G.R. No.147812. April 6, 2005 possession of the premises.
possession of the premises.3 The issue of ownership is immaterial therein4 and the outcome of the case could not in
LEONARDO R. OCAMPO, Petitioners,
vs.
LEONORA TIRONA, Respondents.
Interpleader
The good faith of Tirona is put in question in her preference for Maria Lourdes Breton-Mendiola. As a stakeholder,
Tirona should have used reasonable diligence in hailing the contending claimants to court. Tirona need not have awaited
actual institution of a suit by Ocampo against her before filing a bill of interpleader. 37 An action for interpleader is proper
when the lessee does not know the person to whom to pay rentals due to conflicting claims on the property. 38
The action of interpleader is a remedy whereby a person who has property whether personal or real, in his possession,
or an obligation to render wholly or partially, without claiming any right in both, or claims an interest which in whole
or in part is not disputed by the conflicting claimants, comes to court and asks that the persons who claim the said
property or who consider themselves entitled to demand compliance with the obligation, be required to litigate among
themselves, in order to determine finally who is entitled to one or the other thing. The remedy is afforded not to protect
a person against a double liability but to protect him against a double vexation in respect of one liability. When the
court orders that the claimants litigate among themselves, there arises in reality a new action and the former are styled
interpleaders, and in such a case the pleading which initiates the action is called a complaint of interpleader and not a
cross-complaint.39
Ocampo has the right to eject Tirona from the subject land. All the elements required for an unlawful detainer case to
prosper are present. Ocampo notified Tirona that he purchased the subject land from Tirona’s lessor. Tirona’s continued
occupation of the subject land amounted to acquiescence to Ocampo’s terms. However, Tirona eventually refused to
pay rent to Ocampo, thus violating the lease.
G.R. No. 127913 September 13, 2001
RIZAL COMMERCIAL BANKING CORPORATION, petitioner,
vs.
METRO CONTAINER CORPORATION, respondent.
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
1
any way affect conflicting claims of ownership, in this case between RCBC and LEYCON.
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.
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.
G.R. No. 73794 September 19, 1988
ETERNAL GARDENS MEMORIAL PARKS CORPORATION, petitioner,
vs.
FIRST SPECIAL CASES DIVISION INTERMEDIATE APPELLATE COURT and NORTH PHILIPPINE UNION
MISSION OF THE SEVENTH-DAY ADVENTISTS, respondents.
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 amounts 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 A.C. 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. (Rollo,
p. 227).
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 (Rollo, p. 252).
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 the pendency of the suit at the expense of whoever will ultimately be decided as entitled
thereto." (Rollo, p. 24).
G.R. No. 134241 August 11, 2003
DAVID REYES (Substituted by Victoria R. Fabella), petitioner,
vs.
JOSE LIM, CHUY CHENG KENG and HARRISON LUMBER, INC., respondents.
Reyes is seeking rescission of the Contract to Sell. In his amended answer, Lim is also seeking cancellation of the
Contract to Sell. The trial court then ordered Reyes to deposit in court the P10 million down payment that Lim made
under the Contract to Sell. Reyes admits receipt of the P10 million down payment but opposes the order to deposit the
amount in court. Reyes contends that prior to a judgment annulling the Contract to Sell, he has the "right to use,
possess and enjoy"26 the P10 million as its "owner"27 unless the court orders its preliminary attachment.28
To subscribe to Reyes’ contention will unjustly enrich Reyes at the expense of Lim. Reyes sold to Line One the Property
even before the balance of P18 million under the Contract to Sell with Lim became due on 8 March 1995. On 1 March
1995, Reyes signed a Deed of Absolute Sale 29 in favor of Line One. On 3 March 1995, the Register of Deeds issued TCT
No. 13476730 in the name of Line One.31 Reyes cannot claim ownership of the P10 million down payment because
Reyes had already sold to another buyer the Property for which Lim made the down payment. In fact, in his
Comment32 dated 20 March 1996, Reyes reiterated his offer to return to Lim the P10 million down payment.
In Eternal Gardens Memorial Parks Corp. v. IAC,33 this Court held the plaintiff could not continue to benefit from
the property or funds in litigation during the pendency of the suit at the expense of whomever the court might ultimately
adjudge as the lawful owner. The Court declared:
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 amounts to private respondent; that it claims no interest in such
amounts due and is willing to pay whoever is declared entitled to said amounts. x x x
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 (Rollo, p. 252).
There is also no plausible or justifiable reason for Reyes to object to the deposit of the P10 million down payment in
court. The Contract to Sell can no longer be enforced because Reyes himself subsequently sold the Property to Line
One. Both Reyes and Lim are now seeking rescission of the Contract to Sell. Under Article 1385 of the Civil Code,
rescission creates the obligation to return the things that are the object of the contract. Rescission is possible only
when the person demanding rescission can return whatever he may be obliged to restore. A court of equity will not
rescind a contract unless there is restitution, that is, the parties are restored to the status quo ante. 34
Thus, since Reyes is demanding to rescind the Contract to Sell, he cannot refuse to deposit the P10 million down
payment in court.35 Such deposit will ensure restitution of the P10 million to its rightful owner. Lim, on the other hand,
has nothing to refund, as he has not received anything under the Contract to Sell. 36
The principle that no person may unjustly enrich himself at the expense of another is embodied in Article 2238 of the
Civil Code. This principle applies not only to substantive rights but also to procedural remedies. One condition for
invoking this principle is that the aggrieved party has no other action based on contract, quasi-contract, crime, quasi-
delict or any other provision of law.39 Courts can extend this condition to the hiatus in the Rules of Court where the
aggrieved party, during the pendency of the case, has no other recourse based on the provisional remedies of the
Rules of Court.
2
Thus, a court may not permit a seller to retain, pendente lite, money paid by a buyer if the seller himself seeks
rescission of the sale because he has subsequently sold the same property to another buyer. 40 By seeking rescission,
a seller necessarily offers to return what he has received from the buyer. Such a seller may not take back his offer if
the court deems it equitable, to prevent unjust enrichment and ensure restitution, to put the money in judicial deposit.
There is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person retains
money or property of another against the fundamental principles of justice, equity and good conscience. 41 In this case,
it was just, equitable and proper for the trial court to order the deposit of the P10 million down payment to prevent
unjust enrichment by Reyes at the expense of Lim.42
G.R. No. L-23851 March 26, 1976
WACK WACK GOLF & COUNTRY CLUB, INC., plaintiff-appellant,
vs.
LEE E. WON alias RAMON LEE and BIENVENIDO A. TAN, defendants-appellees.
The action of interpleader, under section 120 of the Code of Civil Procedure, 2 is a remedy whereby a person who has
personal property in his possession, or an obligation to render wholly or partially, without claiming any right to either,
comes to court and asks that the persons who claim the said personal property or who consider themselves entitled to
demand compliance with the obligation, be required to litigate among themselves in order to determine finally who is
entitled to tone or the one thing. The remedy is afforded to protect a person not against double liability but against
double vexation in respect of one liability. 3 The procedure under the Rules of Court 4 is the same as that under the
Code of Civil Procedure, 5 except that under the former the remedy of interpleader is available regardless of the nature
of the subject-matter of the controversy, whereas under the latter an interpleader suit is proper only if the subject-
matter of the controversy is personal property or relates to the performance of an obligation.
There is no question that the subject matter of the present controversy, i.e., the membership fee certificate 201, is
proper for an interpleader suit. What is here disputed is the propriety and timeliness of the remedy in the light of the
facts and circumstances obtaining.
A stakeholder 6 should use reasonable diligence to hale the contending claimants to court. 7 He need not await actual
institution of independent suits against him before filing a bill of interpleader. 8 He should file an action of interpleader
within a reasonable time after a dispute has arisen without waiting to be sued by either of the contending
claimants. 9 Otherwise, he may be barred by laches 10 or undue delay. 11 But where he acts with reasonable diligence
in view of the environmental circumstances, the remedy is not barred. 12
Has the Corporation in this case acted with diligence, in view of all the circumstances, such that it may properly invoke
the remedy of interpleader? We do not think so. It was aware of the conflicting claims of the appellees with respect to
the membership fee certificate 201 long before it filed the present interpleader suit. It had been recognizing Tan as the
lawful owner thereof. It was sued by Lee who also claimed the same membership fee certificate. Yet it did not interplead
Tan.
It has been held that a stakeholder's action of interpleader is too late when filed after judgment has been rendered
against him in favor of one of the contending claimants, 13 especially where he had notice of the conflicting claims prior
to the rendition of the judgment and neglected the opportunity to implead the adverse claimants in the suit where
judgment was entered. This must be so, because once judgment is obtained against him by one claimant he becomes
liable to the latter
The Corporation has not shown any justifiable reason why it did not file an application for interpleader in civil case
26044 to compel the appellees herein to litigate between themselves their conflicting claims of ownership. It was only
after adverse final judgment was rendered against it that the remedy of interpleader was invoked by it.
It is the general rule that before a person will be deemed to be in a position to ask for an order of intrepleader, he
must be prepared to show, among other prerequisites, that he has not become independently liable to any of the
claimants.
It is also the general rule that a bill of interpleader comes too late when it is filed after judgment has been rendered
in favor of one of the claimants of the fund, this being especially true when the holder of the funds had notice of the
conflicting claims prior to the rendition of the judgment and had an opportunity to implead the adverse claimants in
the suit in which the judgment was rendered.
If a stakeholder defends a suit by one claimant and allows it to proceed so far as a judgment against him without
filing a bill of interpleader, it then becomes too late for him to do so. It is one o the main offices of a bill of interpleader
to restrain a separate proceeding at law by claimant so as to avoid the resulting partial judgment; and if the
stakeholder acquiesces in one claimant's trying out his claim and establishing it at law, he cannot then have that part
of the litigation repeated in an interpleader suit.
It is the general rule that a bill of interpleader comes too late when application therefore is delayed until after
judgment has been rendered in favor of one of the claimants of the fund, and that this is especially true where the
holder of the fund had notice of the conflicting claims prior to the rendition of such judgment and an opportunity to
implead the adverse claimants in the suit in which such judgment was rendered.
The remedy by interpleader is afforded to protect the party from the annoyance and hazard of two or more actions
touching the same property or demand; but one who, with knowledge of all the facts, neglects to avail himself of the
relief, or elects to take the chances for success in the actions at law, ought to submit to the consequences of defeat.
To permit an unsuccessful defendant to compel the successful plaintiffs to interplead, is to increase instead of to
diminish the number of suits; to put upon the shoulders of others the burden which he asks may be taken from his
own. ....'
Besides, a successful litigant cannot later be impleaded by his defeated adversary in an interpleader suit and compelled
to prove his claim anew against other adverse claimants, as that would in effect be a collateral attack upon the
judgment.
In United P.P.I. Co. v. Britton (Tex. Civ. App.) 264 S.W. 576. 578, it was said: 'It is the general rule that a bill of
interpleader comes too late when application therefor is delayed until after judgment has been rendered in favor of
one of the claimants of the fund, and this is especially true where the holder of the fund had notice of the conflicting
claims prior to the rendition of such judgment and an opportunity to implead the adverse claimants in the suit in
which such judgment was rendered.
In fine, the instant interpleader suit cannot prosper because the Corporation had already been made independently
liable in civil case 26044 and, therefore, its present application for interpleader would in effect be a collateral attack
upon the final judgment in the said civil case; the appellee Lee had already established his rights to membership fee
certificate 201 in the aforesaid civil case and, therefore, this interpleader suit would compel him to establish his rights
anew, and thereby increase instead of diminish litigations, which is one of the purposes of an interpleader suit, with
the possiblity that the benefits of the final judgment in the said civil case might eventually be taken away from him;
and because the Corporation allowed itself to be sued to final judgment in the said case, its action of interpleader was
filed inexcusably late, for which reason it is barred by laches or unreasonable delay.
3
G.R. No. 70145 November 13, 1986
MARCELO A. MESINA, petitioner,
vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT, HON. ARSENIO M. GONONG, in his capacity as Judge
of Regional Trial Court — Manila (Branch VIII), JOSE GO, and ALBERT UY, respondents.
Petitioner's allegations hold no water. Theories and examples advanced by petitioner on causes and effects of a cashier's
check such as 1) it cannot be countermanded in the hands of a holder in due course and 2) a cashier's check is a bill
of exchange drawn by the bank against itself-are general principles which cannot be aptly applied to the case at bar,
without considering other things. Petitioner failed to substantiate his claim that he is a holder in due course and for
consideration or value as shown by the established facts of the case. Admittedly, petitioner became the holder of the
cashier's check as endorsed by Alexander Lim who stole the check. He refused to say how and why it was passed to
him. He had therefore notice of the defect of his title over the check from the start. The holder of a cashier's check
who is not a holder in due course cannot enforce such check against the issuing bank which dishonors the same. If a
payee of a cashier's check obtained it from the issuing bank by fraud, or if there is some other reason why the payee
is not entitled to collect the check, the respondent bank would, of course, have the right to refuse payment of the
check when presented by the payee, since respondent bank was aware of the facts surrounding the loss of the check
in question. At the outset, respondent bank knew it was Jose Go's check and no one else since Go had not paid or
indorsed it to anyone. The bank was therefore liable to nobody on the check but Jose Go. The bank had no intention
to issue it to petitioner but only to buyer Jose Go.
In his second assignment of error, petitioner stubbornly insists that there is no showing of conflicting claims and
interpleader is out of the question. There is enough evidence to establish the contrary. Considering the aforementioned
facts and circumstances, respondent bank merely took the necessary precaution not to make a mistake as to whom to
pay and therefore interpleader was its proper remedy. It has been shown that the interpleader suit was filed by
respondent bank because petitioner and Jose Go were both laying their claims on the check, petitioner asking payment
thereon and Jose Go as the purchaser or owner. The allegation of petitioner that respondent bank had effectively
relieved itself of its primary liability under the check by simply filing a complaint for interpleader is belied by the
willingness of respondent bank to issue a certificate of time deposit in the amount of P800,000 representing the
cashier's check in question in the name of the Clerk of Court of Manila to be awarded to whoever wig be found by the
court as validly entitled to it. Said validity will depend on the strength of the parties' respective rights and titles thereto.
Bank filed the interpleader suit not because petitioner sued it but because petitioner is laying claim to the same check
that Go is claiming.
G.R. No. 110249 August 21, 1997
ALFREDO TANO, BALDOMERO TANO, DANILO TANO, ROMUALDO TANO, TEOCENES MIDELLO, petitioners,
vs.
HON. GOV. SALVADOR P. SOCRATES, MEMBERS OF SANGGUNIANG PANLALAWIGAN OF PALAWAN, namely,
VICE-GOVERNOR JOEL T. REYES, JOSE D. ZABALA, ROSALINO R. ACOSTA, JOSELITO A. CADLAON, ANDRES
R. BAACO, NELSON P. PENEYRA, CIPRIANO C. BARROMA, CLARO E. ORDINARIO, ERNESTO A. LLACUNA,
RODOLFO C. FLORDELIZA, GILBERT S. BAACO, WINSTON G. ARZAGA, NAPOLEON F. ORDONEZ and GIL P.
ACOSTA, respondents.
The primary interest of the first set of petitioners is, of course, to prevent the prosecution, trial and determination of
the criminal cases until the constitutionality or legality of the Ordinances they allegedly violated shall have been
resolved. The second set of petitioners merely claim that being fishermen or marine merchants, they would be adversely
affected by the ordinance's.
As to the first set of petitioners, this special civil for certiorari must fail on the ground of prematurity amounting to a
lack of cause of action. There is no showing that said petitioners, as the accused in the criminal cases, have filed
motions to quash the informations therein and that the same were denied. The ground available for such motions is
that the facts charged therein do not constitute an offense because the ordinances in question are unconstitutional. 6 It
cannot then be said that the lower courts acted without or in excess of jurisdiction or with grave abuse of discretion to
justify recourse to the extraordinary remedy of certiorari or prohibition. It must further be stressed that even if
petitioners did file motions to quash, the denial thereof would not forthwith give rise to a cause of action under Rule
65 of the Rules of Court. The general rule is that where a motion to quash is denied, the remedy therefrom is
not certiorari, but for the party aggrieved thereby to go to trial without prejudice to reiterating special defenses involved
in said motion, and if, after trial on the merits an adverse decision is rendered, to appeal therefrom in the manner
authorized by law. 7 And, even where in an exceptional circumstance such denial may be the subject of a special civil
action for certiorari, a motion for reconsideration must have to be filed to allow the court concerned an opportunity to
correct its errors, unless such motion may be dispensed with because of existing exceptional circumstances. 8 Finally,
even if a motion for reconsideration has been filed and denied, the remedy under Rule 65 is still unavailable absent
any showing of the grounds provided for in Section 1 thereof. 9 For obvious reasons, the petition at bar does not, and
could not have, alleged any of such grounds.
As to the second set of petitioners, the instant petition is obviously one for DECLARATORY RELIEF, i.e., for a declaration
that the Ordinances in question are a "nullity . . . for being unconstitutional." 10 As such, their petition must likewise
fail, as this Court is not possessed of original jurisdiction over petitions for declaratory relief even if only questions of
law are involved,11 it being settled that the Court merely exercises appellate jurisdiction over such petitions. 12
It is of course settled that laws (including ordinances enacted by local government units) enjoy the presumption of
constitutionality. 15 To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution,
not merely a doubtful or argumentative contradiction. In short, the conflict with the Constitution must be shown beyond
reasonable doubt.16 Where doubt exists, even if well-founded, there can be no finding of unconstitutionality. To doubt
is to sustain.17
After a scrutiny of the challenged Ordinances and the provisions of the Constitution petitioners claim to have been
violated, we find petitioners' contentions baseless and so hold that the former do not suffer from any infirmity, both
under the Constitution and applicable laws.
Petitioners specifically point to Section 2, Article XII and Sections 2 and 7, Article XIII of the Constitution as having
been transgressed by the Ordinances.
Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress on
the duty of the State to protect the nation's marine wealth. What the provision merely recognizes is that the State may
allow, by law, cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays
and lagoons.
Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing resources, but of their
protection, development and conservation. As hereafter shown, the ordinances in question are meant precisely to
protect and conserve our marine resources to the end that their enjoyment may be guaranteed not only for the present
generation, but also for the generations to come.
The so-called "preferential right" of subsistence or marginal fishermen to the use of marine resources is not at all
absolute. In accordance with the Regalian Doctrine, marine resources belong to the State, and, pursuant to the first
paragraph of Section 2, Article XII of the Constitution, their "exploration, development and utilization . . . shall be
under the full control and supervision of the State." Moreover, their mandated protection, development and
4
conservation as necessarily recognized by the framers of the Constitution, imply certain restrictions on whatever right
of enjoyment there may be in favor of anyone.
G.R. No. 159357 April 28, 2004
Brother MARIANO "MIKE" Z. VELARDE, petitioner,
vs.
SOCIAL JUSTICE SOCIETY, respondent.
Procedural Issues: Requisites of Petitions for Declaratory Relief
Section 1 of Rule 63 of the Rules of Court, which deals with petitions for declaratory relief, provides in part:
"Section 1. Who may file petition.- Any person interested under a deed, will, contract or other written instrument,
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."
Based on the foregoing, 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 purpose of the remedy is to interpret or to determine the validity of the written instrument and to
seek a judicial declaration of the parties’ rights or duties thereunder. 16 The essential requisites of the action are as
follows: (1) there is a justiciable controversy; (2) the controversy is between persons whose interests are adverse; (3)
the party seeking the relief has a legal interest in the controversy; and (4) the issue is ripe for judicial determination. 17
Justiciable Controversy
Brother Mike Velarde contends that the SJS Petition failed to allege, much less establish before the trial court, that
there existed a justiciable controversy or an adverse legal interest between them; and that SJS had a legal right that
was being violated or threatened to be violated by petitioner. On the contrary, Velarde alleges that SJS premised its
action on mere speculations, contingent events, and hypothetical issues that had not yet ripened into an actual
controversy. Thus, its Petition for Declaratory Relief must fail.
A justiciable controversy refers to an existing case or controversy that is appropriate or ripe for judicial determination,
not one that is conjectural or merely anticipatory. 18 The SJS Petition for Declaratory Relief fell short of this test. It
miserably failed to allege an existing controversy or dispute between the petitioner and the named respondents therein.
Further, the Petition did not sufficiently state what specific legal right of the petitioner was violated by the respondents
therein; and what particular act or acts of the latter were in breach of its rights, the law or the Constitution.
At the time SJS filed its Petition on January 28, 2003, the election season had not even started yet; and that, in any
event, he has not been actively involved in partisan politics.
An initiatory complaint or petition filed with the trial court should contain "a plain, concise and direct statement of the
ultimate facts on which the party pleading relies for his claim x x x."20 Yet, the SJS Petition stated no ultimate facts.
Indeed, SJS merely speculated or anticipated without factual moorings that, as religious leaders, the petitioner and his
co-respondents below had endorsed or threatened to endorse a candidate or candidates for elective offices.
Such premise is highly speculative and merely theoretical, to say the least. Clearly, it does not suffice to constitute a
justiciable controversy. The Petition does not even allege any indication or manifest intent on the part of any of the
respondents below to champion an electoral candidate, or to urge their so-called flock to vote for, or not to vote for, a
particular candidate. It is a time-honored rule that sheer speculation does not give rise to an actionable right.
Obviously, there is no factual allegation that SJS’ rights are being subjected to any threatened, imminent and inevitable
violation that should be prevented by the declaratory relief sought.
Cause of Action
Respondent SJS asserts that in order to maintain a petition for declaratory relief, a cause of action need not be alleged
or proven. Supposedly, for such petition to prosper, there need not be any violation of a right, breach of duty or actual
wrong committed by one party against the other.
Petitioner, on the other hand, argues that the subject matter of an action for declaratory relief should be a deed, a will,
a contract (or other written instrument), a statute, an executive order, a regulation or an ordinance. But the subject
matter of the SJS Petition is "the constitutionality of an act of a religious leader to endorse the candidacy of a candidate
for elective office or to urge or require the members of the flock to vote for a specified candidate." 26 According to
petitioner, this subject matter is "beyond the realm of an action for declaratory relief." 27 Petitioner avers that in the
absence of a valid subject matter, the Petition fails to state a cause of action and, hence, should have been dismissed
outright by the court a quo.
A cause of action is an act or an omission of one party in violation of the legal right or rights of another, causing injury
to the latter.28 Its essential elements are the following: (1) a right in favor of the plaintiff; (2) an obligation on the part
of the named defendant to respect or not to violate such right; and (3) such defendant’s act or omission that is violative
of the right of the plaintiff or constituting a breach of the obligation of the former to the latter.29
The failure of a complaint to state a cause of action is a ground for its outright dismissal. 30 However, in special civil
actions for declaratory relief, the concept of a cause of action under ordinary civil actions does not strictly apply. The
reason for this exception is that an action for declaratory relief presupposes that there has been no actual breach of
the instruments involved or of rights arising thereunder.31 Nevertheless, a breach or violation should be impending,
imminent or at least threatened.
A perusal of the Petition filed by SJS before the RTC discloses no explicit allegation that the former had any legal right
in its favor that it sought to protect. The Rules require that the interest must be material to the issue and affected by
the questioned act or instrument, as distinguished from simple curiosity or incidental interest in the question raised. 34
Indeed, the Court finds in the Petition for Declaratory Relief no single allegation of fact upon which SJS could base a
right of relief from the named respondents. In any event, even granting that it sufficiently asserted a legal right it
sought to protect, there was nevertheless no certainty that such right would be invaded by the said respondents. Not
even the alleged proximity of the elections to the time the Petition was filed below (January 28, 2003) would have
provided the certainty that it had a legal right that would be jeopardized or violated by any of those respondents.
Legal Standing
Legal standing or locus standi has been defined as a personal and substantial interest in the case, such that the party
has sustained or will sustain direct injury as a result of the challenged act.37 Interest means a material interest in issue
5
that is affected by the questioned act or instrument, as distinguished from a mere incidental interest in the question
involved.38
Petitioner alleges that "[i]n seeking declaratory relief as to the constitutionality of an act of a religious leader to endorse,
or require the members of the religious flock to vote for a specific candidate, herein Respondent SJS has no legal
interest in the controversy";39 it has failed to establish how the resolution of the proffered question would benefit or
injure it.
Parties bringing suits challenging the constitutionality of a law, an act or a statute must show "not only that the law
[or act] is invalid, but also that [they have] sustained or [are] in immediate or imminent danger of sustaining some
direct injury as a result of its enforcement, and not merely that [they] suffer thereby in some indefinite way."40 They
must demonstrate that they have been, or are about to be, denied some right or privilege to which they are lawfully
entitled, or that they are about to be subjected to some burdens or penalties by reason of the statute or act complained
of.41
First, parties suing as taxpayers must specifically prove that they have sufficient interest in preventing the illegal
expenditure of money raised by taxation.42 A taxpayer’s action may be properly brought only when there is an exercise
by Congress of its taxing or spending power.43 In the present case, there is no allegation, whether express or implied,
that taxpayers’ money is being illegally disbursed.
Second, there was no showing in the Petition for Declaratory Relief that SJS as a political party or its members as
registered voters would be adversely affected by the alleged acts of the respondents below, if the question at issue
was not resolved. There was no allegation that SJS had suffered or would be deprived of votes due to the acts imputed
to the said respondents. Neither did it allege that any of its members would be denied the right of suffrage or the
privilege to be voted for a public office they are seeking.
Finally, the allegedly keen interest of its "thousands of members who are citizens-taxpayers-registered voters" is too
general44 and beyond the contemplation of the standards set by our jurisprudence. Not only is the presumed interest
impersonal in character; it is likewise too vague, highly speculative and uncertain to satisfy the requirement of
standing.45
Transcendental Importance
Similarly in the instant case, the Court deemed the constitutional issue raised in the SJS Petition to be of paramount
interest to the Filipino people.
Regrettably, it is not legally possible for the Court to take up, on the merits, the paramount question involving a
constitutional principle. It is a time-honored rule that "the constitutionality of a statute [or act] will be passed upon
only if, and to the extent that, it is directly and necessarily involved in a justiciable controversy and is essential to the
protection of the rights of the parties concerned."100
G.R. No. 150806 January 28, 2008
EUFEMIA ALMEDA and ROMEL ALMEDA, petitioners,
vs.
BATHALA MARKETING INDUSTRIES, INC., respondent.
Declaratory relief is defined as an action by any person interested in a deed, will, contract or other written instrument,
executive order or resolution, to determine any question of construction or validity arising from the instrument,
executive order or regulation, or statute, and for a declaration of his rights and duties thereunder. The only issue that
may be raised in such a petition is the question of construction or validity of provisions in an instrument or statute.
Corollary is the general rule that such an action must be justified, as no other adequate relief or remedy is available
under the circumstances. 15
Decisional law enumerates the requisites of an action for declaratory relief, as follows: 1) the subject matter of the
controversy must be a deed, will, contract or other written instrument, statute, executive order or regulation, or
ordinance; 2) the terms of said documents and the validity thereof are doubtful and require judicial construction; 3)
there must have been no breach of the documents in question; 4) there must be an actual justiciable controversy or
the "ripening seeds" of one between persons whose interests are adverse; 5) the issue must be ripe for judicial
determination; and 6) adequate relief is not available through other means or other forms of action or proceeding.16
It is beyond cavil that the foregoing requisites are present in the instant case, except that petitioners insist that
respondent was already in breach of the contract when the petition was filed.
We do not agree.
After petitioners demanded payment of adjusted rentals and in the months that followed, respondent complied with
the terms and conditions set forth in their contract of lease by paying the rentals stipulated therein. Respondent
religiously fulfilled its obligations to petitioners even during the pendency of the present suit. There is no showing that
respondent committed an act constituting a breach of the subject contract of lease. Thus, respondent is not barred
from instituting before the trial court the petition for declaratory relief.
Petitioners claim that the instant petition is not proper because a separate action for rescission, ejectment and damages
had been commenced before another court; thus, the construction of the subject contractual provisions should be
ventilated in the same forum.
We are not convinced.
It is true that in Panganiban v. Pilipinas Shell Petroleum Corporation17 we held that the petition for declaratory relief
should be dismissed in view of the pendency of a separate action for unlawful detainer. However, we cannot apply the
same ruling to the instant case. In Panganiban, the unlawful detainer case had already been resolved by the trial court
before the dismissal of the declaratory relief case; and it was petitioner in that case who insisted that the action for
declaratory relief be preferred over the action for unlawful detainer. Conversely, in the case at bench, the trial court
had not yet resolved the rescission/ejectment case during the pendency of the declaratory relief petition. In fact, the
trial court, where the rescission case was on appeal, itself initiated the suspension of the proceedings pending the
resolution of the action for declaratory relief.
G.R. No. L-58340 July 16, 1991
KAWASAKI PORT SERVICE CORPORATION, NAIKAI SHIPPING CO. LTD., NAIKAI TUG BOAT SERVICE CO.,
THE PORT SERVICE CORPORATION, LICENSED LAND SEA PILOTS ASSOCIATION, HAYAKOMA UNYU K.K.,
TOKYO KISEN COMPANY, LTD., OMORI KAISOTEN, LTD., TOHOKU UNYU CO., LTD. AND SEITETSU UNYU CO.,
LTD., petitioners,
vs.
6
THE HON. AUGUSTO M. AMORES, Judge of Br. XXIV, Court of First Instance of Manila, and C.F. SHARP &
CO., INC., respondents.
In the case at bar, private respondent has two (2) alternative principal causes of action, to wit: either for declaratory
relief or for injunction. Allegedly, in both cases, the status of the plaintiff is not only affected but is the main issue at
hand.
As defined, "Status means a legal personal relationship, not temporary in nature nor terminable at the mere will of the
parties, with which third persons and the state are concerned" (Holzer v. Deutsche Reichsbahn Gesellschaft, 290 NYS
181; cited in 40 Words and Phrases, 129, Permanent Edition).
It is easy to see in the instant case, that what is sought is a declaration not only that private respondent is a corporation
for there is no dispute on that matter but also that it is separate and distinct from C.F. Sharp Kabushiki Kaisha and
therefore, not liable for the latter's indebtedness. It is evident that monetary obligations does not, in any way, refer to
status, lights and obligations. Obligations are more or less temporary, but status is relatively permanent. But more
importantly, as cited in the case of (Dy Poco v. Commissioner of Immigration, et al., 16 SCRA 618 [1966]), the
prevailing rule is that "where a declaratory judgment as to a disputed fact would be determinative of issues rather than
a construction of definite stated rights, status and other relations, commonly expressed in written instrument, the case
is not one for declaratory judgment." Thus, considering the nature of a proceeding for declaratory judgment, wherein
relief may be sought only to declare rights and not to determine or try issues, there is more valid reason to adhere to
the principle that a declaratory relief proceeding is unavailable where judgment would have to be made, only after a
judicial investigation of disputed issues (ibid). In fact, private respondent itself perceives that petitioners may even
seek to pierce the veil of corporate identity (Rollo, p. 63).
Otherwise stated, there is no action relating to or the subject of which are the properties of the defendants in the
Philippines for it is beyond dispute that they have none in this jurisdiction nor can it be said that they have claimed
any lien or interest, actual or contingent over any property herein, for as above stated, they merely demanded or
attempted to demand from private respondent payment of the monetary obligations of C.F. Sharp K.K., No action in
court has as yet ensued. Verily, the fact that C.F. Sharp Philippines is an entity separate and distinct from C.F. Sharp
K.K., is a matter of defense that can be raised by the former at the proper time.
Hence, as ruled by this Court, where the complaint does not involve the personal status of plaintiff, nor any property
in the Philippines in which defendants have or claim an interest, or which the plaintiff has attached, but purely an action
for injunction, it is a personal action as well as an action in personam, not an action in rem or quasi in rem. As a
personal action, personal or substituted service of summons on the defendants, not extraterritorial service, is necessary
to confer jurisdiction on the court.
G.R. No. 144101 September 16, 2005
ANTONIO P. TAMBUNTING, JR. and COMMERCIAL HOUSE OF FINANCE, INC., Petitioners,
vs.
SPOUSES EMILIO SUMABAT and ESPERANZA BAELLO, Respondent.
An action for declaratory relief should be filed by a person interested under a deed, will, contract or other written
instrument, and whose rights are affected by a statute, executive order, regulation or ordinance before breach or
violation thereof.1 The purpose of the action is to secure an authoritative statement of the rights and obligations of the
parties under a statute, deed, contract, etc. for their guidance in its enforcement or compliance and not to settle issues
arising from its alleged breach.2 It may be entertained only before the breach or violation of the statute, deed,
contract, etc. to which it refers.3 Where the law or contract has already been contravened prior to the filing of an action
for declaratory relief, the court can no longer assume jurisdiction over the action. 4 In other words, a court has no more
jurisdiction over an action for declaratory relief if its subject, i.e., the statute, deed, contract, etc., has already been
infringed or transgressed before the institution of the action. Under such circumstances, inasmuch as a cause of action
has already accrued in favor of one or the other party, there is nothing more for the court to explain or clarify short of
a judgment or final order.
Here, an infraction of the mortgage terms had already taken place before the filing of Civil Case No. C-7496. Thus, the
CFI lacked jurisdiction when it took cognizance of the case in 1979. And in the absence of jurisdiction, its decision was
void and without legal effect. As this Court held in Arevalo v. Benedicto:5
Furthermore, the want of jurisdiction by a court over the subject-matter renders its judgment void and a mere nullity,
and considering that a void judgment is in legal effect no judgment, by which no rights are divested, from which no
rights can be obtained, which neither binds nor bars any one, and under which all acts performed and all claims flowing
out of are void, and considering further, that the decision, for want of jurisdiction of the court, is not a decision in
contemplation of law, and, hence, can never become executory, it follows that such a void judgment cannot constitute
a bar to another case by reason of res judicata.
G.R. No. 164171 February 20, 2006
HON. EXECUTIVE SECRETARY, HON. SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS (DOTC), COMMISSIONER OF CUSTOMS, ASSISTANT SECRETARY, LAND
TRANSPORTATION OFFICE (LTO), COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT ZONE, AND CHIEF OF
LTO, SUBIC BAY FREE PORT ZONE, Petitioners,
vs.
SOUTHWING HEAVY INDUSTRIES, INC., represented by its President JOSE T. DIZON, UNITED
AUCTIONEERS, INC., represented by its President DOMINIC SYTIN, and MICROVAN, INC., represented by
its President MARIANO C. SONON, Respondents.
The established rule that the constitutionality of a law or administrative issuance can be challenged by one who will
sustain a direct injury as a result of its enforcement 11 has been satisfied in the instant case. The broad subject of the
prohibited importation is "all types of used motor vehicles." Respondents would definitely suffer a direct injury from
the implementation of EO 156 because their certificate of registration and tax exemption authorize them to trade
and/or import new and used motor vehicles and spare parts, except "used cars."12 Other types of motor vehicles
imported and/or traded by respondents and not falling within the category of used cars would thus be subjected to
the ban to the prejudice of their business. Undoubtedly, respondents have the legal standing to assail the validity of
EO 156.
As to the propriety of declaratory relief as a vehicle for assailing the executive issuance, suffice it to state that any
breach of the rights of respondents will not affect the case. In Commission on Audit of the Province of Cebu v. Province
of Cebu,13 the Court entertained a suit for declaratory relief to finally settle the doubt as to the proper interpretation
of the conflicting laws involved, notwithstanding a violation of the right of the party affected. We find no reason to
deviate from said ruling mindful of the significance of the present case to the national economy.
NATIONAL HOME MORTGAGE FINANCE CORPORATION and HOME DEVELOPMENT MUTUAL
FUND, respondents.
I. Worthy of recall, the RTC held that respondents’25 act of initiating foreclosure proceedings was in breach of Rep. Act
No. 8501 and rendered the action of declaratory relief improper. The RTC suggested that the proper remedy is an
ordinary civil action. Incidentally, this point is also related to petitioners’ contention that the Court of Appeals should
have ordered the conversion of their petition filed before the RTC to an ordinary civil action, under the provisions of
Section 6,26 Rule 63 of the Rules of Court.
We agree with the RTC but hasten to point out that the RTC had not ruled on whether the petition was also improper
as a petition for prohibition. Indeed, under Section 1, 27 Rule 63, a person must file a petition for declaratory relief
before breach or violation of a deed, will, contract, other written instrument, statute, executive order, regulation,
ordinance or any other governmental regulation. In this case, the petitioners had stated in their petition that
respondents assessed them interest and penalties on their outstanding loans, initiated foreclosure proceedings against
petitioner Rafael Martelino as evidenced by the notice of extra-judicial sale28 and threatened to foreclose the mortgages
of the other petitioners, all in disregard of their right to suspend payment to Shelter for its failure to complete the
subdivision. Said statements clearly mean one thing: petitioners had already suspended paying their amortization
payments. Unfortunately, their actual suspension of payments defeated the purpose of the action to secure an
authoritative declaration of their supposed right to suspend payment, for their guidance. Thus, the RTC could no longer
assume jurisdiction over the action for declaratory relief because its subject initially unspecified, now identified as P.D.
No. 957 and relied upon -- correctly or otherwise -- by petitioners, and assumed by the RTC to be Rep. Act No. 8501,
was breached before filing the action. As we said in Tambunting, Jr. v. Sumabat:29
. . . The purpose of the action [for declaratory relief] is to secure an authoritative statement of the rights and
obligations of the parties under a statute, deed, contract, etc. for their guidance in its enforcement or compliance
and not to settle issues arising from its alleged breach. It may be entertained only before the breach or violation of
the statute, deed, contract, etc. to which it refers. Where the law or contract has already been contravened prior to
the filing of an action for declaratory relief, the court can no longer assume jurisdiction over the action.… Under such
circumstances, inasmuch as a cause of action has already accrued in favor of one or the other party, there is nothing
more for the court to explain or clarify short of a judgment or final order. 30
Under the circumstances, may the Court nonetheless allow the conversion of the petition for declaratory relief and
prohibition into an ordinary action? We are constrained to say: no. Although Section 6, Rule 63 might allow such course
of action, the respondents did not argue the point, and we note petitioners’ failure to specify the ordinary action they
desired. We also cannot reasonably assume that they now seek annulment of the mortgages.
Assuming the Court can also treat the Petition for Declaratory Relief and Prohibition as an action for prohibition, we
must still hold that prohibition is improper. Prohibition is a remedy against proceedings that are without or in excess
of jurisdiction, or with grave abuse of discretion, there being no appeal or other plain, speedy adequate remedy in the
ordinary course of law.35 But here, the petition did not even impute lack of jurisdiction or grave abuse of discretion
committed by respondents and Sheriff Castillo regarding the foreclosure proceedings.
G.R. No. L-24153 February 14, 1983

G.R. No. 160208 June 30, 2008 TOMAS VELASCO, LOURDES RAMIREZ, SY PIN, EDMUNDO UNSON, APOLONIA RAMIREZ and LOURDES
LOMIBAO, as component members of the STA. CRUZ BARBERSHOP ASSOCIATION, in their own behalf and
in representation of the other owners of barbershops in the City of Manila, petitioners-appellants,
RAFAEL R. MARTELINO, BARCHELECHU S. MORALES, ROSELYN S. CACHAPERO, REYNALDO R. vs.
EVANGELISTA, CESAR B. YAPE, LEONORA R. PARAS, SEGUNDINA I. IBARRA, RAQUEL G. HALNIN, ZAMORA HON. ANTONIO J. VILLEGAS, City Mayor of Manila, HON. HERMINIO A. ASTORGA, Vice-Mayor and Presiding
I. DIAZ, and ARTHUR L. VEGA,* petitioners,
vs.

