G.R. No.

124554 December 9, 1997

ETERNAL GARDENS MEMORIAL PARK CORPORATION, petitioner,

vs.
COURT OF APPEALS and NORTH PHILIPPINE UNION MISSION OF THE SEVENTH DAY
ADVENTIST, respondents.

KAPUNAN, J.:

This case if the derivative of G.R. No. 73794, which was decided by the Second Division of this
Court on September 19, 1988. 1

The antecedents are as follows: 2

Petitioner EGMPC and private respondent NPUM entered into a Land Development Agreement
dated October 6, 1976. Under the agreement, EGMPC was to develop a parcel of land owned by
NPUM into a memorial park subdivided into lots. The parties further agreed —

(d) THAT the FIRST PARTY shall receive forty (40%) percent of the gross collection less
Perpetual Care Fees (which in no case shall exceed 10% of the price per lot unless
otherwise agreed upon by both parties in writing) or Net Gross Collection (NGC) from this
project. This shall be remitted monthly by the SECOND PARTY in the following manner: (i)
Forty (40%) percent of the NGC, plus (ii) if it becomes necessary for the FIRST PARTY to
vacate the property earlier than two years from the date of this agreement, at the option of
the FIRST PARTY, an additional amount equivalent to twenty (20%) percent of the NGC as
cash advance for the first four (4) years with interest at twelve (12%) percent per
annum which cash advance shall be deductible out of the proceeds from the FIRST
PARTY's 40% from the 5th year onward. The SECOND PARTY further agrees that if the
FIRST PARTY shall desire to have its projected receivables collected at the 5th year, the
SECOND PARTY shall assist in having the same discounted in advance.

The P1.5 million initial payment mentioned in the Deed of Absolute Sale, covering the first
phase of the project, shall be deducted out of the proceeds from the FIRST PARTY's 40% at
the end of the 5th year. Subsequent payments made by the SECOND PARTY on account of
the stated purchase price in said Deed of Absolute Sale shall be charged against what is due
to the FIRST PARTY under this LAND DEVELOPMENT AGREEMENT. 3

Later, two claimants of the parcel of land surfaced — Maysilo Estate and the heirs of a certain
Vicente Singson Encarnacion. EGMPC thus filed an action for interpleader against Maysilo Estate
and NPUM, docketed as Civil Case No. 9556 before the Regional Trial Court of Kalookan City,
Branch 120. The Singson heirs in turn filed an action for quieting of title against EGMPC and NPUM,
docketed as Civil Case No. C-11836 before Branch 122 of the same court.

From these two cases, several proceedings ensued. One such case, from the interpleader action,
culminated in the filing and subsequent resolution of G.R. No. 73794. In G.R. No 73794, EGMPC
assailed the appellate court's resolution requiring "petitioner Eternal Gardens [to] deposit whatever
amounts are due from it under the Land Development Agreement with a reputable bank to be
designated by the respondent court." 4
In the Decision of September 19, 1988, the court ruled thus:

PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit: (b) this case
(together with all the claims of the intervenors on the merits) is REMANDED to the lower
court for further proceedings; and (c) the Resolution of the Third Division of this Court of July
8, 1987 requiring the deposit by the petitioner (see footnote 6)  of the amounts contested in a
5

depository bank STANDS (the Motion for Reconsideration thereof being hereby DENIED for
reasons already discussed) until after the decision on the merits shall have become final and
executory. Entry of judgment was made on April 24, 1989. 6

Sometime thereafter, the trial court rendered decisions in Civil Case Nos. 9556 (interpleader) and C-
11836 (quieting of title). These decisions were appealed to the Court of Appeals, and the appeals
were consolidated.

The appellate court rendered judgment in the consolidated case on December 17, 1991 as follows:
(a) the trial court's decision in Civil Case No. 9556 was affirmed insofar as it dismissed the claims of
the intervenors, including the Maysilo Estate, and the titles of NPUM to the subject parcel of land
were declared valid; and (b) the trial court's decision in Civil Case No. C-11836 in favor of the
Singson heirs was reversed and set aside. 7

From the consolidated decision, the Singson heirs, Maysilo Estate and EGMPC each filed with this
Court their petitions for review on certiorari. The petition filed by the Singson heirs docketed as G.R.
No. 103247-48 was denied for failure to comply with Circular No. 28-91,  and entry of judgment
8

made on July 27, 1992 G.R. No. 105159 filed by the Maysilo Estate was denied for failure of
petitioner to raise substantial legal issues,  and entry of judgment made on August 19, 1992. G.R.
9

Nos. 103230-31 filed by EGMPC was denied for failure to comply with Circular No. 19-91,  and entry
10

of judgment made on July 20, 1993. EGMPC's other petition, this time under Rule 65, docketed as
G.R. Nos. 107646-47 was dismissed for having been filed out of time and for lack of merit.

Following these, the Court, through the Third Division, issued a Resolution dated December 1, 1993
in G.R. No. 73794, thus:

WHEREFORE, considering that the ownership of the property in dispute has now been
settled with finality, the Court sees no further legal obstacle in carrying out the respective
covenants of the parties to the Land Development Agreement. . . In respect to the mutual
accounting required to determine the remaining accrued rights and liabilities of said parties,
the case is hereby remanded to the Court of Appeals for proper determination and
disposition.

All other incidental motions involving G.R. No. 73794, still pending with this Court, are
hereby, declared MOOT and are NOTED WITHOUT ACTION. 11

In compliance with the Supreme Court resolution, the Court of Appeals proceeded with the
disposition of the case, docketed therein as CA G.R. SP No. 04869, and required the parties to
appear at a scheduled hearing on June 16, 1994, "with counsel and accountants, as well as books of
accounts and related records,' to determine the remaining accrued rights and liabilities of said
parties."
12

Citing the following provision of the land development agreement:

 (e) THAT the SECOND PARTY shall keep proper books and accounting records of all
transactions affecting the sale of said memorial lots, which records shall be open for
inspection by the FIRST PARTY at any time during usual office hours. The SECOND PARTY
shall also render to the FIRST PARTY a monthly accounting report of all sales and cash
collections effected the preceding month. It is also understood that all financial statements
shall be subject to annual audit by a reputable external accounting firm which should be
acceptable to the FIRST PARTY. 13

the appellate court required EGMPC to produce at the scheduled hearings the following documents:

(a) statements of monthly gross income from the year 1981, supported by copies of the
contracts/agreements of the sale of lots to buyers/customers; and

(b) summary statements, by month, of the forty per cent (40%) share in the "net gross"
income under the land development agreement between the parties. 14

The accounting of the parties' respective obligations was referred to the Court's Accountant, Mrs.
Carmencita Angelo, with the concurrence of the parties, to whom the documents were to be
submitted.15

NPUM prepared and submitted a Summary of Sales and Total Amounts Due based on the following
documents it likewise submitted to the court. 16

A-1 Land Development Agreement executed between NPUM and EGMPC

on October 6, 1976.

A-2 Submittal of requirements filed by EGMPC to the Securities and

Exchange Commission dated July 26, 1976 re: its application to develop, sell
and maintain a first class private cemetery part situated in Baesa, Kalookan
City on the 23 has. property of PUC of NPUM. EGMPC's application calls for
the development of 31,326 lawn type memorial lots for underground and
above ground interment, and 20,808 garden and family/estates memorial lots
for above ground interment, or a total of 52,134 memorial lots.

A-3 EGMPC Daily Sales Report which shows that from 1978, 1979, 1980 and
1981 EGMPC has sold 19,237 memorial lots with gross sales amounting to
P52,421,879.70.

A-3a Machine copy of EGMPC Daily Sales Report dated December 29, 1979
showing that in 1978 it sold 2,805 memorial lots valued at P5591,716.40 and
in 1979 it sold 5,503 memorial lots valued at P11,943,631.00.

A-3a-1 Weekly Sales Report of EGMPC corresponding to the period

December 26 to 31, 1979, showing cumulatively as of said date it has sold a
total of 5,503 memorial lots from January 1 to December 29, 1979.

A-3a-2 Sales Report of EGMPC for the period February 12 to 18, 1980.

A-3a-4 Letter of Gabriel O. Vida, Executive Vice President and General

Manager of EGMPC, dated April 9, 1980, to Pastor Bienvenido Capuli stating
among others that for the year 1978, EGMPC has sold 2,805 memorial lots
and in the first quarter of 1980 from January 1 to April 2, it has sold 2,418
memorial lots, for a total gross sales of 10,730 memorial lots.

A-3b EGMPC Daily Sales Report which show that from 1978 up to December
9, 1980 it has sold a total of 15,253 memorial lots with sales value of
P38,085,299.40.

A-3b-1 Are supporting sales records and/or weekly sales report of EGMPC

A-3b-2 in relation to Exhibit "A-3b."

A-3b-3

A-3b-4

A-3b-5

A-3b-6

A-3b-7

A-4 Audited Financial Statement of EGMPC for 1985 which it filed with the
Securities and Exchange Commission on April 16, 1986 pursuant to the
reportorial requirements of the SEC, with accompanying balance sheet and
statement of income and expenses, consisting of five (5) pages.

A-5 Actual Gross Profit Rate of EGMPC for the year 1985 which shows that it
sold 3,623 memorial lots valued at P25,299,601.20.

