annex 'F', Petition), Tan, Jr. alleged, among other things, that until an entry
of judgment has been issued by the Court of Appeals and copy thereof furnished the parties, the
appealed decision of the court a quo in this case cannot be considered final and executory. Pressing the
point, Tan, Jr., citing Cueto vs. Collantes, infra., would then assert that the period of redemption on his
part commenced to run from receipt of entry of judgment in CA-G.R. CV No. 33657.

Meanwhile, Tan, Jr. via a motion for execution dated March 27, 1996, which he filed directly with this
court, prayed this court to direct the court a quo to issue the corresponding writ of execution in Civil
Case No. 19049-88. In a related move, Tan, Jr. filed on April 16, 1996, a MANIFESTATION AND MOTION
therein advising the court a quo of his intention to redeem the property in question and of the fact that,
on such date, he has deposited with its clerk of court the repurchase price, plus interest, as required by
its original decision. By way of relief, Tan, Jr. prayed that the Magdangals be ordered to claim the
amount thus deposited and the Register of Deeds of Davao City, to reinstate the title of Jaime Tan and
Praxedes Tan.
Jointly acting on the aforementioned MOTON FOR CONSOLIDATION AND WRIT OF POSSESION of the
Magdangals (Annex 'C', Petition), MANIFESTATION AND MOTION of Tan, Jr. (Annex 'I', Petition), the
court a quo presided by the respondent judge, came out with the first challenged order of June 10, 1996
(Annex 'N', Petition) dispositively reading, as follows:

'WHEREFORE, x x x the Motion for Consolidation and a Writ of Possession is hereby DENIED for lack of
merit.

The deposit of the amount of P116,032.00 made by plaintiff with the Office of Court x x x on April 17,
1996 is hereby considered full payment of the redemption price and the Clerk of Court is hereby
ordered to deliver said amount to herein defendants.

The Register of Deeds of Davao City x x x is hereby directed to cancel TCT No. T-134470 in the name of
Jose Magdangal and Estrella Magdangal and, thereafter, to reinstate TCT No. 72067 in the name of
Jaime C. Tan and Praxedes Valles Tan and to submit her compliance thereto within ten (10) days from
receipt of this Order.

SO ORDERED.'

Explaining her action, the respondent judge wrote in the same order:

'Following the ruling of the Supreme Court in Cueto vs. Collantes, et al., 97 Phil. 325, the 120 days period
for plaintiff to pay the amount of P59,200.00 plus interest x x x should be reckoned from the date of
Entry of Judgment x x x which was March 13, 1996. The plaintiff made a deposit on April 17, 1996 well
within the 120-day period mandated by the decision of this Court.'

In due time, the Magdangals moved for a reconsideration. However, in her next assailed order of July
24, 1996 (Annex 'R', Petition), the respondent judge denied the motion for being proforma and fatally
defective."3

Petitioner assails the aforequoted Decision as follows:

"I. Petitioner's right to due process was violated when the Court of Appeals rendered a judgment on the
merits of private respondents' petition without granting to petitioner the opportunity to controvert the
same.

II. Appeal not certiorari was the appropriate remedy of private respondents as there was no grave abuse
of discretion as to amount to lack of or excess of jurisdiction on the part of the trial judge. Neither is
delay in resolving the main case a ground for giving due course to the petition.

III. Cueto vs. Collantes, 97 Phil. 325, was disregarded by the Court of Appeals in resolving the petition of
private respondents. It is still good case law and was in effect made a part of section 2 of Rule 68 of the
1997 Rules of Civil Procedure on Foreclosure of Mortgage.

IV. The St. Dominic vs. Intermediate Appellate Court, 138 SCRA 242 case is not applicable to the case at
bar; on the other hand the ruling in Gutierrez Hermanos vs. de La Riva, 46 Phil. 827, applies.