7
Officer of the Municipal Board in relation to Republic Act 4065, THE MUNICIPAL BOARD OF THE CITY OF
MANILA and EDUARDO QUINTOS SR., Chief of Police of the City of Manila, respondents-appellees.
This is an appeal from an order of the lower court dismissing a suit for declaratory relief challenging the constitutionality
based on Ordinance No. 4964 of the City of Manila, the contention being that it amounts to a deprivation of property
of petitioners-appellants of their means of livelihood without due process of law. The assailed ordinance is worded thus:
"It shall be prohibited for any operator of any barber shop to conduct the business of massaging customers or other
persons in any adjacent room or rooms of said barber shop, or in any room or rooms within the same building where
the barber shop is located as long as the operator of the barber shop and the room where massaging is conducted is
the same person." 1 As noted in the appealed order, petitioners-appellants admitted that criminal cases for the violation
of this ordinance had been previously filed and decided.
Even if such were not the case, the attack against the validity cannot succeed. As pointed out in the brief of
respondents-appellees, it is a police power measure. The objectives behind its enactment are: "(1) To be able to impose
payment of the license fee for engaging in the business of massage clinic under Ordinance No. 3659 as amended by
Ordinance 4767, an entirely different measure than the ordinance regulating the business of barbershops and, (2) in
order to forestall possible immorality which might grow out of the construction of separate rooms for massage of
customers." 3 This Court has been most liberal in sustaining ordinances based on the general welfare clause.
G.R. No. 189571 January 21, 2015
THE HONORABLE MONETARY BOARD and GAIL U. FULE, Director, Supervision and Examination Department
II, and BANGKO SENTRAL NG PILIPINAS, Petitioners,
vs.
PHILIPPINE VETERANS BANK, Respondent.
Section 1, Rule 63 of the Rules of Court governs petitions for declaratory relief, viz.:
SECTION 1. Who may file petition. – Any person interested under a deed, will, contract or other written instrument,
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.
Declaratory relief is defined as an action by any person interested in a deed, will, contract or other written instrument,
executive order or resolution, to determine any question of construction or validity arising from the instrument,
executive order or regulation, or statute; and for a declaration of his rights and duties thereunder. The only issue that
may be raised in such a petition is the question of construction or validity of provisions in an instrument or
statute.9 Ergo, the Court, in CJH Development Corporation v. Bureau of Internal Revenue, 10 held that in the same
manner that court decisions cannot be the proper subjects of a petition for declaratory relief, decisions of quasijudicial
agencies cannot be subjects of a petition for declaratory relief for the simple reason that if a party is not agreeable to
a decision either on questions of law or of fact, it may avail of the various remedies provided by the Rules of Court.
In view of the foregoing, the decision of the BSP Monetary Board cannot be a proper subject matter for a petition for
declaratory relief since it was issued by the BSP Monetary Board inthe exercise of its quasi-judicial powers or functions.
The nature of the BSP Monetary Board as a quasi-judicial agency, and the character of its determination of whether or
not appropriate sanctions may be imposed upon erring banks, as anexercise of quasi-judicial function, have been
recognized by this Court in the case of United Coconut Planters Bank v. E. Ganzon, Inc.,15 to wit:
8
A quasi-judicial agency or body isan organ of government other than a court and other thana legislature, which affects
the rights of private parties through either adjudication or rule-making. A "quasi-judicial function" is a term which
applies to the action, discretion, etc. of public administrative officers or bodies, who are required to investigate facts,
or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action
and to exercise discretion of a judicial nature.
Undoubtedly, the BSP Monetary Board is a quasi-,judicial agency exercising quasi-,judicial powers or
functions.1âwphi1 As aptly observed by the Court of Appeals, the BSP Monetary Board is an independent central
monetary authority and a body corporate with fiscal and administrative autonomy, mandated to provide policy
directions in the areas of money, banking, and credit.
A priori, having established that the BSP Monetary Board is indeed a quasi-judicial body exercising quasi-judicial
functions, then its decision in MB Resolution No. 1139 cannot be the proper subject of declaratory relief.
Lastly, also worth noting is the fact that the court a quo's Order dated September 24, 2007, which dismissed
respondent's petition for declaratory relief, had long become final and executory.
G.R. NO. 165001 January 31, 2007
NEW FRONTIER SUGAR CORPORATION, Petitioner,
vs.
REGIONAL TRIAL COURT, BRANCH 39, ILOILO CITY and EQUITABLE PCI BANK, Respondents.
Nevertheless, the suspension of the enforcement of all claims against the corporation is subject to the rule that it shall
commence only from the time the Rehabilitation Receiver is appointed. In this case, respondent bank instituted
the foreclosure proceedings against petitioner’s properties on March 13, 2002 and a Certificate of Sale at Public Auction
was issued on May 6, 2002, with respondent bank as the highest bidder. The mortgage on petitioner’s chattels was
likewise foreclosed and the Certificate of Sale was issued on May 14, 2002. It also appears that titles over the properties
have already been transferred to respondent bank.17
On the other hand, the petition for corporate rehabilitation was filed only on August 14, 2002 and the Rehabilitation
Receiver appointed on August 20, 2002. Respondent bank, therefore, acted within its prerogatives when it foreclosed
and bought the property, and had title transferred to it since it was made prior to the appointment of a rehabilitation
receiver.
Consequently, the CA was correct in upholding the RTC’s dismissal of the petition for rehabilitation in view of the fact
that the titles to petitioner’s properties have already passed on to respondent bank and petitioner has no more assets
to speak of, specially since petitioner does not dispute the fact that the properties which were foreclosed by respondent
bank comprise the bulk, if not the entirety, of its assets.
In the present case, the petition for rehabilitation did not run its full course but was dismissed by the RTC after due
consideration of the pleadings filed before it. On this score, the RTC cannot be faulted for its summary dismissal, as it
is tantamount to a finding that there is no merit to the petition.
The CA also correctly ruled that petitioner availed of the wrong remedy when it filed a special civil action for certiorari
with the CA under Rule 65 of the Rules of Court.
Certiorari is a remedy for the correction of errors of jurisdiction, not errors of judgment. It is an original and independent
action that was not part of the trial that had resulted in the rendition of the judgment or order complained of. More
importantly, since the issue is jurisdiction, an original action for certiorari may be directed against an interlocutory
order of the lower court prior to an appeal from the judgment; or where there is no appeal or any plain, speedy or
adequate remedy. A petition for certiorari should be filed not later than sixty days from the notice of judgment, order,
or resolution, and a motion for reconsideration is generally required prior to the filing of a petition for certiorari, in
order to afford the tribunal an opportunity to correct the alleged errors. 29
The Omnibus Order dated January 13, 2003 issued by the RTC is a final order since it terminated the proceedings and
dismissed the case before the trial court; it leaves nothing more to be done. As such, petitioner’s recourse is to file an
appeal from the Omnibus Order.
However, it should be noted that the Court issued A.M. No. 04-9-07-SC on September 14, 2004, clarifying the proper
mode of appeal in cases involving corporate rehabilitation and intra-corporate controversies. It is provided therein that
all decisions and final orders in cases falling under the Interim Rules of Corporate Rehabilitation and the Interim Rules
of Procedure Governing Intra-Corporate Controversies under Republic Act No. 8799 shall be appealed to the CA through
a petition for review under Rule 43 of the Rules of Court to be filed within fifteen (15) days from notice of the decision
or final order of the RTC.
G.R. No. 181642 January 29, 2009
RUFINO S. CAMUTIN, EDDIE P. CAMUTIN, GINA P. CAMUTIN, represented by NOMINARIO SARIA, as
Attorney-in-fact, Petitioners,
vs.
SPS. NORBERTO POTENTE, and PASCUALA POTENTE, Respondents
Certiorari is an extraordinary remedy available only when there is no appeal, nor any plain, speedy, and adequate
remedy in the ordinary course of law.18 While a petition for certiorari is not allowed against any interlocutory order
issued by the court in the unlawful detainer or ejectment case,19 in the case at bar, the filing of a petition for certiorari
challenging the MTC’s Orders dated 5 June 2007 and 16 August 2007 cannot be deemed a dilatory remedy resorted to
by petitioners. On the contrary, sustaining the MTC’s orders would unnecessarily and unfairly delay the unlawful
detainer case, a result contrary to the rules’ objective of speedy disposition of cases. Petitioners could also not appeal
from the orders of the MTC because these only ordered the indefinite suspension and archiving of the case. The case
was not resolved on the merits so there is actually no decision from which petitioners can appeal. Thus, the RTC could
have validly ruled on the petition for certiorari instead of dismissing it on the ground that it is a prohibited pleading.
However, the MTC’s revival of the unlawful detainer case and its subsequent dismissal thereof on the grounds
aforestated have rendered the resolution of the present petition for review superfluous and unnecessary.
G.R. No. 157985 December 2, 2005
ZENAIDA BUGARIN, VIOLETA ABANO, LIZA ABAYATA, ANTONIO ALEGRE, REMEDIOS ALEGRE, CHRIS
ANASCO, JEFFREY ARQUILLOS, LOURDES BAGARESE, EUGENIA BARAQUIL, PRECIOS BASOY, RANNY
BASOY, FELY BERMEJO, CARLOS BO, JUN BO, ALEX BORRES, ANNA MARIE CORDOVA, ESPERANZE
CORDOVA, EDWIN DEPETILLO, ROMULO FERRY, LEONISA GABRIEL, MA. FE GABRIEL, SALOME CORDOVA,
ELEN JACOB, JEREMIAS JACOB, OLIVIA LERIN, CRISELDA MADEJA, JOMARI MANONG, NESTOR MANONG,
VALENTIN MANONG, EDMUNDO/FELY MINA, TEDDY PARUAN, SALVACION PASCUA, ROMMEL POLISTICO,
DANIEL/NANCY PRADO, ARMANDO ROMERO, SANCHO VILLAFUERTE, and FERNANDO YAMID, Petitioners,
9
vs.
CECILIA B. PALISOC, MARINA B. MATA and REYNALDO T. NEPOMUCENO, Respondents.
Under Section 19,10 Rule 70 of the Revised Rules on Civil Procedure, a judgment on a forcible entry and detainer action
is immediately executory to avoid further injustice to a lawful possessor, and the court’s duty to order the execution is
practically ministerial.11 The defendant may stay it only by (a) perfecting an appeal; (b) filing a supersedeas bond; and
(c) making a periodic deposit of the rental or reasonable compensation for the use and occupancy of the property
during the pendency of the appeal.12 Once the Regional Trial Court decides on the appeal, such decision is immediately
executory under Section 21,13 Rule 70, without prejudice to an appeal, via a petition for review, before the Court of
Appeals or Supreme Court.14
However, petitioners failed to file a petition for review. Records show that petitioners received on March 12, 2003 the
RTC decision denying their motion for reconsideration. They had until March 27, 2003 to file a petition for review before
the Court of Appeals. Instead, they filed a petition for certiorari and prohibition on April 10, 2003. In said petition,
which is still pending, petitioners contended that the RTC committed grave abuse of discretion in affirming the MeTC
decision and insisted that the latter court had no jurisdiction over the complaint.
The remedy to obtain reversal or modification of the judgment on the merits in the instant case is appeal. This holds
true even if the error ascribed to the court rendering the judgment is its lack of jurisdiction over the subject matter, or
the exercise of power in excess thereof, or grave abuse of discretion in the findings of fact or of law set out in the
decision. The existence and availability of the right of appeal prohibits the resort to certiorari because one of the
requirements for the latter remedy is that "there should be no appeal."15
Clearly, petitioners’ petition for certiorari before the Court of Appeals was filed as a substitute for the lost remedy of
appeal. Certiorari is not and cannot be made a substitute for an appeal where the latter remedy is available but was
lost through fault or negligence.16 Thus, the filing of the petition for certiorari did not prevent the RTC decision from
becoming final and executory.17 The RTC acted correctly when it remanded the case to the court of origin in the order
dated April 11, 2003.18
G.R. No. 108619 July 31, 1997
EPIFANIO LALICAN, petitioner,
vs.
HON. FILOMENO A. VERGARA, Presiding Judge, RTC Branch 52, Puerto Princesa City and PEOPLE OF THE
PHILIPPINES, respondents.
The Court, therefore, finds that the lower court did not gravely abuse its discretion in denying the quashal of the
information. The petition simply has no legal basis. Certiorari may be issued only where it is clearly shown that there
is patent and gross abuse of discretion as to amount to an evasion of positive duty or to 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. 11 Grave abuse of discretion implies a capricious and
whimsical exercise of power. 12
On the other hand, certiorari may not be availed of where it is not shown that the respondent court lacked or exceeded
its jurisdiction or committed grave abuse of discretion. 13 Where the court has jurisdiction over the case, even if its
findings are not correct, its questioned acts would at most constitute errors of law and not abuse of discretion correctible
by certiorari. 14 As this Court said:
. . . When a court exercises its jurisdiction, an error committed while so engaged does not deprive it of the jurisdiction
being exercised when the error is committed. If it did, every error committed by a court would deprive it of its
 jurisdiction and every erroneous judgment would be a void judgment. This cannot be allowed. The administration of
justice would not survive such a rule. Consequently, an error of judgment that the court may commit in the exercise
of its jurisdiction is not correctible through the original civil action of certiorari. 15
In other words, certiorari will issue only to correct errors of jurisdiction and not to correct errors of procedure or
mistakes in the judge's findings and conclusions. 16
The unavailability of the writ of certiorari, and even that of prohibition, in this case is borne out of the fact that what
petitioner considers as grave abuse of discretion in this case is the denial of his motion to quash the information filed
against him and three others. This Court has consistently defined the proper procedure in case of denial of a motion to
quash. The accused has to enter a plea, go to trial without prejudice on his part to present the special defenses he had
invoked in his motion and, if after trial on the merits, an adverse decision is rendered, to appeal therefrom in the
manner authorized by law. 17
Certiorari is not the proper remedy where a motion to quash an information is denied. That the appropriate recourse
is to proceed to trial and in case of conviction, to appeal such conviction, as well as the denial of the motion to quash,
is impelled by the fact that a denial of a motion to quash is an interlocutory procedural aspect which cannot be appealed
nor can it be the subject of a petition for certiorari. 18 The remedies of appeal and certiorari are mutually exclusive and
not alternative or successive. 19 An interlocutory order may be assailed by certiorari or prohibition only when it is shown
that the court acted without or in excess of jurisdiction or with grave abuse of discretion.
G.R. No. 167434 February 19, 2007
SPOUSES RAMON M. NISCE and A. NATIVIDAD PARAS-NISCE, Petitioners,
vs.
EQUITABLE PCI BANK, INC., Respondent.
The Ruling of the Court
The Petition in the Court of Appeals Not Premature
The general rule is that before filing a petition for certiorari under Rule 65 of the Rules of Court, the petitioner is
mandated to comply with a condition precedent: the filing of a motion for reconsideration of the assailed order, and
the subsequent denial of the court a quo. It must be stressed that a petition for certiorari is an extraordinary remedy
and should be filed only as a last resort. The filing of a motion for reconsideration is intended to afford the public
respondent an opportunity to correct any actual error attributed to it by way of re-examination of the legal and factual
issues.55 However, the rule is subject to the following recognized exceptions:
(a) where the order is a patent nullity, as where the court a quo has no jurisdiction; (b) where the questions raised
in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those
raised and passed upon in the lower court; (c) where there is an urgent necessity for the resolution of the question
and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of
the action is perishable; (d) where, under the circumstances, a motion for reconsideration would be useless; (e)
where petitioner was deprived of due process and there is extreme urgency for relief; (f) where, in a criminal case,
relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable; (g) where the
proceedings in the lower court are a nullity for lack of due process; (h) where the proceedings was ex parte or in
which the petitioner had no opportunity to object; and (i) where the issue raised is one purely of law or public interest
is involved.56
10
As will be shown later, the March 24, 2003 Order of the trial court granting petitioner’s plea for a writ of preliminary
injunction was issued with grave abuse of discretion amounting to excess or lack of jurisdiction and thus a nullity. If
the trial court issues a writ of preliminary injunction despite the absence of proof of a legal right and the injury sustained
by the plaintiff, the writ is a nullity.57
Petitioners Are Not Entitled to a Writ of Preliminary Prohibitory Injunction
The plaintiff praying for a writ of preliminary injunction must further establish that he or she has a present and
unmistakable right to be protected; that the facts against which injunction is directed violate such right;59 and there is
a special and paramount necessity for the writ to prevent serious damages. In the absence of proof of a legal right and
the injury sustained by the plaintiff, an order for the issuance of a writ of preliminary injunction will be nullified. Thus,
where the plaintiff’s right is doubtful or disputed, a preliminary injunction is not proper. The possibility of irreparable
damage without proof of an actual existing right is not a ground for a preliminary injunction. 60
However, to establish the essential requisites for a preliminary injunction, the evidence to be submitted by the plaintiff
need not be conclusive and complete.61 The plaintiffs are only required to show that they have an ostensible right to
the final relief prayed for in their complaint.
We agree with respondent’s contention that as creditor-mortgagee, it has the right under the real estate mortgage
contract and the amendment thereto to foreclose extrajudicially, the real estate mortgage and sell the property at
public auction, considering that petitioners had failed to pay their loans, plus interests and other incremental amounts
as provided for in the deeds.
It was the burden of petitioners, as plaintiffs below, to adduce preponderant evidence to prove their claim that
respondent bank was the debtor of petitioner Natividad Nisce relative to her dollar deposit with PCIB, and later
transferred to PCI Capital in Hong Kong, a subsidiary of respondent Bank. Petitioners, however, failed to discharge
their burden.
G.R. No. 192986 January 15, 2013
ADVOCATES FOR TRUTH IN LENDING, INC. and EDUARDO B. OLAGUER, Petitioners,
vs.
BANGKO SENTRAL MONETARY BOARD, represented by its Chairman, GOVERNOR ARMANDO M. TETANGCO,
JR., and its incumbent members: JUANITA D. AMATONG, ALFREDO C. ANTONIO, PETER FA VILA, NELLY F.
VILLAFUERTE, IGNACIO R. BUNYE and CESAR V. PURISIMA, Respondents.
The decision on whether or not to accept a petition for certiorari, as well as to grant due course thereto, is addressed
to the sound discretion of the court.15 A petition for certiorari being an extraordinary remedy, the party seeking to avail
of the same must strictly observe the procedural rules laid down by law, and non-observance thereof may not be
brushed aside as mere technicality.16
As provided in Section 1 of Rule 65, a writ of certiorari is directed against a tribunal exercising judicial or quasi-judicial
functions.17 Judicial functions are exercised by a body or officer clothed with authority to determine what the law is
and what the legal rights of the parties are with respect to the matter in controversy. Quasi-judicial function is a term
that applies to the action or discretion of public administrative officers or bodies given the authority to investigate facts
or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action
using discretion of a judicial nature.18
The CB-MB (now BSP-MB) was created to perform executive functions with respect to the establishment, operation or
liquidation of banking and credit institutions, and branches and agencies thereof. 19 It does not perform judicial or quasi-
judicial functions. Certainly, the issuance of CB Circular No. 905 was done in the exercise of an executive function.
Certiorari will not lie in the instant case.20
B. Petitioners have no locus standi to file the Petition
Locus standi is defined as "a right of appearance in a court of justice on a given question." In private suits, Section 2,
Rule 3 of the 1997 Rules of Civil Procedure provides that "every action must be prosecuted or defended in the name of
the real party in interest," who is "the party who stands to be benefited or injured by the judgment in the suit or the
party entitled to the avails of the suit." Succinctly put, a party’s standing is based on his own right to the relief sought. 21
Even in public interest cases such as this petition, the Court has generally adopted the "direct injury" test that the
person who impugns the validity of a statute must have "a personal and substantial interest in the case such that he
has sustained, or will sustain direct injury as a result."22 Thus, while petitioners assert a public right to assail CB Circular
No. 905 as an illegal executive action, it is nonetheless required of them to make out a sufficient interest in the
vindication of the public order and the securing of relief. It is significant that in this petition, the petitioners do not
allege that they sustained any personal injury from the issuance of CB Circular No. 905.
Petitioners also do not claim that public funds were being misused in the enforcement of CB Circular No. 905. The
Petition raises no issues of transcendental importance. In the instant case, there is no allegation of misuse of public
funds in the implementation of CB Circular No. 905. Neither were borrowers who were actually affected by the
suspension of the Usury Law joined in this petition. Absent any showing of transcendental importance, the petition
must fail.
G.R. No. 193978 February 28, 2012
JELBERT B. GALICTO, Petitioner,
vs.
H.E. PRESIDENT BENIGNO SIMEON C. AQUINO III, in his capacity as President of the Republic of the
Philippines; ATTY. PAQUITO N. OCHOA, JR., in his capacity as Executive Secretary; and FLORENCIO B.
ABAD, in his capacity as Secretary of the Department of Budget and Management, Respondents.
A. Certiorari is not the proper remedy.
Under the Rules of Court, petitions for Certiorari and Prohibition are availed of to question judicial, quasi-judicial and
mandatory acts. Since the issuance of an EO is not judicial, quasi-judicial or a mandatory act, a petition for certiorari
and prohibition is an incorrect remedy; instead a petition for declaratory relief under Rule 63 of the Rules of Court,
filed with the Regional Trial Court (RTC), is the proper recourse to assail the validity of EO 7:
Section 1. Who may file petition. Any person interested under a deed, will, contract or other written instrument,
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. (Emphases ours.)
First, the respondents neither acted in any judicial or quasi-judicial capacity nor arrogated unto themselves any judicial
or quasi-judicial prerogatives. A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is a special
civil action that may be invoked only against a tribunal, board, or officer exercising judicial or quasi-judicial functions.
11
Section 1, Rule 65 of the 1997 Rules of Civil Procedure provides:
SECTION 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial functions
has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess
of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying
that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require.
Elsewise stated, for a writ of certiorari to issue, the following requisites must concur: (1) it must be directed against a
tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer must have
acted without or in excess of jurisdiction or with grave abuse of discretion amounting [to] lack or excess of jurisdiction;
and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.
A respondent is said to be exercising judicial function where he has the power to determine what the law is and what
the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of
the parties.
Quasi-judicial function, on the other hand, is "a term which applies to the actions, discretion, etc., of public
administrative officers or bodies … required to investigate facts or ascertain the existence of facts, hold hearings, and
draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature."
Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a law that
gives rise to some specific rights of persons or property under which adverse claims to such rights are made, and the
controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with power and authority to
determine the law and adjudicate the respective rights of the contending parties.
The respondents do not fall within the ambit of tribunal, board, or officer exercising judicial or quasi-judicial
functions. As correctly pointed out by the respondents, the enactment by the City Council of Manila of the assailed
ordinance and the issuance by respondent Mayor of the questioned executive order were done in the exercise of
legislative and executive functions, respectively, and not of judicial or quasi-judicial functions. On this score
alone, certiorari will not lie.
Second, although the instant petition is styled as a petition for certiorari, in essence, it seeks the declaration by this
Court of the unconstitutionality or illegality of the questioned ordinance and executive order. It, thus, partakes of the
nature of a petition for declaratory relief over which this Court has only appellate, not original, jurisdiction. Section 5,
Article VIII of the Constitution provides:
Sec. 5. The Supreme Court shall have the following powers:
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over
petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
(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. (Italics supplied).
G.R. Nos. 139913 & 140159 January 16, 2004
TERESITA S. DAVID, BENJAMIN S. DAVID,PACIFICO S. DAVID, NEMESIO S. DAVID, CELINE S. DAVID,
CRISTINA S. DAVID, PAULINA S. DAVID, and LEONIE S. DAVID-DE LEON, Petitioners,
vs.
AGUSTIN RIVERA, Respondent.
It is clear that the respondent filed the petition for prohibition to correct what he perceived was an erroneous
assumption of jurisdiction by the MCTC. Indeed, the propriety of the recourse to the RTC for a writ of prohibition is
beyond cavil in view of the following considerations:
First. The peculiar circumstances obtaining in this case, where two tribunals exercised jurisdiction over two cases
involving the same subject matter, issue, and parties, and ultimately rendered conflicting decisions, clearly makes out
a case for prohibition. The MCTC manifestly took cognizance of the case for ejectment pursuant to Section 33 of Batas
Pambansa Blg. 129,28 as amended. On the other hand, the ratiocination of the DARAB, which the respondent echoes,
is that the case falls squarely within its jurisdiction as it arose out of, or was connected with, agrarian relations. The
respondent also points out that his right to possess the land, as a registered tenant, was submitted for determination
before the PARAB prior to the filing of the case for ejectment.
Indeed, Section 50 of R.A. 665729 confers on the Department of Agrarian Reform (DAR) quasi-judicial powers to
adjudicate agrarian reform matters.30 In the process of reorganizing the DAR, Executive Order No. 129-A31 created the
DARAB to assume the powers and functions with respect to the adjudication of agrarian reform cases.
Prescinding from the foregoing, it is safe to conclude that the existence of prior agricultural tenancy relationship, if
true, will divest the MCTC of its jurisdiction the previous juridical tie compels the characterization of the controversy
as an "agrarian dispute." Agrarian dispute refers to any controversy relating to tenurial arrangements... This
jurisdiction does not require the continuance of the relationship of landlord and tenant — at the time of
the dispute. The same may have arisen, and often times arises, precisely from the previous termination of such
relationship. If the same existed immediately, or shortly, before the controversy and the subject-matter thereof is
whether or not said relationship has been lawfully terminated, or if the dispute otherwise springs or originates
from the relationship of landlord and tenant, the litigation is (then) cognizable only by the Court of Agrarian
Relations . . .34
With the facts doubtlessly presenting a question of jurisdiction, it follows that the respondent has availed of the proper,
speedy and adequate remedy which is the special civil action of prohibition. It is a settled rule that prohibition is the
proper remedy to afford relief against usurpation of jurisdiction or power by an inferior court, 35 or when, in the exercise
of jurisdiction in handling matters clearly within its cognizance the inferior court transgresses the bounds prescribed to
it by the law, or where there is no adequate remedy available in the ordinary course of law by which such relief can be
obtained."36 The purpose of a writ of prohibition is to keep a lower court within the limits of its jurisdiction in order to
maintain the administration of justice in orderly channels.37
Second. While appeal is the recognized remedy to question the judgment of an inferior court, this does not detract
from the authority of a higher court to issue a writ of prohibition to restrain the inferior court, among other instances,
from proceeding further on the ground that it heard and decided the case without jurisdiction.38 Since the right to
prohibition is defeated not by the existence, but by the adequacy, of a remedy by appeal, it may accordingly be granted
where the remedy by appeal is not plain, speedy or adequate. 39
To say, as the petitioners argue, that the MCTC Decision has already attained finality because the respondent opted to
file a petition for prohibition instead of an appeal is to sacrifice needlessly respondent’s right at the altar of technicalities.
Should tenancy relationship be duly proven, the respondent as a tenant should be protected in keeping with the social
justice precept enshrined in the Constitution.40 Also noteworthy is the fact that the petition for prohibition was filed
within the reglementary period to appeal; hence, it cannot be claimed that the same was used as substitute for a lost
appeal.
12
G.R. No. 147956 February 16, 2005
ESPERANZA S. LONGINO, petitioner,
vs.
ATTY. LINA A. GENERAL, OIC, Commission Member III; ATTY. NOEL A. GALAROSA, OIC, Commission
Member III; ATTY. LUZ SARMIENTO, OIC, Office of the Executive Director, all of COSLAP; JUDGE JAIME F.
BAUTISTA of the Regional Trial Court, Branch 75, Valenzuela City; and ELSA P. SERRANO, respondents.
Rule 65, Section 2 of the Rules of Court provides:
Section 2. Petition for prohibition. – When the proceedings of any tribunal, corporation, board, or person, whether
exercising functions judicial or ministerial, are without or in excess of its or his jurisdiction, or with grave abuse of
discretion, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying
that judgment be rendered commanding the defendant to desist from further proceedings in the action or matter
specified therein.
The petition shall be accompanied by a certified true copy of the judgment or order subject thereof, together with
copies of all pleadings and documents relevant and pertinent thereto.
The principal purpose for the writ of prohibition is to prevent an encroachment, excess, usurpation or assumption of
jurisdiction on the part of an inferior court or quasi-judicial tribunal. It is granted when it is necessary for the orderly
administration of justice, or prevent the use of the strong arm of the law in an oppressive or vindictive manner, or
multiplicity of actions.28 The writs of certiorari and prohibition, for that matter, are intended to annul or void proceedings
in order to insure the fair and orderly administration of justice. 29
For a party to be entitled to a writ of prohibition, he must establish the following requisites: (a) it must be directed
against a tribunal, corporation, board or person exercising functions, judicial or ministerial; (b) the tribunal,
corporation, board or person has acted without or in excess of its jurisdiction, or with grave abuse of discretion; and
(c) there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law. 30
For grave abuse of discretion to prosper as a ground for prohibition, it must first be demonstrated that the lower court
or tribunal has exercised its power in an arbitrary and despotic manner, by reason of passion or personal hostility, and
it must be patent and gross as would amount to an evasion or to a unilateral refusal to perform the duty enjoined or
to act in contemplation of law. Excess of jurisdiction signifies that the court, board or office has jurisdiction over the
case but has transcended the same or acted without authority. 31 The writ of prohibition will not lie to enjoin acts already
done.32 However, as an exception to the rule on mootness, courts will decide a question otherwise moot if it is capable
of repetition yet evading review.33
In a case where a lower court or quasi-judicial body commits an error in the excess of its jurisdiction, if such error is
one of judgment, it is revocable only by appeal. On the other hand, if the act complained of was issued by such court
or body with grave abuse of discretion, which is tantamount to lack or in excess of jurisdiction, the remedy of the
aggrieved party is to file a petition for certiorari and/or prohibition under Rule 65 of the Rules of Court. 34 Indeed, a
decision of a court without jurisdiction is null and void. It could never become final and executory; hence, appeal
therefrom by writ of error is out of the question. The aggrieved party should file a petition for certiorari or prohibition
under Rule 65 of the Rules of Court.35
A remedy is considered plain, speedy and adequate if it will promptly relieve the petitioner from the injurious effects
of the judgment or rule, order or resolution of the lower court or agency.36 While ordinarily, certiorari or prohibition for
that matter is unavailing where the appeal period had lapsed, the same may be availed of whereas in the present case,
public welfare and the administration of public policy dictates; where the broader interest of justice so requires; where
the writs issued are null and void; where the questioned order amounts to an oppressive excess of judicial authority. 37
In the present case, the petition for prohibition filed with the CA by the petitioner could have been dismissed by the
CA because the structures on the property had already been demolished; hence, the acts sought to be enjoined by the
petitioner had already been effected by the respondent sheriff. For another reason, the lease contract of the petitioner
and the PNR had not been renewed after its expiration on January 26, 2000. Manifestly, the petitioner was obliged to
vacate the property and remove her structures thereon. Nevertheless, the CA took cognizance of the petition and
resolved the same on its merits, precisely because the issues raised therein, namely, whether the COSLAP had
jurisdiction over the complaint of the private respondent; and whether the COSLAP exceeded its jurisdiction in declaring
the private respondent the legal possessor of the property and of having priority in leasing the subject property raised
in the petition, were substantial.
We agree with the petitioner that the CA erred in ruling that the COSLAP had jurisdiction on the complaint of the private
respondent and that the latter was the legal possessor and had preferential right to lease the property. Consequently,
the Resolution of the COSLAP dated December 16, 1999, as well as the writ issued by it are null and void.
Under the law, the COSLAP has two options in acting on a land dispute or problem lodged before it, namely, (a) refer
the matter to the agency having appropriate jurisdiction for settlement/resolution; or (b) assume jurisdiction if the
matter is one of those enumerated in paragraph 2(a) to (e) of the law, if such case is critical and explosive in nature,
taking into account the large number of the parties involved, the presence or emergence of social tension or unrest, or
other similar critical situations requiring immediate action. In resolving whether to assume jurisdiction over a case or
to refer the same to the particular agency concerned, the COSLAP has to consider the nature or classification of the
land involved, the parties to the case, the nature of the questions raised, and the need for immediate and urgent action
thereon to prevent injuries to persons and damage or destruction of property. The law does not vest jurisdiction on the
COSLAP over any land dispute or problem.
The dispute between the parties was not critical and explosive in nature so as to generate social tension or unrest, or
a critical situation which required immediate action. The issues raised by the parties in their pleadings involved the
application of the New Civil Code in relation to the Charter of the PNR, which clearly do involve the application of the
expertise of the COSLAP.
The Court, likewise, rules that the COSLAP had no jurisdiction over the issues raised by the parties because as early
as January 19, 1999, the Board of Directors of the PNR had approved Resolution No. 99-03, directing the PNR
Management to desist from selling or leasing its properties needed for the right-of-way of its North Rail Project.
Notwithstanding the Resolution of the Board of Directors, the COSLAP declared the private respondent the legal
possessor of the property and had the priority to lease the same. When to lease property owned by it, whom to lease
such property, as well as the terms and conditions thereof, are matters addressed to the PNR.
G.R. No. 163980 August 3, 2006
HOLY SPIRIT HOMEOWNERS ASSOCIATION, INC. and NESTORIO F. APOLINARIO, in his personal capacity
and as President of Holy Spirit Homeowners Association, Inc., Petitioners,
vs.
SECRETARY MICHAEL DEFENSOR, in his capacity as Chairman of the Housing and Urban Development
Coordinating Council (HUDCC), ATTY. EDGARDO PAMINTUAN, in his capacity as General Manager of the
National Housing Authority (NHA), MR. PERCIVAL CHAVEZ, in his capacity as Chairman of the
Presidential Commission for the Urban Poor (PCUP), MAYOR FELICIANO BELMONTE, in his capacity as
Mayor of Quezon City, SECRETARY ELISEA GOZUN, in her capacity as Secretary of the Department of
13
Environment and Natural Resources (DENR) and SECRETARY FLORENTE SORIQUEZ, in his capacity as
Secretary of the Department of Public Works and Highways (DPWH) as ex-officio members of the
NATIONAL GOVERNMENT CENTER ADMINISTRATION COMMITTEE, Respondents.
Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative
adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and regulations which results
in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and
separability of powers. 12
In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need
not exhaust administrative remedies before going to court. This principle, however, applies only where the act of the
administrative agency concerned was performed pursuant to its quasi-judicial function, and not when the assailed act
pertained to its rule-making or quasi-legislative power. 13
The assailed IRR was issued pursuant to the quasi-legislative power of the Committee expressly authorized by R.A. No.
9207. The petition rests mainly on the theory that the assailed IRR issued by the Committee is invalid on the ground
that it is not germane to the object and purpose of the statute it seeks to implement. Where what is assailed is the
validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its quasi-
legislative function, the regular courts have jurisdiction to pass upon the same. 14
Since the regular courts have jurisdiction to pass upon the validity of the assailed IRR issued by the Committee in the
exercise of its quasi-legislative power, the judicial course to assail its validity must follow the doctrine of hierarchy of
courts. Although the Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to
issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does
not give the petitioner unrestricted freedom of choice of court forum. 15
A direct invocation of the Court’s original jurisdiction to issue these writs should be allowed only when there are special
and important reasons therefor, clearly and specifically set out in the petition. 17
A perusal, however, of the petition for prohibition shows no compelling, special or important reasons to warrant the
Court’s taking cognizance of the petition in the first instance. Petitioner also failed to state any reason that precludes
the lower courts from passing upon the validity of the questioned IRR.
A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a quasi-legislative
function. Prohibition is an extraordinary writ directed against any tribunal, corporation, board, officer or person,
whether exercising judicial, quasi-judicial or ministerial functions, ordering said entity or person to desist from further
proceedings when said proceedings are without or in excess of said entity’s or person’s jurisdiction, or are accompanied
with grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary
course of law. 21 Prohibition lies against judicial or ministerial functions, but not against legislative or quasi-legislative
functions. Generally, the purpose of a writ of prohibition is to keep a lower court within the limits of its jurisdiction in
order to maintain the administration of justice in orderly channels. 22 Prohibition is the proper remedy to afford relief
against usurpation of jurisdiction or power by an inferior court, or when, in the exercise of jurisdiction in handling
matters clearly within its cognizance the inferior court transgresses the bounds prescribed to it by the law, or where
there is no adequate remedy available in the ordinary course of law by which such relief can be obtained. 23 Where the
principal relief sought is to invalidate an IRR, petitioners’ remedy is an ordinary action for its nullification, an action
which properly falls under the jurisdiction of the Regional Trial Court. In any case, petitioners’ allegation that
"respondents are performing or threatening to perform functions without or in excess of their jurisdiction" may
appropriately be enjoined by the trial court through a writ of injunction or a temporary restraining order.
G.R. No. 98310 October 24, 1996
MATUGUINA INTEGRATED WOOD PRODUCTS, INC., petitioner,
vs.
The HON. COURT OF APPEALS, DAVAO ENTERPRISES CORPORATION, The HON. MINISTER, (NOW
SECRETARY) of NATURAL RESOURCES AND PHILLIP CO, respondents.
As observed by the appellate court, to writ:
the appellant should have filed a Motion with the Minister with Notice to the appellee to include the latter as party
liable for the judgment in order to afford the appellee an opportunity to be heard on its liability for the judgment
rendered against Ma. Milagros Matuguina doing business under the name Matuguina Logging Enterprises. 34
Continuing, the said court stated further that:
Nevertheless, the failure to comply with the procedure in order to satisfy the requirements of due process was cured
by the present action for prohibition where the liability of appellee has been ventilated.
We do not agree. Essential, Prohibition is a remedy to prevent inferior courts, corporations, boards or persons from
usurping or exercising a jurisdiction or power with which they have not been vested by law 35 As we have held in Mafinco
Trading Corporation vs. Ople, et al, 36 in a certiorari or prohibition case, only issues affecting the jurisdiction of the
tribunal, board and offices involved may be resolved on the basis of undisputed facts.
The issue of whether or not petitioner is an alter ego of Milagros Matuguina/MLE, is one of fact, and which should have
been threshed out in the administrative proceedings, and not in the prohibition proceedings in the trial court, where it
is precisely the failure of the respondent Minister of Natural Resources to proceed as mandated by law in the execution
of its order which is under scrutiny.
Assuming, arguendo, that prohibition is the proper remedy for determining the propriety of piercing the separate
personality of petitioner with its stockholders, the evidence presented at said trial does not warrant such action.
In the case at bar, there is, insufficient basis for the appellate court's ruling that MIWPI is the same as Matuguina.
G.R. No. 73155 July 11, 1986
PATRICIO TAN, FELIX FERRER, JUAN M. HAGAD, SERGIO HILADO, VIRGILIO GASTON, CONCHITA MINAYA,
TERESITA ESTACIO, DESIDERIO DEFERIA, ROMEO GAMBOA, ALBERTO LACSON, FE HOFILENA, EMILY
JISON, NIEVES LOPEZ AND CECILIA MAGSAYSAY, petitioners,
vs.
THE COMMISSION ON ELECTIONS and THE PROVINCIAL TREASURER OF NEGROS OCCIDENTAL, respondents.
Considering that the legality of the plebiscite itself is challenged for non-compliance with constitutional requisites, the
fact that such plebiscite had been held and a new province proclaimed and its officials appointed, the case before Us
cannot truly be viewed as already moot and academic. Continuation of the existence of this newly proclaimed province
which petitioners strongly profess to have been illegally born, deserves to be inquired into by this Tribunal so that, if
indeed, illegality attaches to its creation, the commission of that error should not provide the very excuse for
perpetuation of such wrong.
In the light of the facts and circumstances alluded to by petitioners as attending to the unusually rapid creation of the
instant province of Negros del Norte after a swiftly scheduled plebiscite, this Tribunal has the duty to repudiate and
discourage the commission of acts which run counter to the mandate of our fundamental law, done by whatever branch
14
of our government. This Court gives notice that it will not look with favor upon those who may be hereafter inclined to
ram through all sorts of legislative measures and then implement the same with indecent haste, even if such acts
would violate the Constitution and the prevailing statutes of our land.
The Court is prepared to declare the said plebiscite held on January 3, 1986 as null and void and violative of the
provisions of Sec. 3, Article XI of the Constitution. The Court is not, however, disposed to direct the conduct of a new
plebiscite, because We find no legal basis to do so. With constitutional infirmity attaching to the subject Batas Pambansa
Big. 885 and also because the creation of the new province of Negros del Norte is not in accordance with the criteria
established in the Local Government Code, the factual and legal basis for the creation of such new province which
should justify the holding of another plebiscite does not exist.
Whatever claim it has to validity and whatever recognition has been gained by the new province of Negros del Norte
because of the appointment of the officials thereof, must now be erased. That Negros del Norte is but a legal fiction
should be announced. Its existence should be put to an end as quickly as possible, if only to settle the complications
currently attending to its creation.
G.R. No. 193007 July 19, 2011
RENATO V. DIAZ and AURORA MA. F. TIMBOL, Petitioners,
vs.
THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE, Respondents.
On August 24, 2010 the Court issued a resolution, treating the petition as one for prohibition rather than one for
declaratory relief, the characterization that petitioners Diaz and Timbol gave their action. The government has sought
reconsideration of the Court’s resolution,7 however, arguing that petitioners’ allegations clearly made out a case for
declaratory relief, an action over which the Court has no original jurisdiction. The government adds, moreover, that
the petition does not meet the requirements of Rule 65 for actions for prohibition since the BIR did not exercise judicial,
quasi-judicial, or ministerial functions when it sought to impose VAT on toll fees. Besides, petitioners Diaz and Timbol
has a plain, speedy, and adequate remedy in the ordinary course of law against the BIR action in the form of an appeal
to the Secretary of Finance.
But there are precedents for treating a petition for declaratory relief as one for prohibition if the case has far-reaching
implications and raises questions that need to be resolved for the public good.8 The Court has also held that a petition
for prohibition is a proper remedy to prohibit or nullify acts of executive officials that amount to usurpation of legislative
authority.9
Here, the imposition of VAT on toll fees has far-reaching implications. Its imposition would impact, not only on the
more than half a million motorists who use the tollways everyday, but more so on the government’s effort to raise
revenue for funding various projects and for reducing budgetary deficits.
To dismiss the petition and resolve the issues later, after the challenged VAT has been imposed, could cause more
mischief both to the tax-paying public and the government. A belated declaration of nullity of the BIR action would
make any attempt to refund to the motorists what they paid an administrative nightmare with no solution.
Although the petition does not strictly comply with the requirements of Rule 65, the Court has ample power to waive
such technical requirements when the legal questions to be resolved are of great importance to the public. The same
may be said of the requirement of locus standi which is a mere procedural requisite.10
G.R. No. 123899 August 30, 1996
ROSALINDA MAYUGA, Spouses ARNEL BUGAYONG and NENA BUGAYONG, LITA CHUA, Spouses BENJAMIN
SANTOS and PURITA SANTOS, Spouses SANTIAGO and GLORIA REYES, SOLEDAD LABRADOR, EMILIA
CERVANTES, Spouses ERNESTO LABRADOR and LEONORA LABRADOR and RESTITUTO
VALBUENA, petitioners,
vs.
COURT OF APPEALS, HON. ROSMARI D. CARANDANG, and RPN REALTY, INC., respondents.
Mandamus will lie to compel a judge or other public officer to perform a duty specifically enjoined by law once it is
shown that the judge or public officer has unlawfully neglected the performance thereof. 15 A court neglects the
performance of its duties only when after demand has been made upon it, it refuses to perform the same. 16 Petitioners
have not shown that the trial court refused to accept the notice of appeal, much less denied said notice. The order of
the trial court dated January 3, 1996 merely granted private respondent's "Motion for the Declaration of Defendants
as Non-underprivileged . . . and for the Issuance of an alias Writ of Execution." There is nothing in it that expressly or
impliedly denied petitioners' appeal from the Order denying relief from judgment. To be sure, the notice of appeal at
bar is not even subject to the approval of the trial court because it was deemed perfected after the fifteenth day, i.e.,
the last day to appeal by both petitioners and private respondent. Likewise, petitioners have not alleged that the trial
court neglected to order the transmittal of the records to the Court of Appeals. We hold that petitioners have failed to
prove their cause of action for mandamus, hence, the petition was correctly dismissed by the Court of Appeals. 17
G.R. No. 79484 December 7, 1987
KANT KWONG and YIM KAM SHING, petitioners,
vs.
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, SECRETARY RAMON A. DIAZ and COMMISSIONER
MARY CONCEPCION BAUTISTA, respondents.
1. The validity of the Hold-Orders issued against petitioners on 13 February 1987 has already expired pursuant to the
Rules and Regulations of the PCGG, which specifically provide:
SECTION 1. ...
(D) ... A "hold-order" shall be valid only for a maximum period of six months, unless for good reasons extended by
the Commission en banc. "
The PCGG has not extended the life-span of the Hold-Orders in question nor has it advanced "good reasons" for doing
so.
2. The grounds f or the issuance of the Hold-Orders have become stale.
It would appear, therefore, that with the changes made and the accomplishments achieved, operations of the
sequestered firms are no longer obstructed, production no longer delayed and funding is available.
Indeed, if petitioners have obstructed the smooth operations" of the sequestered garment firms and "discredited their
Officer-in-Charge," might it not be preferable that they be out of the country to ensure the cessation of their acts
allegedly inimical to the operations of the sequestered garment firms?
And yet, the PCGG has not given petitioners any opportunity to contest the Hold-Orders issued against them. After
their issuance, no hearing had been set; a request for the same had been disregarded.
15
Under the environmental circumstances of the case, the Hold-Orders against petitioners preventing them "from leaving
the country cannot be prolonged indefinitely." The right to travel and to freedom of movement is a fundamental right
guaranteed by the 1987 Constitution 5 and the Universal Declaration of Human Rights to which the Philippines is a
signatory. 6 That right extends to all residents regardless of nationality. And "everyone has the right to an effective
remedy by the competent national tribunals for acts violating the fundamental rights granted him by the Constitution
or by law. 7
While such right is not absolute but must yield to the State's inherent police power upon which the Hold-Orders were
premised, no "good reasons" have been advanced which could justify the continued enforcement of the Hold-Orders.
Petitioners are foreign nationals. Their 33% interest in the sequestered firms is recognized by the PCGG itself. There
is no showing that those interests appear prima facie to be ill-gotten wealth. No charges have been filed against them
before the Sandiganbayan. They face no criminal indictment nor have they been provisionally released on bail that
their right to travel might be restricted.
Although, as averred by respondents, the recognized rule is that, in the performance of an official duty or act involving
discretion, the corresponding official can only be directed by mandamus to act but not to act one way or the other,
"yet it is not accurate to say that the writ will never issue to control his discretion. There is an exception to the rule if
the case is otherwise proper, as in cases of gross abuse of discretion, manifest injustice, or palpable excess of
authority. 8
In this case, for reasons already stated, we find that the PCGG acted with gross abuse of discretion in maintaining the
Hold-Orders against petitioners for an indefinite length of time. By so doing it has arbitrarily excluded petitioners from
the enjoyment of a fundamental — right the right to freedom of movement — to which they are entitled. 9 mandamus
lies.
G.R. No. 176831 January 15, 2010
UY KIAO ENG, Petitioner,
vs.
NIXON LEE, Respondent.
The first paragraph of Section 3 of Rule 65 of the Rules of Court pertinently provides that—
SEC. 3. Petition for mandamus.—When any tribunal, corporation, board, officer or person unlawfully neglects the
performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or
unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there
is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file
a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered
commanding the respondent, immediately or at some other time to be specified by the court, to do the act required
to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of
the wrongful acts of the respondent.13
Mandamus is a command issuing from a court of law of competent jurisdiction, in the name of the state or the sovereign,
directed to some inferior court, tribunal, or board, or to some corporation or person requiring the performance of a
particular duty therein specified, which duty results from the official station of the party to whom the writ is directed
or from operation of law.14 This definition recognizes the public character of the remedy, and clearly excludes the idea
that it may be resorted to for the purpose of enforcing the performance of duties in which the public has no
interest.15 The writ is a proper recourse for citizens who seek to enforce a public right and to compel the performance
of a public duty, most especially when the public right involved is mandated by the Constitution. 16 As the quoted
provision instructs, mandamus will lie if the tribunal, corporation, board, officer, or person unlawfully neglects the
performance of an act which the law enjoins as a duty resulting from an office, trust or station. 17
The writ of mandamus, however, will not issue to compel an official to do anything which is not his duty to do or which
it is his duty not to do, or to give to the applicant anything to which he is not entitled by law.18 Nor will mandamus
issue to enforce a right which is in substantial dispute or as to which a substantial doubt exists, although objection
raising a mere technical question will be disregarded if the right is clear and the case is meritorious.19 As a
rule, mandamus will not lie in the absence of any of the following grounds: [a] that the court, officer, board, or person
against whom the action is taken unlawfully neglected the performance of an act which the law specifically enjoins as
a duty resulting from office, trust, or station; or [b] that such court, officer, board, or person has unlawfully excluded
petitioner/relator from the use and enjoyment of a right or office to which he is entitled. 20 On the part of the relator, it
is essential to the issuance of a writ of mandamus that he should have a clear legal right to the thing demanded and it
must be the imperative duty of respondent to perform the act required.21
Recognized further in this jurisdiction is the principle that mandamus cannot be used to enforce contractual
obligations.22 Generally, mandamus will not lie to enforce purely private contract rights, and will not lie against an
individual unless some obligation in the nature of a public or quasi-public duty is imposed.23 The writ is not appropriate
to enforce a private right against an individual.24 The writ of mandamus lies to enforce the execution of an act, when,
otherwise, justice would be obstructed; and, regularly, issues only in cases relating to the public and to the government;
hence, it is called a prerogative writ.25 To preserve its prerogative character, mandamus is not used for the redress of
private wrongs, but only in matters relating to the public. 26
Moreover, an important principle followed in the issuance of the writ is that there should be no plain, speedy and
adequate remedy in the ordinary course of law other than the remedy of mandamus being invoked. 27 In other words,
mandamus can be issued only in cases where the usual modes of procedure and forms of remedy are powerless to
afford relief.28 Although classified as a legal remedy, mandamus is equitable in its nature and its issuance is generally
controlled by equitable principles.29 Indeed, the grant of the writ of mandamus lies in the sound discretion of the court.
In the instant case, the Court, without unnecessarily ascertaining whether the obligation involved here—the production
of the original holographic will—is in the nature of a public or a private duty, rules that the remedy of mandamus cannot
be availed of by respondent Lee because there lies another plain, speedy and adequate remedy in the ordinary course
of law. Let it be noted that respondent has a photocopy of the will and that he seeks the production of the original for
purposes of probate. The Rules of Court, however, does not prevent him from instituting probate proceedings for the
allowance of the will whether the same is in his possession or not. Rule 76, Section 1 relevantly provides:
There being a plain, speedy and adequate remedy in the ordinary course of law for the production of the subject will,
the remedy of mandamus cannot be availed of. Suffice it to state that respondent Lee lacks a cause of action in his
petition. Thus, the Court grants the demurrer.
G.R. No. L-28971 January 28, 1983
ARLEO E. MAGTIBAY, appellant,
vs.
Lt. Col. SANTIAGO GARCIA and Cadet Colonel MARCELO JAVIER, respondents.
At any rate, appellant's prayer to compel Lt. Col. Garcia to include him in the roster of graduates of the ROTC Advance
Course is absolutely bereft of any legal basis to stand on. He was not allowed to graduate because he flunked the
subject MS-42, a required subject for the completion of the ROTC Advance Course. That he flunked said subject is not
disputed by the appellant. True, an institution of learning has a contractual obligation to afford its students a fair
16
opportunity to complete the course they seek to pursue. However, when a student commits a serious breach of
discipline or fails to maintain the required academic standard, he forfeits his contractual right; and the court should
not review the discretion of university authorities. 4
This Court has consistently adhered to the rule that a writ of mandamus will not issue to control or review the exercise
of discretion of a public officer where the law imposes upon said public officer the right and duty to exercise judgment
in reference to any matter in which he is required to act. It is his judgment that is to be exercised and not that of the
court. 5
G.R. No. 157783 September 23, 2005
NILO PALOMA, Petitioners,
vs.
DANILO MORA, HILARIO FESTEJO, MAXIMA SALVINO, BRYN BONGBONG and VALENTINO
SEVILLA, Respondent.
Section 3, Rule 65 of the Rules of Court provides-
Sec. 3. Petition for mandamus. – When any tribunal, corporation, board, officer or person unlawfully neglects the
performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or
unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there
is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file
a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered
commanding the respondent, immediately or at some other time to be specified by the court, to do the act required
to be done to protect the rights of the petitioner and to pay the damages sustained by the petitioner by reason of
the wrongful acts of the respondent.
Mandamus lies to compel the performance, when refused, of a ministerial duty, but not to compel the performance of
a discretionary duty.23 Mandamus will not issue to control or review the exercise of discretion of a public officer where
the law imposes upon said public officer the right and duty to exercise his judgment in reference to any matter in which
he is required to act. It is his judgment that is to be exercised and not that of the court.24
Mandamus does not lie to compel the Board of Directors of the Palompon, Leyte Water District to reinstate petitioner
because the Board has the discretionary power to remove him under Section 23 of P.D. No. 198, as amended by P.D.
No. 768.
In fine, the appointment of petitioner and his consequent termination are clearly within the wide arena of discretion
which the legislature has bestowed the appointing power, which in this case is the Board of Directors of the Palompon,
Leyte Water District. Here, considering that the petitioner is at loggerheads with the Board, the former’s services
obviously ceased to be "pleasurable" to the latter. The Board of Directors of a Water District may abridge the term of
the General Manager thereof the moment the latter’s services cease to be convivial to the former. Put another way, he
is at the mercy of the appointing powers since his appointment can be terminated at any time for any cause and
following Orcullo there is no need of prior notice or due hearing before the incumbent can be separated from office.
Hence, petitioner is treading on shaky grounds with his intransigent posture that he was removed sans cause and due
process.
Yes, as a general rule, no officer or employee of the civil service shall be removed or suspended except for cause
provided by law as provided in Section 2(3), Article IX-B of the 1987 Constitution. As exception to this, P.D. No. 198,
which we held in Feliciano v. Commission On Audit 28 to be the special enabling charter of Local Water Districts,
categorically provides that the General Manager shall serve "at the pleasure of the board."
Neither is it the Court’s business to intrude into the Congressional sphere on the matter of the wisdom of Section 23
of P.D. No. 198. One of the firmly entrenched principles in constitutional law is that the courts do not involve themselves
with nor delve into the policy or wisdom of a statute. That is the exclusive concern of the legislative branch of the
government. When the validity of a statute is challenged on constitutional grounds, the sole function of the court is to
determine whether it transcends constitutional limitations or the limits of legislative power. No such transgression has
been shown in this case.30
Underlying the rulings of the trial and appellate courts in the case at bar is the doctrine of primary
jurisdiction; i.e., courts cannot and will not resolve a controversy involving a question which is within the jurisdiction
of an administrative tribunal, especially where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the administrative tribunal to determine technical and
intricate matters of fact.
G.R. No. 169042 October 5, 2011
ERDITO QUARTO, Petitioner,
vs.
THE HONORABLE OMBUDSMAN SIMEON MARCELO, CHIEF SPECIAL PROSECUTOR DENNIS VILLA IGNACIO,
LUISITO M. TABLAN, RAUL B. BORILLO, and LUIS A. GAYYA, Respondents.
We dismiss the petition on two grounds: first, the petitioner did not avail of the remedies available to him before filing
this present petition; and, second, within the context of the Court’s policy of non-interference with the Ombudsman’s
exercise of his investigatory and prosecutory powers, the petitioner failed to establish that the grant of immunity to
the respondents was attended by grave abuse of discretion.
I. The petitioner did not exhaust remedies available in the ordinary course of law
As extraordinary writs, both Sections 1 (certiorari) and 3 (mandamus), Rule 65 of the Rules of Court require, as a pre-
condition for these remedies, that there be no other plain, speedy and adequate remedy in the ordinary course of law.
In the present case, the petitioner has not shown that he moved for a reconsideration of the assailed resolutions based
substantially on the same grounds stated in this present petition.32 Neither did the petitioner file a motion for the
inclusion of the respondents in the informations before filing the present petition.33 These are adequate remedies that
the petitioner chose to forego; he bypassed these remedies and proceeded to seek recourse through the present
petition.34
Similarly, the petitioner has not shown that he filed the present petition with this Court within the sixty-day
reglementary period35 from notice of the assailed Ombudsman’s resolutions. He did not do so, of course, since he
initially and erroneously filed a certiorari petition with the Sandiganbayan. We remind the petitioner that the remedy
from the Ombudsman’s orders or resolutions in criminal cases is to file a petition for certiorari under Rule 6536 with
this Court.37
The petition likewise fails even on the merits.
II. The respondents’ exclusion in the informations is grounded on the Ombudsman’s grant of immunity
Mandamus is the proper remedy to compel the performance of a ministerial duty imposed by law upon the
respondent.38 In matters involving the exercise of judgment and discretion, mandamus may only be resorted to, to
17
compel the respondent to take action; it cannot be used to direct the manner or the particular way discretion is to be
exercised.39
In the exercise of his investigatory and prosecutorial powers, the Ombudsman is generally no different from an ordinary
prosecutor in determining who must be charged.40 He also enjoys the same latitude of discretion in determining what
constitutes sufficient evidence to support a finding of probable cause (that must be established for the filing of an
information in court)41 and the degree of participation of those involved or the lack thereof. His findings and conclusions
on these matters are not ordinarily subject to review by the courts except when he gravely abuses his discretion, 42 i.e.,
when his action amounts to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or
when he acts outside the contemplation of law.43
If, on the basis of the same evidence, the Ombudsman arbitrarily excludes from an indictment some individuals while
impleading all others, the remedy of mandamus lies 44 since he is duty-bound, as a rule, to include in the information
all persons who appear responsible for the offense involved.45
An immunity statute does not, and cannot, rule out a review by this Court of the Ombudsman’s exercise of discretion.
Like all other officials under our constitutional scheme of government, all their acts must adhere to the
Constitution.74 The parameters of our review, however, are narrow. In the first place, what we review are executive
acts of a constitutionally independent Ombudsman.75 Also, we undertake the review given the underlying reality that
this Court is not a trier of facts. Since the determination of the requirements under Section 17, Rule 119 of the Rules
of Court is highly factual in nature, the Court must, thus, generally defer to the judgment of the Ombudsman who is
in a better position (than the Sandiganbayan or the defense) to know the relative strength and/or weakness of the
evidence presently in his possession and the kind, tenor and source of testimony he needs to enable him to prove his
case.76 It should not be forgotten, too, that the grant of immunity effectively but conditionally results in the extinction
of the criminal liability the accused-witnesses might have incurred, as defined in the terms of the grant. 77 This point is
no less important as the grant directly affects the individual and enforces his right against self-incrimination. These
dynamics should constantly remind us that we must tread softly, but not any less critically, in our review of the
Ombudsman’s grant of immunity.
From the point of view of the Court’s own operations, we are circumscribed by the nature of the review powers granted
to us under the Constitution and the Rules of Court. We rule on the basis of a petition for certiorari under Rule 65 and
address mainly the Ombudsman’s exercise of discretion. Our room for intervention only occurs when a clear and grave
abuse of the exercise of discretion is shown. Necessarily, this limitation similarly reflects on the petitioner who comes
to us on the allegation of grave abuse of discretion; the petitioner himself is bound to clearly and convincingly establish
that the Ombudsman gravely abused his discretion in granting immunity in order to fully establish his case. 78
G.R. No. 211140
LORD ALLAN JAY Q. VELASCO, Petitioner,
vs.
HON. SPEAKER FELICIANO R. BELMONTE, JR., SECRETARY GENERAL MARILYN1 B. BARUA-YAP AND REGINA
ONGSIAKO REYES, Respondents.
After a painstaking evaluation of the allegations in this petition, it is readily apparent that this special civil action is
really one for mandamus and not a quo warranto case, contrary to the asseverations of the respondents.
A petition for quo warranto is a proceeding to determine the right of a person to the use or exercise of a franchise or
office and to oust the holder from its enjoyment, if his claim is not well-founded, or if he has forfeited his right to enjoy
the privilege. Where the action is filed by a private person, he must prove that he is entitled to the controverted
position; otherwise, respondent has a right to the undisturbed possession of the office.42 In this case, given the present
factual milieu, i.e., (i) the final and executory resolutions of this Court in G.R. No. 207264; (ii) the final and executory
resolutions of the COMELEC in SPA No. 13-053 (DC) cancelling Reyes's Certificate of Candidacy; and (iii) the final and
executory resolution of the COMELEC in SPC No. 13-010 declaring null and void the proclamation of Reyes and
proclaiming Velasco as the winning candidate for the position of Representative for the Lone District of the Province of
Marinduque - it cannot be claimed that the present petition is one for the determination of the right of Velasco to the
claimed office.
To be sure, what is prayed for herein is merely the enforcement of clear legal duties and not to try disputed title. That
the respondents make it appear so will not convert this petition to one for quo warranto.
Section 3, Rule 65 of the Rules of Court, as amended, provides that any person may file a verified petition
for mandamus "when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another
from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and
adequate remedy in the ordinary course of law." A petition for mandamus will prosper if it is shown that the subject
thereof is a ministerial act or duty, and not purely discretionary on the part of the board, officer or person, and that
the petitioner has a well-defined, clear and certain right to warrant the grant thereof.43
The difference between a ministerial and discretionary act has long been established. A purely ministerial act or duty
is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the
mandate of a legal authority, without regard to or the exercise of his own judgment upon the propriety or impropriety
of the act done. If the law imposes a duty upon a public officer and gives him the right to decide how or when the duty
shall be performed, such duty is discretionary and not ministerial. The duty is ministerial only when the discharge of
the same requires neither the exercise of official discretion or judgment. 44
As the facts stand in this case, Speaker Belmonte, Jr. and Sec. Gen. Barua-Y ap have no discretion whether or not to
administer the oath of office to Velasco and to register the latter's name in the Roll of Members of the House of
Representatives, respectively. It is beyond cavil that there is in existence final and executory resolutions of this Court
in G.R. No. 207264 affirming the final and executory resolutions of the COMELEC in SPA No. 13-053 (DC) cancelling
Reyes's Certificate of Candidacy. There is likewise a final and executory resolution of the COMELEC in SPC No. 13-010
declaring null and void the proclamation of Reyes, and proclaiming Velasco as the winning candidate for the position
of Representative for the Lone District of the Province of Marinduque.
The foregoing state of affairs collectively lead this Court to consider the facts as settled and beyond dispute - Velasco
is the proclaimed winning candidate for the Representative of the Lone District of the Province of
Marinduque.
Note must also be made that as early as May 16, 2013, a couple of days before she was proclaimed, Reyes had already
received the said decision cancelling her COC. These points clearly show that the much argued proclamation was made
in clear defiance of the said COMELEC En Banc Resolution.
That Velasco now has a well-defined, clear and certain right to warrant the grant of the present petition
for mandamus is supported by the following undisputed facts that should be taken into consideration:
First. At the time of Reyes's proclamation, her COC was already cancelled by the COMELEC En Banc in its final finding
in its resolution dated May 14, 2013, the effectivity of which was not enjoined by this Court, as Reyes did not avail
of the prescribed remedy which is to seek a restraining order within a period of five (5) days as required by Section
13(b), Rule 18 of COMELEC Rules. Since no restraining order was forthcoming, the PBOC should have refrained from
proclaiming Reyes.
18
Second. This Court upheld the COMELEC decision cancelling respondent Reyes's COC in its Resolutions of June 25,
2013 and October 22, 2013 and these Resolutions are already final and executory.
Third. As a consequence of the above events, the COMELEC in SPC No. 13-010 cancelled respondent Reyes's
proclamation and, in turn, proclaimed Velasco as the duly elected Member of the House of Representatives in
representation of the Lone District of the Province of Marinduque. The said proclamation has not been
challenged or questioned by Reyes in any proceeding.
Fourth. When Reyes took her oath of office before respondent Speaker Belmonte, Jr. in open session, Reyes
had NO valid COC NOR a valid proclamation.
Thus, to consider Reyes' s proclamation and treating it as a material fact in deciding this case will paradoxically alter
the well-established legal milieu between her and Velasco.
Fifth. In view of the foregoing, Reyes HAS ABSOLUTELY NO LEGAL BASIS to serve as a Member of the House of
Representatives for the Lone District of the Province of Marinduque, and therefore, she HAS NO LEGAL
PERSONALITY to be recognized as a party-respondent at a quo warranto proceeding before the HRET.
The present Petition for Mandamus seeks the issuance of a writ of mandamus to compel respondents Speaker
Belmonte, Jr. and Sec. Gen. Barua-Yap to acknowledge and recognize the final and executory Decisions and
Resolution of this Court and of the COMELEC by administering the oath of office to Velasco and entering the latter's
name in the Roll of Members of the House of Representatives. In other words, the Court is called upon to determine
whether or not the prayed for acts, i.e., (i) the administration of the oath of office to Velasco; and (ii) the inclusion of
his name in the Roll of Members, are ministerial in character vis-a-vis the factual and legal milieu of this case. As we
have previously stated, the administration of oath and the registration of Velasco in the Roll of Members of the House
of Representatives for the Lone District of the Province of Marinduque are no longer a matter of discretion or
judgment on the part of Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap. They are legally duty-bound to recognize
Velasco as the duly elected Member of the House of Representatives for the Lone District of Marinduque in view of the
ruling rendered by this Court and the COMELEC'S compliance with the said ruling, now both final and executory.
Under Rule 65, Section 3 of the 1997 Rules of Civil Procedure, any person may file a verified petition
for mandamus "when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an
act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes
another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary course of law." For a petition for mandamus to prosper, it must be
shown that the subject of the petition for mandamus is a ministerial act or duty, and not purely discretionary on the
part of the board, officer or person, and that the petitioner has a well-defined, clear and certain right to warrant the
grant thereof.
The distinction between a ministerial and discretionary act is well delineated. A purely ministerial act or duty is one
which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the mandate
of a legal authority, without regard to or the exercise of his own judgment upon the propriety or impropriety of the
act done. If the law imposes a duty upon a public officer and gives him the right to decide how or when the duty shall
be performed, such duty is discretionary and not ministerial. The duty is ministerial only when the discharge of the
same requires neither the exercise of official discretion or judgment.
G.R. No. 103702 December 6, 1994
MUNICIPALITY OF SAN NARCISO, QUEZON; MAYOR JUAN K. UY; COUNCILORS: DEOGRACIAS R. ARGOSINO
III, BENITO T. CAPIO, EMMANUEL R. CORTEZ, NORMANDO MONTILLA, LEONARDO C. UY, FIDEL C.
AURELLANA, PEDRO C. CARABIT, LEONARDO D. AURELLANA, FABIAN M. MEDENILLA, TRINIDAD F. CORTEZ,
SALVADOR M. MEDENILLA, CERELITO B. AUREADA and FRANCISCA A. BAMBA, petitioners,
vs.
HON. ANTONIO V. MENDEZ, SR., Presiding Judge, Regional Trial Court, Branch 62, 4th Judicial Region,
Gumaca, Quezon; MUNICIPALITY OF SAN ANDRES, QUEZON; MAYOR FRANCISCO DE LEON; COUNCILORS:
FE LUPINAC, TOMAS AVERIA, MANUEL O. OSAS, WILFREDO O. FONTANIL, ENRICO U. NADRES, RODELITO
LUZOIR, LENAC, JOSE L. CARABOT, DOMING AUSA, VIDAL BANQUELES and CORAZON M.
MAXIMO, respondents.
The special civil action of quo warranto is a "prerogative writ by which the Government can call upon any person to
show by what warrant he holds a public office or exercises a public franchise." 13 When the inquiry is focused on the
legal existence of a body politic, the action is reserved to the State in a proceeding for quo warranto or any other credit
proceeding. 14 It must be brought "in the name of the Republic of the Philippines" 15 and commenced by the Solicitor
General or the fiscal "when directed by the President of the Philippines . . . ." 16 Such officers may, under certain
circumstances, bring such an action "at the request and upon the relation of another person" with the permission of
the court. 17 The Rules of Court also allows an individual to commence an action for quo warranto in his own name but
this initiative can be done when he claims to be "entitled to a public office or position usurped or unlawfully held or
exercised by another." 18 While the quo warranto proceedings filed below by petitioner municipality has so named only
the officials of the Municipality of San Andres as respondents, it is virtually, however, a denunciation of the authority
of the Municipality or Municipal District of San Andres to exist and to act in that capacity.
Petitioners' theory might perhaps be a point to consider had the case been seasonably brought. Executive Order No.
353 creating the municipal district of San Andres was issued on 20 August 1959 but it was only after almost thirty (30)
years, or on 05 June 1989, that the municipality of San Narciso finally decided to challenge the legality of the executive
order. In the meantime, the Municipal District, and later the Municipality, of San Andres, began and continued to
exercise the powers and authority of a duly created local government unit. In the same manner that the failure of a
public officer to question his ouster or the right of another to hold a position within a one-year period can abrogate an
action belatedly filed, 19 so also, if not indeed with greatest imperativeness, must a quo warranto proceeding assailing
the lawful authority of a political subdivision be timely raised. 20 Public interest demands it.
Granting the Executive Order No. 353 was a complete nullity for being the result of an unconstitutional delegation of
legislative power, the peculiar circumstances obtaining in this case hardly could offer a choice other than to consider
the Municipality of San Andres to have at least attained a status uniquely of its own closely approximating, if not in
fact attaining, that of a de facto municipal corporation.
G.R. No. 111243 May 25, 1994
JESUS ARMANDO A.R. TARROSA, petitioner,
vs.
GABRIEL C. SINGSON and HON. SALVADOR M. ENRIQUEZ III, respondents
The instant petition is in the nature of a quo warranto proceeding as it seeks the ouster of respondent Singson and
alleges that the latter is unlawfully holding or exercising the powers of Governor of the Bangko Sentral (Cf. Castro v.
Del Rosario, 19 SCRA 196 [1967]). Such a special civil action can only be commenced by the Solicitor General or by a
"person claiming to be entitled to a public office or position unlawfully held or exercised by another" (Revised Rules of
Court, Rule 66, Sec. 6; Acosta v. Flor, 5 Phil. 18 [1905]).
In Sevilla v. Court of Appeals, 209 SCRA 637 (1992), we held that the petitioner therein, who did not aver that he was
entitled to the office of the City Engineer of Cabanatuan City, could not bring the action for quo warranto to oust the
respondent from said office as a mere usurper.
19
Likewise in Greene v. Knox, 175 N.Y. 432 (1903), 67 N.E. 910, it was held that the question of title to an office, which
must be resolved in a quo warranto proceeding, may not be determined in a suit to restrain the payment of salary to
the person holding such office, brought by someone who does not claim to be the one entitled to occupy the said office.
G.R. No. L-14803 June 30, 1961
FLAVIANO LOTA, petitioner,
vs.
THE COURT OF APPEALS, and MOISES SANGALANG, respondents.
It is contended by the petitioner that the respondent Court erred in holding that the present action is one of quo
warranto; in not dismissing the action for failure of the plaintiff to join therein the Municipality of Taal, Batangas, as
party defendant, and in declaring that respondent Moises Sangalang is entitled to hold, and continue in the office of
caretaker of the municipal cemetery of that municipality. It is argued that, as the Court of Appeals found that
respondent Moises Sangalang was the duly appointed caretaker of the municipal cemetery of Taal, Batangas and he
was "unlawfully ousted from office", the remedy available to said respondent is mandamus, not quo warranto.
We do not find merits in appellant's contentions. The claim that the instant action is one of mandamus, not quo
warranto, is devoid of basis. While quo warranto and mandamus are often concurrent remedies, however, there exists
a clear distinction between the two. The authorities are agreed that quo warranto is the remedy to try the right to an
office or franchise and to oust the holder from its enjoyment, while mandamus only lies to enforce clear legal duties,
not to try disputed titles, 38 C.J. 546; 2 Moran, Comments on the Rules of Court, 1957 ed., 200; that where here is
usurpation or intrusion into an office, quo warranto is the proper remedy, Lino Luna vs. Rodriguez, 36 Phil. 491, and
that where the respondent, without claiming any right to an Office, excludes the petitioner therefrom, he remedy
is mandamus, not quo warranto. Manalo vs. Sevilla, 24 Phil. 609; Lino Luna vs. Rodriguez, supra.
As we analyze the facts in the light of the above rules, he instant action is clearly one of quo warranto,
although mandamus is also invoked therein as an ancillary remedy. the facts, as found by the Court of Appeals, show
that respondent Moises Sangalang "was holding the position of cemetery caretaker from 1951 until he was extended a
new appointment on July 1, 1955 by Dr. Noche"; that until then he had not resigned nor intended to abandon the
office"; that on February 13, 1956, the petitioner, Flaviano M. Lota appointed defendant Jose Sangalang as cemetery
caretaker of Taal to take Moises Sangalang's place and that Jose Sangalang claims to be the duly appointed caretaker
of said municipal cemetery. It also appears that Moises Sangalang alleges in his complaint that he had the right to the
possession and enjoyment of said office to which he had legally been appointed, and asks hat Jose Sangalang, who is
occupying it unlawfully, be ousted. The present action, therefore, is one whose purpose is to try the right or title to a
public office and oust he alleged unlawful holder from its enjoyment. Such proceeding and remedy could only be
litigated in a quo warranto action according to the authorities.
We also find no merit in the claim that the action should have been dismissed by the respondent Court for failure of
the plaintiff to implead the municipality of Taal. According to the jurisprudence, any person claiming to be entitled to
a public office may bring an action of quo warranto, without the intervention of the Solicitor-General or the
Fiscal, Navarro vs. Gimenez, 10 Phil. 226; Lino Luna vs. Rodriguez, supra; and that only the person who is in unlawful
possession of the office, and all who claim to be entitled to that office, may be made parties in order to determine their
respective rights thereto in the same action. 2 Moran, Comments on the Rules of Court, 1957 ed., 209, 210. The
municipality of Taal does not claim that it wanted and had the right to occupy and enjoy the office of caretaker of its
own municipal cemetery its pretension, as voiced by its mayor, is that Jose Sangalang is the party who had the right
to occupy said office. It is not necessary for that municipality to appropriate funds for the payment of Moises
Sangalang's salary and salary differentials; there already existed funds appropriated for the purpose, and what
remained to be done was for the municipal treasurer to disburse them in accordance with law. The municipality of Taal,
therefore, is not an essential, nor even a necessary party, to this action.
G.R. No. 168696 February 28, 2006
MA. LUTGARDA P. CALLEJA, JOAQUIN M. CALLEJA, JR., JADELSON PETER P. CALLEJA, MA. JESSICA T.
FLORES, MERCIE C. TIPONES and PERFECTO NIXON C. TABORA, Petitioners,
vs.
JOSE PIERRE A. PANDAY, AUGUSTO R. PANDAY and MA. THELNA P. MALLARI, Respondents.
The Court notes that, indeed, petitioners chose the wrong remedy to assail the Order of July 13, 2005. It is hornbook
principle that Rule 45 of the 1997 Rules of Civil Procedure governs appeals from judgments or final orders.4 The Order
dated July 13, 2005 is basically a denial of herein petitioners’ prayer in their Answer for the dismissal of respondents’
case against them. As a consequence of the trial court’s refusal to dismiss the case, it then directed the transfer of the
case to another branch of the Regional Trial Court that had been designated as a special court to hear cases formerly
cognizable by the SEC. Verily, the order was merely interlocutory as it does not dispose of the case completely, but
leaves something more to be done on its merits. Such being the case, the assailed Order cannot ordinarily be reviewed
through a petition under Rule 45.
While a petition for review on certiorari under Rule 45 would ordinarily be inappropriate to assail an interlocutory
order, in the interest, however, of arresting the perpetuation of an apparent error committed below that could only
serve to unnecessarily burden the parties, the Court has resolved to ignore the technical flaw and, also, to treat the
petition, there being no other plain, speedy and adequate remedy, as a special civil action for certiorari.
It should be noted that allegations in a complaint for quo warranto that certain persons usurped the offices, powers
and functions of duly elected members of the board, trustees and/or officers make out a case for an intra-corporate
controversy.9 Prior to the enactment of R.A. No. 8799, the Court, adopting Justice Jose Y. Feria’s view, declared
in Unilongo v. Court of Appeals 10 that Section 1, Rule 66 of the 1997 Rules of Civil Procedure is "limited to actions
of quo warranto against persons who usurp a public office, position or franchise; public officers who forfeit their office;
and associations which act as corporations without being legally incorporated," while "[a]ctions of quo warranto against
corporations, or against persons who usurp an office in a corporation, fall under the jurisdiction of the Securities and
Exchange Commission and are governed by its rules. (P.D. No. 902-A as amended)."11
However, R.A. No. 8799 was passed and Section 5.2 thereof provides as follows:
5.2. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is
hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That the
Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise
jurisdiction over these cases. xxx
Therefore, actions of quo warranto against persons who usurp an office in a corporation, which were formerly
cognizable by the Securities and Exchange Commission under PD 902-A, have been transferred to the courts of general
jurisdiction. But, this does not change the fact that Rule 66 of the 1997 Rules of Civil Procedure does not apply to quo
warranto cases against persons who usurp an office in a private corporation. Presently, Section 1(a) of Rule 66 reads
thus:
Section 1. Action by Government against individuals. – An action for the usurpation of a public office, position or
franchise may be commenced by a verified petition brought in the name of the Republic of the Philippines against
(a) A person who usurps, intrudes into, or unlawfully holds or exercises a public office, position or franchise;
20
As explained in the Unilongo12 case, Section 1(a) of Rule 66 of the present Rules no longer contains the phrase "or an
office in a corporation created by authority of law" which was found in the old Rules. Clearly, the present Rule 66 only
applies to actions of quo warranto against persons who usurp a public office, position or franchise; public officers who
forfeit their office; and associations which act as corporations without being legally incorporated despite the passage
of R.A. No. 8799. It is, therefore, The Interim Rules of Procedure Governing Intra-Corporate Controversies Under R.A.
No. 8799 (hereinafter the Interim Rules) which applies to the petition for quo warranto filed by respondents before the
trial court since what is being questioned is the authority of herein petitioners to assume the office and act as the board
of directors and officers of St. John Hospital, Incorporated.
The Interim Rules provide thus:
Section 1. (a) Cases covered. – These Rules shall govern the procedure to be observed in civil cases involving the
following:
xxxx
(2) Controversies arising out of intra-corporate, partnership, or association relations, between and
among stockholders, members, or associates, and between, any or all of them and the corporation,
partnership, or association of which they are stockholders, members, or associates, respectively;
(3) Controversies in the election or appointment of directors, trustees, officers, or managers of
corporations, partnerships, or associations;
xxxx
SEC. 5. Venue. – All actions covered by these Rules shall be commenced and tried in the Regional Trial Court which
has jurisdiction over the principal office of the corporation, partnership, or association concerned. xxx (Emphasis
ours)
The next question then is, which branch of the Regional Trial Court has jurisdiction over the present action for quo
warrato? Section 5 of the Interim Rules provides that the petition should be commenced and tried in the Regional Trial
Court that has jurisdiction over the principal office of the corporation. It is undisputed that the principal office of the
corporation is situated at Goa, Camarines Sur. Thus, pursuant to A.M. No. 00-11-03-SC and A.M. No. 03-03-03-SC,
it is the Regional Trial Court designated as Special Commercial Courts in Camarines Sur which shall have
jurisdiction over the petition for quo warranto filed by herein Respondents.
Evidently, the RTC-Br. 58 in San Jose, Camarines Sur is bereft of jurisdiction over respondents’ petition for quo
warranto. Based on the allegations in the petition, the case was clearly one involving an intra-corporate dispute. The
trial court should have been aware that under R.A. No. 8799 and the aforementioned administrative issuances of this
Court, RTC-Br. 58 was never designated as a Special Commercial Court; hence, it was never vested with jurisdiction
over cases previously cognizable by the SEC.
G.R. No. 114795 July 17, 1996
LUCITA Q. GARCES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SALVADOR EMPEYNADO and CLAUDIO CONCEPCION, respondents.
The above organic provision did not require any cause for removal of an appointive official under the 1973
Constitution. 16 The transition period from the old to the new Constitution envisioned an "automatic"
vacancy; 17 hence the government is not hard put to prove anything plainly and simply because the Constitution
allows it. 18 Mere appointment and qualification of the successor removes an incumbent from his post. Nevertheless,
the government in an act of auto-limitation and to prevent indiscriminate dismissal of government personnel issued
on May 28, 1986, Executive Order (E.O.) No. 17. This executive order, which applies in this case as it was passed
 prior to the issuance of Concepcion's transfer order, enumerates five grounds for separation or replacement of elective
and appointive officials authorized under Article III, Section 2 of the Provisional Constitution, to wit:
1. Existence of a case for summary dismissal pursuant to Section 40 of the Civil Service Law;
2. Existence of the probable cause for violation of the Anti-Graft and Corrupt Practices Act as determined by the
Ministry Head concerned;
3. Gross incompetence or inefficiency in the discharge of functions;
4. Misuse of public office for partisan political purposes;
5. Any other analogous ground showing that the incumbent is unfit to remain in the service or his
separation/replacement is in the interest of the service.
Not one of these grounds was alleged to exist, much less proven by petitioner when respondent Concepcion was
transferred from Gutalac to Liloy. More, Concepcion was transferred without his consent. A transfer requires a prior
appointment. 19 If the transfer was made without the consent of the official concerned, it is tantamount to removal
without valid cause 20 contrary to the fundamental guarantee on non-removal except for cause. 21 Concepcion's
transfer thus becomes legally infirm and without effect for he was not validly terminated. His appointment to the
Liloy post, in fact, was incomplete because he did not accept it. Acceptance, it must be emphasized, it is indispensable
to complete an appointment.22 Corollarily, Concepcion's post in Gutalac never became vacant. It is a basic precept in
the law of public officers that "no person, no matter how qualified and eligible he is for a certain position may be
appointed to an office which is not vacant. 23 There can be no appointment to a non-vacant position. The incumbent
must first be legally removed, or his appointment validly terminated before one could be validly installed to succeed
him. Further, Garces' appointment was ordered to be deferred by the COMELEC. The deferment order, we note, was
not unequivocably lifted. Worse, her appointment to Gutalac was even cancelled by the COMELEC en banc.
These factors negate Garces' claim for a well-defined, clear, certain legal right to the Gutalac post. On the contrary,
her right to the said office is manifestly doubtful and highly questionable. As correctly ruled by respondent
court, mandamus, which petitioner filed below, will not lie as this remedy applies only where petitioner's right is
founded clearly in law and not when it is doubtful. 24 It will not issue to give him something to which he is not clearly
and conclusively entitled. 25 Considering that Concepcion continuously occupies the disputed position and exercises
the corresponding functions therefor, the proper remedy should have been quo warranto and not mandamus. 26 Quo
warranto tests the title to one's office claimed by another and has as its object the ouster of the holder from its
enjoyment, while mandamus avails to enforce clear legal duties and not to try disputed titles. 27
G.R. No. 131977 February 4, 1999
PEDRO MENDOZA, petitioner,
vs.
RAY ALLAS and GODOFREDO OLORES, respondents.
The instant petition arose from a special civil action for quo warranto under Rule 66 of the Revised Rules of Court. Quo
warranto is a demand made by the state upon some individual or corporation to show by what right they exercise some
franchise or privilege appertaining to the state which, according to the Constitution and laws of the land, they cannot
legally exercise except by virtue of a grant or authority from the state. 9 In other words, a petition for quo warranto is
a proceeding to determine the right of a person to the use or exercise of a franchise or office and to oust the holder
from its enjoyment, if his claim is not well-founded, or if he has forfeited his right to enjoy the privilege. 10 The action
may be commenced for the Government by the Solicitor General or the fiscal 11 against individuals who usurp a public
office, against a public officer whose acts constitute a ground for the forfeiture of his office, and against an association
which acts as a corporation without being legally incorporated. 12 The action may also be instituted by an individual in
his own name who claims to be entitled to the public office or position usurped or unlawfully held or exercised by
another. 13
21
Where the action is filed by a private person, he must prove that he is entitled to the controverted position, otherwise
respondent has a right to the undisturbed possession of the office. 14 If the court finds for the respondent, the judgment
should simply state that the respondent is entitled to the office. 15 If, however, the court finds for the petitioner and
declares the respondent guilty of usurping, intruding into, or unlawfully holding or exercising the office, judgment may
be rendered as follows:
Sec. 10. Judgment where usurpation found. — When the defendant is found guilty of usurping, intruding into, or
unlawfully holding or exercising an office, position, right, privilege, or franchise, judgment shall be rendered that
such defendant be ousted and altogether excluded therefrom, and that the plaintiff or relator, as the case may be,
recover his costs. Such further judgment may be rendered determining the respective rights in and to the office,
position, right, privilege, or franchise of all the parties to the action as justice requires.
If it is found that the respondent or defendant is usurping or intruding into the office, or unlawfully holding the same,
the court may order:
(1) The ouster and exclusion of the defendant from office;
(2) The recovery of costs by plaintiff or relator;
(3) The determination of the respective rights in and to the office, position, right, privilege or franchise of all the
parties to the action as justice requires. 16
The character of the judgment to be rendered in quo warranto rests to some extent in the discretion of the court and
on the relief sought.
The trial court found that respondent Allas usurped the position of "Director III, Chief of the Customs Intelligence and
Investigation Service." Consequently, the court ordered that respondent Allas be ousted from the contested position
and that petitioner be reinstated in his stead. The decision of the trial court had long become final and executory, and
petitioner prays for its execution. He alleges that he should have been reinstated despite respondent Olores'
appointment because the subject position was never vacant to begin with. Petitioner's removal was illegal and he was
deemed never to have vacated his office when respondent Allas was appointed to the same. Respondent Allas'
appointment was null and void and this nullity allegedly extends to respondent Olores, his successor-in-interest. 20
Ordinarily, a judgment against a public officer in regard to a public right binds his successor in office. This rule, however,
is not applicable in quo warranto cases. 21 A judgment in quo warranto does not bind the respondent's successor in
office, even though such successor may trace his title to the same source. This follows from the nature of the writ of
quo warranto itself. It is never directed to an officer as such, but always against the person — to determine whether
he is constitutionally and legally authorized to perform any act in, or exercise any function of the office to which he
lays claim. 22 In the case at bar, the petition for quo warranto was filed by petitioner solely against respondent Allas.
What was threshed out before the trial court was the qualification and right of petitioner to the contested position as
against respondent Ray Allas, not against Godofredo Olores. The Court of Appeals did not err in denying execution of
the trial court's decision.
G.R. Nos. 179431-32 June 22, 2010
LUIS K. LOKIN, JR., as the second nominee of CITIZENS BATTLE AGAINST CORRUPTION (CIBAC), Petitioner,
vs.
COMMISSION ON ELECTIONS and the HOUSE OF REPRESENTATIVES, Respondents.
The COMELEC posits that once the proclamation of the winning party-list organization has been done and its nominee
has assumed office, any question relating to the election, returns and qualifications of the candidates to the House of
Representatives falls under the jurisdiction of the HRET pursuant to Section 17, Article VI of the 1987 Constitution.
Thus, Lokin should raise the question he poses herein either in an election protest or in a special civil action for quo
warranto in the HRET, not in a special civil action for certiorari in this Court.
We do not agree.
An election protest proposes to oust the winning candidate from office. It is strictly a contest between the defeated
and the winning candidates, based on the grounds of electoral frauds and irregularities, to determine who between
them has actually obtained the majority of the legal votes cast and is entitled to hold the office. It can only be filed by
a candidate who has duly filed a certificate of candidacy and has been voted for in the preceding elections.
A special civil action for quo warranto refers to questions of disloyalty to the State, or of ineligibility of the winning
candidate. The objective of the action is to unseat the ineligible person from the office, but not to install the petitioner
in his place. Any voter may initiate the action, which is, strictly speaking, not a contest where the parties strive for
supremacy because the petitioner will not be seated even if the respondent may be unseated.
The controversy involving Lokin is neither an election protest nor an action for quo warranto, for it concerns a very
peculiar situation in which Lokin is seeking to be seated as the second nominee of CIBAC. Although an election protest
may properly be available to one party-list organization seeking to unseat another party-list organization to determine
which between the defeated and the winning party-list organizations actually obtained the majority of the legal votes,
Lokin’s case is not one in which a nominee of a particular party-list organization thereby wants to unseat another
nominee of the same party-list organization. Neither does an action for quo warranto lie, considering that the case
does not involve the ineligibility and disloyalty of Cruz-Gonzales to the Republic of the Philippines, or some other cause
of disqualification for her.
Lokin has correctly brought this special civil action for certiorari against the COMELEC to seek the review of the
September 14, 2007 resolution of the COMELEC in accordance with Section 7 of Article IX-A of the 1987 Constitution,
notwithstanding the oath and assumption of office by Cruz-Gonzales. The constitutional mandate is now implemented
by Rule 64 of the 1997 Rules of Civil Procedure, which provides for the review of the judgments, final orders or
resolutions of the COMELEC and the Commission on Audit. As Rule 64 states, the mode of review is by a petition for
certiorari in accordance with Rule 65 to be filed in the Supreme Court within a limited period of 30 days. Undoubtedly,
the Court has original and exclusive jurisdiction over Lokin’s petitions for certiorari and for mandamus against the
COMELEC.
G.R. No. 166429 December 19, 2005
REPUBLIC OF THE PHILIPPINES, Represented by Executive Secretary Eduardo R. Ermita, the DEPARTMENT
OF TRANSPORTATION AND COMMUNICATIONS (DOTC), and the MANILA INTERNATIONAL AIRPORT
AUTHORITY (MIAA), Petitioners,
vs.
HON. HENRICK F. GINGOYON, In his capacity as Presiding Judge of the Regional Trial Court, Branch 117,
Pasay City and PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., Respondents.
There are at least two crucial differences between the respective procedures under Rep. Act No. 8974 and Rule 67.
Under the statute, the Government is required to make immediate payment to the property owner upon the filing of
the complaint to be entitled to a writ of possession, whereas in Rule 67, the Government is required only to make an
initial deposit with an authorized government depositary. Moreover, Rule 67 prescribes that the initial deposit be
equivalent to the assessed value of the property for purposes of taxation, unlike Rep. Act No. 8974 which provides, as
the relevant standard for initial compensation, the market value of the property as stated in the tax declaration or the
22
current relevant zonal valuation of the Bureau of Internal Revenue (BIR), whichever is higher, and the value of the
improvements and/or structures using the replacement cost method.
Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of the Implementing Rules, the RTC
made key qualifications to its earlier issuances. First, it directed the Land Bank of the Philippines, Baclaran Branch
(LBP-Baclaran), to immediately release the amount of US$62,343,175.77 to PIATCO, an amount which the RTC
characterized as that which the Government "specifically made available for the purpose of this expropriation;" and
such amount to be deducted from the amount of just compensation due PIATCO as eventually determined by the
RTC. Second, the Government was directed to submit to the RTC a Certificate of Availability of Funds signed by
authorized officials to cover the payment of just compensation. Third, the Government was directed "to maintain,
preserve and safeguard" the NAIA 3 facilities or "perform such as acts or activities in preparation for their direct
operation" of the airport terminal, pending expropriation proceedings and full payment of just compensation. However,
the Government was prohibited "from performing acts of ownership like awarding concessions or leasing any part of
[NAIA 3] to other parties."19
The very next day after the issuance of the assailed 4 January 2005 Order, the Government filed an Urgent Motion for
Reconsideration, which was set for hearing on 10 January 2005. On 7 January 2005, the RTC issued another Order,
the second now assailed before this Court, which appointed three (3) Commissioners to ascertain the amount of just
compensation for the NAIA 3 Complex. That same day, the Government filed a Motion for Inhibition of Hon. Gingoyon.
This pronouncement contains the fundamental premises which permeate this decision of the Court. Indeed, Agan, final
and executory as it is, stands as governing law in this case, and any disposition of the present petition must conform
to the conditions laid down by the Court in its 2004 Resolution.
The 2004 Resolution Which Is Law of This Case Generally Permits Expropriation
The pronouncement in the 2004 Resolution is especially significant to this case in two aspects, namely: (i)
that PIATCO must receive payment of just compensation determined in accordance with law and equity;
and (ii) that the government is barred from taking over NAIA 3 until such just compensation is paid. The
parties cannot be allowed to evade the directives laid down by this Court through any mode of judicial action, such as
the complaint for eminent domain.
The Government has chosen to resort to expropriation, a remedy available under the law, which has the added benefit
of an integrated process for the determination of just compensation and the payment thereof to PIATCO. We appreciate
that the case at bar is a highly unusual case, whereby the Government seeks to expropriate a building complex
constructed on land which the State already owns.
However, the reason for the resort by the Government to expropriation proceedings is understandable in this case. The
2004 Resolution, in requiring the payment of just compensation prior to the takeover by the Government of NAIA 3,
effectively precluded it from acquiring possession or ownership of the NAIA 3 through the unilateral exercise of its
rights as the owner of the ground on which the facilities stood.
The right of eminent domain extends to personal and real property, and the NAIA 3 structures, adhered as they are to
the soil, are considered as real property.26 The public purpose for the expropriation is also beyond dispute. It should
also be noted that Section 1 of Rule 67 (on Expropriation) recognizes the possibility that the property sought to be
expropriated may be titled in the name of the Republic of the Philippines, although occupied by private individuals, and
in such case an averment to that effect should be made in the complaint. The instant expropriation complaint did aver
that the NAIA 3 complex "stands on a parcel of land owned by the Bases Conversion Development Authority, another
agency of [the Republic of the Philippines]."27
Admittedly, eminent domain is not the sole judicial recourse by which the Government may have acquired the NAIA 3
facilities while satisfying the requisites in the 2004 Resolution. Eminent domain though may be the most effective, as
well as the speediest means by which such goals may be accomplished. Not only does it enable immediate possession
after satisfaction of the requisites under the law, it also has a built-in procedure through which just compensation may
be ascertained. Thus, there should be no question as to the propriety of eminent domain proceedings in this case.
It is from these premises that we resolve the first question, whether Rule 67 of the Rules of Court or Rep. Act No. 8974
governs the expropriation proceedings in this case.
Application of Rule 67 Violates the 2004 Agan Resolution
The Government insists that Rule 67 of the Rules of Court governs the expropriation proceedings in this case to the
exclusion of all other laws. On the other hand, PIATCO claims that it is Rep. Act No. 8974 which does apply. Earlier,
we had adverted to the basic differences between the statute and the procedural rule. Further elaboration is in order.
Rule 67 outlines the procedure under which eminent domain may be exercised by the Government. Yet by no means
does it serve at present as the solitary guideline through which the State may expropriate private property. For
example, Section 19 of the Local Government Code governs as to the exercise by local government units of the power
of eminent domain through an enabling ordinance. And then there is Rep. Act No. 8974, which covers expropriation
proceedings intended for national government infrastructure projects.
Rep. Act No. 8974, which provides for a procedure eminently more favorable to the property owner than Rule 67,
inescapably applies in instances when the national government expropriates property "for national government
infrastructure projects."28 Thus, if expropriation is engaged in by the national government for purposes other than
national infrastructure projects, the assessed value standard and the deposit mode prescribed in Rule 67 continues to
apply.
Under both Rule 67 and Rep. Act No. 8974, the Government commences expropriation proceedings through the filing
of a complaint. Unlike in the case of local governments which necessitate an authorizing ordinance before expropriation
may be accomplished, there is no need under Rule 67 or Rep. Act No. 8974 for legislative authorization before the
Government may proceed with a particular exercise of eminent domain. The most crucial difference between Rule 67
and Rep. Act No. 8974 concerns the particular essential step the Government has to undertake to be entitled to a writ
of possession.
The first paragraph of Section 2 of Rule 67 provides:
SEC. 2. Entry of plaintiff upon depositing value with authorized government depository. — Upon the filing of the
complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or
enter upon the possession of the real property involved if he deposits with the authorized government
depositary an amount equivalent to the assessed value of the property for purposes of taxation to be
held by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof
the court authorizes the deposit of a certificate of deposit of a government bank of the Republic of the
Philippines payable on demand to the authorized government depositary.
In contrast, Section 4 of Rep. Act No. 8974 relevantly states:
SEC. 4. Guidelines for Expropriation Proceedings.— Whenever it is necessary to acquire real property for the right-
of-way, site or location for any national government infrastructure project through expropriation, the appropriate
proceedings before the proper court under the following guidelines:
a) Upon the filing of the complaint, and after due notice to the defendant, the implementing agency shall
immediately pay the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%)
23
of the value of the property based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR);
and (2) the value of the improvements and/or structures as determined under Section 7 hereof;
c) In case the completion of a government infrastructure project is of utmost urgency and importance, and there
is no existing valuation of the area concerned, the implementing agency shall immediately pay the owner of the
property its proffered value taking into consideration the standards prescribed in Section 5 hereof.
As can be gleaned from the above-quoted texts, Rule 67 merely requires the Government to deposit with an authorized
government depositary the assessed value of the property for expropriation for it to be entitled to a writ of possession.
On the other hand, Rep. Act No. 8974 requires that the Government make a direct payment to the property owner
before the writ may issue. Moreover, such payment is based on the zonal valuation of the BIR in the case of land, the
value of the improvements or structures under the replacement cost method, 29 or if no such valuation is available and
in cases of utmost urgency, the proffered value of the property to be seized.
It is quite apparent why the Government would prefer to apply Rule 67 in lieu of Rep. Act No. 8974. Under Rule 67, it
would not be obliged to immediately pay any amount to PIATCO before it can obtain the writ of possession since all it
need do is deposit the amount equivalent to the assessed value with an authorized government depositary. Hence, it
devotes considerable effort to point out that Rep. Act No. 8974 does not apply in this case, notwithstanding the
undeniable reality that NAIA 3 is a national government project. Yet, these efforts fail, especially considering the
controlling effect of the 2004 Resolution in Agan on the adjudication of this case.
It is the finding of this Court that the staging of expropriation proceedings in this case with the exclusive use of Rule
67 would allow for the Government to take over the NAIA 3 facilities in a fashion that directly rebukes our 2004
Resolution in Agan. This Court cannot sanction deviation from its own final and executory orders.
Section 2 of Rule 67 provides that the State "shall have the right to take or enter upon the possession of the real
property involved if [the plaintiff] deposits with the authorized government depositary an amount equivalent to the
assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court." 30 It
is thus apparent that under the provision, all the Government need do to obtain a writ of possession is to deposit the
amount equivalent to the assessed value with an authorized government depositary.
Would the deposit under Section 2 of Rule 67 satisfy the requirement laid down in the 2004 Resolution that "[f]or the
government to take over the said facility, it has to compensate respondent PIATCO as builder of the said structures"?
Evidently not.
If Section 2 of Rule 67 were to apply, PIATCO would be enjoined from receiving a single centavo as just compensation
before the Government takes over the NAIA 3 facility by virtue of a writ of possession. Such an injunction squarely
contradicts the letter and intent of the 2004 Resolution. Thus, at the very least, Rule 67 cannot apply in this case
without violating the 2004 Resolution.
Rep. Act No. 8974 Fits to the Situation at Bar and Complements the 2004 Agan Resolution
Rep. Act No. 8974 is entitled "An Act To Facilitate The Acquisition Of Right-Of-Way, Site Or Location For National
Government Infrastructure Projects And For Other Purposes." Obviously, the law is intended to cover expropriation
proceedings intended for national government infrastructure projects. Section 2 of Rep. Act No. 8974 explains what
are considered as "national government projects."
Sec. 2. National Government Projects. – The term "national government projects" shall refer to all national government
infrastructure, engineering works and service contracts, including projects undertaken by government-owned and
controlled corporations, all projects covered by Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise
known as the Build-Operate-and-Transfer Law, and other related and necessary activities, such as site acquisition,
supply and/or installation of equipment and materials, implementation, construction, completion, operation,
maintenance, improvement, repair and rehabilitation, regardless of the source of funding.
As acknowledged in the 2003 Decision, the development of NAIA 3 was made pursuant to a build-operate-and-transfer
arrangement pursuant to Republic Act No. 6957, as amended,33 which pertains to infrastructure or development
projects normally financed by the public sector but which are now wholly or partly implemented by the private
sector.34 Under the build-operate-and-transfer scheme, it is the project proponent which undertakes the construction,
including the financing, of a given infrastructure facility. 35 In Tatad v. Garcia,36 the Court acknowledged that the
operator of the EDSA Light Rail Transit project under a BOT scheme was the owner of the facilities such as "the rail
tracks, rolling stocks like the coaches, rail stations, terminals and the power plant."37
There can be no doubt that PIATCO has ownership rights over the facilities which it had financed and constructed. The
2004 Resolution squarely recognized that right when it mandated the payment of just compensation to PIATCO prior
to the takeover by the Government of NAIA 3. The fact that the Government resorted to eminent domain proceedings
in the first place is a concession on its part of PIATCO’s ownership. Indeed, if no such right is recognized, then there
should be no impediment for the Government to seize control of NAIA 3 through ordinary ejectment proceedings.
There is no doubt that the NAIA 3 is not, under any sensible contemplation, a "right-of-way." Yet we cannot agree with
the Government’s insistence that neither could NAIA 3 be a "site" or "location". Indeed, we cannot accept the
Government’s proposition that the only properties that may be expropriated under Rep. Act No. 8974 are parcels of
land. Rep. Act No. 8974 contemplates within its coverage such real property constituting land, buildings, roads and
constructions of all kinds adhered to the soil.
Even as the provisions of Rep. Act No. 8974 call for that law’s application in this case, the threshold test must still be
met whether its implementation would conform to the dictates of the Court in the 2004 Resolution. Unlike in the case
of Rule 67, the application of Rep. Act No. 8974 will not contravene the 2004 Resolution, which requires the payment
of just compensation before any takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does not
particularize the extent such payment must be effected before the takeover, but it unquestionably requires at least
some degree of payment to the private property owner before a writ of possession may issue. The utilization of Rep.
Act No. 8974 guarantees compliance with this bare minimum requirement, as it assures the private property owner
the payment of, at the very least, the proffered value of the property to be seized. Such payment of the proffered value
to the owner, followed by the issuance of the writ of possession in favor of the Government, is precisely the schematic
under Rep. Act No. 8974, one which facially complies with the prescription laid down in the 2004 Resolution.
The Proper Amount to be Paid under Rep. Act No. 8974
It must be clarified that PIATCO cannot be reimbursed or justly compensated for the value of the parcel of land on
which NAIA 3 stands. PIATCO is not the owner of the land on which the NAIA 3 facility is constructed, and it should not
be entitled to just compensation that is inclusive of the value of the land itself. It would be highly disingenuous to
compensate PIATCO for the value of land it does not own. Its entitlement to just compensation should be limited to
the value of the improvements and/or structures themselves. Thus, the determination of just compensation cannot
include the BIR zonal valuation under Section 4 of Rep. Act No. 8974.
Under Rep. Act No. 8974, the Government is required to "immediately pay" the owner of the property the amount
equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant
zonal valuation of the [BIR]; and (2) the value of the improvements and/or structures as determined under Section 7.
As stated above, the BIR zonal valuation cannot apply in this case, thus the amount subject to immediate payment
24
should be limited to "the value of the improvements and/or structures as determined under Section 7," with Section 7
referring to the "implementing rules and regulations for the equitable valuation of the improvements and/or structures
on the land." Under the present implementing rules in place, the valuation of the improvements/structures are to be
based using "the replacement cost method."42 However, the replacement cost is only one of the factors to be considered
in determining the just compensation.
Admittedly, there is no way, at least for the present, to immediately ascertain the value of the improvements and
structures since such valuation is a matter for factual determination. 43 Yet Rep. Act No. 8974 permits an expedited
means by which the Government can immediately take possession of the property without having to await precise
determination of the valuation. Section 4(c) of Rep. Act No. 8974 states that "in case the completion of a government
infrastructure project is of utmost urgency and importance, and there is no existing valuation of the area
concerned, the implementing agency shall immediately pay the owner of the property its proferred value, taking
into consideration the standards prescribed in Section 5 [of the law]." 44 The "proffered value" may strike as a highly
subjective standard based solely on the intuition of the government, but Rep. Act No. 8974 does provide relevant
standards by which "proffered value" should be based, 45 as well as the certainty of judicial determination of the
propriety of the proffered value.46
In filing the complaint for expropriation, the Government alleged to have deposited the amount of ₱3 Billion earmarked
for expropriation, representing the assessed value of the property. The making of the deposit, including the
determination of the amount of the deposit, was undertaken under the erroneous notion that Rule 67, and not Rep.
Act No. 8974, is the applicable law. Still, as regards the amount, the Court sees no impediment to recognize this sum
of ₱3 Billion as the proffered value under Section 4(b) of Rep. Act No. 8974. After all, in the initial determination of the
proffered value, the Government is not strictly required to adhere to any predetermined standards, although its
proffered value may later be subjected to judicial review using the standards enumerated under Section 5 of Rep. Act
No. 8974.
While the Court agrees that ₱3 Billion should be considered as the correct proffered value, still we cannot deem the
Government as having faithfully complied with Rep. Act No. 8974. For the law plainly requires direct payment to the
property owner, and not a mere deposit with the authorized government depositary. Without such direct payment, no
writ of possession may be obtained.
Clearly, without full payment of just compensation, there can be no transfer of title from the landowner to the
expropriator. Otherwise stated, the Republic’s acquisition of ownership is conditioned upon the full payment of just
compensation within a reasonable time.
Significantly, in Municipality of Biñan v. Garcia[62 ] this Court ruled that the expropriation of lands consists of two
stages, to wit:
"x x x The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent
domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not
of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought
to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation
to be determined as of the date of the filing of the complaint" x x x.
The second phase of the eminent domain action is concerned with the determination by the court of "the just
compensation for the property sought to be taken." This is done by the court with the assistance of not more than
three (3) commissioners. x x x.
Final Determination of Just Compensation Within 60 Days
The issuance of the writ of possession does not write finis to the expropriation proceedings. As earlier pointed out,
expropriation is not completed until payment to the property owner of just compensation. The proffered value stands
as merely a provisional determination of the amount of just compensation, the payment of which is sufficient to transfer
possession of the property to the Government. However, to effectuate the transfer of ownership, it is necessary for the
Government to pay the property owner the final just compensation.
In Lim the Government deliberately refused to pay just compensation. The Court went on to rule that "in cases where
the government failed to pay just compensation within five (5) years from the finality of the judgment in the
expropriation proceedings, the owners concerned shall have the right to recover possession of their property."65
Rep. Act No. 8974 mandates a speedy method by which the final determination of just compensation may be had.
Section 4 provides:
In the event that the owner of the property contests the implementing agency’s proffered value, the court shall
determine the just compensation to be paid the owner within sixty (60) days from the date of filing of the
expropriation case. When the decision of the court becomes final and executory, the implementing agency shall pay
the owner the difference between the amount already paid and the just compensation as determined by the court.
Appointment of Commissioners
The next argument for consideration is the claim of the Government that the RTC erred in appointing the three
commissioners in its 7 January 2005 Order without prior consultation with either the Government or PIATCO, or without
affording the Government the opportunity to object to the appointment of these commissioners. We can dispose of this
argument without complication.
It must be noted that Rep. Act No. 8974 is silent on the appointment of commissioners tasked with the ascertainment
of just compensation.67 This protocol though is sanctioned under Rule 67. We rule that the appointment of
commissioners under Rule 67 may be resorted to, even in expropriation proceedings under Rep. Act No. 8974, since
the application of the provisions of Rule 67 in that regard do not conflict with the statute.
But while the appointment of commissioners under the aegis of Rule 67 may be sanctioned in expropriation proceedings
under Rep. Act No. 8974, the standards to be observed for the determination of just compensation are provided not in
Rule 67 but in the statute.
Nothing in Rule 67 or Rep. Act No. 8974 requires that the RTC consult with the parties in the expropriation case on
who should be appointed as commissioners. Neither does the Court feel that such a requirement should be imposed in
this case.
What Rule 67 does allow though is for the parties to protest the appointment of any of these commissioners, as provided
under Section 5 of the Rule. These objections though must be made filed within ten (10) days from service of the order
of appointment of the commissioners.
G.R. No. G.R. No. 150936 August 18, 2004
NATIONAL POWER CORPORATION, petitioner,
vs.
MANUBAY AGRO-INDUSTRIAL DEVELOPMENT CORPORATION, respondents.
Sole Issue: Just Compensation
25
Petitioner contends that the valuation of the expropriated property -- fixed by the trial court and affirmed by the CA -
- was too high a price for the acquisition of an easement of a mere aerial right of way, because respondent would
continue to own and use the subject land anyway. Petitioner argues that in a strict sense, there is no "taking" of
property, but merely an imposition of an encumbrance or a personal easement/servitude under Article 614 10 of the
Civil Code. Such encumbrance will not result in ousting or depriving respondent of the beneficial enjoyment of the
property. And even if there was a "taking," petitioner points out that the loss is limited only to a portion of the aerial
domain above the property of respondent. Hence, the latter should be compensated only for what it would actually
lose.
We are not persuaded.
Petitioner averred in its Complaint in Civil Case No. RTC 96-3675 that it had sought to acquire an easement of a right
of way over portions of respondent’s land -- a total area of 22,961.71 square meters.11 In its prayer, however, it also
sought authority to enter the property and demolish all improvements existing thereon, in order to commence and
undertake the construction of its Power Transmission Project.
In other words, the expropriation was not to be limited to an easement of a right of way. In its Answer, respondent
alleged that it had already authorized petitioner to take possession of the affected portions of the property and to install
electric towers thereon.12 The latter did not controvert this material allegation.
True, an easement of a right of way transmits no rights except the easement itself, and respondent retains full
ownership of the property. The acquisition of such easement is, nevertheless, not gratis. As correctly observed by the
CA, considering the nature and the effect of the installation power lines, the limitations on the use of the land for an
indefinite period would deprive respondent of normal use of the property. For this reason, the latter is entitled to
payment of a just compensation, which must be neither more nor less than the monetary equivalent of the land.16
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator.
The measure is not the taker’s gain, but the owner’s loss. The word "just" is used to intensify the meaning of the word
"compensation" and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall
be real, substantial, full and ample.17
In eminent domain or expropriation proceedings, the just compensation to which the owner of a condemned property
is entitled is generally the market value. Market value is "that sum of money which a person desirous but not compelled
to buy, and an owner willing but not compelled to sell, would agree on as a price to be given and received
therefor."18 Such amount is not limited to the assessed value of the property or to the schedule of market values
determined by the provincial or city appraisal committee. However, these values may serve as factors to be considered
in the judicial valuation of the property.19
The parcels of land sought to be expropriated are undeniably undeveloped, raw agricultural land. But a dominant
portion thereof has been reclassified by the Sangguniang Panlungsod ng Naga -- per Zoning Ordinance No. 94-076
dated August 10, 1994 -- as residential, per the August 8, 1996 certification of Zoning Administrator Juan O. Villegas
Jr.
The nature and character of the land at the time of its taking is the principal criterion for determining how much just
compensation should be given to the landowner.22 All the facts as to the condition of the property and its surroundings,
as well as its improvements and capabilities, should be considered. 23
In fixing the valuation at P550 per square meter, the trial court had considered the Report of the commissioners and
the proofs submitted by the parties. These documents included the following: (1) the established fact that the property
of respondent was located along the Naga-Carolina provincial road; (2) the fact that it was about 500 meters from the
Kayumanggi Resort and 8 kilometers from the Naga City Central Business District; and a half kilometer from the main
entrance of the fully developed Naga City Sports Complex -- used as the site of the Palarong Pambansa -- and the San
Francisco Village Subdivision, a first class subdivision where lots were priced at P2,500 per square meter; (3) the fair
market value of P650 per square meter proffered by respondent, citing its recently concluded sale of a portion of the
same property to Metro Naga Water District at a fixed price of P800 per square meter; (4) the BIR zonal valuation of
residential lots in Barangay Pacol, Naga City, fixed at a price of P220 per square meter as of 1997; and (5) the fact
that the price of P430 per square meter had been determined by the RTC of Naga City (Branch 21)24 as just
compensation for the Mercados’ adjoining property, which had been expropriated by NPC for the same power
transmission project.
The chairperson of the Board of Commissioners, in adopting the recommendation of Commissioner Bulaos, made a
careful study of the property. Factors considered in arriving at a reasonable estimate of just compensation for
respondent were the location; the most profitable likely use of the remaining area; and the size, shape, accessibility
as well as listings of other properties within the vicinity. Averments pertaining to these factors were supported by
documentary evidence.
On the other hand, the commissioner for petitioner -- City Assessor Albeus -- recommended a price of P115 per square
meter in his Report dated June 30, 1997. No documentary evidence, however, was attached to substantiate the opinions
of the banks and the realtors, indicated in the commissioner’s Report and computation of the market value of the
property.
Majority Report of Commissioners Sufficient
Under Section 8 of Rule 67 of the Rules of Court, the court may "accept the report and render judgment in accordance
therewith; or for cause shown, it may recommit the same to the commissioners for further report of facts, or it may
set aside the report and appoint new commissioners, or it may accept the report in part and reject it in part; x x x." In
other words, the reports of commissioners are merely advisory and recommendatory in character, as far as the courts
are concerned.28
Thus, it hardly matters whether the commissioners have unanimously agreed on their recommended valuation of the
property. It has been held that the report of only two commissioners may suffice, even if the third commissioner
dissents.29 As a court is not bound by commissioners’ reports it may make such order or render such judgment as shall
secure for the plaintiff the property essential to the exercise of the latter’s right of condemnation; and for the defendant,
just compensation for the property expropriated. For that matter, the court may even substitute its own estimate of
the value as gathered from the evidence on record.30
G.R. No. 146587 July 2, 2002
REPUBLIC OF THE PHILIPPINES, represented by the General Manager of the PHILIPPINE INFORMATION
AGENCY (PIA), petitioner,
vs.
THE HONORABLE COURT OF APPEALS and the HEIRS OF LUIS SANTOS as herein represented by DR. SABINO
SANTOS and PURIFICACION SANTOS IMPERIAL, respondents.
The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate any
property within its territorial sovereignty for a public purpose. 7 Fundamental to the independent existence of a State,
26
it requires no recognition by the Constitution, whose provisions are taken as being merely confirmatory of its presence
and as being regulatory, at most, in the due exercise of the power.
The ubiquitous character of eminent domain is manifest in the nature of the expropriation proceedings. Expropriation
proceedings are not adversarial in the conventional sense, for the condemning authority is not required to assert any
conflicting interest in the property. Thus, by filing the action, the condemnor in effect merely serves notice that it is
taking title and possession of the property, and the defendant asserts title or interest in the property, not to prove a
right to possession, but to prove a right to compensation for the taking. 9
Obviously, however, the power is not without its limits: first, the taking must be for public use, and second, that just
compensation must be given to the private owner of the property.10 These twin proscriptions have their origin in the
recognition of the necessity for achieving balance between the State interests, on the one hand, and private rights,
upon the other hand, by effectively restraining the former and affording protection to the latter.11 In determining "public
use," two approaches are utilized - the first is public employment or the actual use by the public, and the second is
public advantage or benefit.
The expropriated property has been shown to be for the continued utilization by the PIA, a significant portion thereof
being ceded for the expansion of the facilities of the Bulacan State University and for the propagation of the Philippine
carabao, themselves in line with the requirements of public purpose. Respondents question the public nature of the
utilization by petitioner of the condemned property, pointing out that its present use differs from the purpose originally
contemplated in the 1969 expropriation proceedings. The argument is of no moment. The property has assumed a
public character upon its expropriation. Surely, petitioner, as the condemnor and as the owner of the property, is well
within its rights to alter and decide the use of that property, the only limitation being that it be for public use, which,
decidedly, it is.
In insisting on the return of the expropriated property, respondents would exhort on the pronouncement in Provincial
Government of Sorsogon vs. Vda. de Villaroya14 where the unpaid landowners were allowed the alternative remedy of
recovery of the property there in question.
Petitioner has occupied, utilized and, for all intents and purposes, exercised dominion over the property pursuant to
the judgment. The exercise of such rights vested to it as the condemnee indeed has amounted to at least a partial
compliance or satisfaction of the 1979 judgment, thereby preempting any claim of bar by prescription on grounds of
non-execution. In arguing for the return of their property on the basis of non-payment, respondents ignore the fact
that the right of the expropriatory authority is far from that of an unpaid seller in ordinary sales, to which the remedy
of rescission might perhaps apply. An in rem proceeding, condemnation acts upon the property.21 After condemnation,
the paramount title is in the public under a new and independent title; 22 thus, by giving notice to all claimants to a
disputed title, condemnation proceedings provide a judicial process for securing better title against all the world than
may be obtained by voluntary conveyance.23
The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the
property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal
action and competition or the fair value of the property as between one who receives, and one who desires to sell, it
fixed at the time of the actual taking by the government. 25 Thus, if property is taken for public use before compensation
is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just
value to be computed from the time the property is taken to the time when compensation is actually paid or deposited
with the court.26 In fine, between the taking of the property and the actual payment, legal interests accrue in order to
place the owner in a position as good as (but not better than) the position he was in before the taking occurred. 27
G.R. No. 152230. August 9, 2005
JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC., Petitioners,
vs.
MUNICIPALITY (now CITY) OF PASIG, METRO MANILA, Respondent.
Eminent Domain: Nature and Scope
The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate any
property within its territorial sovereignty for a public purpose. The nature and scope of such power has been
comprehensively described as follows:
… It is an indispensable attribute of sovereignty; a power grounded in the primary duty of government to serve the
common need and advance the general welfare. Thus, the right of eminent domain appertains to every independent
government without the necessity for constitutional recognition. The provisions found in modern constitutions of
civilized countries relating to the taking of property for the public use do not by implication grant the power to the
government, but limit the power which would, otherwise, be without limit. Thus, our own Constitution provides that
"[p]rivate property shall not be taken for public use without just compensation." Furthermore, the due process and
equal protection clauses act as additional safeguards against the arbitrary exercise of this governmental power.41
Strict Construction and Burden of Proof
The exercise of the right of eminent domain, whether directly by the State or by its authorized agents, is necessarily
in derogation of private rights.42 It is one of the harshest proceedings known to the law. Consequently, when the
sovereign delegates the power to a political unit or agency, a strict construction will be given against the agency
asserting the power.
Corollarily, the respondent, which is the condemnor, has the burden of proving all the essentials necessary to show
the right of condemnation.46 It has the burden of proof to establish that it has complied with all the requirements
provided by law for the valid exercise of the power of eminent domain.
The Court declared that the following requisites for the valid exercise of the power of eminent domain by a local
government unit must be complied with:
1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the local
government unit, to exercise the power of eminent domain or pursue expropriation proceedings over a particular
private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and
the landless.
3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other
pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but
said offer was not accepted.47
The respondent was burdened to prove the mandatory requirement of a valid and definite offer to the owner of the
property before filing its complaint and the rejection thereof by the latter. 48 It is incumbent upon the condemnor to
exhaust all reasonable efforts to obtain the land it desires by agreement. 49 Failure to prove compliance with the
mandatory requirement will result in the dismissal of the complaint.50
The purpose of the requirement of a valid and definite offer to be first made to the owner is to encourage settlements
and voluntary acquisition of property needed for public purposes in order to avoid the expense and delay of a court
action. A reasonable offer in good faith, not merely perfunctory or pro forma offer, to acquire the property for a
27
reasonable price must be made to the owner or his privy. 57 A single bona fide offer that is rejected by the owner will
suffice.
The expropriating authority is burdened to make known its definite and valid offer to all the owners of the property.
However, it has a right to rely on what appears in the certificate of title covering the land to be expropriated. Hence,
it is required to make its offer only to the registered owners of the property.
In the present case, the respondent failed to prove that before it filed its complaint, it made a written definite and valid
offer to acquire the property for public use as an access road.
It bears stressing, however, that the respondent offered the letter only to prove its desire or intent to acquire the
property for a right-of-way.60 The document was not offered to prove that the respondent made a definite and valid
offer to acquire the property.
Public Necessity
We reject the contention of the petitioner that its property can no longer be expropriated by the respondent because
it is intended for the construction of a place for religious worship and a school for its members. As aptly explained by
this Court in Manosca v. Court of Appeals,65 thus:
It has been explained as early as Seña v. Manila Railroad Co., that:
… A historical research discloses the meaning of the term "public use" to be one of constant growth. As society
advances, its demands upon the individual increases and each demand is a new use to which the resources of the
individual may be devoted. … for "whatever is beneficially employed for the community is a public use."
As long as the purpose of the taking is public, then the power of eminent domain comes into play.
The subject property is expropriated for the purpose of constructing a road. The respondent is not mandated to comply
with the essential requisites for an easement of right-of-way under the New Civil Code. Case law has it that in the
absence of legislative restriction, the grantee of the power of eminent domain may determine the location and route
of the land to be taken66 unless such determination is capricious and wantonly injurious.67 Expropriation is justified so
long as it is for the public good and there is genuine necessity of public character.68 Government may not capriciously
choose what private property should be taken.69
The respondent has demonstrated the necessity for constructing a road from E. R. Santos Street to Sto. Tomas Bukid.
The witnesses, who were residents of Sto. Tomas Bukid, testified that although there were other ways through which
one can enter the vicinity, no vehicle, however, especially fire trucks, could enter the area except through the newly
constructed Damayan Street.
Nonetheless, the respondent failed to show the necessity for constructing the road particularly in the petitioner’s
property and not elsewhere.
On this point, the trial court made the following findings:
… The contention of the defendants that there is an existing alley that can serve the purpose of the expropriator is
not accurate. An inspection of the vicinity reveals that the alley being referred to by the defendants actually passes
thru Bagong Taon St. but only about one-half (1/2) of its entire length is passable by vehicle and the other half is
merely a foot-path. It would be more inconvenient to widen the alley considering that its sides are occupied by
permanent structures and its length from the municipal road to the area sought to be served by the expropriation is
considerably longer than the proposed access road. The area to be served by the access road is composed of compact
 wooden houses and literally a slum area. As a result of the expropriation of the 51-square meter portion of the
property of the intervenor, a 3-meter wide road open to the public is created. This portion of the property of the
intervenor is the most convenient access to the interior of Sto. Tomas Bukid since it is not only a short cut to the
interior of the Sto. Tomas Bukid but also an easy path for vehicles entering the area, not to mention the 3-meter
wide road requirement of the Fire Code.72
However, as correctly pointed out by the petitioner, there is no showing in the record that an ocular inspection was
conducted during the trial. If, at all, the trial court conducted an ocular inspection of the subject property during the
trial, the petitioner was not notified thereof. The petitioner was, therefore, deprived of its right to due process. It bears
stressing that an ocular inspection is part of the trial as evidence is thereby received and the parties are entitled to be
present at any stage of the trial.
G.R. No. 197329 September 8, 2014
NATIONAL POWER CORPORATION, Petitioner,
vs.
LUIS SAMAR and MAGDALENA SAMAR, Respondents.
In Republic v. Court of Appeals,18 we held that:
Just compensation is based on the price or value of the property at the time it was taken from the owner and
appropriated by the government. However, if the government takes possession before the institution of expropriation
proceedings, the value should befixed as of the time of the taking of said possession, not of the filing of the complaint.
The value at the time of the filing of the complaint should be the basis for the determination of the value when the
taking of the property involved coincides with or is subsequent to the commencement of the proceedings.
The procedure for determining just compensation is set forth in Rule 67 of the 1997 Rules of Civil Procedure. Section
5 of Rule 67 partly states that ‘upon the rendition of the order of expropriation, the court shall appoint not more than
three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just
compensation for the property sought to be taken.’ However, we held in Republic v. Court of Appealsthat Rule 67
presupposes a prior filing of complaint for eminent domain with the appropriate court by the expropriator. If no such
complaint is filed, the expropriator is considered to have violated procedural requirements, and hence, waived the
usual procedure prescribed in Rule 67, including the appointment of commissioners to ascertain just compensation.
Records show that sometime in 1990, NPC filed an expropriation case docketed as Civil Case No. IR-2243. However,
in an Order dated July 12, 1994, the expropriation case was dismissed by the RTC for failure of NPC to prosecute.
Subsequently, or on December 5, 1994, respondents filed Civil Case No. IR-2678 which is a complaint for compensation
and recovery of damages. Considering the dismissal of the expropriation case for failure of the NPC to prosecute, it is
as if no expropriation suit was filed. Hence, pursuant to the above-quoted ruling, NPC is deemed "to have violated
procedural requirements, and hence, waived the usual procedure prescribed in Rule 67, including the appointment of
commissioners to ascertain just compensation." Nevertheless, just compensation for the property must be based on
its value at the timeof the taking of said property, not at the time of the filing ofthe complaint.
In this case, the RTC formed a panel of commissioners in determining the just compensation of the property. Although
this is not required considering our pronouncement in Republic v. Court of Appeals, 19 nonetheless, its constitution is
not improper.20 "The appointment was done mainly to aid the trial court in determining just compensation, and it was
not opposed by the parties. Besides, the trial court is not bound by the commissioner’s recommended valuation of the
subject property. The court has the discretion on whether to adopt the commissioners’ valuation or to substitute itsown
estimate of the value as gathered from the records."21
28
Significantly, the values recommended by the commissioners were those values prevailing in 1994 and 1995, or during
the time the complaint for compensation and damages was filed. Considering that these are not the relevant values at
the timeNPC took possession of the property in 1990, it was incumbent upon the RTC to have disregarded the same.
Unfortunately, it adopted these values. Onthis score alone, we find a need to remand this case to the RTC for further
proceedings.
G.R. No. 165354 January 12, 2015
REPUBLIC OF THE PHILIPPINES, represented by the NATIONAL POWER CORPORATION, Petitioner,
vs.
HEIRS OF SATURNINO Q. BORBON, AND COURT OF APPEALS, Respondents.
The expropriator who has taken possession of the property subject of expropriation is obliged to pay reasonable
compensation to the landowner for the period of such possession although the proceedings had been discontinued on
the ground that the public purpose for the expropriation had meanwhile ceased.
The dismissal of the proceedings for expropriation at the instance of NAPOCOR is proper, but, conformably with Section
4,36 Rule 67 of the Rules of Court, the dismissal or discontinuance of the proceedings must be upon such terms as the
court deems just and equitable.
Before anything more, we remind the parties about the nature of the power of eminent domain. The right of eminent
domain is "the ultimate right of the sovereign power to appropriate, not only the public but the private property of all
citizens within the territorial sovereignty, to public purpose."37 But the exercise of such right is not unlimited, for two
mandatory requirements should underlie the Government’s exercise of the power of eminent domain, namely: (1) that
it is for a particular public purpose; and (2) that just compensation be paid to the property owner. 38 These requirements
partake the nature of implied conditions that should be complied with to enable the condemnor to keep the property
expropriated.39
Public use, in common acceptation, means "use by the public." "Public use" has now been held to be synonymous with
"public interest," "public benefit," and "public convenience."
More particularly, with respect to the element of public use, the expropriator should commit to use the property
pursuant to the purpose stated in the petition for expropriation filed, failing which, it should file another petition for
the new purpose. If not, it is then incumbent upon the expropriator to return the said property to its private owner,
if the latter desires to reacquire the same.
Indeed, public use is the fundamental basis for the action for expropriation; hence, NAPOCOR’s motion to discontinue
the proceedings is warranted and should be granted. The Court has observed in Metropolitan Water District v. De los
Angeles:
It is not denied that the purpose of the plaintiff was to acquire the land in question for public use. The fundamental
basis then of all actions brought for the expropriation of lands, under the power of eminent domain, is public use.
That being true, the very moment that it appears at any stage of the proceedings that the expropriation is not for a
public use, the action must necessarily fail and should be dismissed, for the reason that the action cannot be
maintained at all except when the expropriation is for some public use. That must be true even during the pendency
of the appeal or at any other stage of the proceedings. If, for example, during the trial in the lower court, it should
be made to appear to the satisfaction of the court that the expropriation is not for some public use, it would be the
duty and the obligation of the trial court to dismiss the action. And even during the pendency of the appeal, if it
should be made to appear to the satisfaction of the appellate court that the expropriation is not for public use, then
it would become the duty and the obligation of the appellate court to dismiss it.
 In the present case the petitioner admits that the expropriation of the land in question is no longer necessary for
public use. Had that admission been made in the trial court the case should have been dismissed there. It now
appearing positively, by resolution of the plaintiff, that the expropriation is not necessary for public use, the action
should be dismissed even without a motion on the part of the plaintiff. The moment it appears in whatever stage of
the proceedings that the expropriation is not for a public use the complaint should be dismissed and all the parties
thereto should be relieved from further annoyance or litigation.46 (underscoring and emphasis supplied)
Here, NAPOCOR seeks to discontinue the expropriation proceedings on the ground that the transmission lines
constructed on the respondents’ property had already been retired. Considering that the Court has consistently upheld
the primordial importance of public use in expropriation proceedings, NAPOCOR’s reliance on Metropolitan Water District
v. De los Angeles was apt and correct. Verily, the retirement of the transmission lines necessarily stripped the
expropriation proceedings of the element of public use. To continue with the expropriation proceedings despite the
definite cessation of the public purpose of the project would result in the rendition of an invalid judgment in favor of
the expropriator due to the absence of the essential element of public use.
Accordingly, the Court grants the motion to discontinue the proceedings subject to the conditions to be shortly
mentioned hereunder, and requires the return of the property to the respondents. Having said that, we must point out
that NAPOCOR entered the property without the owners’ consent and without paying just compensation to the
respondents. Neither did it deposit any amount as required by law prior to its entry. Considering that in the process of
installing transmission lines, NAPOCOR destroyed some fruit trees and plants without payment, and the installation of
the transmission lines went through the middle of the land as to divide the property into three lots, thereby effectively
rendering the entire property inutile for any future use, it would be unfair for NAPOCOR not to be made liable to the
respondents for the disturbance of their property rights from the time of entry until the time of restoration of the
possession of the property.
There is a "taking" in this sense when the expropriator enters private property not only for a momentary period but
for a more permanent duration, for the purpose of devoting the property to a public use in such a manner as to oust
the owner and deprive him of all beneficial enjoyment thereof.
In view of the discontinuance of the proceedings and the eventual return of the property to the respondents, there is
no need to pay "just compensation" to them because their property would not be taken by NAPOCOR. Instead of full
market value of the property, therefore, NAPOCOR should compensate the respondents for the disturbance of their
property rights from the time of entry in March 1993 until the time of restoration of the possession by paying to them
actual or other compensatory damages.
This should mean that the compensation must be based on what they actually lost as a result and by reason of their
dispossession of the property and of its use, including the value of the fruit trees, plants and crops destroyed by
NAPOCOR’s construction of the transmission lines.
29
GREGORIO Y. LIMPIN, and ROGELIO M. SARMIENTO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and GUILLERMO PONCE, respondents.
Once again the parties are before this Court; this time, for a determination of whether or not the equity of
redemption recognized in favor of petitioner Rogelio M. Sarmiento in this Court's judgment promulgated on January
30, 1987, still subsists and may be exercised, more than a year after that judgment had become final and executory.
The proceedings concern two (2) lots, then covered by TCTs Nos. 92836 and 92837, which, together with two (2)
others, were originally mortgaged in 1973 to herein private respondent Ponce by their former owners, the Spouses
Jose and Marcelina Aquino. These two lots were afterwards sold in 1978 by the same Aquino Spouses to Butuan Bay
Wood Export Corporation. Against this corporation herein petitioner Limpin obtained a money judgment in 1979; and
to satisfy the judgment, the two lots were levied on and sold at public auction in 1980, Limpin being the highest bidder.
Limpin later sold the lots to his co-petitioner, Sarmiento.
Earlier however or a day before levy was made on the two lots in execution of the judgment against Butuan Bay Wood
Export Corporation. Ponce had initiated judicial proceedings for the foreclosure of the mortgage over said two (2) lots
(together with the two (2) others mortgaged to him Judgment was rendered in his favor and became final; and at the
ensuing foreclosure sale, the lots were acquired by Ponce himself as highest bidder. Ponce then moved for confirmation
of the foreclosure sale, but the Court confirmed the sale of only two lots, refusing to do so as regards the two which
had been subject of the execution sale in Limpin's favor (i.e., those covered TCTs Nos. 92836 and 92837).
It was to resolve the resulting dispute that Ponce instituted a special civil action in the Intermediate Appellate Court,
impleading Limpin and Sarmiento a indispensable parties respondents. That Court rendered judgment on February 28,
1985 in Ponce's favor; Limpin and Sarmiento appealed; this Court denied their appeal.
The judgment of this Court of January 30, 1987 dismissed Sarmiento's and Limpin's petition for review on certiorari of
the Appellate Court's decision of February 28, 1985. It in effect affirmed the latter's decision which inter alia ordered
the Trial Court "to confirm the sale (of the lots formerly covered by TCT Nos. 92836 and 92837) and issue a writ of
possession to ... (Guillermo Ponce) with respect to the aforesaid lots, subject to the equity of redemption of the
respondent Rogelio V. Sarmiento 1 Applying the doctrine laid down in Santiago v. Dionisio, a 1953 decision of this
Court 2 the Intermediate Appellate Court's decision declared that "the sale to Ponce, as the highest bidder in the
foreclosure sale of the two lots in question should have been confirmed, subject to Limpin's (and now Sarmiento's)
equity of redemption."
This Court's aforesaid judgment also clearly and categorically sustained the exercise by the Appellate Court
of jurisdiction over the persons of Rogelio M. Sarmiento and Gregorio Limpin. 3 There can thus be no question that the
petitoners herein, said Rogelio Sarmiento and Gregorio Limpin, were affected and are bound by the decision of the
Intermediate Appellate Court, and that of this Court affirming it.
Rogelio M. Sarmiento, particularly, was aware that the Trial Court had the ministerial duty to execute the Appellate
Court's decision, i.e., to confirm the sale and issue a writ of possession as regards the aforesaid lots, subject to the
equity of redemption explicitly recognized in his favor in the decisions mentioned. He knew that he had the prerogative
to exercise his equity of redemption, if not from the moment that the judgment of this Court became final and
executory, 4 at least until the Court a quo, presided over by Hon. Antonio Solano, subsequently confirmed the sale and
issued a writ of possession in favor of Guillermo Ponce in June, 1987. 5
He did not try to exercise that right before, at or about the time of the confirmation of the foreclosure sale by Judge
Solano. Instead, he instituted no less than two (2) actions in the same Regional Trial Court which were assigned to
another branch, presided over by Hon. Teodoro Beltran- attempting to relitigate precisely the same issues which this
Court and the Intermediate Appellate Court had already passed upon and resolved adversely to him. For doing so for
trifling with and abusing the processes of the courts, and thus unwarrantedly delaying execution of the final and
executory judgment against him he and his counsel were both found guilty of contempt and correspondingly punished
by this Court, by Resolution dated May 5, 1988. The same resolution also decreed the dismissal of the complaints in
both cases and the nullification and setting aside of the restraining or injunctive orders of Judge Beltran.
It was not until March 11, 1988-nine months or so after entry of the judgment recognizing his equity of redemption as
successor-in-interest of the original mortgagors that Sarmiento finally be stirred himself to attempt to exercise his
unforeclosed equity of redemption. On that day he filed a motion with the Court presided over by Hon. Judge Antonio
Solano, manifesting that he would exercise the right and asked the Court to fix the redemption price. 6 The Court
opined that "this should be the subject of the agreement between Ponce and Sarmiento. 7
Sarmiento then wrote to Ponce on March 23, 1988 offering "P 2.6 million as redemption price for the two lots originally
covered by TCTs Nos. 92836 and 92837, now 307100 and 307124. 8 Ponce's answer, dated March 25, 1988, rejected
the offer said averred "that the period within which ... (Sarmiento) could have exercised such right ... (had)
lapsed. 9 Sarmiento reacted by filing a motion with the Solano Court, dated March 29, 1988, asking it to "fix the
redemption price ... and that the implementation of the writ of possession be provisionally deferred. 10 An opposition
was promptly filed by Ponce under date of May 4, 1988 11 in which he argued that "Sarmiento's right to exercise his
equity of redemption over those lots had long expired," the opportunity to exercise it having presented itself but not
availed of "(i) after ... default in the performance of the conditions of the mortgage and (ii) before the Sheriffs sale of
the property and the judicial confirmation thereof." According to Ponce, "from October 17, 1982, ... (when) Sarmiento's
predecessors-in-interest defaulted in their obligations over the mortgaged properties, up to June 17, 1987, when this
... (Trial) Court confirmed the auction sale of those properties, Sarmiento could (and should) have exercised his 'equity
of redemption.'" Judge Solano did not share this view, and ruled accordingly. 12
The issue has been brought to this Court for resolution by Ponce's "Motion for Clarification" dated May 27, 1988 and
"Supplemental Motion ..." dated June 13, 1988, as to which Sarmiento has submitted a Comment dated June 17,1988.
To the comment a reply has been presented by Ponce under date of August 3, 1988.
Ponce states 13 that the term, equity of redemption, means "the right of the mortgagor to redeem the mortgaged
property after his default in the performance of the conditions of the mortgage but before the sale of the property or
the judicial) confirmation of the (Sheriffs) sale," citing Top Rate International Services, Inc. v. IAC 142 SCRA 473
[1976], or "the right to redeem mortgaged property by paying the amount ordered by the court within a period of
ninety days, or, even thereafter but before the confirmation of the sale, invoking Sun Life Assurance Co. of Canada v.
Diez, 52 Phil. 275 [1928]. 14 On this premise, he postulates that "from October 17, 1982, the date Sarmiento's
predecessors-in-interest defaulted in their obligations over the mortgaged properties, up to June 17, 1987, when the
lower court confirmed the auction sale of those properties, Sarmiento could have exercised his 'equity of redemption."'
Not having done so within that time, his equity of redemption had been extinguished; indeed, by opting to file "new
suits against Ponce ... seeking to annul Ponce's titles over those properties" instead of redeeming the same, he had
"waived his equity of redemption (assuming such right existed at the time the suits were commenced)."
It is Sarmiento's position, on the other hand, 15 that the "17 June 1987 confirmation of the sale of the two lots could
not have cut off ... (his) equity of redemption;" in fact, "Ponce himself, in his 'Urgent Motion' dated 1 June 1987,
precisely prayed for the issuance of a writ of possession 'subject to the equity of redemption of Rogelio M. Sarmiento'
thereby recognizing Sarmiento's equity of redemption beyond confirmation date," 16 He also argues that he had not
been informed of the time when his right of redemption would be cut-off, 17 because he "never received a copy of any
Motion for Confirmation, much less notice of hearing thereon in violation of his right to due process;" that to hold
otherwise would "render nugatory the decision of the Court of Appeals and this ... Court on the issue;" and that he is
entitled to a reasonable time, e.g., a year, for the exercise of his equity of redemption. 18
30
The equity of redemption is, to be sure, different from and should not be confused with the right of redemption. 19
The right of redemption in relation to a mortgage-understood in the sense of a prerogative to re-acquire mortgaged
property after registration of the foreclosure sale- exists only in the case of the extrajudicial foreclosure of the
mortgage. No such right is recognized in a judicial foreclosure except only where the mortgagee is the Philippine
National Bank or a bank or banking institution.
Where a mortgage is foreclosed extra-judicially, Act 3135 grants to the mortgagor the right of redemption within one
(1) year from the registration of the sheriffs certificate of foreclosure sale. 20
Where the foreclosure is judicially effected, however, no equivalent right of redemption exists. The law 21 declares that
a judicial foreclosure sale, "when confirmed by an order of the court, ... shall operate to divest the rights of all the
parties to the action and to vest their rights in the purchaser, subject to such rights of redemption as may be allowed
by law. 22 Such rights exceptionally "allowed by law" (i.e., even after confirmation by an order of the court) are those
granted by the charter of the Philippine National Bank (Acts No. 2747 and 2938), and the General Banking Act (R.A.
337). 23 These laws confer on the mortgagor, his successors in interest or any judgment creditor of the mortgagor, the
right to redeem the property sold on foreclosure-after confirmation by the court of the foreclosure sale-which right may
be exercised within a period of one (1) year, counted from the date of registration of the certificate of sale in the
Registry of Property.
But, to repeat, no such right of redemption exists in case of judicial foreclosure of a mortgage if the mortgagee is not
the PNB or a bank or banking institution. In such a case, the foreclosure sale, "when confirmed by an order of the
court. ... shall operate to divest the rights of all the parties to the action and to vest their rights in the purchaser."
There then exists only what is known as the equity of redemption. This is simply the right of the defendant mortgagor
to extinguish the mortgage and retain ownership of the property by paying the secured debt within the 90-day period
after the judgment becomes final, in accordance with Rule 68, or even after the foreclosure sale but prior to its
confirmation. Section 2, Rule 68 provides that—
... If upon the trial ... the court shag find the facts set forth in the complaint to be true, it shall ascertain the amount
due to the plaintiff upon the mortgage debt or obligation, including interest and costs, and shall render judgment for
the sum so found due and order the same to be paid into court within a period of not less than ninety (90) days from
the date of the service of such order, and that in default of such payment the property be sold to realize the mortgage
debt and Costs. 24
This is the mortgagor's equity (not right) of redemption which, as above stated, may be exercised by him even beyond
the 90-day period "from the date of service of the order,' and even after the foreclosure sale itself, provided it be
before the order of confirmation of the sale. 25 After such order of confirmation, no redemption can be effected any
longer.
It is this same equity of redemption that is conferred by law on the mortgagor's successors-in-interest, or third persons
acquiring rights over the mortgaged property subsequent, and therefore subordinate, to the mortgagee's lien. 26 If
these subsequent or junior lienholders be not joined in the foreclosure action, the judgment in the mortgagor's favor
is ineffective as to them, of course. In that case, they retain what is known as the "unforeclosed equity of
redemption," and a separate foreclosure proceeding should be brought to require them to redeem from the first
mortgagee, or the party acquiring title to the mortgaged property at the foreclosure sale, within 90 days, 27 under
penalty of losing that prerogative to redeem. In the case at bar, however, there is no occasion to speak of any
"unforeclosed equity of redemption' in Sarmiento's favor since he was properly impleaded in the judicial proceeding
where his and Ponce's rights over the mortgaged property were ventilated and specifically adjudicated.
Under the circumstances obtaining in this case, the plain intendment of the Intermediate Appellate Court was to give
to Sarmiento, not the unforeclosed equity of redemption pertaining to a stranger to the foreclosure suit, but the
same equity of redemption possessed by the mortgagor himself. The judgment cannot be construed as contemplating
or requiring the institution of a separate suit by Ponce to compel Sarmiento to exercise his unforeclosed equity of
redemption, or as granting Sarmiento the option to redeem at any time that he pleases, subject only to prescription.
This would give rise to that multiplicity of proceedings which the law eschews. The judgment plainly intended that
Sarmiento exercise his option to redeem, as successor of the mortgagor.
Upon the facts on record, Sarmiento cannot be heard to complain of denial of due process for alleged lack of notice of
any motion or hearing for confirmation of sale. The Decision of the Intermediate Appellate Court which he and his
predecessor, Limpin, had appealed to this Court specifically ordered the Trial Court to confirm 28 the judicial foreclosure
sale in favor of Ponce over the two lots, in these terms. 29
WHEREFORE, the orders dated October 16,1983 and December 19,1983 of the respondent court, so far as they deny
the confirmation of the sale of the lots formerly covered by TCT Nos. 92836 and 92837, are SET ASIDE, and the
respondent court is hereby ORDERED to confirm the sale and issue a writ of possession to the petitioner with respect
to the aforesaid lots, subject to the equity of redemption of the respondent Rogelio V. Sarmiento. Without costs.
Given the fact that said appealed orders of the Trial Court had been issued upon motion for confirmation earlier made
by Ponce-which was duly served and heard-the aforecited Decision of the Intermediate Appellate Court can be
construed in no wise than as a peremptory command to the Trial Court to confirm the sale as directed, motu proprio,
and without the need of any further motion or other action on the part of Ponce. The rejection by this Court of
Sarmiento's and Limpin's appeal in its own Decision of January 30, 1987, which imported nothing less than a total
affirmance of the Decision of the Appellate Court, should therefore have sufficiently alerted Sarmiento that confirmation
could come at any time after this Court's Decision became final, with or without any action from Ponce. He cannot, in
the circumstances, claim unfair surprise. He should, upon being notified of this Court's Decision, have taken steps to
redeem the properties in question or, at the very least, served the Trial Court and Ponce with notice of his intention to
exercise his equity of redemption. There was certainly time enough to do this the order confirming the foreclosure sale
issuing only on June 17, 1987—had he not occupied himself with the fruitless maneuverings to re-litigate the issues
already recounted. Indeed, had he made an attempt to redeem, even belatedly but within a reasonable period of time
after learning of the order of confirmation (the record shows he did learn of it within three [3) days after its
issuance), 30 he might perhaps have given the Court some reason to consider his bid on equitable grounds. He did not.
He let nine (9) months pass, to repeat, in carrying out improper (and contumacious stratagems to negate the judgments
against him, before making any such move.
Neither can Sarmiento acceptably claim that Ponce, by moving for a writ of possession subject to his (Sarmiento's)
equity of redemption, recognized the existence and enforceability of that prerogative beyond the prescribed cut-off
date of confirmation of the sale. Such an interpretation of the motion is totally unwarranted, given the fact that said
motion was made at a time (June 1, 1987) when there was as yet no order confirming the sale and, since Sarmiento's
equity of redemption then still unquestionably existed, there was hardly occasion or for that matter, any reason as far
as Ponce was concerned, to provide against its lapsing. Moreover, assuming for the sake of argument that a resolutory
period fixed by law may be extended by act of the party in whose favor its expiration would operate, that act must
bespeak a clear and unequivocal intent to grant such an extension. No such clear grant can be inferred from the terms
of Ponce's motion, which can, and in fact should be, read as a mere affirmation that there existed at the time an equity
of redemption in Sarmiento's favor.
WHEREFORE, the Court hereby rules that the equity of redemption claimed and invoked by Rogelio M. Sarmiento over
the properties originally covered by Transfer Certificates of Title Nos. 92836 and 92837 (now by TCTs Numbered
307100 and 307124), Registry of Deeds of Quezon City, subject of this case, lapsed and ceased to exist without having
been properly exercised, on June 17, 1987, with the issuance by the Trial Court of the Order confirming the sheriffs
sale (on judicial foreclosure) of said properties in favor of Guillermo Ponce.
31
G.R. NO. 156542 June 26, 2007
CANDELARIA Q. DAYOT, Petitioner,
vs.
SHELL CHEMICAL COMPANY, (PHILS.), INC., Respondent.
Assailed in the Petition for Review on Certiorari before the Court is the July 30, 2002 Decision1 of the Court of Appeals
(CA) in CA-G.R. SP. No. 70696 nullifying the January 8, 2002 Amended Order,2 January 10, 2002 Alias Writ of
Possession,3 January 10, 2002 Notice to Vacate4 and April 12, 2002 Order,5 which were all issued by the Regional Trial
Court (RTC) of Iloilo, Branch 29; and the CA December 23, 2002 Resolution 6 denying herein petitioner's Motion for
Reconsideration.
On April 20, 1982, Panay Railways, Inc. (PRI) executed a real estate mortgage contract over six parcels of land located
in Lapuz District, Iloilo City in favor of Traders Royal Bank (TRB) for purposes of securing its loan obligations to
TRB.7 The subject properties are denominated as follows: Lot No. 3834, covered by Transfer Certificate of Title (TCT)
No. T-45727; Lot No. 1-A, covered by TCT No. T-45728; and Lot Nos. 6153, 6156, 6158 and 6159, all covered by
TCT No. T-58200. PRI failed to pay its loan. As a consequence, the mortgaged properties were foreclosed and sold at
public auction to TRB as the highest bidder. PRI failed to redeem the foreclosed properties. Hence, TRB consolidated
its ownership over the subject parcels of land and, thereafter, certificates of title were issued in its name, to wit: TCT
No. T-84233, which canceled TCT No. T-45728; TCT No. T-84234, which canceled TCT No. T-45727; and TCT Nos. T-
84235, T-84236, T-84237 and T-84238, all of which canceled TCT No. T-58200.
Thereafter, TRB filed a Petition for Writ of Possession with the RTC of Iloilo City, docketed as LRC CAD. REC. NO. 1
ILOILO CITY and LRC CAD. REC. NO. 9616 ILOILO CITY.8 In its Order dated October 22, 1990, the trial court granted
the petition and ordered the issuance of a writ of possession in favor of TRB.9 However, the writ was not fully
implemented.
On November 20, 1990, TRB sold to spouses Edmundo and Candelaria Dayot (Spouses Dayot), by virtue of a Deed of
Absolute Sale, five parcels of land which are portions of Lots 3834, 1-A and 6153.
Subsequently, on February 5, 1991, Candelaria Dayot (petitioner) filed a Supplemental Pleading before the RTC of
Iloilo City, praying that she, being the transferee of all the rights and interests of TRB over the parcels of land subject
of the Petition for Writ of Possession filed by the latter, be substituted as the new petitioner in LRC CAD. REC. NOS. 1
and 9616, and that an alias writ of possession be issued in her favor. The trial court granted petitioner's prayer in its
Order dated March 12, 1991.10 On April 1, 1991, the RTC issued an Alias Writ of Possession in favor of herein
petitioner.11
On August 24, 1994, the spouses Dayot filed with the RTC of Iloilo City, a complaint for Recovery of Ownership and
Possession, Annulment of Documents, Cancellation of Titles, Reconveyance and Damages against TRB, Petron
Corporation (Petron) and herein respondent Shell Chemical Company (Phil.), Inc. (Shell), praying that Shell be directed
to vacate the portion of Lot No. 6153 which it actually possesses and for both Petron and Shell to surrender ownership
and possession of portions of parcels of lands covered separately by TCT Nos. T-47484 and T-94116. The case was
docketed as Civil Case No. 21957.12
On August 21, 1997, while Civil Case No. 21957 was pending resolution, herein petitioner filed in LRC CAD. REC. NOS.
1 and 9616 an Amended Supplemental Motion for the Issuance of Writ of Possession, praying that Shell be ejected
from the portion of Lot 6153 which it actually possesses.
Shell lodged an Opposition to petitioner's Amended Supplemental Motion arguing, among others, that petitioner is
guilty of forum shopping as it seeks the same relief being sought in Civil Case No. 21957 and that the parcels of land
sold to petitioner do not include the portion of Lot 6153 being possessed by Shell.13
On May 7, 1999, the RTC of Iloilo, Branch 30 issued an Order denying herein petitioner's Motion for the Issuance of a
Writ of Possession, insofar as Shell is concerned. 14
Despite the issuance of the above-mentioned Order, petitioner filed two successive motions praying for the issuance
of an alias writ of possession. Shell opposed these motions.
Subsequently, the petition for the issuance of a writ of possession was re-raffled to Branch 29 of the RTC of Iloilo, as
the presiding judge of Branch 30 inhibited himself from hearing the case.
On January 8, 2002, Branch 29 promulgated an Amended Order, the dispositive portion of which reads:
Wherefore, let an Alias Writ of Possession issue on the affected portions of Lots 3834, 1-A and 6153, all situated in
the City of Iloilo, with a total land area of 14,940 sq. meters occupied by Shell and 17,000 sq. meters occupied by
Petron and to place and install petitioner Candelaria Dayot in possession thereof.
Mr. Redentor Rodriguez, Sheriff IV of this Court is hereby directed to implement this order.
On January 10, 2002, the Branch Clerk of Court of RTC Iloilo, Branch 29, issued an Alias Writ of Possession.
On even date, the Sheriff served upon Shell a Notice to Vacate.
Thereafter, Shell and Petron moved for the reconsideration of the January 8, 2002 Order of the RTC but the trial court
denied it via its Order dated April 12, 2002.
Shell then filed a petition for certiorari and prohibition with the CA praying for the nullification of the January 8, 2002
and April 12, 2002 Orders of RTC Iloilo, Branch 29, as well as the Alias Writ of Possession and Notice to Vacate both
dated January 10, 2002. The petition also sought to permanently enjoin the RTC from enforcing the assailed orders
and processes and from acting and conducting further proceedings in the subject case.
On July 30, 2002, the CA promulgated its presently assailed Decision, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, the Petition is GRANTED and the questioned four (4) rulings of the court a quo
are hereby declared NULL and VOID. No costs.
Petitioner's Motion for Reconsideration was denied by the CA in its Resolution dated December 23, 2002.
Hence, herein petition for review on certiorari, anchored on the following grounds:
1. THAT RESPONDENT IS BARRED FROM FILING THE PETITION FOR CERTIORARI WITH THE COURT OF APPEALS,
ASSAILING THE AMENDED ORDER DATED JANUARY 8, 2002 OF HON. RENE B. HONRADO, PRESIDING JUDGE,
REGIONAL TRIAL COURT, ILOILO CITY, BRANCH 29, AFTER RESPONDENT LOST ITS RIGHT TO APPEAL BECAUSE A
SPECIAL CIVIL ACTION FOR CERTIORARI IS NOT AND CANNOT BE A SUBSTITUTE FOR A LOST OR EXPIRED APPEAL
THUS, THE DECISION PROMULGATED JULY 30, 2002 AND THE RESOLUTION PROMULGATED DECEMBER 23, 2002 OF
THE HONORABLE COURT OF APPEALS WERE ISSUED CONTRARY TO PREVAILING JURISPRUDENCE AND THAT SAID
COURT DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND APPLICABLE DECISIONS OF THIS
HONORABLE SUPREME COURT AND THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS.
32
2. THAT PETITIONER IS ENTITLED TO THE POSSESSION OF THE ENTIRE LOTS 3834, 1-A, 6153, 6156, 6158 AND
6159 INCLUDING THE AREA OF 14,940 SQ. METERS OCCUPIED BY RESPONDENT WHICH AREAS ARE PORTIONS OF
LOTS 6153, 3834 AND 1-A, OCCUPATION THEREOF BY RESPONDENT BEING THAT OF MERE INTRUDER OR
TRESSPASSER.17
In her first assigned error, petitioner argues that respondent should have been barred from filing a special civil action
for certiorari before the CA because this recourse is available only when there is no speedy and adequate remedy in
the course of law. Petitioner further argues that respondent should have appealed the Amended Order of the RTC dated
April 12, 2002, but it did not. Petitioner avers that respondent can no longer resort to the filing of a petition
for certiorari because this remedy is not a substitute for a lost appeal.
Anent the second assigned error, petitioner claims that she is not guilty of forum shopping, as Civil Case No. 21957
involves the issue of ownership while the present case is for the recovery of possession; and that the subject matter
of the present case is different from that of Civil Case No. 21957. Even granting that the same parcels of land are
involved in these cases, petitioner argues that a writ of possession can still be validly issued and implemented in
consonance with the rule that proceedings incident to extra-judicial foreclosure of mortgages to resolve the possession
of third-party claimants may proceed independently of the action which said claimants may bring to enforce or protect
their claim of ownership over the property.
Lastly, petitioner asserts that respondent's TCT No. T-47484 refers to a lot which is different from those being contested
in the instant case.
In its Comment, respondent contends that it did not err in resorting to the remedy of filing a petition for certiorari with
the CA. It argues that even when appeal is available as a proper remedy, the Supreme Court will allow a writ
of certiorari if the petition appears to be genuinely meritorious or if filed on the basis of a patent, capricious and
whimsical exercise of discretion by a trial judge, or when an appeal will not promptly relieve petitioner from the injurious
effects of the disputed orders; that the Amended Order of the RTC dated January 8, 2002 collaterally attacked
respondent's title over the disputed property; that petitioner is not a buyer in good faith; that, as a transferee, petitioner
merely acquired the rights and interests that TRB had by reason of the foreclosure of the mortgage made in its favor;
that the contested Alias Writ of Execution is barred by res judicata and litis pendentia; and that respondent has the
right to possess the disputed property as it has satisfactorily shown that it is the registered owner of and has title over
the subject property.
The Court finds the petition bereft of merit.
It bears to emphasize at the outset that the present petition for review arose by reason of the special civil action
for certiorari filed by respondent Shell with the CA questioning the January 8, 2002 Amended Order, Alias Writ of
Possession, Notice to Vacate and the April 12, 2002 Order issued by the RTC of Iloilo, Branch 29. Accordingly, any
discussions on the issues raised as well as rulings by this Court in the present petition apply only insofar as the claim
of respondent Shell is concerned.
As to the first assigned error, it is true that as a rule while certiorari as a remedy may not be used as a substitute for
an appeal, especially for a lost appeal, this rule should not be strictly enforced if the petition is genuinely
meritorious.18 It has been held that where the rigid application of the rules would frustrate substantial justice, or bar
the vindication of a legitimate grievance, the courts are justified in exempting a particular case from the operation of
the rules.19 The Court has given due course to petitions for certiorari although appeal is the proper remedy where the
equities of the case warranted such action, mindful that dismissals based on technicalities are looked upon with
disfavor.20
In the present case, the Court finds no error on the part of the CA in giving due course to the petition for certiorari filed
by respondent as its case is genuinely meritorious for reasons that will be discussed forthwith.
As to the second assigned error, the Court agrees with petitioner that she is not guilty of forum shopping.
There is forum shopping when a party avails himself of several judicial remedies in different courts, simultaneously or
successively, all substantially founded on the same transactions and the same essential facts and circumstances, and
all raising substantially the same issues either pending in or already resolved adversely by some other courts. 21
The test to determine whether a party violated the rule against forum shopping is whether the elements of litis
pendentia are present, or whether a final judgment in one case will amount to res judicata in another.22 In other words,
when litis pendentia or res judicata does not exist, neither can forum shopping exist.23
The requisites of litis pendentia are: (a) the identity of parties, or at least such as representing the same interests in
both actions; (b) the identity of rights asserted and relief prayed for, the relief being founded on the same facts; and
(c) the identity of the two cases such that judgment in one, regardless of which party is successful, would amount to
res judicata in the other.24
On the other hand, the elements of res judicata, also known as "bar by prior judgment," are: (1) the former judgment
must be final; (b) the court which rendered it had jurisdiction over the subject matter and the parties; (c) it must be
a judgment on the merits; and (d) there must be, between the first and second actions, identity of parties, subject
matter, and causes of action.25
It bears to note that the proceedings conducted subsequent to the filing of a petition for the issuance of a writ of
possession are ex parte and summary in nature. The order for the issuance of the writ is simply an incident in the
transfer of title in the name of the petitioner.26 Hence, such order cannot be said to be a judgment on the merits, i.e.,
one rendered after a consideration of the evidence or stipulations submitted by the parties at the trial of the case.
Thus, in the present case, any order or decision of the RTC in LRC CAD. REC. NOS. 1 and 9616 cannot be considered
as determinative of the merits of Civil Case No. 21957.
Moreover, the aforementioned cases cannot be said to be identical as the basic issue in LRC CAD. REC. NOS. 1 and
9616 is possession while in Civil Case No. 21957 the issue raised is essentially that of ownership of the disputed lots.
Based on the foregoing, there can be no litis pendentia or res judicata. Since neither litis pendentia nor res
judicata exists in the instant case, petitioner may not be held guilty of forum shopping.
Nonetheless, the Court finds that under applicable laws and jurisprudence, respondent cannot be ejected from the
property by means of an ex-parte writ of possession.
Article 433 of the Civil Code states:
Art. 433. Actual possession under claim of ownership raises a disputable presumption of ownership. The true owner
must resort to judicial process for the recovery of the property.
Under the aforequoted provision, one who claims to be the owner of a property possessed by another must bring the
appropriate judicial action for its physical recovery. The term "judicial process" could mean no less than an ejectment
suit or reivindicatory action, in which the ownership claims of the contending parties may be properly heard and
adjudicated.27 In the present case, petitioner had already complied with this procedure by filing Civil Case No. 21957.
33
The ex-parte petition for issuance of a possessory writ filed by petitioner's predecessor, TRB, in LRC CAD. REC. NOS.
1 and 9616, strictly speaking, is not the kind of "judicial process" contemplated above. Even if the same may be
considered a judicial proceeding for the enforcement of one’s right of possession as purchaser in a foreclosure sale, it
is not an ordinary suit filed in court, by which one party "sues another for the enforcement or protection of a right, or
the prevention or redress of a wrong."28
The second paragraph of Section 33, Rule 39, of the Rules of Court relating to the right of possession of a purchaser
of property in an extra-judicial foreclosure sale provides:
Sec. 33. Deed and possession to be given at expiration of redemption period; by whom executed or given.
xxx
Upon the expiration of the right of redemption, the purchaser or redemptioner shall be substituted to and acquire all
the rights, title, interest and claim of the judgment obligor to the property at the time of levy. The possession of the
property shall be given to the purchaser or last redemptioner by the same officer unless a third party is actually
holding the property adversely to the judgment obligor. (emphasis supplied)
Thus, in Barican v. Intermediate Appellate Court, 29 this Court held that the obligation of a court to issue a writ of
possession in favor of the purchaser in an extra-judicial foreclosure sale of a mortgaged property ceases to be
ministerial once it is shown that there is a third party in possession of the property who is claiming a right adverse to
that of the mortgagor and that such third party is a stranger to the foreclosure proceedings in which the ex-parte writ
of possession was applied for.
It bears emphasis that an ex-parte petition for issuance of a writ of possession is a non-litigious proceeding authorized
in an extra-judicial foreclosure of mortgage pursuant to Act 3135, as amended. 30 It is brought for the benefit of one
party only, and without notice to, or consent by any person adversely interested. 31
Furthermore, unlike a judicial foreclosure of real estate mortgage under Rule 68 of the Rules of Court where an action
for foreclosure is brought before the RTC where the mortgaged property or any part thereof is situated, any property
brought within the ambit of Act 3135 is foreclosed by the filing of a petition, not with any court of justice, but with the
office of the sheriff of the province where the sale is to be made. As such, a third person in possession of an
extra-judicially foreclosed property, who claims a right superior to that of the original mortgagor, is thus
given no opportunity to be heard in his claim.32 It stands to reason, therefore, that such third person may not be
dispossessed on the strength of a mere ex-parte possessory writ, since to do so would be tantamount to his summary
ejectment, in violation of the basic tenets of due process.33
Besides, as earlier stressed, Article 433 of the Civil Code, cited above, requires nothing less than ejectment or
reivindicatory action to be brought even by the true owner. After all, the actual possessor of a property enjoys a legal
presumption of just title in his favor, which must be overcome by the party claiming otherwise.
In the case at bar, it is not disputed that herein respondent had been in possession of the subject lots since 1975 and
that it has in its premises bulk plant and fuel storage facilities for the purpose of conducting its business. In this respect,
the Court agrees with the findings of the CA that petitioner had knowledge of respondent's prior possession of the
disputed properties. Yet, instead of pursuing Civil Action No. 21957 where respondent will be given a chance to
substantiate its claim of ownership, petitioner still insists on obtaining a writ of possession pursuant to its alleged right
as purchaser of the properties which had been extra-judicially foreclosed. The Court cannot sanction this procedural
shortcut. To enforce the writ against herein respondent, an unwitting third party possessor who took no part in the
foreclosure proceedings, would be tantamount to the taking of real property without the benefit of proper judicial
intervention.
Hence, it was not a ministerial duty of the trial court under Act No. 3135 to issue a writ of possession for the ouster of
respondent from the lot subject of this instant case, particularly in light of the latter's opposition and claim of ownership
and rightful possession of the disputed properties.
Moreover, the trial court was without authority to grant the ex-parte writ, since petitioner's right of possession under
said Act could be rightfully enforced only against PRI as the original mortgagor and its successors-in-interest,34 but not
against respondent which possesses the property subject of execution under a claim of ownership, having bought the
same from the Development Bank of the Philippines (DBP).
In the present case, the questioned Amended Order of the RTC Iloilo, Branch 29 dated January 8, 2002 was issued on
the strength of the Writ of Possession issued by the RTC of Iloilo, Branch 30 dated October 24, 1990. It is clear from
the said writ that the sheriff is directed to eject PRI or any person claiming interest under it from Lot Nos. 3834, 1-A,
6153, 6156, 6158 and 6159 and to place TRB in possession thereof. However, respondent is not a successor-in-interest
of PRI. Instead, respondent claims ownership over the subject lot by virtue of a Deed of Absolute Sale dated June 30,
1975, wherein the property was sold to it by the DBP. As a consequence of such sale, respondent obtained TCT No.
47484 on July 28, 1977. Clearly, respondent's right of possession is adverse to that of PRI or TRB.
Furthermore, registration of the lots in petitioner’s name does not automatically entitle the latter to possession
thereof.35 As discussed earlier, petitioner must resort to the appropriate judicial process for recovery of the properties
and cannot simply invoke its title in an ex-parte proceeding to justify the ouster of respondent,36 especially in view of
the fact that the latter also has in its possession a Transfer Certificate of Title over the subject properties. The court
cannot just ignore the claim of herein respondent, who is in actual possession of the subject properties, that it has
been the owner thereof since 1975 and, therefore, has the better right to possess them. Neither can the RTC rely on
the Surveyor's Report dated August 3, 1997 because respondent was not given the opportunity to refute it, the same
being submitted in the ex-parte proceedings for the issuance of a writ of possession in favor of Dayot. Due process
dictates that herein respondent cannot simply be ejected on the strength of the subject Surveyor's Report without
giving it (respondent) the opportunity to present its own evidence. All of these issues must be ventilated and resolved
on the merits after a proper hearing. In the instant case, the proper forum is Civil Case No. 21957.
Finally, it is expressly stipulated in the Additional Stipulations of Real Estate Mortgage executed by PRI in favor of TRB
that it "excludes those areas already sold to Shell Co., Inc. with total area of 14,920 sq. meters, known as Lot No.
6153-B and portion of Lot No. 5."37
Petitioner insists that respondent's TCT No. T-47484 refers to a different parcel of land. Whether respondent's title
refers to the same property subject of the present case and whether the parcels of land sold to herein petitioner are
the same properties foreclosed by TRB are issues which should properly be resolved in Civil Case No. 21957. This is
not the proper forum to determine who between the parties is entitled to ownership of the disputed lands, as the issue
in the present case is merely limited to the propriety of the issuance of a writ of possession relating to foreclosure of
mortgage.
WHEREFORE, the instant petition is DISMISSED. The Decision and Resolution of the Court of Appeals dated July 30,
2002 and December 23, 2002 in CA-G.R. SP. No. 70696 are AFFIRMED insofar as respondent Shell Chemical Company
(Phils.), Inc. is concerned.
34
G.R. No. 119247 February 17, 1997
CESAR SULIT, petitioner,
vs.
COURT OF APPEALS and ILUMINADA CAYCO, respondents.
The primary issue posed before the Court, in this appeal by certiorari from a decision1 of the Court of Appeals, is
whether or not the mortgagee or purchaser in an extrajudicial foreclosure sale is entitled to the issuance of a writ of
possession over the mortgaged property despite his failure to pay the surplus proceeds of the sale to the mortgagor or
the person entitled thereto. Secondarily, it calls for a resolution of the further consequences of such non-payment of
the full amount for which the property was sold to him pursuant to his bid.
It appears from the record that on 9 June 1992 petitioner (herein private respondent) Iluminada Cayco executed a
Real Estate Mortgage (REM) over Lot 2630 which is located in Caloocan City and covered by TCT No. (23211) 11591
in favor of private respondent (herein petitioner) Cesar Sulit, to secure a loan of P4 Million. Upon petitioner's failure to
pay said loan within the stipulated period, private respondent resorted to extrajudicial foreclosure of the mortgage as
authorized in the contract. Hence, in a public auction conducted by Notary Public Felizardo M. Mercado on 28 September
1993 the lot was sold to the mortgagee, herein private respondent, who submitted a winning bid of P7 Million. As stated
in the Certificate of Sale executed by the notary public (Annex B, petition), the mortgaged property was sold at public
auction to satisfy the mortgage indebtedness of P4 Million. The Certificate further states as follows:
IT IS FURTHER CERTIFIED, that the aforementioned highest bidder/buyer, CESAR SULIT, being the
petitioner/mortgagee thereupon did not pay to the undersigned Notary Public of Kalookan City the said sum of SEVEN
MILLION PESOS (P7,000,000.00), Philippine Currency, the sale price of the above-described real estate property
together with all improvements existing thereon, which amount was properly credited to the PARTIAL satisfaction of
the mortgage debt mentioned in the said real estate mortgage, plus interests, attorney's fees and all other incidental
expenses of foreclosure and sale (par. 2, Annex B, petition).
On 13 December 1993 private respondent petitioned the Regional Trial Court of Kalookan City for the issuance of a
writ of possession in his favor. The petition was docketed as LRC Case No. C-3462 and assigned to Branch 131, presided
over by public respondent.
On 17 January 1994 respondent Judge issued a decision (should have been denominated as order), the dispositive part
of which reads:
WHEREFORE, finding the subject petition to be meritorious, the same is hereby GRANTED. As prayed for, let a Writ
of Possession be issued in favor of herein petitioner, Cesar Sulit, upon his posting of an indemnity bond in the amount
of One Hundred Twenty Thousand (P120,000.00) Pesos (Annex C, petition).
On 28 March 1994 petitioner filed a Motion to have the auction sale of the mortgaged property set aside and to defer
the issuance of the writ of possession. She invited the attention of the court a quo to some procedural infirmities in the
said proceeding and further questioned the sufficiency of the amount of bond. In the same Motion petitioner prayed as
an alternative relief that private respondent be directed to pay the sum of P3 Million which represents the balance of
his winning bid of P7 Million less the mortgage indebtedness of P4 Million (Annex D, petition). This Motion was opposed
by private respondent who contended that the issuance of a writ of possession upon his filing of a bond was a ministerial
duty on the part of respondent Judge (Annex E), to which Opposition petitioner submitted a Reply (Annex F, petition).
On 11 May 1994 respondent Judge denied petitioner's Motion and directed the issuance of a writ of possession and its
immediate enforcement by deputy sheriff Danilo Norberte (Annex G, petition)."2 (Emphasis words supplied for clarity).
From the aforesaid orders of the court a quo, herein private respondent Iluminada Cayco filed on May 26, 1994 a
petition for certiorari with preliminary injunction and/or temporary restraining order before respondent Court of
Appeals, which immediately issued a status quo order restraining the respondent judge therein from implementing his
order of January 17, 1994 and the writ of possession issued pursuant thereto. Subsequently, respondent court rendered
judgment on November 11, 1994, as follows:
IN JUDGMENT, We grant the writ of certiorari and the disputed order of 17 January 1994 which precipitately directed
the issuance of a writ of possession in favor of private respondent and the subsequent order of 11 May 1994 which
denied petitioner's Motion for Reconsideration are hereby SET ASIDE.
Accordingly, private respondent is ordered to pay unto petitioner, through the notary public, the balance or excess
of his bid of P7 Million after deducting therefrom the sum of P4,365,280 which represents the mortgage debt and
interest up to the date of the auction sale (September 23, 1993), as well as expenses of foreclosure based on receipts
which must be presented to the notary public.
In the event that private respondent fails or refuses to pay such excess or balance, then the auction sale of 28
September 1993 is deemed CANCELLED and private respondent may foreclose the mortgage anew either in a judicial
or extrajudicial proceeding as stipulated in the mortgage contract.
Corollary to the principal issue earlier stated, petitioner asserts that respondent Court of Appeals gravely erred when
it failed to appreciate and consider the supposed legal significance of the bouncing checks which private respondent
issued and delivered to petitioner as payment for the agreed or stipulated interest on the mortgage obligation. He
likewise avers that a motion for reconsideration or an appeal, and not certiorari, is the proper remedy available to
herein private respondent from an order denying her motion to defer issuance of the writ of possession. Moreover, it
is claimed that any question regarding the propriety of the sale and the issuance of the writ of possession must be
threshed out in a summary proceeding provided for in Section 8 of Act 3135.
There is no merit in petitioner's contention that the dishonored checks amounting to a total of P1,250,000.00, allegedly
representing interest of 5% per month from June 9, 1992 to December 9, 1992, were correctly considered by the trial
court as the written agreement between the parties. Instead, we find the explanation of respondent court in rejecting
such postulate, on the basis of Article 1956 of the Civil Code,3 to be more logical and plausible, to wit:
It is noteworthy that the Deed of Real Estate Mortgage executed by the parties on 9 June 1992 (Annex A, Petition)
does not contain any stipulation for payment of interest. Private respondent who maintains that he had an agreement
with petitioner for the payment of 5% monthly interest did not produce any other writing or instrument embodying
such a stipulation on interest. It appears then that if any such agreement was reached by the parties, it was merely
a verbal one which does not conform to the aforequoted statutory provision. Certainly, the dishonored checks claimed
to have been issued by petitioner in payment of interest could not have been the written stipulation contemplated in
Article 1956 of the Code. Consequently, in the absence of a written stipulation for the imposition of interest on the
loan obtained by petitioner, private respondent's assessment thereof has no legal basis. 4
It is elementary that in the absence of a stipulation as to interest, the loan due will now earn interest at the legal rate
of 12% per annum 5 which, according to respondent court, is equivalent to P365,280.000.00 computed from December
10, 1992, after private respondent's obligation became due, until September 23, 1993, the date of the auction sale. It
is this amount which should further be deducted from the purchase price of P7,000,000.00, together with any other
expenses incurred in connection with the sale, such as the posting and publication of notices, notarial and documentary
fees, and assessments or taxes due on the disputed property.
It baffles this Court, therefore, why petitioner has continually failed up to the present to submit documentary evidence
of the alleged expenses of the foreclosure sale, and this in spite of the express requirement therefor in the certificate
of sale6 issued by the notary public for the purpose of computing the actual amount payable by the mortgagor or
redemptioner in the event of redemption. It may thus be safely presumed that such evidence having been willfully
suppressed, it would be adverse if produced.7
35
Coming now to the main issue in this case, petitioner argues that it is ministerial upon the court to issue a writ of
possession after the foreclosure sale and during the period of redemption, invoking in support thereof Sections 7 and
8 of Act 3135 which conjointly provide:
Sec. 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of
the province or place where the property or any part thereof is situated, to give him possession thereof during the
redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months,
to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without
complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex
parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the
case of property registered under the Mortgage Law or under section one hundred and ninety-four of the
Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any
register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of
such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered
Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession
issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order
immediately.
Sec. 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after
the purchaser was given possession, petition that the sale be set aside and the writ of possession cancelled, specifying
the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with
the provisions hereof, and the Court shall take cognizance of this petition in accordance with the summary procedure
provided for in section one hundred and twelve of Act Number Four hundred and ninety-six; and if it finds the
complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who
obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen
of Act Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency
of the appeal.
The governing law thus explicitly authorizes the purchaser in a foreclosure sale to apply for a writ of possession during
the redemption period by filing an ex parte motion under oath for that purpose in the corresponding registration or
cadastral proceeding in the case of property with Torrens title. Upon the filing of such motion and the approval of the
corresponding bond, the law also in express terms directs the court to issue the order for a writ of possession.
No discretion appears to be left to the court. Any question regarding the regularity and validity of the sale, as well as
the consequent cancellation of the writ, is to be determined in a subsequent proceeding as outlined in Section 8, and
it cannot be raised as a justification for opposing the issuance of the writ of possession since, under the Act, the
proceeding for this is ex parte.8 Such recourse is available to a mortgagee, who effects the extrajudicial foreclosure of
the mortgage, even before the expiration of the period of redemption provided by law and the Rules of Court. 9
The rule is, however, not without exception. Under Section 35, Rule 39 of the Rules of Court, which is made applicable
to the extrajudicial foreclosure of real estate mortgages by Section 6 of Act 3135, the possession of the mortgaged
property may be awarded to a purchaser in the extrajudicial foreclosure "unless a third party is actually holding the
property adversely to the judgment debtor." 10
Thus, in the case of Barican, et al. vs. Intermediate Appellate Court, et al., 11 this Court took into account the
circumstances that long before the mortgagee bank had sold the disputed property to the respondent therein, it was
no longer the judgment debtor who was in possession but the petitioner spouses who had assumed the mortgage, and
that there was a pending civil case involving the rights of third parties. Hence, it was ruled therein that under the
circumstances, the obligation of a court to issue a writ of possession in favor of the purchaser in a foreclosure of
mortgage case ceases to be ministerial.
Now, in forced sales low prices are generally offered and the mere inadequacy of the price obtained at the sheriff's
sale, unless shocking to the conscience, has been held insufficient to set aside a sale. This is because no disadvantage
is caused to the mortgagor. On the contrary, a mortgagor stands to gain with a reduced price because he possesses
the right of redemption. When there is the right to redeem, inadequacy of price becomes immaterial since the judgment
debtor may reacquire the property or sell his right to redeem, and thus recover the loss he claims to have suffered by
reason of the price obtained at the auction sale. 12
However, also by way of an exception, in Cometa, et al. vs. Intermediate Appellate Court, et al. 13 where the properties
in question were found to have been sold at an unusually lower price than their true value, that is, properties worth at
least P500,000.00 were sold for only P57,396.85, this Court, taking into consideration the factual milieu obtaining
therein as well as the peculiar circumstances attendant thereto, decided to withhold the issuance of the writ of
possession on the ground that it could work injustice because the petitioner might not be entitled to the same.
The case at bar is quite the reverse, in the sense that instead of an inadequacy in price, there is due in favor of private
respondent, as mortgagor, a surplus from the proceeds of the sale equivalent to approximately 40% of the total
mortgage debt, which excess is indisputably a substantial amount. Nevertheless, it is our considered opinion, and we
so hold, that equitable considerations demand that a writ of possession should also not issue in this case.
Rule 68 of the Rules of Court provides:
Sec. 4. Disposition of proceeds of sale. — The money realized from the sale of mortgaged property under the
regulations hereinbefore prescribed shall, after deducting the costs of the sale, be paid to the person foreclosing the
mortgage, and when there shall be any balance or residue, after paying off such mortgage or other incumbrances,
the same shall be paid to the junior incumbrancers in the order of their priority, to be ascertained by the court, or if
there be no such incumbrancers or there be a balance or residue after payment of such incumbrancers, then to the
mortgagor or his agent, or to the person entitled to it.
The application of the proceeds from the sale of the mortgaged property to the mortgagor's obligation is an act of
payment, not payment by dation; hence, it is the mortgagee's duty to return any surplus in the selling price to the
mortgagor. 14 Perforce, a mortgagee who exercises the power of sale contained in a mortgage is considered a custodian
of the fund, and, being bound to apply it properly, is liable to the persons entitled thereto if he fails to do so. And even
though the mortgagee is not strictly considered a trustee in a purely equitable sense, but as far as concerns the
unconsumed balance, the mortgagee is deemed a trustee for the mortgagor or owner of the equity of redemption. 15
Commenting on the theory that a mortgagee, when he sells under a power, cannot be considered otherwise than as a
trustee, the vice-chancellor in Robertson vs. Norris (1 Giff . 421) observed: "That expression is to be understood in
this sense: that with the power being given to enable him to recover the mortgage money, the court requires that he
shall exercise the power of sale in a provident way, with a due regard to the rights and interests of the mortgagor in
the surplus money to be produced by the sale." 16
The general rule that mere inadequacy of price is not sufficient to set aside a foreclosure sale is based on the theory
that the lesser the price the easier it will be for the owner to effect the redemption. 17 The same thing cannot be said
where the amount of the bid is in excess of the total mortgage debt. The reason is that in case the mortgagor decides
to exercise his right of redemption, Section 30 of Rule 39 provides that the redemption price should be equivalent to
the amount of the purchase price, plus one per cent monthly interest up to the time of the redemption, 18 together
with the amount of any assessments or taxes which the purchaser may have paid thereon after purchase, and interest
on such last-named amount at the same rate. 19
36
Applying this provision to the present case would be highly iniquitous if the amount required for redemption is based
on P7,000.000.00, because that would mean exacting payment at a price unjustifiably higher than the real amount of
the mortgage obligation. We need not elucidate on the obvious. Simply put, such a construction will undeniably be
prejudicial to the substantive rights of private respondent and it could even effectively prevent her from exercising the
right of redemption.
Where the redemptioner chooses to exercise his right of redemption, it is the policy of the law to aid rather than to
defeat his right. It stands to reason, therefore, that redemption should be looked upon with favor and where no injury
will follow, a liberal construction will be given to our redemption laws, specifically on the exercise of the right to redeem.
Conformably hereto, and taking into consideration the facts obtaining in this case, it is more in keeping with the spirit
of the rules, particularly Section 30 of Rule 39, that we adopt such interpretation as may be favorable to the private
respondent.
Admittedly, no payment was made by herein petitioner, as the highest bidder, to the notary public who conducted the
extrajudicial foreclosure sale. We are not unmindful of the rule that it is not necessary for the mortgagee to pay cash
to the sheriff or, in this case, the notary public who conducted the sale. It would obviously serve no purpose for the
sheriff or the notary public to go through the idle ceremony of receiving the money and paying it back to the creditor,
under the truism that the lawmaking body did not contemplate such a pointless application of the law in requiring that
the creditor must bid under the same conditions as any other bidder. 20 It bears stressing that the rule holds true only
where the amount of the bid represents the total amount of the mortgage debt.
In case of a surplus in the purchase price, however, there is jurisprudence to the effect that while the mortgagee
ordinarily is liable only for such surplus as actually comes into his hands, but he sells on credit instead of for cash, he
must still account for the proceeds as if the price were paid in cash, and in an action against the mortgagee to recover
the surplus, the latter cannot raise the defense that no actual cash was received. 21
We cannot simply ignore the importance of surplus proceeds because by their very nature, surplus money arising from
a sale of land under a decree of foreclosure stands in the place of the land itself with respect to liens thereon or vested
rights therein. They are constructively, at least, real property and belong to the mortgagor or his assigns. 22 Inevitably,
the right of a mortgagor to the surplus proceeds is a substantial right which must prevail over rules of technicality.
Surplus money, in case of a foreclosure sale, gains much significance where there are junior encumbrancers on the
mortgaged property. Jurisprudence has it that when there are several liens upon the premises, the surplus money
must be applied to their discharge in the order of their priority. 23 A junior mortgagee may have his rights protected
by an appropriate decree as to the application of the surplus, if there be any, after satisfying the prior mortgage. His
lien on the land is transferred to the surplus fund. 24 And a senior mortgagee, realizing more than the amount of his
debt on a foreclosure sale, is regarded as a trustee for the benefit of junior encumbrancers. 25
Upon the strength of the foregoing considerations, we cannot countenance the apparent paltriness that petitioner
persistently accords the right of private respondent over the surplus proceeds. It must be emphasized that petitioner
failed to present the receipts or any other proof of the alleged costs or expenses incurred by him in the foreclosure
sale. Even the trial court failed or refused to resolve this issue, notwithstanding the fact that this was one of the grounds
raised in the motion filed by private respondent before it to set aside the sale. Since it has never been denied that the
bid price greatly exceeded the mortgage debt, petitioner cannot be allowed to unjustly enrich himself at the expense
of private respondent.
As regards the issue concerning the alleged defect in the publication of the notice of the sale, suffice it to state for
purposes of this discussion that a question of non-compliance with the notice and publication requirements of an
extrajudicial foreclosure sale is a factual issue and the resolution thereof by the lower courts is binding and conclusive
upon this Court, 26 absent any showing of grave abuse of discretion. In the case at bar, both the trial court and
respondent Court of Appeals have found that the sale was conducted in accordance with law. No compelling reason
exists in this case to justify a rejection of their findings or a reversal of their conclusions.
There is likewise no merit in the argument that if private respondent had wanted to question the validity of the sale,
she should have filed a petition to set the same aside and to cancel the writ of possession. These, it is argued, should
have been disposed of in accordance with the summary procedure laid down in Section 112 of the Land Registration
Act, provided the petition is filed not later than thirty days after the purchaser was given possession of the land.
Considering, however, that private respondent has filed a motion to set aside the sale and to defer the issuance of a
writ of possession before the court where the ex parte petition for issuance of such writ was then pending, we deem
the same to be substantial compliance with the statutory prescription.
We, however, take exception to and reject the last paragraph in the dispositive portion of the questioned decision of
respondent court, which we repeat:
In the event that private respondent fails or refuses to pay such excess or balance, then the auction sale of 28
September 1993 is deemed CANCELLED and private respondent (petitioner herein) may foreclose the mortgage anew
either in a judicial or extrajudicial proceeding as stipulated in the mortgage contract.
for lack of statutory and jurisprudential bases. The quoted phrase "as stipulated in the mortgage contract" does not,
of course, envision such contingency or warrant the suggested alternative procedure.
Section 4 of Rule 64, hereinbefore quoted, merely provides that where there is a balance or residue after payment of
the mortgage, the same shall be paid to the mortgagor. While the expedient course desired by respondent court is
commendable, there is nothing in the cited provision from which it can be inferred that a violation thereof will have the
effect of nullifying the sale. The better rule is that if the mortgagee is retaining more of the proceeds of the sale than
he is entitled to, this fact alone will not affect the validity of the sale but simply gives the mortgagor a cause of action
to recover such surplus. 27 This is likewise in harmony with the decisional rule that in suing for the return of the surplus
proceeds, the mortgagor is deemed to have affirmed the validity of the sale since nothing is due if no valid sale has
been made. 28
In the early case of Caparas vs. Yatco, etc., et al., 29 it was also held that where the mortgagee has been ordered by
the court to return the surplus to the mortgagor or the person entitled thereto, and the former fails to do so and
flagrantly disobeys the order, the court can cite the mortgagee for contempt and mete out the corresponding penalty
under Section 3(b) of the former Rule 64 (now Rule 71) of the Rules of Court.
WHEREFORE, the questioned decision of the Court of Appeals is MODIFIED by deleting the last paragraph of its fallo,
but its disposition of this case in all other respects is hereby AFFIRMED.
37
G.R. No. 159882 November 23, 2007
SPOUSES RUBEN and VIOLETA SAGUAN, Petitioners,
vs.
PHILIPPINE BANK OF COMMUNICATIONS and COURT OF APPEALS (Second Division), Respondents.
This is a petition for review on certiorari1 of the Decision2 dated January 24, 2003 and of the Resolution3 dated August
21, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 71775. The Decision affirmed the Orders4 of the Regional Trial
Court (RTC) of Branch 31, Tagum City, Davao: (1) dated November 5, 2001 admitting respondent Philippine Bank of
Communications’ Exhibits "A" to "P"; (2) dated March 19, 2002 denying petitioners’, spouses Ruben and Violeta
Saguan’s, Motion to Present Evidence, and granting private respondent’s petition for issuance of a writ of possession;
and (3) dated May 6, 2002 denying petitioners’ Motion for Reconsideration of the second order.
[Petitioners] spouses Ruben Saguan and Violeta Saguan obtained a loan of ₱3 Million from [respondent] Philippine
Bank of Communications. To secure the obligation, they mortgaged five parcels of land covered by TCT Nos. 24274,
38894, 37455, 66339 and 19365, all of the Register of Deeds of the Province of Davao, and improvements therein.
Because [petitioners] defaulted in the payment of their mortgage indebtedness, [respondent] extra-judicially foreclosed
the mortgage. In the auction sale on 05 January 1998, [respondent] was the only and highest bidder for ₱6,008,026.74.
Sheriff’s certificate of sale dated 12 January 1998 was executed and annotated at the back of [petitioners’] titles on
18 February 1998. As [petitioners] failed to redeem the properties within the one-year period ending on 18 February
1999, TCT Nos. T-154065, T-154066, T-154067, T-154068 and T-154069 were issued in the name of [respondent] in
lieu of the old ones. Thus, [respondent] consolidated ownership of the properties in its favor. Since the parcels of land
were in physical possession of [petitioners] and other persons [co-petitioners in the petition before the CA],
[respondent], after due demand, filed a petition for writ of possession with Branch 31, Regional Trial Court, Tagum
City. x x x.5
Petitioners filed an Opposition6 to the petition for writ of possession to which respondent filed a Comment.7 Petitioners
likewise filed a Reply8 to the Comment.
In their Opposition and Reply, petitioners argued that a writ of possession should not issue considering respondent’s
failure to return the excess or surplus proceeds 9 of the extrajudicial foreclosure sale based on our ruling in Sulit v.
Court of Appeals.10 In refutation, respondent points to petitioners’ remaining unsecured obligations with the former to
which the excess or surplus proceeds were applied.
After the hearing on respondent’s evidence, the RTC issued two (2) separate orders requiring respondent to file a
Formal Offer of Evidence. Respondent failed to comply with the aforesaid orders within the time frame prescribed, thus
prompting petitioners to file a motion to dismiss grounded on Section 3,11 Rule 17 of the Rules of Court.
Thereafter, respondent belatedly filed its Formal Offer of Evidence. Consequently, the RTC issued the first assailed
Order12 admitting respondent’s offer of exhibits thereby rendering petitioners’ motion to dismiss moot and academic.
The RTC then issued the Order13 denying petitioners’ Motion to Present Evidence and granted the petition for writ of
possession. The last Order14 of the RTC denied petitioners’ Motion for Reconsideration.
Upon petition for certiorari and mandamus, the CA rejected petitioners’ allegations of grave abuse of discretion in the
lower court’s issuance of the foregoing Orders. The CA affirmed respondent’s entitlement to a writ of possession as a
matter of right, the latter having consolidated its ownership over the parcels of land upon expiration of the redemption
period. It emphasized that the issue on the failure to return the excess or surplus proceeds of the auction sale had
been squarely met by the respondent, and therefore, the case was distinguishable from Sulit v. Court of Appeals. In
all, the CA upheld the general rule that the issuance of a writ of possession to a purchaser in an extrajudicial foreclosure
sale becomes merely a ministerial function of the court.
Hence, this recourse.
In this appeal, the issues for our resolution are:
1. Whether the RTC should have issued a writ of possession considering respondent’s failure to remit the excess or
surplus proceeds of the extrajudicial foreclosure sale.
2. Corollary thereto, whether respondent may unilaterally apply the excess or surplus proceeds of the extrajudicial
foreclosure sale to petitioner’s remaining unsecured obligations.
3. Whether the RTC should have granted petitioners’ motion to dismiss the petition for writ of possession based on
respondent’s failure to comply with the RTC’s Orders on the filing of a formal offer of evidence.
A writ of possession is an order enforcing a judgment to allow a person’s recovery of possession of real or personal
property. An instance when a writ of possession may issue is under Act No. 3135, 15 as amended by Act No. 4118, on
extrajudicial foreclosure of real estate mortgage.16 Sections 6 and 7 provide, to wit:
Section 6. Redemption. – In all cases in which an extrajudicial sale is made under the special power herein before
referred to, the debtor, his successors-in-interest or any judicial creditor or judgment creditor of said debtor or any
person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold,
may redeem the same at anytime within the term of one year from and after the date of the sale; and such redemption
shall be governed by the provisions of section four hundred and sixty-four to four hundred and sixty-six, inclusive,
of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act.
Section 7. Possession during redemption period. – In any sale made under the provisions of this Act, the purchaser
may petition the Court of First Instance of the province or place where the property or any part thereof is situated,
to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of
the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made
without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made
under oath and filed in [the] form of an ex-parte motion in the registration or cadastral proceedings if the property
is registered, or in special proceedings in case of property registered under the Mortgage Law or under section one
hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly
registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of
court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and
fourteen of Act Number Four hundred and ninety-six, and the court shall, upon approval of the bond, order that a
writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute
said order immediately.
From the foregoing provisions, a writ of possession may be issued either (1) within the one-year redemption period,
upon the filing of a bond, or (2) after the lapse of the redemption period, without need of a bond. 17
Within the redemption period the purchaser in a foreclosure sale may apply for a writ of possession by filing for that
purpose an ex-parte motion under oath, in the corresponding registration or cadastral proceeding in the case of
property covered by a Torrens title. Upon the filing of an ex-parte motion and the approval of the corresponding bond,
the court is expressly directed to issue the order for a writ of possession.18
On the other hand, after the lapse of the redemption period, a writ of possession may be issued in favor of the purchaser
in a foreclosure sale as the mortgagor is now considered to have lost interest over the foreclosed
38
property.19 Consequently, the purchaser, who has a right to possession after the expiration of the redemption period,
becomes the absolute owner of the property when no redemption is made. 20 In this regard, the bond is no longer
needed. The purchaser can demand possession at any time following the consolidation of ownership in his name and
the issuance to him of a new TCT. After consolidation of title in the purchaser’s name for failure of the mortgagor to
redeem the property, the purchaser’s right to possession ripens into the absolute right of a confirmed owner. At that
point, the issuance of a writ of possession, upon proper application and proof of title, to a purchaser in an extrajudicial
foreclosure sale becomes merely a ministerial function. 21 Effectively, the court cannot exercise its discretion.
Therefore, the issuance by the RTC of a writ of possession in favor of the respondent in this case is proper. We have
consistently held that the duty of the trial court to grant a writ of possession in such instances is ministerial, and the
court may not exercise discretion or judgment.22 The propriety of the issuance of the writ was heightened in this case
where the respondent’s right to possession of the properties extended after the expiration of the redemption period,
and became absolute upon the petitioners’ failure to redeem the mortgaged properties.
Notwithstanding the foregoing, the petitioners insist that respondent’s failure to return the excess or surplus proceeds
of the extrajudicial foreclosure sale converted the issuance of a writ of possession from a ministerial to a discretionary
function of the trial court pursuant to our holding in Sulit v. Court of Appeals.23
We are not persuaded.
A careful reading of Sulit will readily show that it was decided under a different factual milieu. In Sulit, the plea for a
writ of possession was made during the redemption period and title to the property had not, as yet, been consolidated
in favor of the purchaser in the foreclosure sale. In stark contrast, the herein petitioners failed to exercise their right
of redemption within the one-year reglementary period provided under Section 6 of Act No. 3135, as amended, and
ownership over the properties was consolidated in, and corresponding titles issued in favor of, the respondent.
We emphasize that the proceeding in a petition for a writ of possession is ex-parte and summary in nature. It is a
judicial proceeding brought for the benefit of one party only and without need of notice to any person claiming an
adverse interest. It is a proceeding wherein relief is granted even without giving the person against whom the relief is
sought an opportunity to be heard.24 By its very nature, an ex-parte petition for issuance of a writ of possession is a
non-litigious proceeding authorized under Act No. 3135, as amended.
Be that as it may, the debtor or mortgagor is not without recourse. Section 8 of Act No. 3135, as amended, provides:
Section 8. Setting aside of sale and writ of possession. – The debtor may, in the proceedings in which possession
was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set
aside and the writ of possession cancelled, specifying the damages suffered by him, because the mortgage was not
violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of
this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act
Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his
favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal
from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but
the order of possession shall continue in effect during the pendency of the appeal.
Thus, a party may file a petition to set aside the foreclosure sale and to cancel the writ of possession in the same
proceedings where the writ of possession was requested. However, in this case, petitioners do not challenge the validity
of the foreclosure nor do they wish to set aside the foreclosure sale. It appears that the only remaining bone of
contention is the disposition of the excess or surplus proceeds of the foreclosure sale. In short, petitioners do not
question the consolidation of ownership in favor of the respondent, but simply demand the payment of the sum of
money supposedly still owing them from the latter.
Article 427,25 in relation to Article 428,26 of the Civil Code provides that ownership may be exercised over things or
rights, and grants the owner of property a right of action for recovery against the holder and possessor thereof.
Thus, even as we rule that the writ of possession was properly issued in favor of respondent as a consequence of its
confirmed ownership, we are not unmindful of the fact that the issue of the excess or surplus proceeds of the foreclosure
sale remains unsettled.
Respondent’s stance, as sustained by the CA, is that petitioners have remaining unsecured obligations with respondent
and the excess or surplus proceeds of the foreclosure sale were validly, albeit unilaterally, applied thereto.
This argument is unacceptable.
We have elucidated on the import of surplus proceeds in the case of Sulit, viz.:
In case of a surplus in the purchase price, however, there is jurisprudence to the effect that while the mortgagee
ordinarily is liable only for such surplus as actually comes into his hands, but he sells on credit instead of for cash,
he must still account for the proceeds as if the price were paid in cash, and in an action against the mortgagee to
recover the surplus, the latter cannot raise the defense that no actual cash was received.
We cannot simply ignore the importance of surplus proceeds because by their very nature, surplus money arising
from a sale of land under a decree of foreclosure stands in the place of the land itself with respect to liens thereon
or vested rights therein. They are constructively, at least, real property and belong to the mortgagor or his assigns.
Inevitably, the right of a mortgagor to the surplus proceeds is a substantial right which must prevail over rules of
technicality.
Surplus money, in case of a foreclosure sale, gains much significance where there are junior encumbrancers on the
mortgaged property. Jurisprudence has it that when there are several liens upon the premises, the surplus money
must be applied to their discharge in the order of their priority. A junior mortgagee may have his rights protected by
an appropriate decree as to the application of the surplus, if there be any, after satisfying the prior mortgage. His
lien on the land is transferred to the surplus fund. And a senior mortgagee, realizing more than the amount of his
debt on a foreclosure sale, is regarded as a trustee for the benefit of junior encumbrancers. 27
Given the foregoing pronouncement in Sulit, we cannot countenance respondent’s cavalier attitude towards petitioners’
right to the surplus proceeds. To begin with, the foreclosure of petitioners’ properties was meant to answer only the
obligation secured by the mortgage. Article 2126 of the Civil Code unequivocally states:
Art. 2126. The mortgage directly and immediately subjects the property upon which it is imposed, whoever the
possessor may be, to the fulfillment of the obligation for whose security it was constituted.
We need not expound on the obvious. Simply put, even if petitioners have remaining obligations with respondent, these
obligations, as conceded by respondent itself, were not collateralized by the foreclosed properties.1avvphi1
Furthermore, under Section 128 of Act No. 3135 as amended, the special power of attorney authorizing the extrajudicial
foreclosure of the real estate mortgage must be either (1) inserted or stated in the mortgage deed itself; or (2) the
authority is attached thereto. Thus, petitioners’ supposed remaining obligations which were not secured by the
mortgage cannot be made subject, or even susceptible, to the extrajudicial foreclosure of mortgage.
However, petitioners’ remedy lies in a separate civil action for collection of a sum of money.29 We have previously held
that where the mortgagee retains more of the proceeds of the sale than he is entitled to, this fact alone will not affect
39
the validity of the sale but simply give the mortgagor a cause of action to recover such surplus. 30 In the same case,
both parties can establish their respective rights and obligations to one another, after a proper liquidation of the
expenses of the foreclosure sale, and other interests and claims chargeable to the purchase price of the foreclosed
property. The court can then determine the proper application of compensation with respect to respondent’s claim on
petitioners’ remaining unsecured obligations.31 In this regard, respondent is not precluded from itself filing a case to
collect on petitioners’ remaining debt.
Anent the third issue, we agree with the CA that there was no grave abuse of discretion in the trial court’s liberality in
giving ample time and opportunity for respondent to complete the presentation of its evidence. It was a liberality that
carried no taint of partiality. Despite the ex-parte nature of the proceedings, the RTC also allowed petitioners to file
pleadings to oppose the petition for the issuance of the writ of possession. Clearly, petitioners were not denied due
process, and the trial judge acted accordingly in admitting respondent’s uncontroverted evidence.
Finally, we note petitioners’ incorrect remedy of certiorari before the CA, which the latter and both parties have
apparently overlooked. A special civil action for certiorari may be availed of only if the lower tribunal has acted without
or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and if there is
no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law.321âwphi1
Ineluctably, the RTC issued the writ of possession in compliance with the express provisions of Act No. 3135. It cannot,
therefore, be charged with grave abuse of discretion as there is no showing that, in the exercise of its judgment, it
acted in a capricious, whimsical, arbitrary or despotic manner tantamount to lack of jurisdiction. Absent grave abuse
of discretion, petitioners should have filed an ordinary appeal instead of a petition for certiorari. The soundness of the
order granting the writ of possession is a matter of judgment with respect to which the remedy of the party aggrieved
is ordinary appeal. An error of judgment committed by a court in the exercise of its legitimate jurisdiction is not the
same as "grave abuse of discretion." Errors of judgment are correctible by appeal, while those of jurisdiction are
reviewable by certiorari.33
Nonetheless, we have allowed this procedural lapse to pass without incident, and have resolved the issues raised.
WHEREFORE, the Petition is DENIED. The writ of possession in favor of respondent Philippine Bank of Communications
is hereby AFFIRMED without prejudice to petitioners’ separate remedy for recovery of the excess or surplus proceeds
of the extrajudicial foreclosure sale. Costs against the petitioner.
TERESITA MONZON, G.R. No. 171827 Monzon, in her Answer, claimed that the Petition for Injunction should be dismissed for failure to state a cause of
Petitioner, Present: action.
- versus - YNARES-SANTIAGO, J.,
SPS. JAMES & MARIA ROSA NIEVES RELOVA and SPS. Chairperson, Monzon likewise claimed that respondents could no longer ask for the enforcement of the two promissory notes
BIENVENIDO & EUFRACIA PEREZ, AUSTRIA-MARTINEZ, because she had already performed her obligation to them by dacion en pago as evidenced by the Deed of Conditional
Respondents. CHICO-NAZARIO, Sale and the Deed of Absolute Sale. She claimed that petitioners could still claim the portions sold to them if they
- versus - NACHURA, and would only file the proper civil cases. As regards the fund in the custody of Atty. Luna, respondents cannot acquire
ADDIO PROPERTIES, INC., REYES, JJ. the same without a writ of preliminary attachment or a writ of garnishment in accordance with the provisions of Rule
Intervenor. Promulgated: 57 and Section 9(c), Rule 39 of the Revised Rules of Civil Procedure.
September 17, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
On 5 December 2001, the RTC, citing the absence of petitioner and her counsel on said hearing date despite due
notice, granted an oral Motion by the respondents by issuing an Order allowing the ex parte presentation of evidence
This is a Petition for Review on Certiorari assailing the Decision 1 of the Court of Appeals dated 27 September 2005 by respondents.2
and its Resolution dated 7 March 2006 in CA-G.R. CV No. 83507 affirming the Decision of the Regional Trial Court
(RTC) of Tagaytay City, Branch 18.
On 1 April 2002, the RTC rendered a Decision in favor of respondents. The pertinent portions of the Decision are as
follows:
On 18 October 2000, the spouses James and Maria Rosa Nieves Relova and the spouses Bienvenido and Eufracia That [petitioner] Teresita Monzon owes [herein respondents] certain sums of money is indisputable. Even [Monzon]
Perez, respondents before this Court, filed against Atty. Ana Liza Luna, Clerk of Court of Branch 18 of the RTC of have admitted to this in her Answer. [Respondents] therefore are given every right to get back and collect whatever
Tagaytay City, and herein petitioner Teresita Monzon an initiatory pleading captioned as a Petition for Injunction. amount they gave [Monzon] together with the stipulated rate of interest.
The case, which was filed before the same Branch 18 of the RTC of Tagaytay City, was docketed as Civil Case No. Likewise, it has been established that [petitioner] Teresita Monzon has the amount of P1,602,393.65 in the
TG-2069. possession of the Clerk of Court, Atty. Ana Liza M. Luna. This amount, as is heretofore stated, represented the
balance of the foreclosure sale of [Monzon’s] properties.
In their Petition for Injunction, respondents alleged that on 28 December 1998, Monzon executed a promissory note By way of this petition, [respondents] would want to get said amount so that the same can be applied as full
in favor of the spouses Perez for the amount of P600,000.00, with interest of five percent per month, payable on or payment of [petitioner’s] obligation. That the amount should be divided between the [respondents] in the amount
before 28 December 1999. This was secured by a 300-square meter lot in Barangay Kaybagal, Tagaytay City. they have agreed between themselves; [respondent] spouses Relova to receive the amount of P400.00.00, while
Denominated as Lot No. 2A, this lot is a portion of Psu-232001, covered by Tax Declaration No. 98-008-1793. On the spouses Perez shall get the rest.
31 December 1998, Monzon executed a Deed of Absolute Sale over the said parcel of land in favor of the spouses WHEREFORE, judgment is hereby rendered ordering the x x x Clerk of Court, Atty. Ana Liza M. Luna, to deliver
Perez. unto [herein respondents] the amount of P1,602,393.65 plus whatever interest she may received if and when the
said amount has been deposited in any banking institution.3