A-6 Machine copy of Assumptions to Projected Cash Flow and Income

Statements prepared by EGMPC with assumptions that the 52,000 memorial
lots would be sold and that 15% of total sales per year are cash sales and
85% are on installment and that installment sales are payable over a period
of 60 moths at 12% interest per annum.

A-7 Formula for Computation of Interest Income for Lots Sold on Installment.

A-8 Sales Price Analysis based on Lawn Class Memorial Lots for the period
1978 to 1988, inclusive.

A-8a Price list issued by EGMPC effective December 1, 1977.

A-9 Computation of interest due for the use of NPUM share.

A-9a Letter dated April 11, 1983 of Alfonso P. Roda, President of PUC of
NPUM showing summary of gross collections from memorial lots sales
starting January 1978 up to June 1982, inclusive, per computation given to
PUC by EGMPC.

A-9b Are validating documents consisting of accounting ledgers

A-9c in support of the computations given by EGMPC to PUC

A-9d as mentioned in Dr. Roda's Letter dated April 11, 1983.

A-10 Promissory Note of EGMPC dated April 6, 1976 issued to NPUM for a
loan of P720,000 for which EGMPC agreed to pay 12% interest per annum.

B Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

B-1 effective February 3, 1981.

C Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

C-1 effective March 15, 1982.

C-2

D- Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

D-1 effective February 18, 1983.

D-2

E Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

E-1 effective January 23, 1984.

E-2

F Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

F-1 effective July 9, 1984.

F-2

G Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

G-1 effective March 1, 1985.

G-2

H Price List of Memorial Lots of HIMLAYANG PILIPINO, INC. effective July

1, 1987.

I Price List of Memorial Lots of HIMLAYANG PILIPINO, INC. effective

January 4, 1989.

J Price List of Memorial Lots of HIMLAYANG PILIPINO, INC. effective

August 2, 1989.
K Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

K-1 effective February 4, 1990.

L Price List of Memorial Lots of HIMLAYANG PILIPINO, INC. effective

February 2, 1991.

M Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

M-1 effective October 2, 1991.

N Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

N-1 effective February 5, 1992.

O Price List of Memorial Lots of HIMLAYANG PILIPINO, INC. effective

October 9, 1992.

P Price List of Memorial Lots of HIMLAYANG PILIPINO, INC. effective

January 15, 1993.

Q Price List of Memorial Lots of HIMLAYANG PILIPINO, INC. effective

February 16, 1993.

R Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

R-1 effective March 16, 1993.

S Price List of Memorial Lots of HIMLAYANG PILIPINO, INC.

S-1 effective September 15, 1993.

T Price List of Memorial Lots of MANILA MEMORIAL PARK

T-1 effective January 1, 1985.

T-2

T-3

T-4

U Price List of Memorial Lots of MANILA MEMORIAL PARK

U-1 effective June 1, 1991.

U-2

U-3
 U-4

V Price List of Memorial Lots of MANILA MEMORIAL PARK

V-1 effective November 2, 1991.

V-2

V-3

V-4

W Price List of Memorial Lots of HOLY CROSS MEMORIAL

W-1 PARK effective December 1, 1987.

W-2

W-3

It appears that EGMPC did not submit any document whatsoever to aid the appellate court in its
mandated task. Thus, in a Resolution dated January 19, 1995, the appellate court declared.

. . . (1) that Eternal Gardens Memorial Park Corporation has waived its right to present the
records and documents necessarily for accounting, which records they were specifically
required to preserve under the parties' Land Development Agreement, and (2) that it will now
proceed "to the mutual accounting required to determine the remaining accrued rights and
liabilities of the said parties . . ." ordered by the Supreme Court in its Resolution of December
1, 1993 (p. 7, rec.), and that the Court will proceed to do what it is required to do on the basis
of the documents submitted by the North Philippine Union Mission of the Seventh Day
Adventists only. 17

Ms. Angelo submitted her Report dated January 31, 1995, to which the appellate court required the
parties to comment on. 18

EGMPC took exception to the appellate court's having considered it to have waived its right to
present documents.  Considering EGMPC's arguments, the court set a hearing date where NPUM
19

would present its documents "according to the Rules [of Court], and giving the private respondent
[EGMPC] the opportunity to object thereto." 20

Subsequently, NPUM asked for and the appellate court issued a subpoena duces tecum and
subpoena ad testificandum to EGMPC's President, Mr. Gabriel O. Vida requiring him to produce the
following documents.

1. Copies of Deeds of Sale corresponding to each memorial lot sold subject of the Land
Development Agreement between the parties;

2. Lists of all memorial lots sold under or affecting the said Land Development Agreement
with an indication of the types/kinds of memorial lots and the corresponding prices at which
each was sold and the dates when each lot was sold;
 3. Lists of all the owners of the memorial lots affected by the Land Development Agreement;

4. Copies of all the annual audits made by the external accounting firm pursuant to provision
(a) of the Land Development Agreement.

5. Copies of all audited financial statements of ETERNAL from 1978 to the present;

6. Copies of all monthly accounting reports of all sales and cash collections regarding all the
memorial lots sold under the Land Development Agreement pursuant to provision (e) of the
said Land Development Agreement;

7. The name/s of the Depository/Trustee Bank/s which acted as the depository/trustee of

funds collected by ETERNAL pursuant to provision (f) of the subject Land Development
Agreement.

8. All other accounting books and records on all transactions affecting all the memorial lots
covered under the Land Development Agreement.

9. List of all the corporate officers and employees of ETERNAL from 1975 up to the present
whose duties and responsibilities involved the recording of all sales and other transactions
and the safekeeping of such records relating to the sale of the memorial lots subject of the
Land Development Agreement. 21

NPUM also filed a Request for Admission of the documents it had earlier submitted to the Court
annexed to the Summary of Sales and Total Amounts Due, addressed to Mr. Vida.  EGMPC,
22

however, filed a Denial to the Request for Admission, alleging that it was without knowledge or
information of the documents, except for the Land Development Agreement of October 6, 1976. 23

NPUM then reiterated its request for and was granted by the appellate court, a subpoena duces
tecum and subpoena ad testificandum, this time addressed to the Chief of the Records Division of
EGMPC.  NPUM further filed a Motion for Production, Inspection and Photocopying of Documents
24

and Books of Accounts of EGMPC, in particular:

1. Master Development and/or Operational Plan of Eternal Gardens for Memorial Park at
Baesa, Metro Manila subject of the Land Development Agreement.

2. Inventory of memorial lots developed and sold by Eternal under the Land Development
Agreement and the type of memorial lots developed and sold, i.e., whether lawn type, family
estate type, garden estate type and the number of each type developed and sold.

3. List of buyers and owners of memorial lots sold under the Land Development Agreement
and the corresponding sales contracts.

4. Records of number of memorial lots sold on installment terms, and those sold on cash
basis.

5. Sales and marketing records as to the number of memorial lots effected by the Land
Development Agreement sold in each of the following years: 1978, 1979, 1980, 1981, 1982,
1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994 and 1995.
 6. Monthly accounting records of collections from sales of memorial lots under the Land
Development Agreement from 1978 to 1995, inclusive.

7. Year-end audited financial statements of Eternal Gardens Memorial Park Corporation from
1977 to 1995, inclusive.

8. Price list of Eternal's memorial plot lots affected by the Land Development Agreement
covering the period 1977 to 1995.

9. List of accredited and/or authorized agents, brokers, salesmen, and sales counselors of
Eternal from 1977 to 1995 and their addresses.

10. Records of collections representing 10% of the gross collections on each memorial lot
sold under the Land Development Agreement, for perpetual care fees and constituting a trust
fund to secure perpetual care of the memorial park affected by the Land Development
Agreement. 25

Later, NPUM filed a second Request for Admissions addressed to Mr. Vida. He was asked to make
the following admissions:

1. That the auditor retained by Eternal Gardens Memorial Park Corp. to audit and examine
its financial position, and which prepared Eternal's audited financial statements, for the years
1982, 1983 and 1984 was the auditing and accounting firms of Josue, Arceo & Co., CPAs,
with office at the 2nd Floor, Roman R. Santos Building, Plaza Goeti, Manila.

2. That the auditor retained by Eternal Gardens Memorial Park Corp. to audit and examine
its financial position, and which prepared Eternal's audited financial statement for the Fiscal
years 1985 and 1986 was Roseller A. Ditangco, CPA, with offices at No. 6, Plata Street,
Tugatog, Malabon, Metro Manila.

3. That the auditor retained by Eternal Gardens Memorial Park Corp. to audit and examine
its financial position, and which prepared Eternal's audited financial statements for the Fiscal
years 1987, 1988, 1989, 1990, 1991, 1992 and 1993, was Bernardino T. Dela Cruz, CPA
with offices at No. 9, Interior II, K-8th Street, Kamuning, Quezon City.

4. That true and faithful copies of the audited financial statements of Eternal Gardens
Memorial Park Corp. for the Fiscal years 1981 to 1993, inclusive, specifically those referred
to in paragraphs 1, 2 and 3 of this Request, were submitted to and filed with the Bureau of
Internal Revenue as an integral part of Eternal's Income Tax Returns, as well as with the
Securities and Exchange Commission in compliance with the reportorial requirements of the
said Securities and Exchange Commission.