V. Equity considerations justify giving due course to this petition."4 (emphasis ours)

We will immediately resolve the key issue of what rule should govern the finality of judgment favorably
obtained in the trial court by the petitioner.
The operative facts show that in its Decision of June 4, 1991, the trial court held that: (1) the contract
between the parties is not an absolute sale but an equitable mortgage; and (2) petitioner Tan should pay
to the respondents Magdangal "within 120 days after the finality of this decision P59,200.00 plus
interest at the rate of 12% per annum from May 2, 1988, the date the complaint was filed, until paid."5

On September 28, 1995 in CA-G.R. CV No. 33657, the Special Third Division of the Court of Appeals
affirmed the decision of the trial court in toto. Both parties received the decision of the appellate court
on October 5, 1995. On March 13, 1996, the clerk of court of the appellate court entered in the Book of
Entries of Judgement the decision in CA-G.R. CV No. 33657 and issued the corresponding Entry of
Judgment which, on its face, stated that the said decision "has on October 21, 1995 become final and
executory."6

The respondents Magdangal filed in the trial court a Motion for Consolidation and Writ of
Possession.7 They alleged that the 120-day period of redemption of the petitioner has expired. They
reckoned that the said period began 15 days after October 5, 1995, the date when the finality of the
judgment of the trial court as affirmed by the appellate court commenced to run.

On the other hand, petitioner filed on March 27, 1996 a motion for execution in the appellate court
praying that it "direct the court a quo to issue the corresponding writ of execution in Civil Case No.
19049-88."8 On April 17, 1996, petitioner deposited with the clerk of court the repurchase price of the
lot plus interest as ordered by the decision.

On June 10, 1996, the trial court allowed the petitioner to redeem the lot in question. It ruled that the
120-day redemption period should be reckoned from the date of Entry of Judgment in the appellate
court or from March 13, 1996.9 The redemption price was deposited on April 17, 1996. As aforestated,
the Court of Appeals set aside the ruling of the trial court.

From 1991-1996, the years relevant to the case at bar, the rule that governs finality of judgment is Rule
51 of the Revised Rules of Court. Its sections 10 and 11 provide:

"SEC. 10. Entry of judgments and final resolutions. - If no appeal or motion for new trial or
reconsideration is filed within the time provided in these Rules, the judgment or final resolution shall
forthwith be entered by the clerk in the book of entries of judgments. The date when the judgment or
final resolution becomes executory shall be deemed as the date of its entry. The record shall contain the
dispositive part of the judgment or final resolution and shall be signed by the clerk, with a certificate
that such judgment or final resolution has become final and executory. (2a, R36)

SEC. 11. Execution of judgment. - Except where the judgment or final order or resolution, or a portion
thereof, is ordered to be immediately executory, the motion for its execution may only be filed in the
proper court after its entry.

In original actions in the Court of Appeals, its writ of execution shall be accompanied by a certified true
copy of the entry of judgment or final resolution and addressed to any appropriate officer for its
enforcement.

In appealed cases, where the motion for execution pending appeal is filed in the Court of Appeals at a
time that it is in possession of the original record or the record on appeal, the resolution granting such
motion shall be transmitted to the lower court from which the case originated, together with a certified
true copy of the judgment or final order to be executed, with a directive for such court of origin to issue
the proper writ for its enforcement."

This rule has been interpreted by this Court in Cueto vs. Collantes as follows:10

"The only error assigned by appellants refer to the finding of the lower court that plaintiff can still
exercise his right of redemption notwithstanding the expiration of the 90-day period fixed in the original
decision and, therefore, defendants should execute the deed of reconveyance required in said decision.
Appellants contend that, the final judgment of the Court of Appeals having been entered on July 8,
1953, the 90-day period for the exercise of the right of redemption has long expired, it appearing that
plaintiff deposited the redemption money with the clerk of court only on October 17, 1953, or, after the
expiration of 101 days. Appellee brands this computation as erroneous, or one not in accordance with
the procedure prescribed by the rules of court.

Appellee's contention should be sustained. The original decision provides that appellee may exercise his
right of redemption within the period of 90 days from the date the judgment has become final. It should
be noted that appellee had appealed from this decision. This decision was affirmed by the court of
appeals and final judgment was entered on July 8, 1953. Does this mean that the judgment became final
on that date?

Let us make a little digression for purposes of clarification. Once a decision is rendered by the Court of
Appeals a party may appeal therefrom by certiorari by filing with the Supreme Court a petition within 10
days from the date of entry of such decision (Section 1, Rule 46). The entry of judgment is made after it
has become final, i.e., upon the expiration of 15 days after notice thereof to the parties (Section 8, Rule
53, as modified by a resolution of the Supreme Court dated October 1, 1945). But, as Chief Justice
Moran has said, 'such finality *** is subject to the aggrieved party's right of filing a petition for certiorari
under this section,' which means that 'the Court of Appeals shall remand the case to the lower court for
the execution of its judgment, only after the expiration of ten (10) days from the date of such judgment,
if no petition for certiorari is filed within that period.' (1 Moran, Comments on the Rules of Court, 1952
ed., p. 950) It would therefore appear that the date of entry of judgment of the Court of Appeals is
suspended when a petition for review is filed to await the final entry of the resolution or decision of the
Supreme Court.