Respondents also claim in their Petition for Injunction that on 29 March 1999, Monzon executed another promissory
note, this time in favor of the spouses Relova for the amount of P200,000.00 with interest of five percent per month The Decision also mentioned that the Order allowing the ex parte presentation of evidence by respondents was due
payable on or before 31 December 1999. This loan was secured by a 200 square meter lot, denominated as Lot No. to the continuous and incessant absences of petitioner and counsel.4
2B, another portion of the aforementioned Psu-232001 covered by Tax Declaration No. 98-008-1793. On 27
December 1999, Monzon executed a Deed of Conditional Sale over said parcel of land in favor of the spouses Relova. On 25 April 2002, Monzon filed a Notice of Appeal, which was approved by the trial court. Monzon claims that the
RTC gravely erred in rendering its Decision immediately after respondents presented their evidence ex parte without
On 23 October 1999, the Coastal Lending Corporation extrajudicially foreclosed the entire 9,967-square meter giving her a chance to present her evidence, thereby violating her right to due process of law.
property covered by Psu-232001, including the portions mortgaged and subsequently sold to respondents. According
to the Petition for Injunction, Monzon was indebted to the Coastal Lending Corporation in the total amount On 14 June 2002, Addio Properties, Inc. filed before the trial court a Motion for Intervention, which was granted by
of P3,398,832.35. The winning bidder in the extrajudicial foreclosure, Addio Properties Inc., paid the amount the same court on 12 July 2002.
of P5,001,127.00, thus leaving a P1,602,393.65 residue. According to respondents, this residue amount, which is in
the custody of Atty. Luna as Branch Clerk of Court, should be turned over to them pursuant to Section 4, Rule 68 of
On 27 September 2005, the Court of Appeals rendered the assailed Decision dismissing the appeal. According to the
the Revised Rules of Civil Procedure. Thus, respondents pray in their Petition for Injunction for a judgment (1) finding
Court of Appeals, Monzon showed tepid interest in having the case resolved with dispatch. She, thus, cannot now
Monzon liable to the spouses Perez in the amount of P1,215,000.00 and to the spouses Relova in the amount
complain that she was denied due process when she was given ample opportunity to defend and assert her interests
of P385,000.00; (2) ordering Atty. Luna to deliver said amounts to respondents; and (3) restraining Atty. Luna from
in the case. The Court of Appeals reminded Monzon that the essence of due process is reasonable opportunity to be
delivering any amount to Monzon pending such delivery in number (2).
heard and submit evidence in support of one’s defense. What the law proscribes is lack of opportunity to be heard.
Monzon’s Motion for Reconsideration was denied in a Resolution dated 7 March 2006.