5. That each of the following documents, exhibited with and attached to this request, are true
and faithful copies of the original and genuine documents, thus:

a. Annex "A" (inclusive of sub-markings from Annexes "A-1" to "A-9") is the

audit report prepared by the accounting firm of Josue, Arceo & Co., (CPAs),
of the financial position of Eternal Gardens Memorial Park Corp. at 31
December 1982;
 b. Annex "B" (inclusive of sub-markings from Annexes "B-1" to "B-3") is the
audit report prepared by the accounting firm of Josue, Arceo & Co., (CPAs)
of the financial position of Eternal Gardens Memorial Park Corp. at 31
December 1983;

c. Annex "C" (inclusive of sub-markings from Annexes "C-1" to "C-6") is the

audit report prepared by the accounting firm of Josue, Arceo & Co. (CPAs) of
the financial position of Eternal Gardens Memorial Park Corp. at 31
December 1984;

d. Annex "D" (inclusive of sub-markings from Annexes "D-1" to "D-3") is the

audit report prepared by Roseller A Ditangco, CPA of the financial position of
Eternal Gardens Memorial Park Corp. at 31 December 1985;

e. Annex "E" (inclusive of sub-markings from Annexes "E-1" to "E-8") is the

audit report prepared by Bernardino T. Dela Cruz, CPA; of the financial
position of Eternal Gardens Memorial Park Corp. at 31 December 1987;

f. Annex "F" (inclusive of sub-markings from Annexes "F-1" to "F-7") is the

audit report prepared by Bernardino T. Dela Cruz, CPA, of the financial
position of Eternal Gardens Memorial Park Corp. at 31 December 1989;

g. Annex "G" (inclusive of sub-markings from Annexes "G-1" to "G-9") is the

audit report prepared by Bernardino T. Dela Cruz, CPA, of the financial
position of Eternal Gardens Memorial Park Corp., at 31 December 1990;

h. Annex "H" (inclusive of sub-markings from Annexes "H-1" to "H-13") is the

audit report prepared by Bernardino T. Dela Cruz, CPA, of the financial
position of Eternal Gardens Memorial Park Corp. at 31 December 1991;

i. Annex "I" (inclusive of sub-markings from Annexes "I-1'' to "I-8") is the audit
report prepared by Bernardino T. Dela Cruz, CPA, of the financial position of
Eternal Gardens Memorial Park Corp. at 31 December 1992.

j. Annex "J" (inclusive of sub-markings from Annexes "J-1" to "J-7") is the

audit report prepared by Bernardino T. Dela Cruz, CPA, of the financial
position of Eternal Gardens Memorial Park Corp. at 31 December 1993. 26

Meanwhile, EGMPC failed to present the documents required by the subpoena. It further filed a
Denial and/or Objection to the Requests for Admission on the ground that it could not make
comparison of the documents with the originals thereof. 27

On November 10, 1995, Ms. Angelo submitted her Report. 28

In a Resolution dated January 15, 1996, the Court of Appeals approved the report of Ms. Angelo,
finding this "to be a just and fair account of what Eternal Gardens and Memorial Park owes to the
petitioner North Philippine Union Mission of the Seventh-Day Adventists, and accordingly orders the
former to pay and turn over to the latter the amounts of P167,065,195.00 as principal and
P167,235,451.00 in interest . . ."
29
EGMPC filed a Motion for Reconsideration, which was denied for lack of merit by the appellate court
in a Resolution dated April 12, 1996. 30

On April 29, 1996, EGMPC filed a Motion for Extension of Time to File Petition for Certiorari and
Prohibition with this Court, docketed as G.R. No. 124554, seeking the review of the appellate court's
Resolutions dated January 15, 1996 and April 12, 1996.  The Court granted this motion for
31

extension,  and on May 27, 1996, EGMPC filed the instant petition.
32 33

It appears, however, that in a Report dated May 31, 1996 in CA-G.R. SP No. 04869, the Court of
Appeals informed the parties that its January 15, 1996 Resolution had attained finality considering
the following:

The respondent Eternal Gardens Memorial Park received copy of the [January 15, 1996]
resolution on January 22, 1996 and, after twelve (12) days from its receipt or on February 2,
1996, filed a motion for reconsideration thereof. This Court denied Eternal Garden's motion
for reconsideration in a resolution promulgated April 12, 1996, a copy of which it received on
April 18, 1996. After eleven (11) days from receipt of the resolution denying its motion for
reconsideration, or on April 12, 1996 (sic), it filed a motion for extension to file a petition for
review with the Supreme Court.

It is quite clear that after the denial of its motion for reconsideration, Eternal Gardens had
only three (3) days left of the reglementary period to file a petition for review, or only up to
April 12, 1996, but Eternal Gardens allowed that period to lapse, and then filed its motion to
extend to file its petition on April 29, 1996 — which is eight (8) days beyond the period of
finality of the resolution sought to be reviewed by the Supreme Court. Consequently, the
resolution of January 15, 1996 had attained finality before Eternal Gardens filed its motion to
extend before this Honorable Court. 34

Entry of judgment was made on June 6, 1996. 35

Following the above incidents, on June 20, 1996, EGMPC filed in G.R. No. 73794 an "Opposition
and/or Comment to the Report of the Court of Appeals dated 31 May 1996" with the prayer:

. . . to disregard and nullify the Report of the Court of Appeals dated May 31, 1996 and at the
same time allow or tolerate the First Division of the Honorable Supreme Court to resolved
(sic) the petitioner Eternal Gardens Petition for Certiorari against the Court of Appeals and
NPUM with G.R. No. 124554. 36

In retort to EGMPC's opposition, also in G.R. No. 73794, NPUM filed on June 11, 1996 an Omnibus
Motion (a) to dismiss the petition in G.R. No. 124554, or (b) to consolidate the two petitions, and (c)
for the issuance of a writ of execution. NPUM contended that as a consequence of the appellate
court's resolutions in CA G.R. SP No. 04869 having attained finality, a writ of execution may be
issued under G.R. No. 73794, and EGMPC could no longer file a separate petition such as that
docketed as G.R. No. 124554. 37

In its Comment filed on July 17, 1996, in G.R. No. 124554, NPUM prayed for the denial of the
petition for "being frivolous and dilatory", citing EGMPC's violation of Circular No. 04-94 on forum
shopping, in reference to its (EGMPC's) pleadings filed in G.R. No. 73794. NPUM pointed out that
the reliefs sought by EGMPC in G.R. No. 124554 were "identical" to those in its Opposition And/Or
Comment to the Report of the Court of Appeals dated 31 May 1996 filed in G.R. No. 73794. 38
On December 26, 1996, the Regional Trial Court of Kalookan City, Branch 120, issued an Order in
the case of origin, Civil Case No. 9556, granting NPUM's motion for execution of judgment.  A writ of
39

execution was subsequently issued by that trial court on January 7, 1997. 40

Because of the trial court's issuance of the writ of execution, on January 10, 1997, EGMPC filed in
G.R. No. 124554 an Urgent Motion for Restraining Order And/Or Injunction and Motion for Contempt
of Court. EGMPC prayed that "pending resolution of the petition to promptly issue a restraining order
and/or injunction against Judge Jaime Discaya of the RTC Br. 120 of Kalookan City in Civil Case No.
9556 . . ."41

EGMPC also filed in G.R. No. 73794 on January 17, 1997 an Urgent Motion for Restraining Order
And/Or Injunctive Relief with the same prayer as in its Urgent Motion filed in G.R. No. 124554. 42

In G.R. No. 124554, the Court granted EGMPC's motion and issued a temporary restraining order
against the trial court's order dated December 16, 1996 and writ of execution dated January 7,
1997.43

In a Resolution dated January 27, 1997 issued in G.R. No. 73794, the Court denied for lack of merit
EGMPC's Urgent Motion. 44

The threshold question here is whether Eternal Gardens timely filed its petition for review from the
Court of Appeals' January 15, 1996 and April 12, 1996 Resolutions.

We restate the material dates thus:

EGMPC received a copy of the January 15, 1996 Resolution on January 22, 1996. Twelve days from
such receipt, or on February 2, 1996, EGMPC filed its Motion for Reconsideration. On April 18,
1996, EGMPC received the appellate court's Resolution of April 12, 1996 denying its Motion for
Reconsideration. On April 29, 1996, or eleven days from its receipt of the denial of its motion for
reconsideration, EGMPC filed a motion for extension of time to file its "Petition for Certiorari and
Prohibition" and concurrently paid the legal fees.

We find that EGMPC's Motion for Extension of Time to File a Petition for Review was timely filed on
April 29, 1996, such motion having been filed eleven days from receipt of the appellate court's denial
of its motion for reconsideration Supreme Court Circular No. 10 dated August 28, 1986 on modes
and periods of appeal provides thus.

(5) APPEALS BY CERTIORARI TO THE SUPREME COURT

In an appeal by certiorari to this Court under Rule 45 of the Rules of Court, Section 25 of the
Interim Rules and Section 7 of PD 1606, a party may file a petition for review on certiorari of
the judgment of a regional trial court, the Court of Appeals or the Sandiganbayan within
fifteen days from notice of judgment or of the denial of his motion for reconsideration filed in
due time, and paying at the same time the corresponding docket fee (Section 1 of Rule 45).
In other words, in the event a motion for reconsideration is filed and denied, the period of
fifteen days begins to run again from notice of denial (See Codilla vs. Estenzo, 97 SCRA
351; Turingan vs. Cacdad, 122 SCRA 634).