Since in the present case appellee has filed a petition for review within the reglementary period, which
was dismissed by resolution of July 6, 1953, and for lack of a motion for reconsideration the entry of
final judgment was made on August 7, 1953, it follows that the 90-day period within which appellee
may exercise his right of redemption should be counted from said date, August 7, 1953. And appellee
having exercised such right on October 17, 1953 by depositing the redemption money with the clerk of
court, it is likewise clear that the motion be filed for the exercise of such right is well taken and is within
the purview of the decision of the lower court."11

On April 18, 1994, this Court issued Circular No. 24-94, viz:

"TO: COURT OF APPEALS, SANDIGANBAYAN, COURT OF TAX APPEALS, REGIONAL TRIAL COURTS,
METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS, MUNICIPAL CIRCUIT TRIAL COURTS, AND
ALL MEMBERS OF THE INTEGRATED BAR OF THE PHILIPPINES
SUBJECT: RESOLUTION OF THE COURT EN BANC APPROVING AND PROMULGATING THE REVISED
PROVISION ON EXECUTION OF JUDGMENTS. SPECIFICALLY IN APPEALED CASES, AND AMENDING
SECTION 1, RULE 39 OF THE RULES OF COURT

It appears that in a number of instances, the execution of judgments in appealed cases cannot be
promptly enforced because of undue administrative delay in the remand of the records to the court of
origin, aggravated at times by misplacement or misdelivery of said records. The Supreme Court
Committee on the Revision of the Rules of Court has drafted proposals including a provision which can
remedy the procedural impasse created by said contingencies.

Accordingly, pending approval by the Court of the revised rules on Civil Procedure, and to provide a
solution to the aforestated problems, the Court Resolved to approve and promulgate the following
section thereof on execution of judgments, amending Section 1, Rule 39 of the Rules of Court:

Section 1. Execution upon judgments or final orders. - Execution shall issue as a matter of right, on
motion, upon a judgment or order that disposes of the action or proceeding upon expiration of the
period to appeal therefrom if no appeal has been duly perfected.

If the appeal has been duly perfected and finally resolved, such execution may forthwith be applied for
in the lower court from which the action originated, on motion of the judgment obligee, submitting
therewith certified true copies of the judgment or judgments or the final order or orders sought to be
enforced and of the entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so requires, direct the
court of origin to issue the writ of execution.

This resolution shall be published in two (2) newspapers of general circulation and shall take effect on
June 1, 1994.

April 18, 1994.

"(Sgd.) ANDRES R. NARVASA

Chief Justice"

The Circular took effect on June 1, 1994.

The 1997 Revised Rules of Civil Procedure, however, amended the rule on finality of judgment by
providing in section 1, Rule 39 as follows:

"Section 1. Execution upon judgments or final orders. - Execution shall issue as a matter of right, on
motion, upon a judgment or order that disposes of the action or proceeding upon the expiration of the
period to appeal therefrom if no appeal has been duly perfected. (1a)

If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in
the court of origin, on motion of the judgment obligee, submitting therewith certified true copies of the
judgment or judgments or final order or orders sought to be enforced and of the entry thereof, with
notice to the adverse party.
The appellate court may, on motion in the same case, when the interest of justice so requires, direct the
court of origin to issue the writ of execution."

The rationale of the new rule is explained by retired Justice F.D. Regalado as follows:12

"1. The term 'final order' is used in two senses depending on whether it is used on the issue of
appealability or on the issue of binding effect. For purposes of appeal, an order is "final" if it disposes of
the action, as distinguished from an interlocutory order which leaves something to be done in the trial
court with respect to the merits of the case (De la Cruz, et al. vs. Paras, et al., L-41053, Feb. 27, 1976).
For purposes of binding effect or whether it can be subject of execution, an order is 'final' or executory
after the lapse of the reglementary period to appeal and no appeal has been perfected (see Perez, et al.
vs. Zulueta, L-10374, Sept. 30, 1959; cf. Denso [Phil.], Inc. vs. IAC, et al., G.R. No. 75000, Feb. 27, 1987;
Montilla vs. CA, et al., L-47968, May 9, 1988).