40
On 27 March 2006, Monzon filed the instant Petition for Review on Certiorari under Rule 45 of the Rules of Court.
Monzon claims anew that it was a violation of her right to due process of law for the RTC to render its Decision
immediately after respondents presented their evidence ex parte without giving her a chance to present her
evidence. Monzon stresses that she was never declared in default by the trial court. The trial court should have,
thus, set the case for hearing for the reception of the evidence of the defense. She claims that she never waived her
right to present evidence.
Monzon argues that had she been given the opportunity to present her evidence, she would have proven that (1)
respondents’ Exhibit A (mortgage of land to the spouses Relova) had been novated by respondent’s Exhibit B (sale
of the mortgage land to the spouses Relova); (2) respondents’ Exhibit C (mortgage of land to the spouses Perez)
had been novated by respondent’s Exhibit B (sale of the mortgage land to the spouses Perez); and (3) having
executed Exhibits "B" and "D," Monzon no longer had any obligation towards respondents.
The Order by the trial court which allowed respondents to present their evidence ex parte states:
In view of the absence of [Monzon] as well as her counsel despite due notice, as prayed for by counsel for by
[respondents herein], let the reception of [respondent’s] evidence in this case be held ex-parte before a
commissioner who is the clerk of court of this Court, with orders upon her to submit her report immediately upon
completion thereof.5
It can be seen that despite the fact that Monzon was not declared in default by the RTC, the RTC nevertheless
applied the effects of a default order upon petitioner under Section 3, Rule 9 of the Rules of Court:
SEC. 3. Default; declaration of.—Ifthe defending party fails to answer within the time allowed therefor, the court
shall, upon motion of the claiming party with notice to the defending party, and proof of such failure, declare the
defending party in default. Thereupon, the court shall proceed to render judgment granting the claimant such relief
as his pleading may warrant, unless the court in its discretion requires the claimant to submit evidence. Such
reception of evidence may be delegated to the clerk of court.
(a) Effect of order of default.—Aparty in default shall be entitled to notice of subsequent proceedings but not to
take part in the trial.
In his book on remedial law, former Justice Florenz D. Regalado writes that failure to appear in hearings is not a
ground for the declaration of a defendant in default:
Failure to file a responsive pleading within the reglementary period, and not failure to appear at the hearing, is the
sole ground for an order of default (Rosario, et al. vs. Alonzo, et al., L-17320, June 29, 1963), except the failure to
appear at a pre-trial conference wherein the effects of a default on the part of the defendant are followed, that is,
the plaintiff shall be allowed to present evidence ex parte and a judgment based thereon may be rendered against
the defendant (Section 5, Rule 18).6 Also, a default judgment may be rendered, even if the defendant had filed his
answer, under the circumstance in Sec. 3(c), Rule 29.7
Hence, according to Justice Regalado, the effects of default are followed only in three instances: (1) when there is
an actual default for failure to file a responsive pleading; (2) failure to appear in the pre-trial conference; and (3)
refusal to comply with modes of discovery under the circumstance in Sec. 3(c), Rule 29.
In Philippine National Bank v. De Leon,8 we held:
We have in the past admonished trial judges against issuing precipitate orders of default as these have the effect
of denying a litigant the chance to be heard, and increase the burden of needless litigations in the appellate courts
where time is needed for more important or complicated cases. While there are instances when a party may be
41
properly defaulted, these should be the exception rather than the rule, and should be allowed only in clear cases
of obstinate refusal or inordinate neglect to comply with the orders of the court (Leyte vs. Cusi, Jr., 152 SCRA 496;
Tropical Homes, Inc. vs. Hon. Villaluz, et al., G.R. No. L-40628, February 24, 1989).
It is even worse when the court issues an order not denominated as an order of default, but provides for the
application of effects of default. Such amounts to the circumvention of the rigid requirements of a default order, to
wit: (1) the court must have validly acquired jurisdiction over the person of the defendant either by service of
summons or voluntary appearance; (2) the defendant failed to file his answer within the time allowed therefor; and
(3) there must be a motion to declare the defendant in default with notice to the latter. 9 In the case at bar, petitioner
had not failed to file her answer. Neither was notice sent to petitioner that she would be defaulted, or that the effects
of default shall be imposed upon her. "Mere non-appearance of defendants at an ordinary hearing and to adduce
evidence does not constitute default, when they have already filed their answer to the complaint within the
reglementary period. It is error to default a defendant after the answer had already been filed. It should be borne
in mind that the policy of the law is to have every litigant’s case tried on the merits as much as possible; it is for
this reason that judgments by default are frowned upon."10
Does this mean that defendants can get away with failing to attend hearings despite due notice? No, it will not. We
agree with petitioner that such failure to attend, when committed during hearing dates for the presentation of the
complainant’s evidence, would amount to the waiver of such defendant’s right to object to the evidence presented
during such hearing, and to cross-examine the witnesses presented therein. However, it would not amount to a
waiver of the defendant’s right to present evidence during the trial dates scheduled for the reception of evidence for
the defense. It would be an entirely different issue if the failure to attend of the defendant was on a hearing date
set for the presentation of the evidence of the defense, but such did not occur in the case at bar.
In view of the foregoing, we are, therefore, inclined to remand the case to the trial court for reception of evidence
for the defense. Before we do so, however, we need to point out that the trial court had committed another error
which we should address to put the remand in its proper perspective. We refer to Monzon’s argument as early as
the Answer stage that respondents’ Petition for Injunction had failed to state a cause of action.
Section 4, Rule 68 of the Rules of Court, which is the basis of respondent’s alleged cause of action entitling them to
the residue of the amount paid in the foreclosure sale, provides as follows:
SEC. 4. Disposition of proceeds of sale.—Theamount realized from the foreclosure sale of the mortgaged property
shall, after deducting the costs of the sale, be paid to the person foreclosing the mortgage, and when there shall
be any balance or residue, after paying off the mortgage debt due, the same shall be paid to junior encumbrancers
in the order of their priority, to be ascertained by the court, or if there be no such encumbrancers or there be a
balance or residue after payment to them, then to the mortgagor or his duly authorized agent, or to the person
entitled to it.
However, Rule 68 governs the judicial foreclosure of mortgages. Extra-judicial foreclosure of mortgages, which was
what transpired in the case at bar, is governed by Act No. 3135, 11 as amended by Act No. 4118,12 Section 6 of
Republic Act No. 7353, Section 18 of Republic Act No. 7906, and Section 47 of Republic Act No. 8791. A.M. No. 99-
10-05-0, issued on 14 December 1999, provides for the procedure to be observed in the conduct of an extrajudicial
foreclosure sale. Thus, we clarified the different types of sales in Supena v. Dela Rosa, 13 to wit:
Any judge, worthy of the robe he dons, or any lawyer, for that matter, worth his salt, ought to know that different
laws apply to different kinds of sales under our jurisdiction. We have three different types of sales, namely: an
ordinary execution sale, a judicial foreclosure sale, and an extrajudicial foreclosure sale. An ordinary execution sale
is governed by the pertinent provisions of Rule 39 of the Rules of Court on Execution, Satisfaction and Effect of
Judgments. Rule 68 of the Rules, captioned Foreclosure of Mortgage, governs judicial foreclosure sales. On the
other hand, Act No. 3135, as amended by Act No. 4118, otherwise known as "An Act to Regulate the Sale of
 Property under Special Powers Inserted in or Annexed to Real Estate Mortgages," applies in cases of extrajudicial
foreclosure sales of real estate mortgages.
Unlike Rule 68, which governs judicial foreclosure sales, neither Act No. 3135 as amended, nor A.M. No. 99-10-05-
0 grants to junior encumbrancers the right to receive the balance of the purchase price. The only right given to
second mortgagees in said issuances is the right to redeem the foreclosed property pursuant to Section 6 of Act No.
3135, as amended by Act No. 4118, which provides:
Sec. 6. Redemption. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred
to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person
having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may
redeem the same at any time within the term of one year from and after the date of the sale; and such redemption
shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-
six,14 inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with this Act.
Even if, for the sake of argument, Rule 68 is to be applied to extrajudicial foreclosure of mortgages, such right can
only be given to second mortgagees who are made parties to the (judicial) foreclosure. While a second mortgagee
is a proper and in a sense even a necessary party to a proceeding to foreclose a first mortgage on real property,
he is not an indispensable party, because a valid decree may be made, as between the mortgagor and the first
mortgagee, without regard to the second mortgage; but the consequence of a failure to make the second
mortgagee a party to the proceeding is that the lien of the second mortgagee on the equity of redemption is not
affected by the decree of foreclosure.15
A cause of action is the act or omission by which a party violates the right of another. 16 A cause of action exists if
the following elements are present: (1) a right in favor of the plaintiff by whatever means and under whatever law
it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right;
and (3) an act or omission on the part of such defendant violative of the right of plaintiff or constituting a breach of
the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages.17 In
view of the foregoing discussions, we find that respondents do not have a cause of action against Atty. Ana Liza
Luna for the delivery of the subject amounts on the basis of Section 4, Rule 68 of the Rules of Court, for the reason
that the foregoing Rule does not apply to extrajudicial foreclosure of mortgages.
If respondents answer in the affirmative, then the case shall proceed with the presentation of the evidence for the
defense. If Monzon would be successful in proving her defense of dacion en pago, there would, in effect, be a double
sale of the mortgaged properties: the same properties were sold to both respondents and to herein intervenor Addio
Properties, Inc. If, pursuant to the rules on double sales, respondents are entitled to the properties, their remedy is
to file the proper action to recover possession. If, pursuant to said rules, Addio Properties, Inc. is entitled to the
properties, respondents’ remedy is to file an action for damages against Monzon.
If respondents answer in the negative, the case shall be dismissed, without prejudice to the exercise of respondents’
rights as mortgage creditors. If respondents’ mortgage contract was executed before the execution of the mortgage
contract with Addio Properties, Inc., respondents would be the first mortgagors. Pursuant to Article 212620 of the
Civil Code, they would be entitled to foreclose the property as against any subsequent possessor thereof. If
respondents’ mortgage contract was executed after the execution of the mortgage contract with Addio Properties,
Inc., respondents would be the second mortgagors. As such, they are entitled to a right of redemption pursuant to
Section 6 of Act No. 3135, as amended by Act No. 4118.
WHEREFORE, the Decision of the Court of Appeals dated 27 September 2005 and its Resolution dated 7 March 2006
are REVERSED and SET ASIDE. The Petition for Injunction in Civil Case No. TG-2069 is hereby ordered DISMISSED
insofar as Atty. Ana Liza Luna is concerned. The Petition for Injunction in Civil Case No. TG-2069, insofar as petitioner
Teresita Monzon is concerned, is ordered REMANDED to the Regional Trial Court of Tagaytay City for further
proceedings. Upon such remand, the Regional Trial Court of Tagaytay City shall issue an Order to respondents, the
spouses James and Maria Rosa Nieves Relova and the spouses Bienvenido and Eufracia Perez, to manifest whether
the Petition for Injunction should be treated as a complaint for the collection of a sum of money.
If respondents answer in the affirmative, the Regional Trial Court shall set the case for hearing for the presentation
of the evidence for the defense. If respondents answer in the negative, the case shall be dismissed, without prejudice
to the exercise of respondents’ rights as mortgage creditors. No costs.