A motion for extension of time to file a petition for review on certiorari may be filed with the
Supreme Court within the reglementary period, paying at the same time the corresponding
docket fee.45
While the petition filed by EGMPC purports to be one of certiorari under Rule 65 of the Revised
Rules of Court, we shall treat it as having been filed under Rule 45, considering that it was filed
within the 15-day reglementary period for the filing of a petition for review on certiorari. As the Court
stated in Delsan Transport Lines, Inc. vs. Court of Appeals, where the Court was liberal in its
application of the Rules of Court in the interest of justice: "It cannot . . . be claimed that this petition is
being used as a substitute for appeal after that remedy has been lost through the fault of petitioner.
Moreover, stripped of allegations of 'grave abuse of discretion,' the petition actually avers errors of
judgment rather than of jurisdiction, which are the subject of a petition for review." 46

The May 31, 1996 Report of the Court of Appeals informed the parties that the January 15, 1996
Resolution had attained finality, erroneously applying the rule applicable to petitions for review filed
with the Court of Appeals from a final judgment or order of the regional trial court. 47

We cannot and do not in the instant case vacate and set aside the May 31, 1996 Report. The report
is not before this Court on review. We must however, within the milieu of this case, regard the report
impertinent by the fact of EGMPC having timely filed its motion for extension of time to file its petition
on April 29, 1996.

We also consider that the consequences of the issuance of the report, that is, the entry of judgment
in the appellate court and the writ of execution issued by the trial court in the case of origin,
inextricably affect the resolution of the instant case. Hence, the rationale for our restraining order of
January 15, 1997.

We next consider whether, as asserted by NPUM, EGMPC's petition must be summarily dismissed
on the ground of forum shopping. NPUM points to EGMPC's Opposition and/or Comment to the
Report of the Court of Appeals dated May 31, 1996 filed in G.R. No. 73794 vis-a-vis its Petition for
Review in the instant case, and the two Urgent Motions for the Issuance of a Temporary Restraining
Order filed in G.R. No. 73794 and in the instant case.

NPUM asserts that the reliefs sought by EGMPC in its opposition and in its petition are "identical"
We disagree. The petition here seeks the setting aside of the Court of Appeals' January 1, 1996 and
April 12, 1996 Resolutions.

The Opposition in G.R. No. 73794, on the other hand, sought the nullification of the May 31, 1996
Report and as a corollary, for the instant case to be "allowed or tolerated".

The opposition and the petition do not seek to provoke from this Court the resolution of a same
issue, the evil which Revised Circular No. 28-91 and its companion Administrative Circular No. 04-94
address. We read the opposition in G.R. No. 73794 as a complement to the petition here, to which it
makes categorical and express reference.  We consider it as merely a matter of discourse and
48

emphasis that Eternal Gardens reiterated its case in the later pleading.

Regarding the motions for the issuance of a temporary restraining order filed by EGMPC on January
10, 1997 in the instant case and on January 17, 1997 in G.R. No. 73794, we consider the exigency
which may have prompted EGMPC to file the motions in both cases. The trial court in the case of
origin, acted favorably on NPUM's motion for the issuance of a writ of execution, the basis of which
is the alleged finality of the appellate court's January 15, 1996 Resolution. The trial court ruled that
the instant case denominated as an original action for certiorari "does not interrupt the course of the
principal action [G.R No. 73794] nor the running of the period in the proceeding."  To not stay the
49

execution considering the trial court's ratiocination would render moot EGMPC's remedy in the
instant case.
NPUM also contends that EGMPC has committed perjury, pointing to the certification under oath
filed by EGMPC, through its President Gabriel O. Vida, where he states "that there is no other case
pending in any court or tribunal in the Philippines, with the same issues in this case . . ."
50

Again, we disagree. It does not appear that EGMPC was to pursue the two cases concurrently.
EGMPC filed this new petition, and did not assail the appellate court's resolution under G.R. No.
73794, as in fact the Court has informed the parties that no further pleadings were to be entertained
in G.R. No. 73794 after remand to the Court of Appeals. 51

EGMPC next asserts that the Resolution of the Third Division dated December 1, 1993 ordering the
remand to the Court of Appeals of the case for accounting "changed, modified and reversed" the
September 19, 1988 Decision of the Second Division which ordered the remand of the case to the
trial court. EGMPC contends that the Third Division "is in violation of the constitution which provides
that no doctrine or principle of law laid down in a decision en banc or in division may be changed
modified or revised by the Court except when sitting en banc." 52

EGMPC had raised the very same issue in its Motion for Reconsideration  of the December 1, 1993
53

Resolution. The Court, in its Resolution dated February 14, 1994 had denied the motion with finality
for lack of merit.

Needless to say, the argument raised by EGMPC is utterly without consequence. At the time the
September 19, 1988 Decision was rendered, the two civil cases — interpleader and quieting of title
— were still pending. What was brought before the appellate courts and subject of G.R. No. 73794
were mere incidents, and not the judgment of the trial court; thus, the remand to the trial court for
further proceedings on the merits of the case. The December 1, 1993 Resolution was issued after
the issue of ownership of the subject parcel of land was already resolved with finality. What was left
for the courts to do was to have an accounting done of the rights and liabilities of EGMPC and
NPUM, thus, the remand to the Court of Appeals.

We now consider the merits of the case.

The gist of EGMPCs' contention is that it owes the amount of only P35,000,000.00 less advances
and not P167,065,195.00 as principal and P167,235,451.00 in interest as computed by Court
Accountant Carmencita C. Angelo. 54

EGMPC first contends that the appellate court, in appointing an accountant to make the
computations, delegated judicial function, such as to determine the admissibility of evidence. 55

Under the Revised Internal Rules of the Court of Appeals, that court has the —

d. Authority to receive evidence and perform any and all acts necessary for the resolution of
factual issues raised in cases falling within its original jurisdiction.

For the proper disposition of the case, the appellate court, under the above-quoted authority,
designated an accountant "to receive, collate and analyze the documents to be filed by the parties." 56

No judicial function was exercised by Ms. Angelo. She was not asked to rule on the admissibility of
the evidence. The documents were duly marked during the hearing of July 19, 1995, for the
consideration of the appellate court, which alone had the power to decide. Ms. Angelo's role in the
proceedings was to prepare a report, which she did, culling from the documents submitted to her.
While it may be true that the report, when adopted by the appellant court, became part of its
decision, judicial power lies, not with the official who prepared the report, but with the court itself
which wields the power of approval or rejection. Under American jurisprudence, the rule is thus —

It would seem on principle that a commissioner, master or referee appointed by a court to aid
it in the adjudication of a particular case is not a court when performing the functions
assigned to him, although the court may adopt his conclusions in its decision . . . It has, for
instance, been held that a statute giving the supreme court of a state the power to appoint
commissioners thereof whose duty shall be, under such rules and regulations as the court
may adopt, to assist it in the performance of its functions, and in disposing of undetermined
cases before it, is not unconstitutional or open to the objection that the commissioners are
vested with judicial power, since the commissioners merely report facts found and
conclusions reached, and the court retains the power to decide which is the only judicial
power. It has also been pointed out that a chancellor does not, by referring a matter to a
commissioner, delegate his judicial function to him. The commissioner is appointed for the
purpose of assisting the chancellor, not to supplant or replace him, and the findings of a
commissioner are merely advisory and not binding on the court. 57

EGMPC also contends that it was deprived of due process because it "was not given reasonable
opportunity to know and meet the claim of [NPUM] as its counsel was not able to cross-examine the
American Accountant of [NPUM]. 58

The contention is without merit.

Contrary to EGMPC's claim, it was given every opportunity to present its case. At the outset, the
parties were asked by the appellate court to submit documents for accounting. NPUM made full
utilization of the modes of discovery, asking the appellate court to subpoena documents and
testimonies, and requesting admissions from EGMPC regarding documents it (EGMPC) had in its
possession, documents which emanated from the corporation itself, and either sent to NPUM as
communiques, such as the Letter of Mr. Vida dated April 4, 1980 to Pastor Bienvenido Capule of
NPUM stating inter alia that for 1978, EGMPC sold 2,805 memorial lots and that during the first
quarter of 1980 the corporation sold 2,418 lots, totalling 10,730,  or documents available to the
59

general public, as in the Price Lists, or filed with government offices, specifically the Securities and
Exchange Commission and the Bureau of Internal Revenue.

EGMPC cannot claim that it was denied the forum to confer with NPUM and NPUM's accountant.
The appellate court had arranged conferences for the parties and their accountants to allow them to
discuss with each other and with Ms. Angelo. Even Ms. Angelo, in her Letter dated November 10,
1995 covering her second and final report spoke of such a conference, to wit:

In compliance with your instructions in the last conference-meeting with the party-litigants in
Case CA-G.R. No. SP No. 04869 held last August 30, 1995, the undersigned together with
the representatives of the North Philippine Union Mission (NPUM) and the Eternal Gardens
Memorial, Inc. had a discussion on the computations made by each of the party of the
amount due to the North Philippine Union Mission which were submitted to the Court. 60

It was not even imperative that EGMPC cross-examine the accountant who prepared EGMPC's
computation, and there was no denial of due process without such cross-examination. This
computation was merely to aid Ms. Angelo, who was to make her own independent computation
from the documents submitted to her.