2. On the aspect of appealability, these revised Rules use the adjective 'final' with respect to orders and
resolutions, since to terminate a case the trial courts issue orders while the appellate courts and most of
the quasi-judicial agencies issue resolutions. Judgment are not so qualified since the use of the so-called
interlocutory judgments is not favored in this jurisdiction, while the categorization of an order or a
resolution for purposes of denoting that it is appealable is to distinguish them from interlocutory orders
or resolutions. However, by force of extended usage the phrase 'final and executory judgment' is
sometimes used and tolerated, although the use of 'executory' alone would suffice. These observations
also apply to the several and separate judgments contemplated in Rule 36, or partial judgments which
totally dispose of a particular claim or severable part of the case, subject to the power of the court to
suspend or defer action on an appeal from or further proceedings in such special judgment, or as
provided by Rule 35 on the matter of partial summary judgments which are not considered as
appealable (see Sec. 4, Rule 35 and the explanation therein).

The second paragraph of this section is an innovation in response to complaints over the delay caused
by the former procedure in obtaining a writ of execution of a judgment, which has already been
affirmed on appeal, with notice to the parties. As things then stood, after the entry of judgment in the
appellate court, the prevailing party had to wait for the records of the case to be remanded to the court
of origin when and where he could then move for the issuance of a writ of execution. The intervening
time could sometimes be substantial, especially if the court a quo is in a remote province, and could also
be availed of by the losing party to delay or thwart actual execution.

On these considerations, the Supreme Court issued Circular No. 24-94, dated April 18, 1994, approving
and promulgating in advance this amended Section 1 of Rule 39 and declaring the same effective as of
June 1, 1994.

Under the present procedure, the prevailing party can secure certified true copies of the judgment or
final order of the appellate court and the entry thereof, and submit the same to the court of origin with
and to justify his motion for a writ of execution, without waiting for its receipt of the records from the
appellate court. That motion must be with notice to the adverse party, with a hearing when the
circumstances so require, to enable him to file any objection thereto or bring to the attention of said
court matters which may have transpired during the pendency of the appeal and which may have a
bearing on the execution sought to enforce the judgment.
The third paragraph of this section, likewise a new provision, is due to the experience of the appellate
courts wherein the trial court, for reasons of its own or other unjustifiable circumstances, unduly delays
or unreasonably refuses to act on the motion for execution or issue the writ therefor. On motion in the
same case while the records are still with the appellate court, or even after the same have been
remanded to the lower court, the appellate court can direct the issuance of the writ of execution since
such act is merely in the enforcement of its judgment and which it has the power to require."

It is evident that if we apply the old rule on finality of judgment, petitioner redeemed the subject
property within the 120-day period of redemption reckoned from the appellate court's entry of
judgment. The appellate court, however, did not apply the old rule but the 1997 Revised Rules of Civil
Procedure. In fine, it applied the new rule retroactively and we hold that given the facts of the case at
bar this is an error.

There is no dispute that rules of procedure can be given retroactive effect. This general rule, however,
has well-delineated exceptions. We quote author Agpalo:13

"9.17. Procedural laws.

Procedural laws are adjective laws which prescribe rules and forms of procedure of enforcing rights or
obtaining redress for their invasion; they refer to rules of procedure by which courts applying laws of all
kinds can properly administer justice. They include rules of pleadings, practice and evidence. As applied
to criminal law, they provide or regulate the steps by which one who commits a crime is to be punished.

The general rule that statutes are prospective and not retroactive does not ordinarily apply to
procedural laws. It has been held that "a retroactive law, in a legal sense, is one which takes away or
impairs vested rights acquired under laws, or creates a new obligation and imposes a new duty, or
attaches a new disability, in respect of transactions or considerations already past. Hence, remedial
statutes or statutes relating to remedies or modes of procedure, which do not create new or take away
vested rights, but only operate in furtherance of the remedy or confirmation of rights already existing,
do not come within the legal conception of a retroactive law, or the general rule against the retroactive
operation of statutes." The general rule against giving statutes retroactive operation whose effect is to
impair the obligations of contract or to disturb vested rights does not prevent the application of statutes
to proceedings pending at the time of their enactment where they neither create new nor take away
vested rights. A new statute which deals with procedure only is presumptively applicable to all actions -
those which have accrued or are pending.