In Katon v. Palanca, Jr.,18 we held that where prescription, lack of jurisdiction or failure to state a cause of action
clearly appears from the complaint filed with the trial court, the action may be dismissed motu proprio, even if the
case has been elevated for review on different grounds. However, while the case should indeed be dismissed insofar
as Atty. Luna is concerned, the same is not necessarily true with respect to Monzon. Other than respondents’ prayer
that the amount due to respondents be delivered by Atty. Luna to them, they also pray for a judgment declaring
Monzon liable for such amounts. Said prayer, as argued by Monzon herself, may constitute a cause of action for
collection of sum of money against Monzon.

The rule is now settled that a mortgage creditor may elect to waive his security and bring, instead, an ordinary
action to recover the indebtedness with the right to execute a judgment thereon on all the properties of the debtor
including the subject matter of the mortgage, subject to the qualification that if he fails in the remedy elected by
him, he cannot pursue further the remedy he has waived.19

However, due to the fact that construing respondents’ Petition for Injunction to be one for a collection of sum of
money would entail a waiver by the respondents of the mortgage executed over the subject properties, we should
proceed with caution before making such construction. We, therefore, resolve that upon the remand of this case to
the trial court, respondents should be ordered to manifest whether the Petition for Injunction should be treated as
a complaint for the collection of a sum of money.

42
G.R. No. 133366 August 5, 1999
UNIONBANK OF THE PHILIPPINES, petitioner,
vs.
THE COURT OF APPEALS and FERMINA S. DARIO and REYNALDO S. DARIO, respondents.
Unionbank of the Philippines (hereafter UNIONBANK) appeals, by way of certiorari, the Decision1 of the Court of Appeals
(CA) of 26 June 1997 and its Resolution of 7 April 19982. The CA nullified the Regional Trial Court's (RTC) Order3 of 7
August 1995 denying private respondents' application for preliminary injunction as UNIONBANK's consolidation of
ownership divested private respondents of their property without due process of law. It also ordered the register of
deeds to cancel UNIONBANK's title and the trial court to hear private respondents prayer for injunctive
relief.1âwphi1.nêt
This case stemmed from a real estate mortgage executed on 17 December 1991 by spouses Leopoldo and Jessica Dario
(hereafter mortgagors) in favor of UNIONBANK to secure a P3 million loan, including interest and other charges. The
mortgage covered a Quezon City property with Transfer Certificate of Title (TCT) No. 41828 in Leopoldo Dario's name
and was annotated on the title on 18 December 1991. For non-payment of the principal obligation, UNIONBANK
extrajudicially foreclosed the property mortgaged on 12 August 1993 and sold the same at public auction, with itself
posting the highest bid.
On 4 October 1994, one week before the one-year redemption period expired, private respondents filed a complaint
with the RTC of Quezon City against the mortgagors, UNIONBANK, the Register of Deeds and the City Sheriff of Quezon
City. Docketed as Civil Case No. Q-94-21830, the complaint was for annulment of sale and real estate mortgage
reconveyance and prayer for restraining notice of lis pendens was annotated on the title.
On 10 October 1994, RTC, Branch 81, through Presiding Judge (later CA Justice) Celia Lipana-Reyes, issued a temporary
restraining order (TRO) enjoining the redemption of property within the statutory period and its consolidation under
UNIONBANK's name. At a hearing four days later, UNIONBANK's counsel orally moved for dismissal of the complaint
alleging that a certification of non-forum shopping-is prescribed by SC-Circular 4-944 was not attached thereto. Judge
Lipana-Reyes settled the motion in favor of UNIONBANK and dismissed5 the complaint on 17 October 1994.
Aggrieved, private respondents filed a motion for reconsideration6 of the dismissal on 20 October 1994 and prayed that
they be permitted to amend their verified complaint to comply with the requisites of Circular 4-94. Upon the
appointment of Judge Lipana-Reyes to the CA, pairing Judge Agustin S. Dizon took over the case and on 15 November
1994 allowed private respondents to incorporate the mandatory formal requirements of SC Administrative Circular 4-
94 to their complaint.
In the meantime, without notifying private respondents, UNIONBANK consolidated its title over the foreclosed property
on 24 October 1994, TCT No. 41828 was cancelled and TCT No. 120929 in UNIONBANK's name was issued in its stead.
Private respondents filed an amended complaint7 on 9 December 1994, alleging that they, not the mortgagors, are the
true owners of the property mortgaged and insisting on the invalidity of both the mortgage and its subsequent
extrajudicial foreclosure. They claimed that the original title, TCT No. 61571, was entrusted to a certain Atty. Reynaldo
Singson preparatory to its administrative reconstitution after a fire gutted the Quezon City Hall building. Mortgagor
Leopoldo, private respondent Fermina's son, obtained the property from Atty. Singson, had the title reconstituted under
his name without private respondents' knowledge, executed an ante-dated deed of sale in his favor and mortgaged the
property to UNIONBANK.
43
On 19 December 1994, Judge Ignacio M. Capulong to whom this case was assigned admitted the aforementioned
amended complaint and set the application for writ of preliminary injunction for hearing. After UNIONBANK's motion
for reconsideration of said Order was denied on 17 January 1995, it filed a petition for certiorari with the CA questioning
the admission of the amended complaint. The CA upheld Judge Capulong's order admitting the amended complaint on
24 April 1995, UNIONBANK thereafter elevated its cause to this Court.
Meanwhile, on 9 February 1995 UNIONBANK filed its answer ad cautelam asserting its status as an innocent mortgagee
for value whose right or lien upon the property mortgaged must be respected even if, the mortgagor obtained his title
through fraud. It also averred that the action had become "moot and academic by the consolidation of the foreclosed
property on 24 October 1994" in its name, resulting to the issuance of TCT No. 120929 by the Register of Deeds of
Quezon City. In reaction to UNIONBANK's revelation, private respondents moved to declare UNIONBANK's counsel in
indirect contempt attacking his disobedience to the TRO.
On 19 May 1995, private respondents moved to declare the other defendants in default for their non-filing of responsive
pleadings within the mandatory period and to set the application for preliminary injunction and indirect contempt for
pre-trial and trial.
On 14 June 1995 the second division of this Court denied the petition for certiorari, which it considered as a petition
for review under Rule 45, "for failure to show that the CA had committed any reversible error" in judgment.
In its 19 August 1995 Order, the RTC held the mortgagors and the City Sheriff of Quezon City in default and sustained
UNIONBANK's contention that the act sought to be enjoined had been enforced, negating the need of hearing the
application for preliminary injunction. Private respondents filed a lengthy motion for reconsideration to this Order.
The annulment case was re-raffled to Branch 227 under Presiding Judge Vicente Q. Roxas upon the creation of
new salas. Judge Roxas, on 25 March 1996, denied the motion to reconsider the 19 August 1995 Order but suggested
that private respondents amend their application from prohibitory to mandatory injunction.
As private respondents were unable to amend their application, the RTC denied the motion for reconsideration and
their motion for indirect contempt, "in the interest of free speech and tolerance" on 9 July 1996. Asserting grave abuse
of discretion, private respondents brought the denial of their motion for reconsideration with the Court of Appeals on
6 September 1996.
After considering the arguments presented by the parties, the CA ruled that despite its knowledge that the ownership
of the property was being questioned, UNIONBANK took advantage of private respondents' procedural error by
consolidating title to the property, which "smack[ed] of bad faith" and "evince[d] a reprobate disposition of the part of
its counsel to advance his client's cause by fair means or foul." As a result thereof the transfer of title was vitiated by
non-adherence to procedural due process.8
On 26 June 1997, CA nullified the consolidation of ownership, ordered the Register of Deeds to cancel the certificate of
title in UNIONBANK's name and to reinstate TCT No. 41828 with the notice of lis pendens annotated at the back. The
CA also set aside the portion of the assailed RTC Orders that declared private respondents' prayer for writ of preliminary
injunction as moot and academic. UNIONBANK's motion for reconsideration of the above-mentioned decision was
likewise rejected for lack of merit on 7 April 1998.
Hence, UNIONBANK came to this Court claiming to be a mortgagee in good faith and for value with a right to consolidate
ownership over the foreclosed property with the redemption period having expired and there having been no
redemptioners. UNIONBANK contends that the TRO which provisionally enjoined the tolling of the redemption period
was automatically dissolved upon dismissal of the complaint on 17 October 1994. Conformably, consolidation of title
in its name and the issuance of TCT No. 120929 rendered further proceedings on the application for injunction
academic. Moreover, the alleged fraudulent mortgage was facilitated through private respondents' negligence so they
must bear the loss. It also contends that since private respondents had filed several pleadings, due process, being an
opportunity to be heard either through pleadings or oral arguments, was observed.
Private respondents maintain that UNIONBANK's consolidation of the title in its name was in bad faith, vitiated a
standing court order, is against the law, thus void ab initio. The application for preliminary injunction was not rendered
moot and academic by consolidation, which took place during the lifetime of the TRO, and did not follow the proper
legal procedure due to the surreptitious manner it was accomplished. By treating the application for preliminary
injunction as moot and academic and denying the motion for indirect contempt without hearing, the RTC order ran
afoul with the requirements of due process.
Two main issues can be gleaned from the posturing and claims of the parties, to wit, was the consolidation of title in
UNIONBANK's name proper, and was the dismissal of the application for preliminary prohibitory injunction valid.
The issues must be answered in the affirmative.
UNIONBANK's consolidation of title over the property on 24 October 1994 was proper, though precipitate. Contrary to
private respondents' allegation UNIONBANK violated no standing court order. The only bar to consolidation was the
temporary restraining order issued by Justice Lipana-Reyes on 10 October 1994 which effectively halted the tolling of
the redemption period 7 days short of its expiration. When private respondents' original complaint was dismissed on
17 October 1994 for failure to append a certification of non-forum shopping, the TRO, as an ancillary order that cannot
stand independent of the main proceeding, became functus officio. Thus the tolling of the 12-month redemption period,
interrupted by the filing of the complaint and the TRO, recommenced and eventually expired 7 days thereafter or on
24 October 1994, the date of the disputed consolidation.
The motion for reconsideration and to amend complaint filed by private respondent on 20 October 1994 was of no
moment, this Court recognizing that "a dismissal, discontinuance or non-suit of an action in which a restraining order
or temporary injunction has been granted operates as a dissolution of the restraining order or temporary
injunction,"9 regardless of whether the period for filing a motion for reconsideration of the order dismissing the case or
appeal therefrom has expired.10 The rationale therefor is that even in cases where an appeal is taken from a judgment
dismissing an action on the merits, the appeal does not suspend the judgment, hence the general rule applies that a
temporary injunction terminates automatically on the dismissal of the action.11
We disagree with the appellate court's observation that consolidation deprived private respondents of their property
without due process. It is settled that the buyer in a foreclosure sale becomes the absolute owner of the property
purchased if it is not redeemed during the period of one year after the registration of the sale. 12 Consolidation took
place as a matter of right since there was no redemption of the foreclosed property and the TRO expired upon dismissal
of the complaint. UNIONBANK need not have informed private respondent that it was consolidaint its title over the
property, upon the expiration of the redemption period, without the judgment debtor having made use of his right of
redemption, the ownership of the property sold becomes consolidated in the purchaser. 13 Notice to the mortgagors and
with more reason, to private respondents who are not even parties to the mortgage contract nor to the extra judicial
sale is not necessary.
In real estate mortgage, when the principal obligation is not paid when due, the mortgage has the right to foreclose
the mortgage and to have the property seized and sold with a view to applying the proceeds to the payment of the
principal obligation.14 Foreclosure may be effected either judicially or extrajudicially.
44
In a public bidding during extra-judicial foreclosure, the creditor —mortgagee, trustee, or other person authorized to
act for the creditor may participate and purchase the mortgaged property as any other bidder. Thereafter the mortgagor
has one year within which to redeem the property from and after registration of sale with the Register of Deeds. 15 In
case of non-redemption, the purchaser at foreclosure sale shall file with the Register of Deeds, either a final deed of
sale executed by the person authorized by virtue of the power of attorney embodied in the deed or mortgage, or his
sworn statement attesting to the fact of non-redemption; whereupon, the Register of Deeds Shall issue a new certificate
of title in favor of the purchaser after the owner's duplicate of the certificate has been previously delivered and
canceled.16 Thus, upon failure to redeem foreclosed realty, consolidation of title becomes a matter of right on the part
of the auction buyer,17 and the issuance of a certificate of title in favor of the purchaser becomes ministerial upon the
Register of Deeds.
There is, moreover, nothing erroneous with the denial of private respondents' application for preliminary prohibitory
injunction. The acts complained of have already been consummated. It is impossible to restrain the performance of
consummated acts through the issuance of prohibitory injunction. When the act sought to be prevented had long been
consummated, the remedy of injunction could no longer be entertained,18 hearing the application for preliminary
injunction would just be an exercise in futility.
In addition, to be entitled to the injunctive writ, movant must show that there exists a right to be protected which is
directly threatened by an act sought to be enjoined. Furthermore, there must be a showing that the invasion of the
right is material and substantial and that there is an urgent and paramount necessity for the writ to prevent a serious
damage.19 The injunctive remedy prevents a threatened or continuous irremediable injury to some of the parties before
their claim can be thoroughly investigated and advisedly adjudicated; it is resorted to only when there is a pressing
necessity to avoid injurious consequences which cannot be remedied under any standard compensation.20
In the case at bar, the consolidation of ownership over the mortgaged property in favor of UNIONBANK and the issuance
of a new title in its name during the pendency of an action for annulment and reconveyance will not cause irreparable
injury to private respondents who are plaintiffs in the said preliminary injunction. This is because .as purchaser at a
public auction, UNIONBANK is only substituted to and acquires the right, title, interest and claim of the judgment
debtors or mortgagors to the property at the time of levy. 21 Perforce, the judgment in the main action for reconveyance
will not be rendered ineffectual by the consolidation of ownership and the issuance of title in the name of UNIONBANK.
More importantly, with the main action for reconveyance pending before the RTC, the notice of lis pendens, which
despite consolidation remains annotated on UNIONBANK's transfer certificate of title subject to the outcome of the
litigation, sufficiently protects private respondents interest over the property. A transferee pendente lite stands exactly
in the shoes of the transferor and is bound by any judgment or decree which may be rendered for or against the
transferor. Once a notice of lis pendens has been duly registered, any cancellation or issuance of the title of the land
involved as well as any subsequent transaction affecting the same, would have to be subject to the outcome of the
litigation. In other words, upon the termination of the litigation there can be no risk of losing the property or any part
thereof as a result of any conveyance of the land or any encumbrance that may be made thereon posterior to the filing
of the notice of lis pendens.22
Finally, as to the issue of who between private respondents and UNIONBANK is negligent and hence must bear the
loss, the same is not the proper subject of the present petition and can only be resolved by the trial court after the
trial on the merit of the main case.
WHEREFORE, the assailed Decision of the Court of Appeals of 26 June 1997 nullifying the consolidation of ownership and ordering the
Register of Deeds of Quezon City to cancel TCT No. 120929 and reinstate TCT No. 41828 is hereby REVERSED and SET ASIDE. The order
of the trial court dated 7 August 1999, declaring UNIONBANK's prayer for writ of preliminary injunction moot and academic, is hereby
REINSTATED. Let this case be remanded to the Regional Trial Court for trial on the merits.
G.R. No. 148448 August 17, 2004
RUSTICO A. ARDIENTE and ASUNCION PALOMARDIENTE, petitioners,
vs.
PROVINCIAL SHERIFF, REGISTER OF DEEDS OF QUEZON and PENINSULA DEVELOPMENT
BANK, respondents.
In mid-November 1979, the spouses Rustico Ardiente and Asuncion Paloma, together with their son Angel P. Ardiente
and the latter’s wife Gliceria Ardiente, obtained a loan in the amount of P100,000.00 from the Peninsula Development
Bank (the bank) at its main office at Lucena City, to be amortized in six years, on account of which they executed a
November 15, 1979 Promissory Note1 in the same amount.
To secure the payment of the loan, the Ardientes executed in favor of the bank a Real Estate Mortgage 2 on November
14, 1979 over a parcel of land situated at Mabutag, Cawa, Buenavista, Quezon and covered by Transfer Certificate of
Title (TCT) No. 29478, and three (3) parcels of land situated at Cadlit, Guinayangan, Quezon and covered by Original
Certificate of Title (OCT) No. 0-5961.
Out of the proceeds of the loan, the Ardientes purchased a mini bus costing P81,875.00.
After the bus was in operation for several months, it met an accident in August 1980 as result of which it sustained
heavy damages and rendered the Ardientes unable to meet their obligation to the bank. As the Ardientes were later
granted by the bank an additional loan of P46,000 for which they executed an October 29, 1981 Promissory Note,3 the
Real Estate Mortgage was amended.
Demands for the payment of their obligation to the bank notwithstanding, the Ardientes failed to settle the same.
The bank thus extra-judicially foreclosed the mortgage and the parcels of land covered thereby were sold at public
auction to the bank which was the highest bidder.
The bank later notified the Ardientes by letter of February 24, 19844 that they had one (1) year from November 11,
1983 or up to November 11, 1984 to redeem the foreclosed mortgage.
Two days before the period to redeem the foreclosed mortgage expired or on November 9, 1984, the spouses Rustico
and Suncion Ardiente filed before the Regional Trial Court (RTC) of Quezon at Gumaca a complaint, denominated as
Petition,5 against the bank, the provincial Sheriff of Quezon, and the Register of deeds of Quezon, for Annulment of
Auction Sale with Preliminary Injunction and Damages, anchored to two grounds as reflected in paragraph 16 of the
Complaint:
16. On two (2) legal grounds, therefore, namely, (a) that it was the defendant, not herein petitioners, who had
violated the Real Estate Mortgage and Amended Real Estate Mortgage, and (b) that the requisite of notifying the
mortgagors of the intended extra-judicial foreclosure sale was not duly complied with ¾ the FORECLOSURE
SALE should be annulled, which had supposedly taken place on November 11, 1983 in the Office of the Provincial
Sheriff situated in the courthouse building, National Trial Court, Lucena City wherein the alleged highest bidder was
the defendant for the satisfaction of petitioners’ alleged indebtedness of P247,279.14;
As the following allegation in paragraph 15 of the Complaint shows, the Ardiente spouses capitalized on the alleged
lack of notice to them of the "judicial foreclosure auction sale."
45
15. And, the unkindest cut of all came up when, without first having been duly notified of an intended extra-judicial
foreclosure auction sale, petitioners received a letter from the defendant, under date of February 24, 1984, informing
them that "the one (1) year period within which to exercise their right to redeem the foreclosed properties commenced
to run on November 11, 1983 to November 11, 1984" (a Xerox copy of which is hereto attached as Annex "A" and
made an integral part hereof).7 (Underscoring supplied)
On the above-quoted allegations in paragraphs 15 and 16 of the Complaint, the bank, in its Answer with Counterclaim,
alleged:
15) Answering respondent admits the allegations contained in paragraph 15 of the petition, with the explanations
and qualifications, that petitioners were duly notified of the extra-judicial foreclosure and public auction sale. There
was sufficient notice and publication served to all concern[ed] of said public auction sale of the properties offered as
collaterals.8 (Underscoring supplied)
(16) Answering respondent specifically denies the allegations contained in paragraph [16] of the petition. The truth
of the matter is that the petitioners have violated the terms and conditions of Real Estate Mortgage, Amended Real
Estate Mortgage and that respondent has complied with the requisites of Art. 3135 as amended in relation to the
application [for] extra-judicial proceeding of collaterals."9 (Underscoring supplied)
To the Answer the spouses Ardiente filed a Reply and Answer to Counterclaim. 10
The Complaint was later amended11 whereby the spouses Ardiente alleged that, among other things, the purchase price
of the mortgaged parcels of land was so "grossly and greatly inadequate," hence, the foreclosure sale should be
annulled; by reason of the unlawful foreclosure of the real estate mortgage, they suffered damages; and to protect
their interests, they filed a formal request with the Register of Deeds to cause a notice of lis pendens.
In compliance with the directive of Branch 61 of the Gumaca RTC, the parties submitted their respective memoranda.
In their memorandum, the defendants bank et al. proffered the following pertinent argument on the Ardiente spouses’
claim that they were not previously notified of the foreclosure:
[I]t is maintained that there was notice, coupled with a publication of Notice of Public Auction Sale in a newspaper of
general circulations (sic) supported by publishers’ affidavit attached to the record in the Office of the Provincial
Sheriff of Quezon at Calauag, Quezon. Personal notice was sent to the plaintiffs. However, said requirements in the
extra-judicial foreclosure is dispensed with, in accordance with the decision of the Supreme Court in the case of ---
BONNEVIE V. COURT OF APPEALS, 125 SCRA 122 (1983)
In extra-judicial foreclosure, Act No. 3135 personal notice on the mortgagor is not necessary. Section 3
thereof reads:
Sec. 3 – Notice shall be given by posting notices of the sale for not less than twenty (20) days in at
least three (3) public places of the municipality or city where the property is situated, and if such
property is worth more than P400.00, such notice shall also be published once a week for at least
3 consecutive weeks in a newspaper of general circulation in the municipality or city.
Such phrase "once a week for at least 3 consecutive weeks", as interpreted in "BASA vs. MERCADO" (61 Phil. 632)
does not mean that the notice should be published for 3 full weeks.12 (Emphasis and underscoring supplied)
By Decision of August 12, 1994,13 the trial court, noting the absence of documentary evidence showing strict compliance
with the statutory requirements on publication of notice of extra-judicial foreclosure of mortgage, declared the extra-
judicial foreclosure and the sale of the mortgaged properties null and void. Thus, the trial court discoursed:
Respondent Bank maintained that it filed an extra-judicial foreclosure with the Provincial Sheriff of Quezon. After due
notice and publication, these properties were sold at Public Auction Sale where a corresponding Certificate of Sale
(Exh. 5) was issued in its name dated November 11, 1983, as the sole bidder (Memorandum for the Defendants,
 p.4). On page 7 of said Memorandum, it contended that there was notice, coupled with a publication of Notice of
Public Auction Sale in a newspaper of general circulation supported by publisher’s affidavit attached to the record in
the Office of the Provincial Sheriff of Quezon at Calauag, Quezon. Personal notice was sent to petitioners. (Record,
pp. 358 & 361, Memorandum For the Defendants, pages 4 & 7). Despite these allegations on record, no
documentary exhibits of such publication of notice of public auction sale in a newspaper of general
circulations supported by publisher’s affidavit were ever submitted by respondent Bank. Considering that
petitioners are clearly attacking the validity of the public auction sale for which respondent Bank was the sole
bidder, said documentary exhibits should have been presented in court and not merely alleged to be
attached to the record in the Office of the Provincial Sheriff of Quezon at Calauag, Quezon. The clear fact
remains that these documents were not submitted to form part of the records of this case. No such proof of publication
exists in the records. In the case of Tambunting vs. Court of Appeals (167 SCRA 17), the Hon. Supreme Court
stressed that "failure to present proof of posting and publication rebuts the presumption of compliance with official
duty". To show compliance, the published notices and certificate of posting by the sheriff of the notice of sale on
November 11, 1983 should have been presented.
Therefore, in the absence of convincing proof that the statutory provisions governing publication of notice
of mortgage foreclosure sales have been strictly complied with, this Court has no other recourse except
to declare as null and void the sale in favor of judgment creditor, made by respondent Sheriff on November 12,
1983, awarding the properties in question to respondent Bank, and for which, the titles in the name of petitioner-
spouses were already cancelled and registered in its name. This Court also finds that petitioners are entitled to and
deserving the reliefs prayed for.14 (Emphasis and underscoring supplied),
Accordingly, the trial court disposed as follows:
WHEREFORE, judgment is hereby rendered, in favor of petitioners, and against the respondents, as follows:
(1) Declaring as null and void the extrajudicial foreclosure and sale conducted by respondent Provincial Sheriff of
Quezon;
(2) Declaring as null and void all transactions/proceedings held subsequent thereto such as the execution of the
final deed of sale and issuance of title to and in the name of respondent Bank;
(3) Ordering the respondent Register of Deeds of Quezon to re-issue a new Transfer Certificate of Title to and in
the name of petitioners in lieu of the former titles which had been deemed cancelled by virtue of the issuance of
the titles which had been deemed cancelled by virtue of the issuance of the titles which had been issued in favor
of respondent Corporation; and
(4) Ordering all respondents, jointly and severally, to pay unto herein petitioners, the sum of P15,000, for attorney’s
fees and litigation expenses of P10,000.
The Defendants bank et al. thus appealed to the Court of Appeals upon the following assigned errors:
[I.] THE LOWER COURT ERRED IN FINDING AND CONCLUDING THAT THERE WAS ABSENCE OF CONVINCING
PROOF THAT THE STATUTORY PROVISIONS GOVERNING PUBLICATION OF NOTICE OF MORTGAGE FORECLOSURE
SALE HAVE BEEN STRICTLY COMPLIED WITH.
[II.] THE COURT A QUO ERRED IN DECLARING NULLAND VOID THE EXTRAJUDICIAL FORECLOSURE AND SALE
CONDUCTED BY RESPONDENT PROVINCIAL SHERIFF OF QUEZON, AND ALL TRANSACTIONS/PROCEEDINGS HELD
SUBSEQUENT THERETO SUCH AS THE EXECUTION OF THE FINAL DEED OF SALE AND ISSUANCE OF TITLE TO AND
IN THE NAME OF RESPONDENT BANK.
[III.] THE LOWER COURT ERRED IN ORDERING THE RRESPONDENT REGISTER OF DEEDS OF QUEZON TO REISSUE
A NEW TRANSFER CERTIFICATE OF TITLE TO AND IN THE NAME OF PETITIONERS IN LIEU OF THE FORMER TITLES
WHICH HAD BEEN DEEMED CANCELLED BY VIRTUE OF THE ISSUANCE OF THE TITLES WHICH HAD BEEN ISSUED IN
FAVOR OF RESPONDENT CORPORATION.
[IV.] THE TRIAL COURT ERRED IN AWARDING TO PLAINTIFFS-APPELLEES’ ATTORNEY’S FEES ABD LITIGATION
EXPENSES.16 (Underscoring supplied)
46
By Decision of January 29, 2001,17 the Court of Appeals reversed the decision of the trial court after finding the
argument of the defendant-appellants bank et al. that the lack of required notice and publication of the extra-judicial
foreclosure of mortgage was not averred in the complaint, hence, cannot be the basis of an adverse judgment.
Explaining its reversal of the decision, the Court of Appeals held:
It is axiomatic that the complaint should inform the defendant of all the material facts on which the plaintiff relies to
support his demand; it should state the theory of a cause of action which forms the bases of the plaintiff’s claim of
liability. The office, purpose or function of the complaint is to inform the defendant clearly and definitely of the claims
made against him so that he may be prepared to meet the issues at the trial. Otherwise stated, if the wrong or
omission of the defendant is not alleged in the complaint, then the defendant would be precluded from presenting
evidence to refute the imputation of such wrong or present justification for the alleged omission. In this case, even
perfunctory reading of the Petition and the Amended Petition, readily reveals the absence of any averment
relating to the required posting and publication of the notice of foreclosure sale. Understandably then, the
defendant-appellant Bank saw no need to present the Sheriff’s Certification of Posting and the newspaper where the
notice was published as well as the publisher’s affidavit. Clearly, the presumption that the Provincial Sheriff of Quezon
has discharged his official duty in a regular manner and that the defendant-appellant Bank complied with the
requirements under the law will suffice. And while it may be true that the Supreme Court said, in the case
of Tambunting v. Court of Appeals and relied upon by the trial court, that the presumption of compliance
with official duty is rebutted by the failure to present proof of posting and publication of the notice of
sale, such may be applied only when these omissions are alleged and raised by the party in the complaint.
The result would have been different if evidence of these issues were raised during the trial of the case with the
acquiescence of the parties. Then, the rule on the amendment of the petition to conform to or authorize presentation
of evidence may be applied, thus:
Sec. 5. Amendment to conform to or authorize presentation of evidence.¾ When issues not raised in the pleadings
are tried with the express or implied consent of the parties, they shall be treated in all respects as if they had been
raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the
evidence and to raise these issues may be made upon motion of any party at any time, even after judgments but
failure to amend does not affect the result of the trial of these issues. x x x
As earlier stated however, the issue of lack of posting and publication was not even discussed nor even touched in
the testimony of plaintiff-appellee Rustico Ardiente. His testimony is limited only to his receipt of a letter from the
bank that their properties have been foreclosed and that they have one year to redeem the same. The plaintiffs-
appellees only imputed to the defendant-appellant Bank its omission to give them personal notice of the foreclosure
sale. However, it is jurisprudentially settled that personal notice to the mortgagor in extrajudicial foreclosure
proceedings is not necessary. Hence, lack of personal notice to the mortgagors is not a ground to set aside the
foreclosure sale. Ergo, the trial court erred in declaring the foreclosure null and void based on a ground not raised in
the pleadings nor tried before it.18 (Underscoring in the original; emphasis supplied)
Hence, the present petition for review filed by the Ardiente spouses proferring the following:
REASONS WARRANTING REVIEW
I. RESPON[ENT] COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT SINCE THE PETITIONER’S IN
THEIR PETITION AND IN THEIR AMENDED PETITION DID NOT MENTION THE ABSENCE OF THE REQUIRED
POSTING AND PUBLICATION OF THE NOTICE OF FORECLOSURE SALE, THERE IS NO NEED FOR THE
DEFENDANT APPELLANT BANK TO PRESENT THE SHERIFF CERTIFICATION OF POSTING AND THE NEWSPAPER
WHERE THE NOTICE WAS PUBLISHED AS WELL AS THE PUBLISHER’S AFFIDAVIT TO PROVE THE VALIDITY
OF THE FORECLOSURE SALE.
II. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE TRIAL COURT’S DECISION AND
DISMISSING PETITIONER’S COMPLAINT.
 III. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN NOT AWARDING ATTORNEY’S FEES AND
LITIGATION EXPENSES TO THE PLAINTIFFS-APPELLEES.19
The spouses Ardientes (hereinafter referred to as petitioners) argue that paragraph 15 of their Complaint and paragraph
16 of the Amended Complaint show that they were "attacking the validity of the extra-judicial sale"; that the impleading
of the sheriff demonstrates that they are "questioning the validity and legality of his performance of officially duty";
that the bank was sufficiently informed of their "cause of action, theory of their case and relief being sought" as shown
by the bank’s allegations in paragraphs 15 and 16 of its Answer; and that in fact in the bank’s Special and Affirmative
Defenses, particularly paragraph 25 thereof which reads:
25) That answering respondent as well as the Office of Provincial Sheriff fully compl[ied] [with] the
requirements of law under Act 3135 as amended, more specifically with regards to notices of the public
auction sale as well as the extra-judicial foreclosure application in accordance with the law.20 ,
an issue was tendered, the nature of which affirmative defense-answer called for the presentation of evidence, they
citing Benavides v. Alabastro,21 but the bank did not present "proof of proper compliance with Act 3135, "AN ACT TO
REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL ESTATE
MORTAGES,: as to posting and publication of notices of public auction sale.
The Court is not persuaded.
With respect to petitioners’ paragraphs 15 and 16 allegations in their Complaint, clearly, they were questioning the
validity of the extra-judicial foreclosure of the mortgage on the basis of lack of notice to them as mortgagors.
It is settled that personal notice to the mortgagor in extra-judicial foreclosure proceedings is not necessary, hence, not
a ground to set aside the foreclosure sale.22
With respect to petitioners’ argument that the bank, in paragraph 25 of its Answer, in fact put in issue its compliance
with the requirements of Act 3135, "more specifically with regards to the notices of the public auction sale as well as
the extra-judicial application in accordance with law," to thus call for the presentation of evidence, they citing
again Benavides,23 the same fails.
Benavides bears on the rendition of judgment on the pleadings. It holds that where the defendant’s answer tenders an
issue, as where it does not only deny the material allegations of the complaint but also sets up certain special and
affirmative defenses, the nature of such answer calls for presentation of evidence, hence, it is error to render a
judgment on the pleadings thereon without such evidence.
No doubt, it is a well-settled rule that statutory provisions governing publication of notice of mortgage foreclosure sales
must be strictly complied with, and that even slight deviations therefrom will invalidate the notice and the sale at least
voidable.24
Despite petitioners’ non-allegation of lack of publication of notice of foreclosure in their Complaint, the bank pleaded
in its Answer (1) "that petitioners were duly notified of the extrajudicial foreclosure and public auction sale" and "[t]here
was sufficient notice and publication served to all concern[ed] of said public auction sale," and (2) that it and the Office
of the provincial Sheriff "fully compl[ied] with the requirements of law under Act 3135, more specifically with regard to
notices of the public auction as well as the extra-judicial foreclosure in accordance with law."
Yet petitioners never refuted in their Reply and Answer to Counterclaim such defense of the bank nor presented
evidence before the trial court to disprove the same.
47
In fact, in its Comment on petitioners’ Formal Offer of Evidence before the trial court, the bank, passing on Exhibit "D"
– its letter to petitioners advising them that they had one year from November 11, 1993 to exercise their right of
redemption, stated that said exhibit was admitted "with the qualification as to the purpose to the effect that said extra-
judicial foreclosure was filed in accordance with law and that all requirements of said law were complied with and that
plaintiffs were duly notified of said proceedings."25
Despite the bank’s repeated claim that the statutory requirements governing extra-judicial foreclosure had been
complied with, the bank’s plea of lack of publication of notice of foreclosure was not raised by petitioners either in the
Amended Complaint or in the Reply and Answer to Counterclaim. It was not also raised during the trial as the entire
transcripts of the stenographic notes of the proceedings before the trial court show. Nor even in their memorandum
filed before the trial court, petitioners having merely assailed the lack of "personal" notification to them of any
"intended" extrajudicial foreclosure and the "grossly and greatly inadequate" purchase price of the lands.
As the appellate court thus held, the issue of lack of publication of notice cannot be raised for the first time on appeal.
In the Tambunting case cited by petitioners to support their thesis that failure to strictly comply with statutory
requirements governing publication of notice of mortgage foreclosure sales renders the sale at least voidable, the
therein mortgagors, in their complaint for annulment of mortgage and damages, sought to enjoin the extra-judicial
foreclosure of mortgage. During the pendency of the case, the extra-judicial foreclosure pushed thru just the same.
The mortgaged property was sold at public auction to the mortgagees, and the property was eventually sold to
the Tambunting Realty. The mortgagors thereupon filed a Supplemental Complaint impleading the realty firm, the
provincial sheriff as the officer responsible for holding the foreclosure, and the Register of Deeds for the subsequent
transfer of the property "despite alleged non-compliance with the requirements of Act 3135, Sec. 3 (as amended by
Act 4118) on posting and publication of the notice of foreclosure sale." In other words, the lack of publication was
raised in issue by the mortgagors in their Supplemental Complaint.
In the case of Go v. Court of Appeals,26 as in the present case, despite the fact that the mortgagees pleaded as a
defense in their Answer the "receipt of the ‘notice of the sale which was published in a newspaper of general
circulation,’’’ the issue of lack of publication of the notice of foreclosure was never raised in issue by the mortgagors.
In disposing of the issue of lack of publication of the notice of foreclosure of mortgage which was raised for the first
time on appeal, this Court in Go held:
Indeed, as correctly held by the respondent Court, the issue of lack of publication of the notice of foreclosure of the
mortgage was raised only on appeal. Petitioner does not represent that he directly attacked in his complaint in Civil
Case No. 8920 the validity of the foreclosure because of such lack of notice. His own Statement of the Facts and of
the Case in the instant petition makes no reference to such lack o notice as one, or even just as a basis for any, of
his causes of action in the complaint. He sought the cancellation of the contract of mortgage because he allegedly
never received the amounts indicated in the promissory notes. Of course, nullity of the mortgage due to absence of
consideration is leagues apart form the nullity of the foreclosure of a mortgage because of non-publication of the
notice of foreclosure.
Additionally, petitioner presented no evidence before the trial court to prove the absence of publication of the notice
despite the fact that private respondents, in their Answer, squarely pleaded as a defense the foreclosure sale and
petitioner’s receipt of the "notice of the sale which was published in a newspaper of general
circulation." That the lack of publication of the notice of foreclosure was never raised in issue by petitioner and that
it is not within the issues framed by the parties in the trial court are then too obvious.
WHEREFORE, there being no reversible error in the assailed decision, the petition is hereby DISMISSED.
G.R. No. 141974 August 9, 2004
BPI FAMILY SAVINGS BANK,
vs.
SPS. JANUARIO ANTONIO VELOSO AND NATIVIDAD VELOSO, respondents.
Before us is a petition for review of the decision1 dated February 14, 2000 of the Court of Appeals affirming the decision of the Regional
Trial Court, Branch 94, Quezon City,2 which upheld the validity of the extra-judicial foreclosure proceedings initiated by Family Bank and
Trust Company (Family Bank) on the mortgaged properties of respondent spouses Januario Antonio Veloso and Natividad Veloso but
allowed the latter to redeem the same properties.
On January 8, 1983, respondent spouses obtained a loan of P1,300,000 from petitioner’s predecessor-in-interest Family
Bank and Trust Company. To secure payment of the loan, respondent spouses executed in favor of the bank a deed of
mortgage over three parcels of land, with improvements, registered in their names under TCT Nos. 272227, 272228
and 272229 of the Registry of Deeds of Quezon City.
On February 9, 1983, respondents, for value received, executed a promissory note for P1,300,000. Subsequently,
however, respondents defaulted in the monthly installments due on their loan. When efforts to update the account
failed, Family Bank instituted extra-judicial foreclosure proceedings on the respondents’ mortgaged properties.
On July 1, 1985, the properties were sold at public auction with Family Bank as the highest bidder for P2,782,554.66.
On August 5, 1985, Family Bank assigned all its rights and interests in the foreclosed properties to petitioner BPI Family
Bank, Inc. (BPI).
On August 28, 1985, the sheriff’s certificate of sale was registered with the Registry of Deeds of Quezon City.
On July 24, 1986, respondents, through counsel, wrote BPI offering to redeem the foreclosed properties for P1,872,935.
This was, however, rejected by petitioner.
On August 27, 1986, respondents filed in the RTC of Quezon City, Branch 94, a complaint for annulment of foreclosure,
with consignation and prayer for damages. On motion of respondents, the trial court, in an order dated August 27,
1986, allowed respondents to deposit with the clerk of court the sum of P1,500,000 representing the redemption price.
Thereafter, trial on the merits ensued.
Meanwhile, in Branch 76 of the Regional Trial Court of Quezon City, BPI was able to secure a writ of possession over
the foreclosed properties. This prompted respondents to file with the Court of Appeals a petition for certiorari with
preliminary injunction docketed as CA-G.R. SP No. 22681. On October 8, 1990, the Court of Appeals resolved to grant
respondents’ motion for preliminary mandatory injunction.
Eventually, however, in a decision promulgated on May 31, 1991, the Court of Appeals, in CA-G.R. SP No. 22681,
resolved the issue of possession in favor of BPI and accordingly lifted the preliminary mandatory injunction it had
earlier issued, denying altogether respondents’ petition. From this decision, respondents came to this Court via a
petition for review which was, however, denied in a resolution dated January 13, 1992. The resolution affirmed, in
effect, petitioner’s right to the possession of the subject properties.
On December 16, 1992, upon motion of respondents and despite the opposition of petitioner, Branch 94 ordered the
release of P1,400,000 of the consigned amount to respondents, with the balance of P100,000 to take the place of the
injunction bond to answer for whatever damages petitioner might suffer because of the issuance of the preliminary
injunction (previously issued and later lifted) in favor of respondents.
INC., petitioner,
Finally, on August 18, 1995, after almost a decade of protracted litigation, the trial court rendered a decision declaring
the validity of the extra-judicial foreclosure of the mortgaged properties of respondents but allowed the redemption of
the same at a redemption price of P2,140,000.
BPI elevated the matter to the Court of Appeals which affirmed the trial court’s decision, with modification:
WHEREFORE, subject to the modification declaring P2,678,639.80 as the redemption price due the appellant, the
decision appealed from is hereby AFFIRMED in all other respects.3
Hence, the instant petition based on the following assigned errors:
I THE HONORABLE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW AND THE
APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT AFFIRMED THE DECISION OF THE TRIAL COURT AND ALLOWED THE
RESPONDENTS TO REDEEM THE FORECLOSED PROPERTY.
II ASSUMING FOR THE SAKE OF ARGUMENT, BUT WITHOUT ADMITTING, THAT THE HONORABLE COURT OF APPEALS DID NOT ERR
IN AFFIRMING THE DECISION OF THE TRIAL COURT, NEVERTHELESS IT DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN
ACCORD WITH LAW AND THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT FIXED THE REDEMPTION PRICE TO BE
PAID BY RESPONDENTS TO PETITIONER AT ONLY P2,678,639.80 AND SHALL ONLY EARN 1% PER MONTH UNDER SECTION 28, RULE
39 OF THE 1997 RULES OF CIVIL PROCEDURE.
The fact is that, at the time of the foreclosure sale on July 1, 1985, respondent spouses Veloso had already defaulted
on their loan to petitioner’s predecessor-in-interest family bank. In a real estate mortgage, when the principal obligation
is not paid when due, the mortgagee has the right to foreclose on the mortgage and to have the property seized and
sold, and to apply the proceeds to the obligation.4 foreclosure is proper if the debtor is in default in the payment of his
obligation.5 and in this case, the validity of the extra-judicial foreclosure on July 1, 1985 was confirmed by both the
trial court and the court of appeals. We find no reason to question it.
The sole question therefore that remains to be resolved is: did respondent spouses comply with all the requirements
for the redemption of the subject properties?
We answer in the negative.
The general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire to do so.
The statement of intention must be accompanied by an actual and simultaneous tender of payment. This constitutes
the exercise of the right to repurchase.6
In several cases7 decided by the Court where the right to repurchase was held to have been properly exercised, there
was an unequivocal tender of payment for the full amount of the repurchase price. Otherwise, the offer to redeem is
ineffectual.8 Bona fide redemption necessarily implies a reasonable and valid tender of the entire repurchase price,
otherwise the rule on the redemption period fixed by law can easily be circumvented. As explained by this Court
in Basbas vs. Entena:9
x x x the existence of the right of redemption operates to depress the market value of the land until the period
expires, and to render that period indefinite by permitting the tenant to file a suit for redemption, with either party
unable to foresee when final judgment will terminate the action, would render nugatory the period of two years fixed
by the statute for making the redemption and virtually paralyze any efforts of the landowner to realize the value of
his land. No buyer can be expected to acquire it without any certainty as to the amount for which it may be redeemed,
so that he can recover at least his investment in case of redemption. In the meantime, the landowner’s needs and
obligations cannot be met. It is doubtful if any such result was intended by the statute, absent clear wording to that
effect.
48
Consequently, in this case, the offer by respondents on July 24, 1986 to redeem the foreclosed properties
for P1,872,935 and the subsequent consignation in court of P1,500,000 on August 27, 1986, while made within the
period10 of redemption, was ineffective since the amount offered and actually consigned not only did not include the
interest but was in fact also way below the P2,782,554.66 paid by the highest bidder/purchaser of the properties during
the auction sale.
In Bodiongan vs. Court of Appeals,11 we held:
In order to effect a redemption, the judgment debtor must pay the purchaser the redemption price composed of the
following: (1) the price which the purchaser paid for the property; (2) interest of 1% per month on the purchase
price; (3) the amount of any assessments or taxes which the purchaser may have paid on the property after the
purchase; and (4) interest of 1% per month on such assessments and taxes x x x.
Furthermore, Article 1616 of the Civil Code of the Philippines provides:
The vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the sale x x
x.
It is not difficult to understand why the redemption price should either be fully offered in legal tender or else validly
consigned in court. Only by such means can the auction winner be assured that the offer to redeem is being made in
good faith.
The sum of P1,400,000 consigned by respondents in Branch 94 was subsequently withdrawn by them, leaving
only P100,000 to take the place of the injunction bond. This would have been tantamount to requiring petitioner to
accept payment by installments as there would have necessarily been an indefinite extension of the redemption
period.12 If a partial payment can bind the winning bidder or purchaser in an auction sale, by what rule can the payment
of the balance be determined? Petitioner could not be expected to entertain an offer of redemption without any
assurance that respondents could pay the repurchase price immediately. A contrary rule would leave the buyers at
foreclosure sales open to harassment by expectedly angry debtors and cause unnecessary prolongation of the
redemption period, contrary to the policy of the law.
Whether or not respondents were diligent in asserting their willingness to pay is irrelevant. Redemption within the
period allowed by law is not a matter of intent but a question of payment or valid tender of the full redemption price
within said period.
The disposition of the instant case in the trial court unnecessarily dragged for almost a decade. Now, it is on its 18 th year
and still respondents have not tendered the full redemption price. Nor have they consigned the full amount, if only to
prove their willingness and ability to pay. This would have evidenced their good faith.
The law granted respondents the right of redemption. But in so granting that right, the law intended that their offer to
redeem be valid and effective, accompanied by an actual tender of the redemption price. Fixing a definite term within
which the property should be redeemed is meant to avoid prolonged economic uncertainty over the ownership of the
thing sold. In the case at bar, the offer was not a legal and effective exercise of the right of redemption contemplated
by law, hence, refusal of the offer by petitioner was completely justified.
Finally, respondents cannot argue that the law on equity should prevail. Equity applies only in the absence of, and
never against, statutory law or judicial rules of procedure. 13
WHEREFORE, the appealed decision of the Court of Appeals is hereby REVERSED and SET ASIDE. The complaint filed
by respondents, the spouses Veloso, is hereby dismissed.
49
G.R. No. 173183 November 18, 2013
SYCAMORE VENTURES CORPORATION and SPOUSES SIMON D. PAZ AND LENG LENG PAZ, Petitioners,
vs.
METROPOLITAN BANK AND TRUST COMPANY, Respondent.
We are once more faced by a petition filed by debtors who could not pay their indebtedness and who, at the point of
foreclosure, sought judicial recourse to delay the inevitable. In this case, the issue used as anchor is the valuation of
the mortgage property s appraised value – an issue that hardly carries any significant consequence in extrajudicial
foreclosure proceedings. How the delay in the foreclosure has affected the parties is a matter that is not in the record
before us, but delay, if it had been the objective sought, came as it has come in many other similar cases. To be sure,
the Judiciary has been affected by these cases as they have unnecessarily clogged the dockets of our courts, to the
detriment of more important cases equally crying for attention.
The petitioners, Sycamore Ventures Corporation (Sycamore) and the spouses Simon D. Paz and Leng Leng Paz,
challenge the decision1 dated May 3, 2006 and the resolution2 dated June 19, 2006 of the Court of Appeals (CA) in CA-
G.R. SP No. 88463. The CA reversed and set aside the orders 3 dated August 5, 2004 and November 22, 2004 of the
Regional Trial Court (RTC), Branch 43, San Fernando, Pampanga, in Civil Case No. 12569.
The Factual Antecedents
Sixteen years ago (or sometime in 1997), Sycamore and the spouses Paz obtained from respondent Metropolitan Bank
and Trust Company (Metrobank) a credit line of ₱180,000,000.00, secured by 10 real estate mortgages 4 over
Sycamore’s 11 parcels of land,5 together with their improvements.6 Sycamore and the spouses Paz withdrew from the
credit line the total amount of ₱65,694,914.26, evidenced by 13 promissory notes. 7
Because the petitioners failed to pay their loan obligations and for violations of the terms and conditions of their 13
promissory notes, Metrobank instituted extrajudicial foreclosure proceedings over the six real estate mortgages,
pursuant to Act No. 3135, as amended.8 The public auction sale was set for various dates – March 22, 2000, April 23,
2000 and May 23, 2000 – but the sale did not take place because Sycamore and the spouses Paz asked for
postponements.
Metrobank subsequently restructured Sycamore and the spouses Paz’s loan, resulting in the issuance of one promissory
note denominated as PN No. 751622 736864.92508.000.99, in lieu of the 13 promissory notes9 previously issued, and
the execution of a single real estate mortgage covering the 12 parcels of land.10
Application for Extrajudicial Foreclosure
Despite reminders, Sycamore and the spouses Paz still failed to settle their loan obligations, compelling Metrobank to
file a second petition for auction sale, which was set for October 25, 2002.
On October 16, 2002, Sycamore and the spouses Paz once again asked for the postponement of the October 25, 2002
public auction sale; they asked that the sale be moved to November 26, 2002, but this time Metrobank refused to give
in.11
Civil Case No. 12569 for Annulment of Contract and Real Estate Mortgage with Temporary Restraining Order and
Injunction
Decision G.R. No. 173183 3
Application for Extrajudicial Foreclosure
Despite reminders, Sycamore and the spouses Paz still failed to settle their loan obligations, compelling Metrobank to
file a second petition for auction sale, which was set for October 25, 2002. On October 16, 2002, Sycamore and the
spouses Paz once again asked for the postponement of the October 25, 2002 public auction sale; they asked that the
sale be moved to November 26, 2002, but this time Metrobank refused to give in. 11
Civil Case No. 12569 for Annulment of Contract and Real Estate Mortgage with Temporary Restraining Order and
Injunction
On November 25, 2002, Sycamore and the spouses Paz filed before the RTC, Branch 43, San Fernando Pampanga, a
complaint for the annulment of the contract and of the real estate mortgage. They likewise asked for the issuance of a
temporary restraining order (TRO).
The petitioners disputed Metrobank’s alleged unilateral and arbitrary reduction of the mortgaged properties’ appraisal
value from ₱1,200.00 to ₱300.00-₱400.00 per square meter. They likewise sought the maintenance of the status quo,
to enjoin Metrobank, and to prevent it from proceeding with the extrajudicial foreclosure.
On the same day, the Executive Judge issued a 72-hour TRO, directing the sheriff to cease and desist from proceeding
with the scheduled public auction.12 After summary hearing, Judge Carmelita S. Gutierrez-Fruelda, RTC, San Fernando
Pampanga, ordered the extension of the TRO to its full 20-day term.13
On December 17, 2002, Judge Fruelda issued a writ of preliminary injunction which Metrobank unsuccessfully resisted
through a motion for reconsideration that was denied.14 Thus, Metrobank ran to the CA on a petition for certiorari15 to
question the RTC orders for grave abuse of discretion.
The CA dismissed Metrobank’s petition for lack of merit and upheld the RTC’s issued injunction.
Order for Appointment of Independent Commissioners
Meanwhile, the proceedings in the main case continued. At the trial, Sycamore and the spouses Paz moved for the
appointment of independent commissioners to determine the mortgaged properties’ appraisal value. 16 They mainly
alleged that Metrobank arbitrarily and unilaterally reduced the mortgaged properties’ appraisal value; hence, the need
for their reappraisal to determine their true value.
In an order dated August 5, 2004, the RTC granted the petitioners’ motion, and again Metrobank was unsuccessful in
securing a reconsideration.
Metrobank thus again went to the CA on a petition for certiorari under Rule 65, imputing grave abuse of discretion on
the RTC for issuing the questioned order. The bank alleged that the appraisal value of the mortgaged properties is not
an issue in the proceedings because their value is already a matter of record.
On May 3, 2006, the CA this time granted Metrobank’s petition for certiorari and set aside the RTC’s orders. It found
that the appraisal value of the mortgaged properties was not an issue since the real estate mortgage and the promissory
note already indicated with certainty the amount of the loan obligation.
50
It was Sycamore and the spouses Paz this time who filed their motion for reconsideration which the CA denied.
Significantly, the CA noted that the determination of the properties’ appraisal value has nothing to do with the question
of whether the foreclosure proceeding will proceed.
The CA’s denial gave rise to the present petition for review on certiorari.
Sycamore and the spouses Paz contend that the CA erred in setting aside the RTC’s order granting their motion for
appointment of independent commissioners. They argue that it had the effect of preventing the RTC’s determination
of a critical question of fact – i.e., the determination of the mortgaged properties’ true valuation – which, they insist,
is an issue that needs to be resolved prior to the determination of the foreclosure’s validity.
They claim that before resolving the said issue, the RTC has to decide the following prejudicial questions, namely:
(1) Whether Metrobank validly reduced the mortgaged properties’ valuation; and
(2) Whether Metrobank can validly foreclose the mortgaged properties at a further reduced valuation.17
Lastly, Sycamore and the spouses Paz invoke this Court’s intervention to prevent an unfair situation where the
mortgage foreclosure, based on Metrobank’s arbitrary and unilateral reduction of the properties’ appraisal value, would
deprive them of all their properties and, at the same time, leave a deficiency of ₱500,000,000.00.
The Issue
The core issue for our determination is whether the determination of the mortgaged properties’ appraisal value
constitutes a prejudicial question that warrants the suspension of the foreclosure proceedings. Simply put, is the
appraisal value of the mortgaged properties material in the mortgage foreclosure’s validity?
The Court’s Ruling
We deny the petition for lack of merit. The CA did not err when it set aside the RTC’s order granting the motion for
appointment of independent commissioners.
Remedies of a secured creditor
A secured creditor may institute against the mortgage debtor either a personal action for the collection of the debt, a
real action to judicially foreclose the real estate mortgage, or an extrajudicial judicial foreclosure of the mortgage. The
remedies, however, are alternative, not cumulative, and the election or use of one remedy operate as a waiver of the
others.18
We discussed these legal points in Bachrach Motor Co., Inc. v. Icarangal19 and ruled that:
[I]n the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor
either a personal action for debt or a real action to foreclose the mortgage. In other words, he may pursue either of
the two remedies, but not both. By such election, his cause of action can by no means be impaired, for each of the
two remedies is complete in itself. Thus, an election to bring a personal action will leave open to him all the properties
of the debtor for attachment and execution, even including the mortgaged property itself. And, if he waives such
personal action and pursues his remedy against the mortgaged property, an unsatisfied judgment thereon would still
give him the right to sue for a deficiency judgment, in which case, all the properties of the defendant, other than the
mortgaged property, are again open to him for the satisfaction of the deficiency. In either case, his remedy is
complete, his cause of action undiminished, and any advantages attendant to the pursuit of one or the other remedy
are purely accidental and are all under his right of election.
In the present case, Metrobank elected the third remedy – the extrajudicial foreclosure of the real estate mortgage.
Extrajudicial foreclosure under Act No. 3135
Extrajudicial foreclosure is governed by Act No. 3135, as amended by Act No. 4118.
It provides in its Section 1 that:
SECTION 1. When a sale is made under a special power inserted in or attached to any real-estate mortgage hereafter
made as security for the payment of money or the fulfillment of any other obligation, the provisions of the following
election shall govern as to the manner in which the sale and redemption shall be effected, whether or not provision
for the same is made in the power.
In brief, Act No. 3135 recognizes the right of a creditor to foreclose a mortgage upon the mortgagor’s failure to pay
his/her obligation. In choosing this remedy, the creditor enforces his lien through the sale on foreclosure of the
mortgaged property. The proceeds of the sale will then be applied to the satisfaction of the debt. In case of a deficiency,
the mortgagee has the right to recover the deficiency resulting from the difference between the amount obtained in
the sale at public auction, and the outstanding obligation at the time of the foreclosure proceedings. 20
Certain requisites must be established before a creditor can proceed to an extrajudicial foreclosure, namely: first, there
must have been the failure to pay the loan obtained from the mortgagee-creditor; second, the loan obligation must be
secured by a real estate mortgage; and third, the mortgagee-creditor has the right to foreclose the real estate mortgage
either judicially or extrajudicially.
Act No. 3135 outlines the notice and publication requirements and the procedure for the extrajudicial foreclosure which
constitute a condition sine qua non for its validity. Specifically, Sections 2, 3 and 4 of the law prescribe the formalities
of the extrajudicial foreclosure proceeding, which we quote:
SECTION 2. Said sale cannot be made legally outside of the province in which the property sold is situated; and in
case the place within said province in which the sale is to be made is subject to stipulation, such sale shall be made
in said place or in the municipal building of the municipality in which the property or part thereof is situated.
SECTION 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least three public
places of the municipality or city where the property is situated, and if such property is worth more than four hundred
pesos, such notice shall also be published once a week for at least three consecutive weeks in a newspaper of general
circulation in the municipality or city.
SECTION 4. The sale shall be made at public auction, between the hours or nine in the morning and four in the
afternoon; and shall be under the direction of the sheriff of the province, the justice or auxiliary justice of the peace
of the municipality in which such sale has to be made, or a notary public of said municipality, who shall be entitled
to collect a fee of five pesos each day of actual work performed, in addition to his expenses.
Act No. 3135 does not require determination of appraised value
All the above provisions are quoted verbatim to stress that Act No. 3135 has no requirement for the determination of
the mortgaged properties’ appraisal value. Nothing in the law likewise indicates that the mortgagee-creditor’s appraisal
value shall be the basis for the bid price. Neither is there any rule nor any guideline prescribing the minimum amount
of bid, nor that the bid should be at least equal to the properties’ current appraised value. What the law only provides
are the requirements, procedure, venue and the mortgagor’s right to redeem the property. When the law does not
provide for the determination of the property’s valuation, neither should the courts so require, for our duty limits us to
the interpretation of the law, not to its augmentation.
51
Under the circumstances, we fail to see the necessity of determining the mortgaged properties’ current appraised
value.1âwphi1 We likewise do not discern the existence of any prejudicial question, anchored on the mortgaged
properties’ appraised value, that would warrant the suspension of the foreclosure proceedings.
For greater certainty, a prejudicial question is a prior issue whose resolution rests with another tribunal, but at the
same time is necessary in the resolution of another issue in the same case.21 For example, there is a prejudicial question
where there is a civil action involving an issue similar or intimately related to the issue raised in a criminal action, and
the resolution of the issue in the civil action is determinative of the outcome of the criminal action.
As so defined, we do not see how the motion for the appointment of independent commissioners can serve as a
prejudicial question. It is not a main action but a mere incident of the main proceedings; it does not involve an issue
that is intimately related to the foreclosure proceedings; and lastly, the motion’s resolution is not determinative of the
foreclosure’s outcome.
On this point alone, the petition should be denied. But even if Metrobank’s reduced appraised value were lesser than
the mortgaged properties’ current valuation, the petition would still fail. There is no question in this case that Sycamore
and the spouses Paz failed to settle their loan obligations to Metrobank as they fell due. (In fact, there were multiple
or repeated failures to pay.) There is likewise no dispute on the total amount of their outstanding loan obligation.
Sycamore and the spouses Paz also acknowledged Metrobank’s right to foreclose when they asked for the sale’s
postponement, to quote:The undersigned mortgagor(s) hereby acknowledged(s) that the publication and posting of
the Notice of Auction Sale have been completely and regularly complied with the request(s) that republication and
reposting of the same be dispensed with at the discretion of the mortgagee bank and agreed that all expenses incurred
by the said mortgagee bank in connection herewith shall be chargeable to his/her/their account(s) and secured by the
said mortgage(s).
The undersigned mortgagor(s) likewise stipulate(s) that, in consideration of the mortgagee’s having acceded and
agreed to this postponement, he/she/they hereby waive(s), forego(es), quitclaim(s) and set(s) over unto the said
mortgagee any and all his/her/their cause or causes of action, claims or demands arising out of or necessarily connected
with the Promissory Note(s), Real Estate Mortgage Contract(s) and other credit documents mentioned in the above
entitled Petition for Foreclosure of Real Estate Mortgage.22 [emphases supplied]
What Sycamore and the spouses Paz only assail in the present petition is the validity of Metrobank’s appraisal of the
mortgaged properties. Even that issue, if the quoted terms above were to be considered, appears to have been waived
"in consideration of the mortgagee’s having acceded and agreed to this postponement."23
Under these facts, how and why to petitioners would still insist on the appraisal valuation as an issue boggles the mind
and this is a puzzle that only they have a key to. But whatever may that key or answer be, it is not one that is material
to the case below or to the present petition.
Determination of mortgaged properties’ appraisal value is not material to the foreclosure’s validity
We have held in a long line of cases that mere inadequacy of price per se will not invalidate a judicial sale of real
property. It is only when the inadequacy of the price is grossly shocking to the conscience or revolting to the mind,
such that a reasonable man would neither directly nor indirectly be likely to consent to it, that the sale shall be declared
null and void. This rule, however, does not strictly apply in the case of extrajudicial foreclosure sales where the right
of redemption is available.
In Bank of the Philippine Islands v. Reyes,24 involving a similar question arising from the correctness of the mortgaged
properties’ valuation, we held that the inadequacy of the price at which the mortgaged property was sold does not
invalidate the foreclosure sale.