EGMPC also asserts that "substantially if not all records, documents and papers submitted by the
private respondent NPUM to the Court's Accountant which eventually became the basis of the report
and Resolution of January 15, 1996 of the public respondent Court, were not genuine and not
properly identified by the persons who were supposed to have executed the same including the
alleged financial statement of Eternal Gardens allegedly issued by the Securities and Exchange
Commission (SEC)." 61

From the transcript of stenographic notes of the proceedings in the appellate court, we find that
EGMPC acquiesced to the use of the documents submitted by NPUM, including the financial
statements, even actively participating in the discussion of the contents of such documents.
EGMPC's main objection was only on how the entries in these documents were to be interpreted, for
example, on how payments towards the perpetual care fund would be credited.  EGMPC did not
62

object even when counsel for NPUM read into the records the contents of the documents. 63

It even appears that after Ms. Angelo came up with her first report, EGMPC's counsel expressed that
it was "amenable to that computation."  In that report, Ms. Angelo had stressed that "[s]ince the
64

Eternal Gardens Memorial Park, Inc. did not submit to the Court any documents pertaining to the
computations of the 40% share of the North Philippine Union Mission of the Seventh Day Adventists,
then we have no other recourse but to base the computation on the available figures and on the
other documents as presented by the petitioner [NPUM]." 65

EGMPC lastly contends that it is not liable for interest. It claims that it was justified in withholding
payment as there was still the unresolved issue of ownership over the property subject of the Land
Development Agreement of October 6, 1976. 66

The argument is without merit EGMPC under the agreement had the obligation to remit monthly to
NPUM forty percent (40%) of its net gross collection from the development of a memorial park on
property owned by NPUM. The same agreement provided for the designation of a depository/trustee
bank to act as the depository/trustee for all funds collected by EGMPC.  There was no obstacle,
67

legal or otherwise, to the compliance by EGMPC of this provision in the contract, even on the
affectation that it did not know to whom payment was to be made.

Even disregarding the agreement, EGMPC cannot "suspend" payment on the pretext that it did not
know who among the subject property's claimants was the rightful owner. It had a remedy under the
New Civil Code of the Philippines — to give in consignation the amounts due, as these fell
due.  Consignation produces the effect of payment.
68 69

The rationale for consignation is to avoid the performance of an obligation becoming more onerous
to the debtor by reason of causes not imputable to
him.  For its failure to consign the amounts due, Eternal Gardens' obligation to NPUM necessarily
70

became more onerous as it became liable for interest on the amounts it failed to remit.

Notably, EGMPC filed an interpleader action, "the essence of which, aside from the disavowal of
interest in the property in litigation on the part of the petitioner, is the deposit of the property or funds
in controversy with the court." Yet from the outset, EGMPC had assailed any court ruling ordering
the deposit with a reputable bank of the amounts due from it under the Land Development
Agreement. In G.R. No. 73794,  the Court made the following discourse on the disavowal of EGMPC
71

of its obligations, thus:

In the case at bar, a careful analysis of the records will show that petitioner admitted among
others in its complaint in Interpleader that it is still obligated to pay certain amount to private
respondent; that it claims no interest in such amounts due and is willing to pay whoever is
declared entitled to said amounts. Such admissions in the complaint were reaffirmed in open
 court before the Court of Appeals as stated in the latter court's resolution dated September
5, 1985 in C.A. G.R. No. 04869 which states:

The private respondent (MEMORIAL) then reaffirms before the Court its
original position that it is a disinterested party with respect to the property
now the subject of the interpleader case.

In the light of the willingness, expressly made before the court, affirming the
complaint filed below, that the private respondent (MEMORIAL) will pay
whatever is due on the Land Development Agreement to the rightful
owner/owners, there is no reason why the amount due on subject agreement
has not been placed in the custody of the Court.

Under the circumstances, there appears to be no plausible reason for petitioner's objections
to the deposit of the amounts in litigation after having asked for the assistance of the lower
court by filing a complaint for interpleader where the deposit of aforesaid amounts is not only
required by the nature of the action but is a contractual obligation of the petitioner under the
Land Development Program.

As correctly observed by the Court of Appeals, the essence of an interpleader, aside from
the disavowal of interest in the property in litigation on the part of the petitioner, is the deposit
of the property or funds in controversy with the court, it is a rule founded on justice and
equity: "that the plaintiff may not continue to benefit from the property or funds in litigation
during pendency of the suit at the expense of whoever will ultimately be decided as entitled
thereto."

The case at bar was elevated to the Court of Appeals on certiorari with prohibitory and
mandatory injunction. Said appellate court found that more than twenty million pesos are
involved; so that on interest alone for savings or time deposit would be considerable, now
accruing in favor of the Eternal Gardens. Finding that such is violative of the very essence of
the complaint for interpleader as it clearly runs against the interest of justice in this case, the
Court of Appeals cannot be faulted for finding that the lower court committed a grave abuse
of discretion which requires correction by the requirement that a deposit of said amounts
should be made to a bank approved by the Court.

Petitioner would now compound the issue by its obvious turnabout, presently claiming in its
memorandum that there is a novation of contract so that the amounts due under the Land
Development Agreement were allegedly extinguished, and the requirement to make a
deposit of said amounts in a depository bank should be held in abeyance until after the
conflicting claims of ownership now on trial before Branch CXXII RTC-Caloocan City, has
finally been resolved.

All these notwithstanding, the need for the deposit in question has been established, not only
in the lower courts and in the Court of Appeals but also in the Supreme Court where such
deposit was required in the resolution of July 8, 1987 to avoid wastage of funds.

Even during the pendency of G.R. No. 73794, EGMPC was required to deposit the accruing
interests with a reputable commercial bank "to avoid possible wastage of funds" when the case was
given due course.  Yet, EGMPC hedged in depositing the amounts due and made obvious attempts
72

to stay payment by filing sundry motions and pleadings.

We thus find that the Court of Appeals correctly held Eternal Gardens liable for interest at the rate of
twelve percent (12%). The withholding of the amounts due under the agreement was tantamount to
a forbearance of money. 73

CONSIDERING THE FOREGOING, the Court Resolved to DENY the petition. The Resolutions
dated January 15, 1996 and April 12, 1996 are AFFIRMED. The temporary restraining order issued
by this Court on January 15, 1997 is LIFTED.

SO ORDERED.

Davide, Jr., Bellosillo and Vitug, JJ., concur.

G.R. No. 127913      September 13, 2001

RIZAL COMMERCIAL BANKING CORPORATION, petitioner,

vs.
METRO CONTAINER CORPORATION, respondent.

KAPUNAN, J.:

Assailed in this petition for review on certiorari are the Decision, promulgated on 18 October 1996
and the Resolution, promulgated on 08 January 1997, of the Court of Appeals in CA-G.R. SP No.
41294.

The facts of the case are as follows:

On 26 September 1990, Ley Construction Corporation (LEYCON) contracted a loan from Rizal
Commercial Banking Corporation (RCBC) in the amount of Thirty Million Pesos (P30,000,000.00).
The loan was secured by a real estate mortgage over a property, located in Barrio Ugong,
Valenzuela, Metro Manila (now Valenzuela City) and covered by TCT No. V-17223. LEYCON failed
to settle its obligations prompting RCBC to institute an extrajudicial foreclosure proceedings against
it.

After LEYCON's legal attempts to forestall the action of RBCB failed, the foreclosure took place on
28 December 1992 with RCBC as the highest bidder.

LEYCON promptly filed an action for Nullification of Extrajudicial Foreclosure Sale and Damages
against RCBC. The case, docketed as Civil Case No. 4037-V-93, was raffled to the Regional Trial
Court (RTC) of Valenzuela, Branch 172. Meanwhile, RCBC consolidated its ownership over the
property due to LEYCON's failure to redeem it within the 12-month redemption period and TCT No.
V-332432 was issued if favor of the bank. By virtue thereof, RCBC demanded rental payments from
Metro Container Corporation (METROCAN) which was leasing the property from LEYCON.

On 26 May 1994, LEYCON filed an action for Unlawful Detainer, docketed as Civil Case No. 6202,
against METROCAN before the Metropolitan Trial Court (MeTC) of Valenzuela, Branch 82.

On 27 May 1994, METROCAN filed a complaint for Interpleader, docketed as Civil Case No. 4398-
V-94 before the Regional Trial Court of Valenzuela, Metro Manila; Branch 75 against LEYCON and
RCBC to compel them to interplead and litigate their several claims among themselves and to
determine which among them shall rightfully receive the payment of monthly rentals on the subject
property .On 04 July 1995, during the pre-trial conference in Civil Case No. 4398-V-94, the trial court
ordered the dismissal of the case insofar as METROCAN and LEYCON were concerned in view of
an amicable settlement they entered by virtue of which METROCAN paid back rentals to LEYCON.

On 31 October 1995, judgment was rendered in Civil Case No.6202, which among other things,
ordered METROCAN to pay LEYCON whatever rentals due on the subject premises. The MeTC
decision became final and executory.

On 01 February 1996, METROCAN moved for the dismissal of Civil Case No. 4398-V-94 for having
become moot and academic due to the amicable settlement it entered with LEYCON on 04 July
1995 and the decision in Civil Case No. 6202 on 31 October 1995. LEYCON, likewise, moved for the
dismissal of the case citing the same grounds cited by METROCAN.

On 12 March 1996, the two motions were dismissed for lack of merit. The motions for
reconsideration filed by METROCAN and LEYCON were also denied prompting METROCAN to
seek relief from the Court of Appeals via a petition for certiorari and prohibition with prayer for the
issuance of a temporary restraining order and a writ of preliminary injunction. LEYCON, as private
respondent, also sought for the nullification of the RTC orders.