Statutes regulating the procedure of the courts will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are retroactive in that sense and to that
extent. The fact that procedural statutes may somehow affect the litigants' rights may not preclude their
retroactive application to pending actions. The retroactive application of procedural laws is not violative
of any right of a person who may feel that he is adversely affected. Nor is the retroactive application of
procedural statutes constitutionally objectionable. The reason is that as a general rule no vested right
may attach to, nor arise from, procedural laws. It has been held that "a person has no vested right in any
particular remedy, and a litigant cannot insist on the application to the trial of his case, whether civil or
criminal, of any other than the existing rules of procedure."
Thus, the provision of Batas Bilang 129 in Section 39 thereof prescribing that "no record on appeal shall
be required to take an appeal" is procedural in nature and should therefore be applied retroactively to
pending actions. Hence, the question as to whether an appeal from an adverse judgment should be
dismissed for failure of appellant to file a record on appeal within thirty days as required under the old
rules, which question is pending resolution at the time Batas Bilang 129 took effect, became academic
upon the effectivity of said law because the law no longer requires the filing of a record on appeal and
its retroactive application removed the legal obstacle to giving due course to the appeal. A statute which
transfers the jurisdiction to try certain cases from a court to a quasi-judicial tribunal is a remedial statute
that is applicable to claims that accrued before its enactment but formulated and filed after it took
effect, for it does not create new nor take away vested rights. The court that has jurisdiction over a
claim at the time it accrued cannot validly try the claim where at the time the claim is formulated and
filed the jurisdiction to try it has been transferred by law to a quasi-judicial tribunal, for even actions
pending in one court may be validly taken away and transferred to another and no litigant can acquire a
vested right to be heard by one particular court.

9.18. Exceptions to the rule.

The rule that procedural laws are applicable to pending actions or proceedings admits certain
exceptions. The rule does not apply where the statute itself expressly or by necessary implication
provides that pending actions are excepted from its operation, or where to apply it to pending
proceedings would impair vested rights. Under appropriate circumstances, courts may deny the
retroactive application of procedural laws in the event that to do so would not be feasible or would
work injustice. Nor may procedural laws be applied retroactively to pending actions if to do so would
involve intricate problems of due process or impair the independence of the courts."

We hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure should not be given retroactive
effect in this case as it would result in great injustice to the petitioner. Undoubtedly, petitioner has the
right to redeem the subject lot and this right is a substantive right. Petitioner followed the procedural
rule then existing as well as the decisions of this Court governing the reckoning date of the period of
redemption when he redeemed the subject lot. Unfortunately for petitioner, the rule was changed by
the 1997 Revised Rules of Procedure which if applied retroactively would result in his losing the right to
redeem the subject lot. It is difficult to reconcile the retroactive application of this procedural rule with
the rule of fairness. Petitioner cannot be penalized with the loss of the subject lot when he faithfully
followed the laws and the rule on the period of redemption when he made the redemption. The subject
lot may only be 34,829 square meters but as petitioner claims, "it is the only property left behind by
their father, a private law practitioner who was felled by an assassin's bullet."14

Petitioner fought to recover this lot from 1988. To lose it because of a change of procedure on the date
of reckoning of the period of redemption is inequitous. The manner of exercising the right cannot be
changed and the change applied retroactively if to do so will defeat the right of redemption of the
petitioner which is already vested.

IN VIEW WHEREOF, the decision of the Court of Appeals dated July 15, 1998 and its Resolution dated
November 9, 1998 in CA-G.R. SP-41738 are annulled and set aside. The Orders dated June 10, 1996 and
July 24, 1996 of the RTC of Davao City, 11th Judicial Region, Branch 11, in Civil Case No. 19049-88 are
reinstated. No costs.
FACTS:

On January 22, 1981, Tan, for a consideration of P59,200 executed a deed of absolute sale over the property in question in favor of spouses Jose
Magdangal and Estrella Magdangal. Simultaneous with the execution of this deed, the same contracting parties entered into another agreement
whereunder Tan was given one (1) year within which to redeem or repurchase the property. Tan failed to redeem the property until his death on
January 4, 1988.
SO ORDERED.
On May 2, 1988, Tan's heirs filed before the RTC at Davao City a suit against the Magdangals for reformation of instrument alleging that while Tan
and the Magdangals denominated their agreement as deed of absolute sale, their real intention was to conclude an equitable mortgage.
Davide, Jr., C.J., Kapunan, Pardo, and Ynares-Santiago, JJ., concur.1âwphi1.nêt
RTC rendered judgment finding for Tan, portion of which reads:

1) The Deed of Absolute Sale is, in accordance with the true intention of the parties, hereby declared and reformed an equitable mortgage;

2) The plaintiff is ordered to pay the defendants within 120 days after the finality of this decision P59,200 plus interest at the rate of 12% per annum
from May 2, 1988, Footnote
the date the complaint was filed, until paid;
1
3)xxx. Rollo, p. 48.
2
On Sept. 28, 1995,Id.,CAp.affirmed
58. the decision of the RTC in toto. Both parties received the decision of the appellate court on Oct. 5, 1995. On March
13, 1996, the clerk of court of the appellate court entered in the Book of Entries of Judgement the decision xxx and issued the corresponding Entry of
Judgment which,3 Decision,
on its face,CA-G.R.
stated that
SP the
No.said decision
41738, has on
pp. 1-5; Oct. pp.
Rollo, 21, 1995
48-52.become final and executory.

Magdangals filed4 in the RTC a Motion for Consolidation and Writ of Possession alleging that the 120-day period of redemption of the petitioner has
expired. Id., p. 3; id., p. 16.
5
On June 10, 1996, Rollo, p. 18.
the RTC allowed the petitioner to redeem the lot in question. It ruled that the 120-day redemption period should be reckoned from
the date of Entry of Judgment in the CA or from March 13, 1996. The redemption price was deposited on April 17, 1996.
6
Id., pp. 18-19.
7
Ibid.
ISSUE:
8
Ibid.
What rule should9 govern the finality of judgment favorably obtained in the trial court by the petitioner?
Rollo, p. 59.
10
HELD: 97 Phil. 325 (1955).
From 1991-1996,11 the years relevant to the case at bar, the rule that governs finality of judgment is Rule 51 of the Revised Rules of Court. Its sections
Id., pp. 328-329.
10 and 11 provide:
12
Remedial Law Compendium, Vol. I, 7th ed., p. 398-400.
SEC. 10. Entry of judgments and final resolutions. If no appeal or motion for new trial or reconsideration is filed within the time provided in these
Rules, the judgment
13
or final resolution shall forthwith be entered by the clerk in the book of entries of judgments. The date when the judgments or
Statutory
final resolution becomes Construction,
executory 1986 ed.,
shall be deemed pp.date
as the 269-272.
of its entry. The record shall contain the dispositive part of the judgment or final
resolution and shall be signed by the clerk, with a certificate that such judgment or final resolution has become final and executory.
14
See p. 28, Petition; Rollo, p. 41.
SEC.11. Execution of judgment. Except where the judgment or final order or resolution, or a portion thereof, is ordered to be immediately executory,
the motion for its execution may only be filed in the proper court after its entry.

The 1997 Revised Rules of Civil Procedure, however, amended the rule on finality of judgment by providing in section 1, Rule 39 as follows:

Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of right, on motion, upon a judgment or order that disposes of
the action or proceeding upon the expiration of the period to appeal therefrom if no appeal has been duly perfected.

If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of origin, on motion of the judgment
obligee, submitting therewith certified true copies of the judgment or judgments or final order or orders sought to be enforced and of the entry thereof,
with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue the writ of execution.

SC hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure should not be given retroactive effect in this case as it would result in great
injustice to the petitioner. Undoubtedly, petitioner has the right to redeem the subject lot and this right is a substantive right. Petitioner followed the
procedural rule then existing as well as the decisions of this Court governing the reckoning date of the period of redemption when he redeemed the
subject lot. Unfortunately for petitioner, the rule was changed by the 1997 Revised Rules of Procedure which if applied retroactively would result in
his losing the right to redeem the subject lot. It is difficult to reconcile the retroactive application of this procedural rule with the rule of fairness.
Petitioner cannot be penalized with the loss of the subject lot when he faithfully followed the laws and the rule on the period of redemption when he
made the redemption.