In that case, the winning bid price was ₱9,032,960.00 or merely 19% of the alleged current appraisal value of the
property pegged at ₱47,536,000.00. Despite the relatively sizeable discrepancy, the Court ruled that the level of the
bid price is immaterial in a forced sale because a low price is more beneficial to the mortgage debtor.

We quote from the relevant portion of this decision:

In the case at bar, the winning bid price of ₱9,032,960.00 is nineteen percent (19%) of the appraised value of the
property subject of the extrajudicial foreclosure sale that is pegged at ₱47,536,000.00 which amount, notably, is
only an arbitrary valuation made by the appraising officers of petitioner’s predecessor-in-interest ostensibly for loan
purposes only. Unsettled questions arise over the correctness of this valuation in light of conflicting evidence on
record. xxxx
xxx. In the case at bar, other than the mere inadequacy of the bid price at the foreclosure sale, respondent did not
allege any irregularity in the foreclosure proceedings nor did she prove that a better price could be had for her
property under the circumstances.
Thus, even if we assume that the valuation of the property at issue is correct, we still hold that the inadequacy of
the price at which it was sold at public auction does not invalidate the foreclosure sale."25 (emphasis ours)

In Hulst v. PR Builders, Inc.,26 we explained that when there is a right of redemption, the inadequacy of the price
becomes immaterial because the judgment debtor may still re-acquire the property or even sell his right to redeem
and thus recover the loss he might have suffered by reason of the "inadequate price" obtained at the execution sale.
In this case, the judgment debtor even stands to gain rather than be harmed.1âwphi1

These rulings were also applied in Rabat v. Philippine National Bank, 27 where the Court used the same reasoning and
arrived at the same conclusion:
It bears also to stress that the mode of forced sale utilized by petitioner was an extrajudicial foreclosure of real estate
mortgage which is governed by Act No. 3135, as amended.
An examination of the said law reveals nothing to the effect that there should be a minimum bid price or that the
winning bid should be equal to the appraised value of the foreclosed property or to the amount owed by the mortgage
debtor. What is clearly provided, however, is that a mortgage debtor is given the opportunity to redeem the foreclosed
property "within the term of one year from and after the date of sale." In the case at bar, other than the mere
inadequacy of the bid price at the foreclosure sale, respondent did not allege any irregularity in the foreclosure
proceedings nor did she prove that a better price could be had for her property under the circumstances.
At any rate, we consider it notable enough that PNB’s bid price of ₱3,874,800.00 might not even be said to be
outrageously low as to be shocking to the conscience. As the CA cogently noted in the second amended
decision,20 that bid price was almost equal to both the ₱4,000,000.00 applied for by the Spouses Rabat as loan, and
to the total sum of ₱3,517,380.00 of their actual availment from PNB. [emphasis ours]

We find no reason to depart from these sound and established rulings. We also need not rule on the validity of Metrobank’s valuation.
Whether Metrobank’s reduced valuation is valid or not, or whether the valuation is outrageously lower than its current value, has nothing
to do with the foreclosure proceedings. From this perspective, we cannot but conclude that that the recourses sought in this case have
been intended solely to delay the inevitable – the foreclosure sale and the closure of the collection action -and are an abuse of the
processes of this Court. Under these circumstances the maximum allowable triple costs should be imposed on the petitioners for this
abuse in accordance with Section 3 Rule 142 of the Rules of Court to be paid by counsel for the petitioners. Let counsel also be warned
that what happened in this case is a practice that in a proper administrative proceeding may be found violative of their duties to the
Court. WHEREFORE, the petition is DENIED for lack of merit; the appealed decision of the Court of Appeals dated May 3, 2006 is
AFFIRMED. Let a copy of this Decision be furnished the Board of Governors Integrated Bar of the Philippines for its information. Triple
costs against the petitioners Sycamore Ventures Corporation and the spouses Simon D. Paz and Leng Leng Paz to be paid by their counsel
of record.

52
G.R. No. 154322 August 22, 2006
EMILIA FIGURACION-GERILLA, Petitioner,
vs.
CAROLINA VDA. DE FIGURACION,* ELENA FIGURACION-ANCHETA,* HILARIA A. FIGURACION, FELIPA
FIGURACION-MANUEL, QUINTIN FIGURACION and MARY FIGURACION-GINEZ, Respondents.
In this petition for review on certiorari,1 petitioner Emilia Figuracion-Gerilla challenges the decision2 and resolution3 of
the Court of Appeals (CA) affirming the decision of the Regional Trial Court (RTC) of Urdaneta City, Pangasinan, Branch
49, which dismissed her complaint for partition. The properties involved are two parcels of land which belonged to her
late father, Leandro Figuracion.
Spouses Leandro and respondent Carolina Figuracion (now both deceased) had six children: petitioner and respondents
Elena Figuracion-Ancheta (now deceased), Hilaria Figuracion, Felipa Figuracion-Manuel, Quintin Figuracion and Mary
Figuracion-Ginez.
On August 23, 1955, Leandro executed a deed of quitclaim over his real properties in favor of his six children. When
he died in 1958, he left behind two parcels of land: (1) Lot 2299 of the Cadastral Survey of Urdaneta consisting of
7,547 square meters with Transfer Certificate of Title (TCT) No. 4221-P in the name of "Leandro Figuracion, married
to Carolina Adviento" and (2) Lot 705 of the Cadastral Survey of Urdaneta with an area of 2,900 sq. m. with TCT No.
4220-P also in the name of "Leandro Figuracion, married to Carolina Adviento." Leandro had inherited both lots from
his deceased parents,5 as evidenced by Original Certificate of Title (OCT) Nos. 16731 and 16610, respectively, issued
by the Register of Deeds of the Province of Pangasinan.
Leandro sold a portion of Lot 2299 to Lazaro Adviento, as a result of which TCT No. 4221-P was cancelled and TCT No.
101331 was issued to "Lazaro Adviento, married to Rosenda Sagueped" as owner of the 162 sq. m. and "Leandro
Figuracion, married to Carolina Adviento" as owner of 7,385 sq. m. This lot continued to be in the name of Leandro in
Tax Declaration No. 616 for the year 1985.
What gave rise to the complaint for partition, however, was a dispute between petitioner and her sister, respondent
Mary, over the eastern half of Lot 707 of the Cadastral Survey of Urdaneta with an area of 3,164 sq. m.
Lot 707 belonged to Eulalio Adviento, as evidenced by OCT No. 15867 issued on February 9, 1916. When Adviento
died, his two daughters, Agripina Adviento (his daughter by his first wife) and respondent Carolina (his daughter by
his second wife), succeeded him to it. On November 28, 1961, Agripina executed a quitclaim in favor of petitioner over
the one-half eastern portion of Lot 707. Agripina died on July 28, 1963, single and without any issue. Before her half-
sister’s death, however, respondent Carolina adjudicated unto herself, via affidavit under Rule 74 of the Rules of Court,
the entire Lot 707 which she later sold to respondents Felipa and Hilaria. The latter two immediately had OCT No.
15867 cancelled, on December 11, 1962. A new title, TCT No. 42244, was then issued in the names of Felipa and
Hilaria for Lot 707.
In February 1971, petitioner and her family went to the United States where they stayed for ten years. Returning in
1981,6 she built a house made of strong materials on the eastern half-portion of Lot 707. She continued paying her
share of the realty taxes thereon.
It was sometime later that this dispute erupted. Petitioner sought the extrajudicial partition of all properties held in
common by her and respondents. On May 23, 1994, petitioner filed a complaint in the RTC of Urdaneta City, Branch
49, for partition, annulment of documents, reconveyance, quieting of title and damages against respondents, praying,
53
among others, for: (1) the partition of Lots 2299 and 705; (2) the nullification of the affidavit of self-adjudication
executed by respondent Carolina over Lot 707, the deed of absolute sale in favor of respondents Felipa and Hilaria,
and TCT No. 42244; (3) a declaration that petitioner was the owner of one-half of Lot 707 and (4) damages. The case
was docketed as Civil Case No. U-5826.
On the other hand, respondents took the position that Leandro’s estate should first undergo settlement proceedings
before partition among the heirs could take place. And they claimed that an accounting of expenses chargeable to the
estate was necessary for such settlement.
On June 26, 1997,7 the RTC8 rendered judgment nullifying Carolina’s affidavit of self-adjudication and deed of absolute
sale of Lot 707. It also declared Lots 2299 and 705 as exclusive properties of Leandro Figuracion and therefore part of
his estate. The RTC, however, dismissed the complaint for partition, reconveyance and damages on the ground that it
could not grant the reliefs prayed for by petitioner without any (prior) settlement proceedings wherein the transfer of
title of the properties should first be effected.
On appeal, the CA upheld the dismissal of petitioner’s action for partition for being premature. The CA reversed the
decision, however, with respect to the nullification of the self-adjudication and the deed of sale. Upholding the validity
of the affidavit of self-adjudication and deed of sale as to Carolina’s one-half pro-indiviso share, it instead partitioned
Lot 707. Dissatisfied, respondents elevated the CA decision to this Court in G.R. No. 151334, entitled Carolina vda. de
Figuracion, et al. v. Emilia Figuracion-Gerilla.9
The issue for our consideration is whether or not there needs to be a prior settlement of Leandro’s intestate estate
(that is, an accounting of the income of Lots 2299 and 705, the payment of expenses, liabilities and taxes, plus
compliance with other legal requirements, etc.) before the properties can be partitioned or distributed.
Respondents claim that: (1) the properties constituting Leandro’s estate cannot be partitioned before his estate is
settled and (2) there should be an accounting before anything else, considering that they (respondents) had to spend
for the maintenance of the deceased Leandro Figuracion and his wife in their final years, which support was supposed
to come from the income of the properties. Among other things, respondents apparently wanted petitioner to share in
the expenses incurred for the care of their parents during the ten years she stayed in the United States, before she
could get her part of the estate while petitioner apparently wanted her gross share, without first contributing to the
expenses.
In any event, there appears to be a complication with respect to the partition of Lot 705. The records refer to a case
entitled Figuracion, et al. v. Alejo currently pending in the CA. The records, however, give no clue or information
regarding what exactly this case is all about. Whatever the issues may be, suffice it to say that partition is premature
when ownership of the lot is still in dispute.10
Petitioner faces a different problem with respect to Lot 2299. Section 1, Rule 69 of the Rules of Court provides:
SECTION 1. Complaint in action for partition of real estate. — A person having the right to compel the partition of real
estate may do so as provided in this Rule, setting forth in his complaint the nature and extent of his title and an
adequate description of the real estate of which partition is demanded and joining as defendants all other persons
interested in the property.
The right to an inheritance is transmitted immediately to the heirs by operation of law, at the moment of death of the
decedent. There is no doubt that, as one of the heirs of Leandro Figuracion, petitioner has a legal interest in Lot 2299.
But can she compel partition at this stage?
There are two ways by which partition can take place under Rule 69: by agreement under Section 211 and through
commissioners when such agreement cannot be reached, under Sections 3 to 6. 12
Neither method specifies a procedure for determining expenses chargeable to the decedent’s estate. While Section 8
of Rule 69 provides that there shall be an accounting of the real property’s income (rentals and profits) in the course
of an action for partition,13 there is no provision for the accounting of expenses for which property belonging to the
decedent’s estate may be answerable, such as funeral expenses, inheritance taxes and similar expenses enumerated
under Section 1, Rule 90 of the Rules of Court.
In a situation where there remains an issue as to the expenses chargeable to the estate, partition is inappropriate.
While petitioner points out that the estate is allegedly without any debt and she and respondents are Leandro
Figuracion’s only legal heirs, she does not dispute the finding of the CA that "certain expenses" including those related
to her father’s final illness and burial have not been properly settled. 14 Thus, the heirs (petitioner and respondents)
have to submit their father’s estate to settlement because the determination of these expenses cannot be done in an
action for partition.
In estate settlement proceedings, there is a proper procedure for the accounting of all expenses for which the estate
must answer. If it is any consolation at all to petitioner, the heirs or distributees of the properties may take possession
thereof even before the settlement of accounts, as long as they first file a bond conditioned on the payment of the
estate’s obligations.15
WHEREFORE, the petition is hereby DENIED. The Court of Appeals’ decision and resolution in CA-G.R. CV No. 58290
are AFFIRMED in so far as the issue of the partition of Lots 2299 and 705 is concerned.
But with respect to Lot 707, we make no ruling on the validity of Carolina vda. de Figuracion’s affidavit of self-
adjudication and deed of sale in favor of Felipa and Hilaria Figuracion in view of the fact that Carolina vda. de Figuracion,
et al. v. Emilia Figuracion-Gerilla (G.R. No. 151334) is still pending in this Division.
54
G.R. No. 152195 January 31, 2005
PEDRO SEPULVEDA, SR., substituted by SOCORRO S. LAWAS, Administratrix of His Estate, petitioner,
vs.
ATTY. PACIFICO S. PELAEZ, respondent.
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court, of the Decision1 of the Court of
Appeals (CA) in CA-G.R. CV No. 43758 affirming the decision of the Regional Trial Court (RTC) of Danao City, Branch
25, in Civil Case No. SF-175.
On December 6, 1972, private respondent Atty. Pacifico Pelaez filed a complaint against his granduncle, Pedro
Sepulveda, Sr., with the then Court of First Instance (CFI) of Cebu, for the recovery of possession and ownership of
his one-half (1/2) undivided share of several parcels of land covered by Tax Declaration (T.D.) Nos. 28199, 18197,
18193 and 28316; his undivided one-third (1/3) share in several other lots covered by T.D. Nos. 28304, 35090, 18228,
28310, 26308, 28714, 28311, 28312 and 28299 (all located in Danao, Cebu); and for the partition thereof among the
co-owners. The case was docketed as Civil Case No. SF-175.
The eleven (11) lots were among the twenty-five (25) parcels of land which the private respondent’s mother, Dulce
Sepulveda, inherited from her grandmother, Dionisia Sepulveda under the Project of Partition 2 dated April 16, 1937
submitted by Pedro Sepulveda, Sr. as the administrator of the former’s estate, duly approved by the then CFI of Cebu
in Special Proceeding No. 778-0. Under the said deed, Pedro Sepulveda, Sr. appeared to be the owner of an undivided
portion of Lot No. 28199, while his brother and Dulce’s uncle Santiago Sepulveda, was the undivided owner of one-half
(1/2) of the parcels of land covered by T.D. Nos. 18197, 18193 and 28316. Dulce and her uncles, Pedro and Santiago,
were likewise indicated therein as the co-owners of the eleven other parcels of land, each with an undivided one-third
(1/3) share thereof.
In his complaint, the private respondent alleged that his mother Dulce died intestate on March 2, 1944, and aside from
himself, was survived by her husband Rodolfo Pelaez and her mother Carlota Sepulveda. Dulce’s grandfather Vicente
Sepulveda died intestate on October 25, 1920,3 and Dulce was then only about four years old. According to the private
respondent, his grandmother Carlota repeatedly demanded the delivery of her mother’s share in the eleven (11) parcels
of land, but Pedro Sepulveda, Sr. who by then was the Municipal Mayor of Tudela, refused to do so. Dulce, likewise,
later demanded the delivery of her share in the eleven parcels of land, but Pedro Sepulveda, Sr. still refused, claiming
that he needed to continue to possess the property to reap the produce therefrom which he used for the payment of
the realty taxes on the subject properties. The private respondent alleged that he himself demanded the delivery of
his mother’s share in the subject properties on so many occasions, the last of which was in 1972, to no avail.
The private respondent further narrated that his granduncle executed an affidavit 4 on November 28, 1961, stating that
he was the sole heir of Dionisia when she died intestate on June 5, 1921, when, in fact, the latter was survived by her
three sons, Santiago, Pedro and Vicente. Pedro Sepulveda, Sr. also executed a Deed of Absolute Sale 5 on July 24, 1968
over the property covered by T.D. No. 19804 (T.D. No. 35090) in favor of the City of Danao for ₱7,492.00. According
to the private respondent, his granduncle received this amount without his (private respondent’s) knowledge.
The private respondent prayed that, after due hearing, judgment be rendered in his favor, thus:
ON THE FIRST CAUSE OF ACTION:
1. Declaring the plaintiff the absolute owner of ONE-HALF (1/2) portion of the TWO (2) parcels of land described in
paragraph 2 of the complaint;
2. Declaring the plaintiff the absolute owner of the ONE-THIRD (1/3) portion of the NINE (9) parcels of land
described in paragraph 3 of the complaint;
 3. Ordering the defendant to deliver to the plaintiff the latter’s ONE-THIRD (1/3) share of the SEVEN THOUSAND
FOUR HUNDRED NINETY-TWO PESOS (₱7,492.00) representing the purchase price of the parcel of land described
in paragraph 3(a) of the complaint with interest thereon until the amount is fully paid;
ON THE SECOND CAUSE OF ACTION:
1. Ordering the partition and segregation of the ONE-HALF (1/2) portion belonging to the plaintiff of the TWO (2)
parcels of land described in paragraph 2 of the complaint;
2. Ordering the partition and segregation of the ONE-THIRD (1/3) portion belonging to the plaintiff of the remaining
EIGHT (8) parcels of land described in paragraph 3 of the complaint;
COMMON TO THE FIRST AND SECOND CAUSES OF ACTION:
1. Ordering the defendant to pay the plaintiff the amount of FIFTY THOUSAND PESOS (₱50,000.00) as moral
damages;
2. Ordering the defendant to pay the plaintiff exemplary damages the amount of which is left to the discretion of
this Honorable Court;
3. Ordering the defendant to deliver to the plaintiff the latter’s share of the fruits of the ELEVEN (11) parcels of
land subject-matter of this complaint, the value of which will be proven during the trial;
4. Ordering the defendant to pay the plaintiff actual litigation expenses, the value of which will be proven during
the trial;
5. Ordering the defendant to pay attorney’s fee in the amount of TWELVE THOUSAND PESOS (P12,000.00);
6. Granting to the plaintiff such other reliefs and remedies as he may be entitled to in accordance with law and
equity.6
In his answer to the complaint, Pedro Sepulveda, Sr. admitted having executed a deed of sale over the parcel of land
covered by T.D. No. 19804 in favor of Danao City, but averred that the latter failed to pay the purchase price thereof;
besides, the private respondent had no right to share in the proceeds of the said sale. He likewise denied having
received any demand for the delivery of Dulce’s share of the subject properties from the latter’s mother Carlota, or
from the private respondent.
During the trial, Pedro Sepulveda, Sr. died intestate. A petition for the settlement of his estate was filed on May 8,
1975 with the RTC of Cebu, docketed as Special Proceeding No. SF-37. His daughter, petitioner Socorro Sepulveda
Lawas, was appointed administratrix of his estate in July 1976. In compliance with the decision of this Court in Lawas
v. Court of Appeals,7 docketed as G.R. No. L-45809 and promulgated on December 12, 1986, the deceased was
substituted by the petitioner.
To prove the delivery of Dulce’s share under the project of partition, the petitioner presented the Affidavit of
Consolidation she executed in October 1940 covering thirteen (13) of the twenty-five (25) parcels of land which were
deeded to her under the Project of Partition,8 as well as the Order9 dated March 24, 1962 of the then CFI in Special
Proceeding No. 778-R, denying Carlota’s motion for the reconstitution of the records of the said case, and for the
delivery of Dulce’s share in the eleven parcels of land. The court likewise declared therein that Dulce, through her
grandchildren and her mother, Carlota, had already received her share of the estate from Pedro Sepulveda, Sr. as early
as January 10, 1938.
According to the petitioner, Dulce and Pedro Sepulveda, Sr. had a verbal agreement wherein the eleven parcels of land
covered by the complaint would serve as the latter’s compensation for his services as administrator of Dionisia’s estate.
Thus, upon the termination of Special Proceeding No. 778-0, and subsequent to the distribution of the shares of
Dionisia’s heirs, Pedro Sepulveda, Sr. then became the sole owner of Dulce’s shares.
The petitioner likewise adduced evidence that Santiago Sepulveda died intestate and was survived by his wife, Paz
Velez Sepulveda and their then minor children. 10 It was pointed out that the private respondent failed to implead Paz
Sepulveda and her minor children as parties-defendants in the complaint.
55
It was further claimed that Pedro Sepulveda, Sr. declared the property covered by T.D. No. 18199 11 under his name
for taxation purposes since the beginning of 1948.12 It was likewise alleged that the eleven (11) parcels of land deeded
to Dulce under the Project of Partition had been declared for taxation purposes under the name of Pedro Sepulveda
since 1974, and that he and his heirs paid the realty taxes thereon. 13
On June 7, 1993, the trial court rendered judgment14 in favor of the private respondent. The fallo of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and against the defendant by
declaring that the plaintiff is legally and rightfully entitled to the one half (1/2) portion of the two (2) parcels of land
described in paragraph 2 of the Complaint and to the one third (1/3) portion of the nine (9) parcels of land described
in paragraph 3 of the complaint as co-owner thereof, and ordering the partition and segregation of the said one half
(1/2) portion of the said two (2) parcels of land and of the said one third (1/3) portion of the nine (9) parcels of land,
and in the partition thereof, the mechanics of partition outlined in Rule 69 of the Revised Rules of Court must be
followed (Magallon vs. Montejo, 146 SCRA 282); ordering the defendant Socorro Lawas, as administratrix of the
Estate of Pedro Sepulveda, Sr., to deliver to plaintiff the latter’s one third (1/3) share of the ₱7,492.00 representing
the purchase price of the parcel of land sold to Danao City with interest of twelve [per] centum (12%) per annum
(Reformina vs. Tomol, 139 SCRA 260) from the date of filing of the Complaint until the amount due to plaintiff is fully
paid, to pay attorney’s fees to plaintiff’s attorney in the sum of ₱10,000.00, and to pay the costs. The counterclaim
is hereby dismissed.
The trial court ruled that the private respondent’s action for reconveyance based on constructive trust had not yet
prescribed when the complaint was filed; that he was entitled to a share in the proceeds of the sale of the property to
Danao City; and that the partition of the subject property among the adjudicatees thereof was in order.
The petitioner appealed the decision to the CA, which rendered judgment on January 31, 2002, affirming the appealed
decision with modification.
The petitioner now comes to the Court via a petition for review on certiorari, contending that the appellate court erred
as follows:
1. THE COURT OF APPEALS ERRED IN THE INCORRECT APPLICATION OF ART. 494 OF THE CIVIL CODE AND IN
UPHOLDING THE REGIONAL TRIAL COURT’S FINDING THAT A TRUST RELATIONSHIP WAS CREATED BETWEEN
HEREIN RESPONDENT AND PEDRO SEPULVEDA [SR.].
2. THE COURT OF APPEALS ERRED IN NOT APPLYING THE LAWS ON PRESCRIPTION AND LACHES TO THE FACTS AS
PROVEN IN THE CASE AGAINST HEREIN RESPONDENT.
3. THE COURT OF APPEALS ERRED IN UPHOLDING THE FINDING OF THE REGIONAL TRIAL COURT, BRANCH 25 IN
DANAO CITY THAT PAYMENT WAS MADE BY DANAO CITY FOR ONE (1) OF THE ELEVEN (11) PARCELS INVOLVED IN
THE CASE AND OF WHICH HEREIN RESPONDENT SHOULD BE PAID BY PETITIONER ONE THIRD (1/3) OF THE
PURCHASE PRICE.
4. THE COURT OF APPEALS ERRED IN AWARDING MORAL AND EXEMPLARY DAMAGES AND A SHARE IN THE RENTS
AND PROFITS OF THE ELEVEN (11) PARCELS TO HEREIN RESPONDENT.
5. THE COURT OF APPEALS ERRED IN UPHOLDING THE REGIONAL TRIAL COURT’S FINDING THAT ATTORNEY’S FEES
ARE TO BE AWARDED AND EVEN INCREASING THE AMOUNT THEREOF.16
The petition is granted for the sole reason that the respondent failed to implead as parties, all the indispensable parties
in his complaint.
As gleaned from the material averments of the complaint and the reliefs prayed for therein, the private respondent, as
plaintiff therein, sought the recovery of the ownership and possession of the ten (10) parcels of land and the partition
thereof; and for the payment of his share in the proceeds of the sale of the property which Pedro Sepulveda, Sr. sold
to Danao City amounting to ₱7,492.00, which Pedro Sepulveda, Sr. claimed was left unpaid. It appears that when the
private respondent filed the complaint, his father, Rodolfo Pelaez, was still alive. Thus, when his mother Dulce Pelaez Section 7, Rule 3 of the Rules of Court reads:
died intestate on March 2, 1944, she was survived by her husband Rodolfo and their son, the private respondent. Under SEC. 7. Compulsory joinder of indispensable parties. – Parties in interest without whom no final determination can
Article 996 of the New Civil Code,17 Rodolfo Pelaez, as surviving spouse, is entitled to a portion in usufruct equal to be had of an action shall be joined either as plaintiffs or defendants.
that corresponding by way of legitime to each of the legitimate children who has not received any betterment. The
rights of the usufructuary are provided in Articles 471 to 490 of the old Civil Code. 18 In Gamis v. Court of Appeals,19 we Indeed, the presence of all indispensable parties is a condition sine qua non for the exercise of judicial power. It is
held that: precisely when an indispensable party is not before the court that the action should be dismissed. Thus, the plaintiff is
Under articles 807 and 834 of the old Civil Code the surviving spouse is a forced heir and entitled to a share in mandated to implead all the indispensable parties, considering that the absence of one such party renders all
usufruct in the estate of the deceased spouse equal to that which by way of legitime corresponds or belongs to each subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as
of the legitimate children or descendants who have not been bettered or have not received any share in the one- to those present.24 One who is a party to a case is not bound by any decision of the court, otherwise, he will be deprived
third share destined for betterment. The right of the surviving spouse to have a share in usufruct in the estate of the of his right to due process. Without the presence of all the other heirs as plaintiffs, the trial court could not validly
deceased spouse is provided by law of which such spouse cannot be deprived and which cannot be ignored. Of course, render judgment and grant relief in favor of the private respondent. The failure of the private respondent to implead
the spouse may waive it but the waiver must be express. the other heirs as parties-plaintiffs constituted a legal obstacle to the trial court and the appellate court’s exercise of
judicial power over the said case, and rendered any orders or judgments rendered therein a nullity. 25
Section 1, Rule 69 of the Rules of Court provides that in an action for partition, all persons interested in the property
shall be joined as defendants. To reiterate, the absence of an indispensable party renders all subsequent actions of the court null and void for want
Section 1. Complaint in action for partition of real estate.- A person having the right to compel the partition of real of authority to act, not only as to the absent parties but even as to those present. 26 Hence, the trial court should have
estate may do so as in this rule prescribed, setting forth in his complaint the nature and extent of his title and an ordered the dismissal of the complaint.27
adequate description of the real estate of which partition is demanded and joining as defendants all the other persons
interested in the property.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decisions of the Court of Appeals in CA-G.R. CV
No. 43758 and of the Regional Trial Court are SET ASIDE. The Regional Trial Court is ORDERED to dismiss the complaint
Thus, all the co-heirs and persons having an interest in the property are indispensable parties; as such, an action for without prejudice. No pronouncement as to costs.
partition will not lie without the joinder of the said parties.20 The mere fact that Pedro Sepulveda, Sr. has repudiated
the co-ownership between him and the respondent does not deprive the trial court of jurisdiction to take cognizance of
the action for partition, for, in a complaint for partition, the plaintiff seeks, first, a declaration that he is a co-owner of
the subject property; and, second, the conveyance of his lawful shares. 21 As the Court ruled in De Mesa v. Court of
Appeals:22
The first stage of an action for judicial partition and/or accounting is concerned with the determination of whether or
not a co-ownership in fact exists and a partition is proper, that is, it is not otherwise legally proscribed and may be
made by voluntary agreement of all the parties interested in the property. This phase may end in a declaration that
plaintiff is not entitled to the desired partition either because a co-ownership does not exist or a partition is legally
prohibited. It may also end, on the other hand, with an adjudgment that a co-ownership does in truth exist, that
partition is proper in the premises, and that an accounting of rents and profits received by the defendant from the
real estate in question is in order. In the latter case, "the parties may, if they are able to agree, make partition among
themselves by proper instruments of conveyance, and the court shall confirm the partition so agreed upon by all the
parties." In either case, whether the action is dismissed or partition and/or accounting is decreed, the order is a final
one and may be appealed by any party aggrieved thereby.