In its Decision, promulgated on 18 October 1996, the Court of Appeals granted the petition and set
aside the 12 March 1996 and 24 June 1996 orders of the RTC. The appellate court also ordered the
dismissal of Civil Case No. 4398-V-94. RCBC's motion for reconsideration was denied for lack of
merit in the resolution of 08 January 1997.

Hence, the present recourse.

RCBC alleged, that:

(1) THE DECISION OF THE METROPOLITAN TRIAL COURT IN THE EJECTMENT CASE
BETWEEN METROCAN AND LEYCON DOES NOT AND CANNOT RENDER THE
INTERPLEADER ACTION MOOT AND ACADEMIC.

(2) WHILE A PARTY WHO INITIATES AN INTERPLEADER ACTION MAY NOT BE

COMPELLED TO LITIGATE IF HE IS NO LONGER INTERESTED TO PURSUE SUCH
CAUSE OF ACTION, SAID PARTY MAY NOT UNILATERALLY CAUSE THE DISMISSAL
OF THE CASE AFTER THE ANSWER HA VE BEEN FILED. FURTHER, THE
DEFENDANTS IN AN INTERPLEADER SUIT SHOULD BE GIVEN FULL OPPORTUNITY
TO LITIGATE THEIR RESPECTIVE CLAIMS.1

We sustain the Court of Appeals.

Section 1, Rule 63 of the Revised Rules of Court2 provides:

Section 1. - Interpleader when proper. - Whenever conflicting claims upon the same subject
matter are or may be made against a person, who claims no interest whatever in the subject
matter, or an interest which in whole or in part is not disputed by the claimants, he may bring
an action against the conflicting claimants to compel them to interplead and litigate their
several claims among themselves.
In the case before us, it is undisputed that METROCAN filed the interpleader action (Civil Case No.
4398-V-94) because it was unsure which between LEYCON and RCBC was entitled to receive the
payment of monthly rentals on the subject property. LEYCON was claiming payment of the rentals
as lessor of the property while RCBC was making a demand by virtue of the consolidation of the title
of the property in its name.

It is also undisputed that LEYCON, as lessor of the subject property filed an action for unlawful
detainer (Civil Case No. 6202) against its lessee METROCAN. The issue in Civil Case No. 6202 is
limited to the question of physical or material possession of the premises. 3 The issue of ownership is
immaterial therein4 and the outcome of the case could not in any way affect conflicting claims of
ownership, in this case between RCBC and LEYCON. This was made clear when the trial court, in
denying RCBC's "Motion for Inclusion x x x as an Indispensable Party" declared that "the final
determination of the issue of physical possession over the subject premises between the plaintiff and
the defendant shall not in any way affect RCBC's claims of ownership over the said premises, since
RCBC is neither a co-lessor or co- lessee of the same, hence he has no legal personality to join the
parties herein with respect to the issue of physical possession vis-a-vis the contract of lease
between the parties."5 As aptly pointed by the MeTC, the issue in Civil Case No. 6202 is limited to
the defendant LEYCON's breach of the provisions of the Contract of Lease Rentals. 6

Hence, the reason for the interpleader action ceased when the MeTC rendered judgment in Civil
Case No. 6202 whereby the court directed METROCAN to pay LEYCON "whatever rentals due on
the subject premises x x x." While RCBC, not being a party to Civil Case No. 6202, could not be
bound by the judgment therein, METROCAN is bound by the MeTC decision. When the decision in
Civil Case No. 6202 became final and executory, METROCAN has no other alternative left but to
pay the rentals to LEYCON. Precisely because there was already a judicial fiat to METROCAN,
there was no more reason to continue with Civil Case No. 4398-V-94. Thus, METROCAN moved for
the dismissal of the interpleader action not because it is no longer interested but because there is no
more need for it to pursue such cause of action.

It should be remembered that an action of interpleader is afforded to protect a person not against
double liability but against double vexation in respect of one liability. 7 It requires, as an
indespensable requisite, that "conflicting claims upon the same subject matter are or may be made
against the plaintiff-in-interpleader who claims no interest whatever in the subject matter or an
interest which in whole or in part is not disputed by the claimants." 8 The decision in Civil Case No.
6202 resolved the conflicting claims insofar as payment of rentals was concerned.

Petitioner is correct in saying that it is not bound by the decision in Civil Case No. 6202. It is not a
party thereto. However, it could not compel METROCAN to pursue Civil Case No. 4398-V-94. RCBC
has other avenues to prove its claim. Is not bereft of other legal remedies. In fact, he issue of
ownership can very well be threshed out in Civil Case No. 4037-V-93, the case for Nullification of
Extrajudicial foreclosure Sale and Damages filed by LEYCON against RCBC. 1âwphi1.nêt

WHEREFORE, the petition for review is DENIED and the Decision of the Court of Appeals,
promulgated on 18 October 1996, as well as its Resolution promulgated on 08 January 1997,
are AFFIRMED.

SO ORDERED.

Davide, Jr., C.J., Pardo, Ynares-Santiago, JJ. concur.

Puno, on official leave.

G.R. No. 161400 September 2, 2005

ZENAIDA ORTEGA, represented by Her Attorney-in Fact OCTAVIO ALVAREZ and/or ZEMVE
ORTEGA ALVAREZ, Petitioners,
vs.
THE QUEZON CITY GOVERNMENT, THE NATIONAL HOUSING AUTHORITY & THE NATIONAL
HOME MORTGAGE CORP., Respondent.

DECISION

CARPIO MORALES, J.:

Petitioner Zenaida Ortega comes directly to this Court assailing the validity of Quezon City
Ordinance No. SP 1304, Series of 2003, and praying that the following agencies, National Housing
Authority (NHA), Housing and Land Use Regulatory Board (HLURB), Department of Environment
and Natural Resources – Bureau of Land Management, National Home Mortgage Financing
Corporation, and Home Insurance Guarantee Corporation, be restrained from implementing the said
ordinance.

Proposed Ordinance No. 2002-07 (PO 2002-07) was filed on January 10, 2002 before the City
Council. PO 2002-07 sought to approve "the Subdivision Plan of Samahang Kapitbahayan ng
Barangay Vasra (Samahang Kapitbahayan), a Socialized Housing Project (B.P. Blg. 220) with
seventeen (17) lots (Community Mortgage Program) containing [a total] area of Six Hundred Sixty
Seven (667) square meters, covered by Original Certificate of Title No. 735, owned by the City
Government of Quezon City (Vendor) located at a portion of [an] easement [in] Barangay Vasra,
Quezon City, Metro Manila, as applied for by the Samahang Kapitbahayan ng Barangay Vasra
(Vendee) subject to the conditions prescribed under Quezon City Ordinance No. SP-56, S-93 and
Batas Pambansa Blg. 220."1

Proposed Resolution No. 2003-13 (PR 2003-13) was subsequently filed on January 20, 2002 to
complement PO 2002-07. The proposed resolution sought to authorize Quezon City Mayor Feliciano
R. Belmonte to enter into a contract to sell a portion of an easement located at Barangay Vasra,
Quezon City with the SAMAHANG KAPITBAHAYAN to be represented by its President, through the
Community Mortgage Program (CMP) of the National Home Mortgage Finance Corporation
(NHMFC).2

On August 5, 2003, the Quezon City government enacted Ordinance No. SP-1304, Series of 2003
(the ordinance), which is being challenged in the present petition, 3 reclassifying "as residential or
converted from its original classification to residential for distribution or for sale to its informal
settlers" a "parcel of land which may be considered an accretion/excess lot and previously
conceived and referred to in Proposed Ordinance No. 2002-07 and Proposed [Resolution] 2002-13
as portion of [an] easement situated between Block 14, Psd-39577 of the original subdivision plan
and Culiat Creek, Barangay Vasra, Quezon City." 4

The provisions of the assailed ordinance read:

SECTION 1. A parcel of land which may be considered an accretion/excess lot and previously
conceived and referred to in proposed ordinance no. PO 2002-07 and proposed ordinance no. PO
2002-13 as portion of easement, situated between Block 14. Psd-39577 of the original subdivision
plan and Culiat Creek, Barangay Vasra, Quezon City, is hereby classified as residential or converted
from its original classification to residential for distribution or for sale to its informal settlers.

SECTION 2. This Ordinance shall take effect immediately upon its approval. 5

Petitioner, who claims to be the rightful owner of the land subject of the ordinance, alleges that in
enacting the ordinance, her various letter-protests to the City Council against proposed Resolutions
No. 2002-13, 2002-07 and 2002-239 6 were not heeded in the City Council, thus violating her
constitutional rights to due process and equal protection of the law.

Petitioner further claims that the lot referred to in the ordinance overlaps her properties as their
technical descriptions in Transfer Certificates of Title Nos. RT-70472 (296026) and N-152137 issued
in her name show;7 and that assuming that there exists accretion or easement of the Culiat Creek,
she, being the owner of the adjoining land, is the rightful owner thereof following Articles 457 8 and
Article 6209 of the Civil Code.

Petitioner likewise claims that the intended beneficiaries under the proposed ordinance and
resolution are not informal settlers as required under City Ordinance No. SP-56, Series of 1993, 10 but
lessees of her properties who had been ordered ejected after she filed several unlawful detainer
cases against them.11

By Comment12 filed on April 14, 2004, the Quezon City Government, through the Office of the City
Attorney, alleges that the present petition is premature and raises questions of fact which entail
reception of evidence; and that petitioner has not yet established her right of ownership over the
property referred to in the ordinance, whereas its clear right thereover is evidenced by Original
Certificate of Title No. 735 issued in its name.13

The NHA, by Comment14 filed on May 17, 2004, prayed for the dismissal of the petition, pointing out
that the petition is actually one for declaratory relief under Section 1, Rule 63 of the Rules of Court
over which this Court has no original jurisdiction.

The NHMFC, by Comment15 filed on June 17, 2004, alleged that it is not a party to any of the
transactions with any of the parties in the present case. It nevertheless adopted the comment of the
Quezon City government that the petition is premature and alleges facts which still need to be
proven.16

The petition must be dismissed.

Article VIII, Section 5 of the Constitution provides:

SECTION 5. The Supreme Court shall have the following powers:

xxx

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court
may provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in
question.

x x x (Emphasis and underscoring supplied).

This Court can thus only review, revise, reverse, modify on appeal or certiorari final judgments and
orders of lower courts in all cases in which the constitutionality or validity of, among other things, an
ordinance is in question. Foremost, therefore, is that there must be first a final judgment rendered by
an inferior court17 before this Court can assume jurisdiction over a case of this nature.

Verily, this Court does not conduct original and full trial of a main factual issue like what petitioner is
raising in the present petition.18 It does not analyze or weigh evidence brought before it at the first
instance, otherwise, it would preempt the primary function of the lower court to try the case on the
merits, receive evidence, and decide the case definitively. 19 Its jurisdiction in cases which assail the
validity of an ordinance is limited to reviewing or revising final judgments or orders of lower courts
and applying the law based on their findings of facts brought before it. 20

In another vein, if this petition was to be considered as one for declaratory relief, as observed by the
OSG, it is not embraced within the original jurisdiction of this Court. 21 Rule 63 of the Rules of Court
provides:

SECTION 1. Who may file petition. Any person interested under a deed, will, contract or other
written instrument, or whose rights are affected by a statute, executive order or
regulation, ordinance, or any other government regulation may, before breach or violation
thereof, bring an action in the appropriate Regional Trial Court to determine any question of
construction or validity arising from, and for a declaration of his rights or duties, thereunder.

An action for the reformation of an instrument, or to quiet title to real property or remove clouds
therefrom, or to consolidate ownership under Article 1607 of the Civil Code may be brought under
this Rule.

xxx

SEC. 4. Local government ordinances. – In any action involving the validity of a local government
ordinance, the corresponding prosecutor or attorney of the local government unit involved shall be
similarly notified and entitled to be heard. (Emphasis and underscoring supplied)

Respecting petitioner’s contention that since the ordinance violates national laws, the present
petition delves on questions of law over which this Court has original jurisdiction, 22 the same fails.

As reflected above, petitioner’s assertion that the invalidity of the ordinance is premised on her claim
that she has a better right to the parcel of land referred to in the ordinance is a factual issue.

At all events, even if this petition delves on questions of law, there is no statutory or jurisprudential
basis for according to this Court original and exclusive jurisdiction over declaratory relief which
advances only questions of law.23

Finally, while a petition for declaratory relief may be treated as one for prohibition if it has far
reaching implications and raises questions that need to be resolved, 24 there is no allegation of facts
by petitioner tending to show that she is entitled to such a writ. The judicial policy must thus remain
that this Court will not entertain direct resort to it, except when the redress sought cannot be
obtained in the proper courts or when exceptional and compelling circumstances warrant availment
of a remedy within and calling for the exercise of this Court’s primary jurisdiction. 25

WHEREFORE, the petition is hereby DISMISSED.

G.R. No. 181303               September 17, 2009

CARMEN DANAO MALANA, MARIA DANAO ACORDA, EVELYN DANAO, FERMINA DANAO,
LETICIA DANAO and LEONORA DANAO, the last two are represented herein by their
Attorney-in-Fact, MARIA DANAO ACORDA, Petitioners,
vs.
BENIGNO TAPPA, JERRY REYNA, SATURNINO CAMBRI and SPOUSES FRANCISCO AND
MARIA LIGUTAN, Respondents.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Certiorari under Rule 65 of the Rules of Court, assailing the Orders 1 dated 4
May 2007, 30 May 2007, and 31 October 2007, rendered by Branch 3 of the Regional Trial Court
(RTC) of Tuguegarao City, which dismissed, for lack of jurisdiction, the Complaint of petitioners
Carmen Danao Malana, Leticia Danao, Maria Danao Accorda, Evelyn Danao, Fermina Danao, and
Leonora Danao, against respondents Benigno Tappa, Jerry Reyna, Saturnino Cambri, Francisco
Ligutan and Maria Ligutan, in Civil Case No. 6868.

Petitioners filed before the RTC their Complaint for Reivindicacion, Quieting of Title, and
Damages2 against respondents on 27 March 2007, docketed as Civil Case No. 6868. Petitioners
alleged in their Complaint that they are the owners of a parcel of land covered by Transfer Certificate
of Title (TCT) No. T-1279373 situated in Tuguegarao City, Cagayan (subject property). Petitioners
inherited the subject property from Anastacio Danao (Anastacio), who died intestate. 4 During the
lifetime of Anastacio, he had allowed Consuelo Pauig (Consuelo), who was married to Joaquin
Boncad, to build on and occupy the southern portion of the subject property. Anastacio and
Consuelo agreed that the latter would vacate the said land at any time that Anastacio and his heirs
might need it.5

Petitioners claimed that respondents, Consuelo’s family members, 6 continued to occupy the subject
property even after her death, already building their residences thereon using permanent materials.
Petitioners also learned that respondents were claiming ownership over the subject property.
Averring that they already needed it, petitioners demanded that respondents vacate the same.
Respondents, however, refused to heed petitioners’ demand. 7

Petitioners referred their land dispute with respondents to the Lupong Tagapamayapa of Barangay
Annafunan West for conciliation. During the conciliation proceedings, respondents asserted that they
owned the subject property and presented documents ostensibly supporting their claim of
ownership.

According to petitioners, respondents’ documents were highly dubious, falsified, and incapable of
proving the latter’s claim of ownership over the subject property; nevertheless, they created a cloud
upon petitioners’ title to the property. Thus, petitioners were compelled to file before the RTC a
Complaint to remove such cloud from their title.8 Petitioners additionally sought in their Complaint an
award against respondents for actual damages, in the amount of ₱50,000.00, resulting from the
latter’s baseless claim over the subject property that did not actually belong to them, in violation of
Article 19 of the Civil Code on Human Relations. 9 Petitioners likewise prayed for an award against
respondents for exemplary damages, in the amount of ₱50,000.00, since the latter had acted in bad
faith and resorted to unlawful means to establish their claim over the subject property. Finally,
petitioners asked to recover from respondents ₱50,000.00 as attorney’s fees, because the latter’s
refusal to vacate the property constrained petitioners to engage the services of a lawyer. 10

Before respondents could file their answer, the RTC issued an Order dated 4 May 2007 dismissing
petitioners’ Complaint on the ground of lack of jurisdiction. The RTC referred to Republic Act No.
7691,11 amending Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act
of 1980, which vests the RTC with jurisdiction over real actions, where the assessed value of the
property involved exceeds ₱20,000.00. It found that the subject property had a value of less than
₱20,000.00; hence, petitioners’ action to recover the same was outside the jurisdiction of the RTC.
The RTC decreed in its 4 May 2007 Order that:

The Court has no jurisdiction over the action, it being a real action involving a real property with
assessed value less than ₱20,000.00 and hereby dismisses the same without prejudice. 12

Petitioners filed a Motion for Reconsideration of the aforementioned RTC Order dismissing their
Complaint. They argued that their principal cause of action was for quieting of title; the accion
reivindicacion was included merely to enable them to seek complete relief from respondents.
Petitioner’s Complaint should not have been dismissed, since Section 1, Rule 63 of the Rules of
Court13 states that an action to quiet title falls under the jurisdiction of the RTC. 14

In an Order dated 30 May 2007, the RTC denied petitioners’ Motion for Reconsideration. It reasoned
that an action to quiet title is a real action. Pursuant to Republic Act No. 7691, it is the Municipal Trial
Court (MTC) that exercises exclusive jurisdiction over real actions where the assessed value of real
property does not exceed ₱20,000.00. Since the assessed value of subject property per Tax
Declaration No, 02-48386 was ₱410.00, the real action involving the same was outside the
jurisdiction of the RTC.15

Petitioners filed another pleading, simply designated as Motion, in which they prayed that the RTC
Orders dated 4 May 2007 and 30 May 2007, dismissing their Complaint, be set aside. They
reiterated their earlier argument that Section 1, Rule 63 of the Rules of Court states that an action to
quiet title falls under the exclusive jurisdiction of the RTC. They also contended that there was no
obstacle to their joining the two causes of action, i.e., quieting of title and reivindicacion, in a single
Complaint, citing Rumarate v. Hernandez.16 And even if the two causes of action could not be joined,
petitioners maintained that the misjoinder of said causes of action was not a ground for the dismissal
of their Complaint.17

The RTC issued an Order dated 31 October 2007 denying petitioners’ Motion. It clarified that their
Complaint was dismissed, not on the ground of misjoinder of causes of action, but for lack of
jurisdiction. The RTC dissected Section 1, Rule 63 of the Rules of Court, which provides:

Section 1. Who may file petition. Any person interested under a deed, will, contract or other written
instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or any
other governmental regulation may, before breach or violation thereof, bring an action in the
appropriate Regional Trial Court to determine any question of construction or validity arising, and for
a declaration of his rights or duties, thereunder.
An action for the reformation of an instrument, to quiet title to real property or remove clouds
therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be brought under
this Rule.

The RTC differentiated between the first and the second paragraphs of Section 1, Rule 63 of the
Rules of Court. The first paragraph refers to an action for declaratory relief, which should be brought
before the RTC. The second paragraph, however, refers to a different set of remedies, which
includes an action to quiet title to real property. The second paragraph must be read in relation to
Republic Act No. 7691, which vests the MTC with jurisdiction over real actions, where the assessed
value of the real property involved does not exceed ₱50,000.00 in Metro Manila and ₱20,000.00 in
all other places.18 The dispositive part of the 31 October 2007 Order of the RTC reads:

This Court maintains that an action to quiet title is a real action. [Herein petitioners] do not dispute
the assessed value of the property at ₱410.00 under Tax Declaration No. 02-48386. Hence, it has
no jurisdiction over the action.

In view of the foregoing considerations, the Motion is hereby denied. 19

Hence, the present Petition, where petitioners raise the sole issue of:

WHETHER OR NOT THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION

IN DISMISSING THE COMPLAINT OF THE PETITIONERS MOTU PROPRIO.20

Petitioners’ statement of the issue is misleading. It would seem that they are only challenging the
fact that their Complaint was dismissed by the RTC motu proprio. Based on the facts and arguments
set forth in the instant Petition, however, the Court determines that the fundamental issue for its
resolution is whether the RTC committed grave abuse of discretion in dismissing petitioners’
Complaint for lack of jurisdiction.

The Court rules in the negative.

An action for declaratory relief should be filed by a person interested under a deed, a will, a contract
or other written instrument, and whose rights are affected by a statute, an executive order, a
regulation or an ordinance. The relief sought under this remedy includes the interpretation and
determination of the validity of the written instrument and the judicial declaration of the parties’ rights
or duties thereunder.21

Petitions for declaratory relief are governed by Rule 63 of the Rules of Court. The RTC correctly
made a distinction between the first and the second paragraphs of Section 1, Rule 63 of the Rules of
Court.

The first paragraph of Section 1, Rule 63 of the Rules of Court, describes the general circumstances
in which a person may file a petition for declaratory relief, to wit:

Any person interested under a deed, will, contract or other written instrument, or whose rights are
affected by a statute, executive order or regulation, ordinance, or any other governmental regulation
may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to
determine any question of construction or validity arising, and for a declaration of his rights or duties,
thereunder. (Emphasis ours.)
As the afore-quoted provision states, a petition for declaratory relief under the first paragraph of
Section 1, Rule 63 may be brought before the appropriate RTC.

Section 1, Rule 63 of the Rules of Court further provides in its second paragraph that:

An action for the reformation of an instrument, to quiet title to real property or remove clouds
therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be brought under
this Rule. (Emphasis ours.)

The second paragraph of Section 1, Rule 63 of the Rules of Court specifically refers to (1) an action
for the reformation of an instrument, recognized under Articles 1359 to 1369 of the Civil Code; (2) an
action to quiet title, authorized by Articles 476 to 481 of the Civil Code; and (3) an action to
consolidate ownership required by Article 1607 of the Civil Code in a sale with a right to repurchase.
These three remedies are considered similar to declaratory relief because they also result in the
adjudication of the legal rights of the litigants, often without the need of execution to carry the
judgment into effect.22

To determine which court has jurisdiction over the actions identified in the second paragraph of
Section 1, Rule 63 of the Rules of Court, said provision must be read together with those of the
Judiciary Reorganization Act of 1980, as amended.

It is important to note that Section 1, Rule 63 of the Rules of Court does not categorically require that
an action to quiet title be filed before the RTC. It repeatedly uses the word "may" – that an action for
quieting of title "may be brought under [the] Rule" on petitions for declaratory relief, and a person
desiring to file a petition for declaratory relief "may x x x bring an action in the appropriate Regional
Trial Court." The use of the word "may" in a statute denotes that the provision is merely permissive
and indicates a mere possibility, an opportunity or an option. 23

In contrast, the mandatory provision of the Judiciary Reorganization Act of 1980, as amended, uses
the word "shall" and explicitly requires the MTC to exercise exclusive original jurisdiction over all civil
actions which involve title to or possession of real property where the assessed value does not
exceed ₱20,000.00, thus:

Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts in Civil Cases.—Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts shall exercise:

xxxx

(3) Exclusive original jurisdiction in all civil actions which involve title to, possession of, real property,
or any interest therein where the assessed value of the property or interest therein does not exceed
Twenty thousand pesos (₱20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceeds Fifty thousand pesos (₱50,000.00) exclusive of interest, damages of whatever
kind, attorney’s fees, litigation expenses and costs: x x x (Emphasis ours.)

As found by the RTC, the assessed value of the subject property as stated in Tax Declaration No.
02-48386 is only ₱410.00; therefore, petitioners’ Complaint involving title to and possession of the
said property is within the exclusive original jurisdiction of the MTC, not the RTC.

Furthermore, an action for declaratory relief presupposes that there has been no actual breach of
the instruments involved or of rights arising thereunder. 24 Since the purpose of an action for
declaratory relief is to secure an authoritative statement of the rights and obligations of the parties
under a statute, deed, or contract for their guidance in the enforcement thereof, or compliance
therewith, and not to settle issues arising from an alleged breach thereof, it may be entertained only
before the breach or violation of the statute, deed, or contract to which it refers. A petition for
declaratory relief gives a practical remedy for ending controversies that have not reached the state
where another relief is immediately available; and supplies the need for a form of action that will set
controversies at rest before they lead to a repudiation of obligations, an invasion of rights, and a
commission of wrongs.25

Where the law or contract has already been contravened prior to the filing of an action for
declaratory relief, the courts can no longer assume jurisdiction over the action. In other words, a
court has no more jurisdiction over an action for declaratory relief if its subject has already been
infringed or transgressed before the institution of the action. 26

In the present case, petitioners’ Complaint for quieting of title was filed after petitioners already
demanded and respondents refused to vacate the subject property. In fact, said Complaint was filed
only subsequent to the latter’s express claim of ownership over the subject property before the
Lupong Tagapamayapa, in direct challenge to petitioners’ title.

Since petitioners averred in the Complaint that they had already been deprived of the possession of
their property, the proper remedy for them is the filing of an accion publiciana or an accion
reivindicatoria, not a case for declaratory relief. An accion publiciana is a suit for the recovery of
possession, filed one year after the occurrence of the cause of action or from the unlawful
withholding of possession of the realty. An accion reivindicatoria is a suit that has for its object one’s
recovery of possession over the real property as owner. 27 1avvphi1

Petitioners’ Complaint contained sufficient allegations for an accion reivindicatoria. Jurisdiction over
such an action would depend on the value of the property involved. Given that the subject property
herein is valued only at ₱410.00, then the MTC, not the RTC, has jurisdiction over an action to
recover the same. The RTC, therefore, did not commit grave abuse of discretion in dismissing,
without prejudice, petitioners’ Complaint in Civil Case No. 6868 for lack of jurisdiction.

As for the RTC dismissing petitioners’ Complaint motu proprio, the following pronouncements of the
Court in Laresma v. Abellana28 proves instructive:

It is axiomatic that the nature of an action and the jurisdiction of a tribunal are determined by the
material allegations of the complaint and the law at the time the action was commenced. Jurisdiction
of the tribunal over the subject matter or nature of an action is conferred only by law and not by the
consent or waiver upon a court which, otherwise, would have no jurisdiction over the subject matter
or nature of an action. Lack of jurisdiction of the court over an action or the subject matter of an
action cannot be cured by the silence, acquiescence, or even by express consent of the parties. If
the court has no jurisdiction over the nature of an action, it may dismiss the same ex mero motu or
motu proprio. x x x. (Emphasis supplied.)

Since the RTC, in dismissing petitioners’ Complaint, acted in complete accord with law and
jurisprudence, it cannot be said to have done so with grave abuse of discretion amounting to lack or
excess of jurisdiction. An act of a court or tribunal may only be considered to have been committed
in grave abuse of discretion when the same was performed in a capricious or whimsical exercise of
judgment, which is equivalent to lack of jurisdiction. The abuse of discretion must be so patent and
gross as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined
by law or to act at all in contemplation of law, as where the power is exercised in an arbitrary and
despotic manner by reason of passion or personal hostility. 29 No such circumstances exist herein as
to justify the issuance of a writ of certiorari.

IN VIEW OF THE FOREGOING, the instant Petition is DISMISSED. The Orders dated 4 May 2007,
30 May 2007 and 31 October 2007 of the Regional Trial Court of Tuguegarao City, Branch 3,
dismissing the Complaint in Civil Case No. 6868, without prejudice, are AFFIRMED. The Regional
Trial Court is ordered to REMAND the records of this case to the Municipal Trial Court or the court of
proper jurisdiction for proper disposition. Costs against the petitioners.

SO ORDERED.