The second stage commences when the parties are unable to agree upon the partition ordered by the court. In that
event, partition shall be effected for the parties by the court with the assistance of not more than three (3)
commissioners. This second phase may also deal with the rendition of the accounting itself and its approval by the
Court after the parties have been accorded the opportunity to be heard thereon, and an award for the recovery by
the party or parties thereto entitled of their just shares in the rents and profits of the real estate in question…. 23

In the present action, the private respondent, as the plaintiff in the trial court, failed to implead the following
indispensable parties: his father, Rodolfo Pelaez; the heirs of Santiago Sepulveda, namely, Paz Sepulveda and their
children; and the City of Danao which purchased the property covered by T.D. 19804 (T.D. No. 35090) from Pedro
Sepulveda, Sr. and maintained that it had failed to pay for the purchase price of the property.

Rodolfo Pelaez is an indispensable party he being entitled to a share in usufruct, equal to the share of the respondent
in the subject properties. There is no showing that Rodolfo Pelaez had waived his right to usufruct.

56
G.R. No. 129704 September 30, 2005
ULPIANO BALO, LYDIA BALO-LUMPAS, EUGENIO BALO, ULPIANO BALO, JR., NIDA BALO-MORALETA, NORA
BALO-CATANO, ZAIDA BALO, JUDITH BALO-MANDREZA, DANILO BALO and RONILO BALO, Petitioners,
vs.
THE HON. COURT OF APPEALS, HON. JUDGE ENRIQUE ASIS and JOSEFINA GARRIDO, Respondent.
A complaint for Judicial Partition of Real Properties and Accounting with Damages, docketed as Civil Case No. 279, was
filed by private respondent Josefina Garrido against petitioners Ulpiano Balo, Lydia Balo-Lumpas, Eugenio Balo, Ulpiano
Balo, Jr., Nida Balo-Moraleta, Nora Balo-Catano, Zaida Balo, Judith Balo-Mandreza, Danilo Balo and Ronilo Balo, before
the Regional Trial Court (RTC) of Abuyog, Leyte, Branch 10, alleging that she (private respondent) and petitioners are
the co-owners of undivided parcels of land located at Mayorga, Leyte. According to her, these lands were originally
owned by the spouses Eugenio Balo, Sr. and Ma. Pasagui-Balo, who, at the time of the filing of the complaint, were
already deceased. The Balo spouses were survived by their two (2) children, Ulpiano, Sr. and Maximino, the latter
likewise deceased. Private respondent is the daughter of Maximino Balo and Salvacion Sabulao. Petitioner Ulpiano Balo
is the son of Eugenio Balo, Sr., while the other petitioners, the children of Ulpiano, are Eugenio’s grandchildren.
Private respondent further alleged in her complaint that immediately upon the death of her grandfather, Eugenio Sr.,
the petitioners took possession of the said real properties without her knowledge and consent. The petitioners being
her uncle and cousins, private respondent earnestly requested them that they come up with a fair and equal partition
of the properties left by her grandparents. The petitioners having outrightly refused her proposal, private respondent
filed the complaint.1
In lieu of an Answer, petitioners filed a Motion to Dismiss2 on the following grounds:
1. Failure to state a cause of action - plaintiff, though she claims to be a daughter of Maximino who died sometime
in 1946, failed to allege whether or not she is a legitimate child. Plaintiff’s failure to allege legitimacy is fatal
considering the provision of Article 992 of the Civil Code.3 To allow Plaintiff to inherit from the estate of the spouses
Eugenio and Maria Balo in representation of her father Maximino Balo would be to permit intestate succession by an
illegitimate child from the legitimate parent of his father, assuming that she is the child of Maximino Balo.
2. The complaint does not show that the estate of the spouses Eugenio and Maria Balo have been settled and its
obligations have been paid.
3. The properties enumerated in the Complaint were proceeded against by way of execution to satisfy a judgment
against Eugenio and Maria Balo. Subsequently, defendant Ulpiano repurchased the said properties and has been,
together with his children, openly, exclusively and adversely in possession of the real estate properties in question.
Private respondent filed her comment/opposition to the motion to dismiss. 4
In an Order dated 12 September 1996, the RTC denied the motion to dismiss for lack of merit. 5 The trial court held:
The complaint clearly states that the late Eugenio Balo, Sr., and Maria Pasagui Balo had two (2) children, namely:
Ulpiano, Sr. and Maximino. The plaintiff is the daughter of the late Maximino Balo and Salvacion Sabulao; while the
defendants are children of the late Ulpiano Balo, Sr. and Felicidad Superio.
The complaint enumerates/annexes 13 tax declarations in the name of Eugenio Balo, Sr. marked as Annexes "A" to
"M." The plaintiff as an heir prays that these parcels of land be partitioned in accordance with Article 982 of the Civil
Code which states:
"The grandchildren and other descendants shall inherit by right of representation, and if any one of them should have
died, leaving several heirs, the portion pertaining to him shall be divided among the latter in equal portions."
57
No evidence may be alleged or considered to test the sufficiency of the complaint except the very facts pleaded therein.
It would be improper to inject into the allegation, facts not alleged and use them as basis for the decision on the
motion.
The Court is not permitted to go beyond and outside of the allegations in the complaint for data or facts.
Therefore, the allegation of illegitimacy and claim of absolute ownership are modifications and unreasonable inferences.
If there is doubt to the truth of the facts averred in the complaint, the Court does not dismiss the complaint but requires
an answer and proceeds to hear the case on the merit.6
Petitioners filed a Motion for Reconsideration7 which the RTC denied in its Order8 dated 07 November 1996.
Petitioners filed a Petition for Certiorari9 before the Court of Appeals. After the filing of Comment and other pleadings,
the case was deemed submitted for decision. In a resolution dated 16 April 1997, the Court of Appeals denied due
course to the petition and accordingly dismissed the same. The Court of Appeals justified the dismissal in the following
manner:
It is an established rule that an order denying a motion to dismiss is basically interlocutory in character and cannot
be the proper subject of a petition for certiorari. When a motion to dismiss is denied, the proper procedure is to
proceed with the trial and if the decision be adverse to the movant, the remedy is to take an appeal from said
decision, assigning as one of the errors therefore the denial of the motion to dismiss.10
Petitioners filed a Motion for Reconsideration11 which the Court of Appeals denied in a resolution dated 30 June
1997.12 Hence this petition for review13 under Rule 45 of the Rules of Court.
Petitioners cite the following grounds for the allowance of their petition, to wit:
I WHETHER OR NOT THE FAILURE TO ALLEGE THE NATURE AND EXTENT OF PLAINTIFF’S TITLE IN A PETITION FOR
PARTITION IS FATAL TO ITS CAUSE OF ACTION.
II WHETHER OR NOT THE ACTION FOR JUDICIAL PARTITION AND ACCOUNTING HAS PRESCRIBED, WAS WAIVED,
OR WAS OTHERWISE ABANDONED.14
At the threshold of the instant petition for review is the correctness of the appellate court’s dismissal of the petition
for certiorari filed by the petitioners.
In resolving to deny the petition, the Court of Appeals relied on the long established jurisprudence that an order denying
a motion to dismiss is interlocutory and cannot be the proper subject of a petition for certiorari.
The general rule regarding denial of a motion to dismiss as a basis of a resort to the extraordinary writ of certiorari is
that:
. . . [A]n order denying a motion to dismiss is an interlocutory order which neither terminates nor finally disposes of
a case as it leaves something to be done by the court before the case is finally decided on the merits. As such, the
general rule is that the denial of a motion to dismiss cannot be questioned in a special civil action for certiorari which
is a remedy designed to correct errors of jurisdiction and not errors of judgment.
To justify the grant of the extraordinary remedy of certiorari, therefore, the denial of the motion to dismiss must
have been tainted with grave abuse of discretion. By "grave abuse of discretion" is meant, such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as
where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility and must
 be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined
by or to act all in contemplation of law.15
Specific instances whereby the rule admits certain exceptions are provided as follows:
. . . Under certain situations, recourse to certiorari or mandamus is considered appropriate, i.e., (a) when the trial
court issued the order without or in excess of jurisdiction; (b) where there is patent grave abuse of discretion by the
trial court; or (c) appeal would not prove to be a speedy and adequate remedy as when an appeal would not promptly
relieve a defendant from the injurious effects of the patently mistaken order maintaining the plaintiff’s baseless action
and compelling the defendant needlessly to go through a protracted trial and clogging the court dockets by another
futile case.16
Applying the foregoing, the Court of Appeals should not have dismissed the petition outright as the same alleges grave
abuse of discretion. Instead, it should have proceeded to determine whether or not the trial court did commit grave
abuse of discretion as alleged by the petitioners. The Court of Appeals having failed in this regard, it behooves upon
this Court to discuss the merits of the petition to put to rest the issues raised by the petitioners.
Contrary to petitioners’ contention, allegations sufficient to support a cause of action for partition may be found in
private respondent’s complaint.17
Nothing is more settled than the rule that in a motion to dismiss for failure to state a cause of action, the inquiry is
into the sufficiency, not the veracity, of the material allegations.18 Moreover, the inquiry is confined to the four corners
of the complaint, and no other.19
In a motion to dismiss a complaint based on lack of cause of action, the question submitted to the court for
determination is the sufficiency of the allegations made in the complaint to constitute a cause of action and not whether
those allegations of fact are true, for said motion must hypothetically admit the truth of the facts alleged in the
complaint.
The test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged, the court
could render a valid judgment upon the same in accordance with the prayer of the complaint. (Garcon vs. Redemptorist
Fathers, 17 SCRA 341)
If the allegations of the complaint are sufficient in form and substance but their veracity and correctness are assailed,
it is incumbent upon the court to deny the motion to dismiss and require the defendant to answer and go to trial to
prove his defense. The veracity of the assertions of the parties can be ascertained at the trial of the case on the merits.
(Galeon vs. Galeon, 49 SCRA 516-521)20
Section 1, Rule 8 of the 1997 Rules of Civil Procedure provides that the complaint needs only to allege the ultimate
facts upon which private respondent bases her claim.
The rules of procedure require that the complaint must make a concise statement of the ultimate facts or the essential
facts constituting the plaintiff’s cause of action. A fact is essential if it cannot be stricken out without leaving the
statement of the cause of action inadequate. A complaint states a cause of action only when it has its three
indispensable elements, namely: (1) a right in favor of the plaintiff by whatever means and under whatever law it
arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and
(3) an act or omission on the part of such defendant violate of the right of plaintiff or constituting a breach of the
obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages.21
58
In her Complaint, the private respondent made the following assertions:
. . . That the afore-described parcels of lands were originally owned by Eugenio Balo, Sr. and Ma. Pasagui-Balo, who
are now both deceased and after their death, were inherited into two (2) equal shares by their two (2) children,
namely: Ulpiano, Sr. and Maximino, both surnamed Balo, the later (sic) being already dead.
That plaintiff is the daughter of the late Maximino Balo and Salvacion Sabulao, who after her father’s death, had
inherited her father’s share of the inheritance.
That defendant Ulpiano Balo, Sr. aside from being the son of Eugenio Balo, Sr., is married to Felicidad Superio, and is
the father of all the other defendants in this case.
The defendants took possession of the above-described real properties immediately after the death of plaintiff’s
grandfather Eugenio Balo, Sr. without her knowledge and consent.
That plaintiff is desirous that the above-described real properties be partitioned between her and defendants.
That plaintiff has proposed to the defendants that the above-described real properties be amicably partitioned between
them by mutual agreement in a very fair and practical division of the same, but said defendants refused and continue
to do so without any justifiable cause or reason to accede to the partition of the said properties. 22
The foregoing allegations show substantial compliance with the formal and substantial requirements of a Complaint for
Partition as required under Section 1, Rule 69 of the 1997 Rules of Civil Procedure.23
On the insistence of petitioners that private respondent first prove her legitimacy before an action for partition may be
maintained, this Court, in the case of Briz v. Briz,24 pronounced that proof of legal acknowledgment is not a prerequisite
before an action for partition may be filed. We said:25
. . . In other words, there is no absolute necessity requiring that the action to compel acknowledgment should have
been instituted and prosecuted to a successful conclusion prior to the action in which that same plaintiff seeks
additional relief in the character of heir. Certainly, there is nothing so peculiar to the action to compel acknowledgment
as to require that a rule should be here applied different from that generally applicable in other cases. For instance,
if the plaintiff had in this action impleaded all of the persons who would be necessary parties defendant to an action
to compel acknowledgement, and had asked for relief of that character, it would have been permissible for the court
to make the judicial pronouncement declaring that the plaintiff is entitled to be recognized as the natural child of
Maximo Briz, and at the same time to grant the additional relief sought in this case against the present defendants;
that is, a decree compelling them to surrender to the plaintiff the parcel of land sued for and to pay her the damages
awarded in the appealed decision.
The conclusion above stated, though not heretofore explicitly formulated by this court, is undoubtedly to some extent
supported by our prior decisions. Thus, we have held in numerous cases, and the doctrine must be considered well
settled, that a natural child having a right to compel acknowledgment, but who has not been in fact legally
acknowledged, may maintain partition (proceedings for the division of the inheritance against his coheirs (Siguiong vs.
Siguiong, 8 Phil. 5; Tiamson vs. Tiamson, 32 Phil 62); and the same person may intervene in proceedings for the
distribution of the estate of his deceased natural father, or mother (Capistrano vs. Fabella, 8 Phil. 135; Conde vs.
Abaya, 13 Phil. 249; Ramirez vs. Gmur, 42 Phil 855). In neither of these situations has it been thought necessary for
the plaintiff to show a prior decree compelling acknowledgment. The obvious reason is that in partition suits and
distribution proceedings the other persons who might take by inheritance are before the court; and the declaration of
heirship is appropriate to such proceedings.
To further reiterate that in partition proceedings, dismissal prior to answer is premature, this Court has held:
In a complaint for partition, the plaintiff seeks, first, a declaration that he is a co-owner of the subject properties;
and second, the conveyance of his lawful shares. As the Court of Appeals correctly held, an action for partition is at
once an action for declaration of co-ownership and for segregation and conveyance of a determine portion of the
properties involved. If the defendant asserts exclusive title over the property, the action for partition should not be
dismissed. Rather, the court should resolve the case and if the plaintiff is unable to sustain his claimed status as a
co-owner, the court should dismiss the action, not because the wrong remedy was availed of, but because no basis
exists for requiring the defendant to submit to partition. If, on the other hand, the court after trial should find the
existence of co-ownership among the parties, the court may and should order the partition of the properties in the
same action.26
The case of Vda. De Daffon v. Court of Appeals27 is almost most appropriate. In said case, the action for partition filed
by the plaintiffs was met by a motion to dismiss filed by the defendants based on the grounds of failure of the complaint
to state a cause of action, waiver, abandonment and extinguishment of the obligation. The trial court denied the motion
to dismiss and the denial was affirmed by the appellate court and by this Court. We held there that the trial court and
the Court of Appeals were correct in dismissing the petition for certiorari absent a clear showing of grave abuse of
discretion amounting to lack or excess of jurisdiction. We further expressed our dismay over the delay in the resolution
of the said case due to the fact that the issue of the denial of the Motion to Dismiss was elevated to this Court by
petitioner and counsel instead of just filing an Answer and meeting the issues head-on.
On the matter of prescription cited by the petitioners as a ground for the dismissal of the complaint, it is noteworthy
that the motion to dismiss filed by the petitioners did not ipso facto establish prescription. An allegation of prescription
can effectively be used in a motion to dismiss only when the complaint on its face shows that indeed the action has
already prescribed;28 otherwise, the issue of prescription is one involving evidentiary matters requiring a full-blown
trial on the merits and cannot be determined in a mere motion to dismiss. 29
Wherefore, premises considered, the instant Petition is DENIED and the decision of the Court of Appeals in CA-G.R. SP
No. 42803, affirming the Order of the Regional Trial Court dated 12 September 1996, is AffIRmed. This case is ordered
remanded to the court of origin which is directed to resolve the case with dispatch. Costs against petitioners.
59
G.R. No. 109963 October 13, 1999
HEIRS OF JOAQUIN TEVES: RICARDO TEVES, ARCADIA TEVES, TOMAS ZAMORA, FELICIA TEVES, HELEN
TEVES, ALFREDO OSMEÑA, ROBERTO TEVES, JOAQUIN TEVES, III, PETER TEVES, MILDRED TEVES, WILSON
MABILOG, LEONILO PATIGAYON, EDUARDO PATIGAYON, ALEXANDER PATIGAYON, ALDRIN PATIGAYON,
NOEL PATIGAYON, VICTOR PATIGAYON, MA. TEVES PATERNO OCHOTORENA, EXEQUILA TEVES, EMILIO JO,
EMILIANA TEVES, MILAGROS TEVES, EDSEL PINILI, VICENTE TEVES, EMILIANA ISO, ALBERTO TEVES,
ERLINDA TEVES, DIOSDADO TEVES, VICTORIA TEVES AND VIVENCIO NARCISO, petitioners,
vs.
COURT OF APPEALS, HEIRS OF ASUNCION IT-IT NAMELY: ELISA IT-IT, SUSANA IT-IT, NORBERTO IT-IT,
ISA-AC IT-IT, JR., JAIME IT-IT, FELICITAS IT-IT, TERESITA IT-IT, ANTONIO NODADO, CORAZON IT-IT,
JIMMY LERO, DANILO IT-IT, EDITA GAMORA, PACITA VAILOCES, CRIS VAILOCES, CECILIA CIMAFRANCA
and CECILIA FLOR CIMAFRANCA, respondents.
Before us is a petition for review on certiorari assailing the decision 1 of the Court of Appeals which was promulgated
on August 18, 1992 affirming the July 11, 1991 decision 2 of Branch 38 of the Regional Trial Court of Negros Oriental
in favor of defendants-appellees.
Marcelina Cimafranca and Joaquin Teves had nine children, namely Teotimo, Felicia, Pedro, Andres, Asuncion, Gorgonio,
Cresenciano, Arcadia and Maria. Andres, however, predeceased both his parents and died without issue. After Marcelina
Cimafranca and Joaquin Teves died, intestate and without debts, in 1943 and 1953, respectively, their children
executed extrajudicial settlements purporting to adjudicate unto themselves the ownership over two parcels of land
belonging to their deceased parents and to alienate their shares thereto in favor of their sister Asuncion Teves. The
validity of these settlements executed pursuant to section 1 of Rule 74 of the Rules of Court is the primary issue in the
present case.1âwphi1.nêt
On May 9, 1984, plaintiffs-appellants Ricardo and Arcadia Teves filed a complaint with the Regional Trial Court of
Negros Oriental for the partition and reconveyance of two parcels of land located in Dumaguete, designated as Lots
769-A and 6409, against the heirs of Asuncion Teves. The complaint was subsequently amended to include Maria Teves
and the heirs of Teotimo, Felicia, Pedro, and Gorgonio Teves as plaintiffs and the spouses Lucresio Baylosis and Pacita
Nocete, and Cecilia Cimafranca-Gamos and Cecilia Flor Cimafranca as defendants. 3 Plaintiffs-appellants alleged that
defendants-appellees, without any justifiable reason, refused to partition the said parcels of land and to convey to
plaintiffs their rightful shares. 4
Lot 769, covered by Original Certificate of Title (OCT) No. 4682-A, 5 is registered in the names of Urbana Cimafranca,
one-fourth (1/4) share, Marcelina Cimafranca, the wife of Joaquin Teves, one-fourth (1/4) share, Domingo
Villahermosa, one-eighth (1/8) share, Antero Villahermosa, one-eighth (1/8) share, Cecilia Cimafranca, one-eighth
(1/8) share and Julio Cimafranca, one-eighth (1/8) share. The present controversy involves only Marcelina Cimafranca's
one-fourth (1/4) share in the land, designated as Lot 769-A.
On June 13, 1956, Teotimo, Felicia, Pedro, Asuncion, Gorgonio and Arcadia Teves executed a document entitled
"Settlement of Estate and Sale," 6 adjudicating unto themselves, in equal shares, Lot 769-A and conveying their shares,
interests and participations over the same in favor of Asuncion Teves for the consideration of P425.00. A similar deed
denominated "Extrajudicial Settlement and Sale" 7 was signed by Maria Teves on April 21, 1959. Under such deed,
Maria conveys her own share over Lot 769-A in favor of Asuncion Teves for the consideration of P80.00. The two
settlements were denounced by the plaintiffs as spurious. The trial court summarized the claims of the plaintiffs, viz —
. . . Maria Teves Ochotorena herself, denied having executed this Extrajudicial Settlement and Sale over her share
or interest in Lot 769 claiming that her signature in said document is a forgery. She disowns her signature declaring
 that as a married woman she always signs a document in her husband's family name. Further, she declared that on
the date she purportedly signed said document in Dumaguete City before the notary public, she was in her home in
Katipunan, Zamboanga del Norte.
On Exhibit "G" which is likewise offered as Exhibit "3" for the defendants, plaintiffs hold that said document is spurious
claiming that the signatures of Pedro Teves, Felicia Teves and Gorgonio Teves are all forgeries. To support this
allegation, Helen T. Osmena, daughter of Felicia Teves and Erlinda Teves, daughter of Gorgonio Teves were presented
as witnesses. Being allegedly familiar with the style and character of the handwriting of their parents these witnesses
declared unequivocally that the signatures of their parents appearing on the document are forgeries.
In sum, plaintiffs argue that these fraudulent documents which defendants rely in claiming ownership to the disputed
properties are all nullities and have no force in law and could not be used as basis for any legal title. Consequently,
in their view, they are entitled to the reliefs demanded particularly, to their respective shares of the disputed
properties. 8
The other property in dispute is Lot 6409 which was originally covered by OCT No. 9091 9 and was registered in the
name of Joaquin Teves and his two sisters, Matea and Candida Teves. However, Matea and Candida died without issue,
causing the entire property to pass to Joaquin Teves. On December 14, 1971, Lot 6409 was adjudicated and divided
in equal shares in a "Deed of Extrajudicial Settlement & Sale" 10 executed by Joaquin Teves' children — Asuncion,
Teotimo, Felisia, Gorgonio, Arcadia and Maria Teves. In the same deed, the shares of these same heirs in Lot 6409
were sold to Asuncion Teves for P100.00. Asuncion Teves took possession of the land and acquired title 11 over the
same on March 22, 1972. After her death in 1981, her children, defendants-appellees It-it herein, extrajudicially settled
Asuncion Teves' property, adjudicating unto themselves Lot 6409. 12 On July 20, 1983 a new transfer certificate of
title 13 was issued in the names of Asuncion Teves' children, namely Elisa, Susana, Norberto, Isaac, Jaime, Felicitas,
Teresita, Corazon, and Danilo, all surnamed It-it. On July 2, 1984, the It-its sold Lot 6409 to defendants-appellees
Lucrecio Baylosis, Sr. and Pacita Nocete-Baylosis for P20,000.00 14 and a transfer certificate of title 15 was issued in
the name of the Baylosis couple.
Plaintiffs-appellants claim that the Deed of Extrajudicial Settlement & Sale covering Lot 6409 is also spurious. Their
arguments were discussed in the trial court's decision as follows —
Presented as Exhibit "D" and "1" for both the plaintiffs and defendants respectively, is a document denominated as
"Extrajudicial Settlement and Sale" executed on December 4, 1971 by and among the heirs of Joaquin Teves and
Marcelina Cimafranca. This document which gave birth to TCT No. 5761 over Lot 6409 registered in the name of
Asuncion Teves It-it is questioned by the plaintiffs as spurious for the following reasons:
1. Erasure of the word "quitclaim" is superimposed with the word "sale" in handwriting.
2. The consideration of "One peso" stated in document is intercalated with the word "hundred" in handwriting.
3. The signature of Maria Teves Ochotorena, Pedro Teves and Felicia Teves are forgeries.
4. The thumbmark imposed on the name of Gorgonio Teves does not actually belong to Gorgonio Teves who was
an educated man and skilled in writing according to his daughter.
Aside from these defects which would make said document null and void, Arcadia Teves who is one of the living
sisters of the mother of the principal defendants although confirming the authenticity of her signature averred that
in reality no consideration was ever given to her and that her impression of the said document was that she was only
giving her consent to sell her share of the land.
Plaintiffs likewise contend that as regards the share of Ricardo Teves, son of Crescenciano Teves who predeceased
Joaquin and Marcelina, it was not at all affected in that extrajudicial settlement and sale since neither Crescenciano
Teves nor his son Ricardo Teves participated in its execution.
60
Likewise, plaintiffs offered TCT No. 5761 for Lot 6409 registered in the name of Asuncion Teves It-it as Exhibit "B"
as proof that said property was later titled in trust for all the heirs of Joaquin Teves and which was used later as basis
in effecting a deed of sale in favor of co-defendant Lucresio Baylosis. In this light, the plaintiffs argue that the sale
of said property is a nullity for it was not only attended with bad faith on the part of both the vendor and the vendee
but primarily the vendor had no right at all to part with said property which is legally owned by others. 16
In answer to plaintiffs-appellants' charges of fraud, defendants-appellees maintained that the assailed documents were
executed with all the formalities required by law and are therefore binding and legally effective as bases for acquiring
ownership or legal title over the lots in question. Furthermore, it is contended that plaintiffs-appellants have slept on
their rights and should now be deemed to have abandoned such rights. 17
The trial court ruled in favor of defendants-appellees and rendered judgment dismissing the complaint with costs
against plaintiffs-appellants. As regards Lot 6409, the court declared that the Extrajudicial Settlement and Sale
executed by the heirs of Joaquin Teves and Marcelina Cimafranca was duly executed with all the formalities required
by law, thus, validly conveying Lot 6409 in favor of Asuncion Teves. Moreover, it stated that, even granting the truth
of the imputed infirmities in the deed, the right of plaintiffs-appellants to bring an action for partition and reconveyance
was already barred by prescription. An action for the annulment of a partition must be brought within four years from
the discovery of the fraud, while an action for the reconveyance of land based upon an implied or constructive trust
prescribes after ten years from the registration of the deed or from the issuance of the title. The complaint in this case
was filed on May 9, 1984, exactly 12 years, 1 month and 17 days after the issuance of the transfer certificate of title
in the name of Asuncion Teves on March 22, 1972. Thus, ownership over Lot 6409 rightfully belonged to defendants-
appellees It-it.
Moreover, the trial court held that the extrajudicial settlements over both Lots 6409 and 769, having been prepared
and acknowledged before a notary public, are public documents, vested with public interest, the sanctity of which
deserves to be upheld unless overwhelmed by clear and convincing evidence. The evidence presented by the plaintiffs
to support their charges of forgery was considered by the court insufficient to rebut the legal presumption of validity
accorded to such documents. 18
The Court of Appeals upheld the trial court's decision affirming the validity of the extrajudicial statements, with a slight
modification. It disposed of the case, thus —
WHEREFORE, premises considered, the decision appealed from is AFFIRMED with the modification in that herein
defendant-appellees are hereby ORDERED to partition Lot 769-A and deliver to plaintiff-appellant Ricardo Teves one-
eight (sic) (1/8) portion thereof corresponding to the share of his deceased father Cresenciano Teves. No costs.
The appellate court said that plaintiffs-appellants' biased and interested testimonial evidence consisting of mere denials
of their signatures in the disputed instruments is insufficient to prove the alleged forgery and to overcome the
evidentiary force of the notarial documents. It also ruled that the plaintiffs-appellants' claim over Lot 6409 was barred
by prescription after the lapse of ten years from the issuance of title in favor of Asuncion Teves, while their claim over
Lot 769-A is barred by laches since more than 25 years has intervened between the sale to Asuncion Teves and the
filing of the present case in 1984.
The appellate court noted that the conveyance of Lot 769-A in favor of Asuncion Teves did not affect the share of
Cresenciano Teves as he was not a signatory to the settlements. It also found that Ricardo Teves, Cresenciano's heir,
is in possession of a portion of Lot 769-A and that defendants-appellees do no not claim ownership over such portion.
Thus, the defendants-appellees It-it were ordered to partition and convey to Ricardo Teves his one-eighth share over
Lot 769-A.1âwphi1.nêt
As regards the extrajudicial settlement involving Lot 6409, although it was found by the appellate court that
Cresenciano Teves was also not a signatory thereto, it held that it could not order the reconveyance of the latter's
share in such land in favor of his heir Ricardo Teves because Cresenciano had predeceased Joaqin Teves. Moreover,
Ricardo Teves, by a deed simply denominated as "Agreement" executed on September 13, 1955 wherein he was
represented by his mother, authorized the heirs of Joaquin Teves to sell his share in Lot 6409. 19
Plaintiffs-appellants assailed the appellate court's decision upon the following grounds —
I. IN CONSIDERING RICARDO TEVES AS BOUND BY THE SIGNATURE OF HIS MOTHER, INSPITE OF DEATH OF
CRESENCIANO TEVES IN 1944; AND UNDER THE OLD CIVIL CODE THE SPOUSE CANNOT INHERIT EXCEPT THE
USUFRUCT;
II. IN UPHOLDING SWEEPINGLY THE PRESUMPTION OF REGULARITY OF NOTARIZED DEED, DESPITE CLEAR,
CONVINCING, SUBSTANTIAL AND SUFFICIENT EVIDENCE THAT MARIA OCHOTORENA WAS IN MINDANAO; THE
NOTARY PULIC DID NOT KNOW MARIA OCHOTORENA AND THE SIGNATURES OF THE OTHER HEIRS IN THE
QUESTIONED DOCUMENT ARE BELIED BY COMPARISON WITH THE GENUINE SIGNATURE IN EXH. "E";
III. IN VALIDATING THE ONE PESO CONSIDERATION, INSPITE OF NO OTHER VALUABLE CONSIDERATION, THE
SUPERIMPOSED P100 WAS UNILATERALLY INSERTED, SHOWING FICTITIOUS AND SIMULATED CONSIDERATION;
AND
IV. PRESCRIPTION DOES NOT START FROM A VOID CONTRACT. 20
We affirm that the extrajudicial settlements executed by the heirs of Joaquin Teves and Marcelina Cimafranca are
legally valid and binding.
The extrajudicial settlement of a decedent's estate is authorized by section 1 of Rule 74 of the Rules of Court, which
provides in pertinent part that —
If the decedent left no will and no debts and the heirs are all of age, or the minors are represented by their judicial
or legal representatives duly authorized for the purpose, the parties may, without securing letters of administration,
divide the estate among themselves as they see fit by means of a public instrument filed in the office of the register
of deeds, . . .
Thus, for a partition pursuant to section 1 of Rule 74 to be valid, the following conditions must concur: (1) the
decedent left no will; (2) the decedent left no debts, or if there were debts left, all had been paid; (3) the heirs are
all of age, or if they are minors, the latter are represented by their judicial guardian or legal representatives; (4) the
partition was made by means of a public instrument or affidavit duly filed with the Register of Deeds. 21
We uphold, finding no cogent reason to reverse, the trial and appellate courts' factual finding that the evidence
presented by plaintiffs-appellants is insufficient to overcome the evidentiary value of the extrajudicial settlements. The
deeds are public documents and it has been held by this Court that a public document executed with all the legal
formalities is entitled to a presumption of truth as to the recitals contained therein. 22 In order to overthrow a certificate
of a notary public to the effect that the grantor executed a certain document and acknowledged the fact of its execution
before him, mere preponderance of evidence will not suffice. Rather, the evidence must be so clear, strong and
convincing as to exclude all reasonable dispute as to the falsity of the certificate. When the evidence is conflicting, the
certificate will be upheld. 23 The appellate court's ruling that the evidence presented by plaintiffs-appellants does not
constitute the clear, strong, and convincing evidence necessary to overcome the positive value of the extrajudicial
settlements executed by the parties, all of which are public documents, being essentially a finding of fact, is entitled to
great respect by the appellate court and should not be disturbed on appeal. 24
It is noted that the Deed of Extrajudicial Settlement & Sale covering Lot 6409 purports to divide Joaquin Teves' estate
among only six of his heirs, namely Asuncion, Teotimo, Felisia, Gorgonio, Arcadia and Maria Teves. 25 It does not
mention nor bear the signatures of either Pedro or Cresenciano Teves although they are both intestate heirs of Joaquin
61
Teves and as such, are entitled to a proportionate share of the decedent's estate. Contrary to the ruling of the appellate
court, the fact that Cresenciano predeceased Joaquin Teves does not mean that he or, more accurately, his heirs, lose
the right to share in the partition of the property for this is a proper case for representation, wherein the representative
is raised to the place and degree of the person represented and acquires the rights which the latter would have if he
were living. 26
However, notwithstanding their non-inclusion in the settlement, the action which Pedro and Cresenciano might have
brought for the reconveyance of their shares in the property has already prescribed. An action for reconveyance based
upon an implied trust pursuant to article 1456 of the Civil Code prescribes in ten years from the registration of the
deed or from the issuance of the title. 27 Asuncion Teves acquired title over Lot 6409 in 1972, but the present case was
only filed by plaintiffs-appellants in 1984, which is more than 10 years from the issuance of title. 28
The division of Lot 769-A, on the other hand, was embodied in two deeds. The first extrajudicial settlement was entered
into by Teotimo, Felicia, Pedro, Gorgonio, Arcadia and Asuncion Teves in 1956 29, while the second deed was executed
in 1959 by Maria Teves. 30 Cresenciano was not a signatory to either settlement. However, in contrast to the
extrajudicial settlement covering Lot 6409, the two extrajudicial settlements involving Lot 769-A do not purport to
exclude Cresenciano from his participation in Lot 769-A or to cede his share therein in favor of Asuncion. The settlement
clearly adjudicated the property in equal shares in favor of the eight heirs of Marcelina Cimafranca. Moreover, the
deeds were intended to convey to Asuncion Teves only the shares of those heirs who affixed their signatures in the
two documents. The pertinent portions of the extrajudicial settlement executed in 1956, of which substantively identical
provisions are included in the 1959 deed, provide —
5. That by virtue of the right of succession the eight heirs above mentioned inherit and adjudicate unto themselves
in equal shares Lot No. 769-A and our title thereto is evidenced by the O.C. of Title No. 4682-A of the Land Records
of Negros Oriental.
THAT FOR AND IN CONSIDERATION of the sum of FOUR HUNDRED TWENTY-FIVE (P425.00) PESOS, Philippine
Currency which we have received from ASUNCION TEVES; WE, Teotimo, Felicia, Pedro, Gorgonio and Arcadia, all
surnamed Teves, do hereby sell, transfer and convey unto Asuncion Teves, married to Isaac Itit, Filipino, of legal
age and resident of and with postal address in the City of Dumaguete, all our shares, interests and participations
over Lot 769-A of the subdivision plan, Psd, being a portion of Lot No. 769 of the Cadastral Survey of Dumaguete,
her heirs, successors and assigns, together with all the improvements thereon.
It has even been admitted by both parties that Ricardo Teves is in possession of an undetermined portion of Lot 769-
A and defendants-appellees It-it do not claim ownership over his share in the land. 31 Thus, contrary to the appellate
court's ruling, there is no basis for an action for reconveyance of Ricardo Teves' share since, in the first place, there
has been no conveyance. Ricardo Teves is entitled to the ownership and possession of one-eighth of Lot 769-A.
Neither does Ricardo Teves have a right to demand partition of Lot 769-A because the two extajudicial settlements
have already effectively partitioned such property. Every act which is intended to put an end to indivision among co-
heirs and legatees or devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a
compromise, or any other transaction. 32 The extrajudicial settlements executed in 1956 and 1959 adjudicated Lot 769-
A in equal shares unto the eight heirs of Marcelina Cimafranca. Such a partition, which was legally made, confers upon
each heir the exclusive ownership of the property adjudicated to him. 33 Although Cresenciano, Ricardo's predecessor-
in-interest, was not a signatory to the extrajudicial settlements, the partition of Lot 769-A among the heirs was made
in accordance with their intestate shares under the law. 34
With regards to the requisite of registration of extrajudicial settlements, it is noted that the extrajudicial settlements
covering Lot 769-A were never registered. However, in the case of Vda. de Reyes vs. CA, 35 the Court, interpreting
section 1 of Rule 74 of the Rules of Court, upheld the validity of an oral partition of the decedent's estate and declared
that the non-registration of an extrajudicial settlement does not affect its intrinsic validity. It was held in this case that
—
[t]he requirement that a partition be put in a public document and registered has for its purpose the protection of
creditors and at the same time the protection of the heirs themselves against tardy claims. The object of registration
is to serve as constructive notice to others. It follows then that the intrinsic validity of partition not executed with the
prescribed formalities does not come into play when there are no creditors or the rights of creditors are not affected.
Where no such rights are involved, it is competent for the heirs of an estate to enter into an agreement for distribution
in a manner and upon a plan different from those provided by law.
Thus, despite its non-registration, the extrajudicial settlements involving Lot 769-A are legally effective and binding
among the heirs of Marcelina Cimafranca since their mother had no creditors at the time of her death.
Except for the portion of Lot 769-A occupied by Ricardo Teves, both parcels of land have been and continue to be in
the possession of Asuncion Teves and her successors-in-interest. 36 Despite this, no explanation was offered by
plaintiffs-appellants as to why they instituted the present action questioning the extrajudicial settlements only in 1984,
which is more than 25 years after the assailed conveyance of Lot 769-A and more than 10 years after the issuance of
a transfer certificate of title over Lot 6409, both in favor of Asuncion Teves. Such tardiness indubitably constitutes
laches, which is the negligence or omission to assert a right within a reasonable time, warranting a presumption that
the party entitled to assert it either has abandoned it or declined to assert it. 37 Thus, even assuming that plaintiffs-
appellants had a defensible cause of action, they are barred from pursuing the same by reason of their long and
inexcusable inaction.
An extrajudicial settlement is a contract and it is a well-entrenched doctrine that the law does not relieve a party from
the effects of a contract, entered into with all the required formalities and with full awareness of what he was doing,
simply because the contract turned out to be a foolish or unwise investment. 38 Therefore, although plaintiffs-appellants
may regret having alienated their hereditary shares in favor of their sister Asuncion, they must now be considered
bound by their own contractual acts.1âwphi1.nêt
WHEREFORE, the August 18, 1992 decision of the Court of Appeals is hereby AFFIRMED. No pronouncements as to
costs.
62
G..R. No. 132424 May 2, 2006
SPOUSES BONIFACIO R. VALDEZ, JR. and VENIDA M. VALDEZ, Petitioners,
vs.
HON. COURT OF APPEALS, SPOUSES GABRIEL FABELLA and FRANCISCA FABELLA, Respondents.
This case originated from a complaint for unlawful detainer filed by petitioners Bonifacio and Venida Valdez against
private respondents Gabriel and Francisca Fabella before the Municipal Trial Court of Antipolo, Rizal. The complaint
alleges these material facts:
2. That plaintiffs are the registered owner[s] of a piece of residential lot denominated as Lot [N]o. 3 Blk 19 located
at Carolina Executive Village, Brgy. Sta. Cruz, Antipolo, Rizal which [they] acquired from Carolina Realty, Inc.
Sometime [i]n November 1992 by virtue of Sales Contract, xerox copy of which is hereto attached marked as Annex
"A" and the xerox copy of the Torrens Certificate of Title in her name marked as Annex "B";
3. That defendants, without any color of title whatsoever occupie[d] the said lot by building their house in the said
lot thereby depriving the herein plaintiffs rightful possession thereof;
4. That for several times, plaintiffs orally asked the herein defendants to peacefully surrender the premises to them,
but the latter stubbornly refused to vacate the lot they unlawfully occupied;
5. That despite plaintiffs’ referral of the matter to the Barangay, defendants still refused to heed the plea of the
former to surrender the lot peacefully;
6. That because of the unfounded refusal of the herein defendants to settle the case amicably, the Barangay Captain
was forced to issue the necessary Certification to File Action in favor of the herein plaintiffs in order that the necessary
cause of action be taken before the proper court, xerox copy of which is hereto attached marked as Annex "C";
7. That by reason of the deliberate, malicious and unfounded refusal of the defendants to vacate/surrender the
premises in question, the herein plaintiffs were constrained to engage the professional services of counsel thus
incurring expenses amounting to TEN THOUSAND PESOS (P10,000.00) representing acceptance fee and additional
ONE THOUSAND PESOS (P1,000.00) per appearance, who on July 12, 1994 sent a formal demand was likewise
ignored, (sic) copy of which is hereto attached as Annex "D";
8. That likewise by virtue of the adamant refusal of the defendants to vacate/surrender the said premises in question,
plaintiff[s] suffered serious anxiety, sleepless nights, mental torture and moral erosion; x x x2
In their answer, private respondents contended that the complaint failed to state that petitioners had prior physical
possession of the property or that they were the lessors of the former. In the alternative, private respondents claimed
ownership over the land on the ground that they had been in open, continuous, and adverse possession thereof for
more than thirty years, as attested by an ocular inspection report from the Department of Environment and Natural
Resources. They also stressed that the complaint failed to comply with Supreme Court Circular No. 28-91 regarding
affidavits against non-forum shopping.
The Municipal Trial Court (MTC) rendered a decision in favor of the petitioners, ordering private respondents to vacate
the property and to pay rent for the use and occupation of the same plus attorney’s fees.
Private respondents appealed the MTC’s decision to the Regional Trial Court (RTC). The RTC, in a decision dated 8
January 1997, affirmed in toto the decision of the MTC.
Undeterred, the private respondents filed a petition for review with the Court of Appeals on 10 March 1997 questioning
the decision of the RTC.
In a decision dated 22 April 1997, the Court of Appeals reversed and set aside the decision of the RTC. It held that
petitioners failed to make a case for unlawful detainer because they failed to show that they had given the private
respondents the right to occupy the premises or that they had tolerated private respondents’ possession of the same,
which is a requirement in unlawful detainer cases. It added that the allegations in petitioners’ complaint lack
jurisdictional elements for forcible entry which requires an allegation of prior material possession. The Court of Appeals
ratiocinated thus:
An examination of the complaint reveals that key jurisdictional allegations that will support an action for ejectment
are conspicuously lacking. In particular, an allegation of prior material possession is mandatory in forcible entry, xxx
and the complaint is deficient in this respect. On the other hand, neither does there appear to be a case of unlawful
detainer, since the private respondents failed to show that they had given the petitioners the right to occupy the
premises, which right has now [been] extinguished.
xxx
In light of the foregoing, the conclusion is inevitable that the Municipal Trial Court before which the action for
ejectment was filed had no jurisdiction over the case. Consequently, the dismissal thereof is in order.
WHEREFORE, the Petition is hereby GIVEN DUE COURSE, and GRANTED. The decision dated 08 January 1997
rendered by the respondent court is hereby REVERSED and SET ASIDE, and judgment is hereby rendered
DISMISSING the complaint in Civil Case No. 2547 of the Municipal Trial Court of Antipolo, Rizal for lack of jurisdiction. 3
Petitioners filed a motion for reconsideration which was denied in a resolution dated 30 January 1998.4
Hence, the instant petition.
Petitioners submit the following issues for the Court’s consideration5:
A. WHETHER OR NOT THE ALLEGATIONS OF THE COMPLAINT CLEARLY MADE OUT A CASE FOR UNLAWFUL DETAINER.
B. WHETHER OR NOT BASED ON THE ALLEGATION(S) OF THE COMPLAINT, THE MUNICIPAL TRIAL COURT OF
ANTIPOLO, RIZAL, CLEARLY HAS ORIGINAL JURISDICTION OVER THE INSTANT COMPLAINT FILED BEFORE IT.
Since the two issues are closely intertwined, they shall be discussed together.
In the main, petitioners claim that the averments of their complaint make out a case for unlawful detainer having
alleged that private respondents unlawfully withheld from them the possession of the property in question, which
allegation is sufficient to establish a case for unlawful detainer. They further contend that the summary action for
ejectment is the proper remedy available to the owner if another occupies the land at the former’s tolerance or
permission without any contract between the two as the latter is bound by an implied promise to vacate the land upon
demand by the owner.
The petition is not meritorious.
Under existing law and jurisprudence, there are three kinds of actions available to recover possession of real property:
(a) accion interdictal; (b) accion publiciana; and (c) accion reivindicatoria.6
Accion interdictal comprises two distinct causes of action, namely, forcible entry (detentacion) and unlawful detainer
(desahuico).7 In forcible entry, one is deprived of physical possession of real property by means of force, intimidation,
strategy, threats, or stealth whereas in unlawful detainer, one illegally withholds possession after the expiration or
termination of his right to hold possession under any contract, express or implied. 8 The two are distinguished from
each other in that in forcible entry, the possession of the defendant is illegal from the beginning, and that the issue is
which party has prior de facto possession while in unlawful detainer, possession of the defendant is originally legal but
became illegal due to the expiration or termination of the right to possess.9
The jurisdiction of these two actions, which are summary in nature, lies in the proper municipal trial court or
metropolitan trial court.10 Both actions must be brought within one year from the date of actual entry on the land, in
63
case of forcible entry, and from the date of last demand, in case of unlawful detainer. 11 The issue in said cases is the
right to physical possession.
Accion publiciana is the plenary action to recover the right of possession which should be brought in the proper regional
trial court when dispossession has lasted for more than one year. 12 It is an ordinary civil proceeding to determine the
better right of possession of realty independently of title. 13 In other words, if at the time of the filing of the complaint
more than one year had elapsed since defendant had turned plaintiff out of possession or defendant’s possession had
become illegal, the action will be, not one of the forcible entry or illegal detainer, but an accion publiciana. On the other
hand, accion reivindicatoria is an action to recover ownership also brought in the proper regional trial court in an
ordinary civil proceeding.14
To justify an action for unlawful detainer, it is essential that the plaintiff’s supposed acts of tolerance must have been
present right from the start of the possession which is later sought to be recovered.15 Otherwise, if the possession was
unlawful from the start, an action for unlawful detainer would be an improper remedy.16 As explained in Sarona v.
Villegas17:
But even where possession preceding the suit is by tolerance of the owner, still, distinction should be made.
If right at the incipiency defendant’s possession was with plaintiff’s tolerance, we do not doubt that the latter may
require him to vacate the premises and sue before the inferior court under Section 1 of Rule 70, within one year from
the date of the demand to vacate.
xxxx
A close assessment of the law and the concept of the word "tolerance" confirms our view heretofore expressed that
such tolerance must be present right from the start of possession sought to be recovered, to categorize a cause of
action as one of unlawful detainer - not of forcible entry. Indeed, to hold otherwise would espouse a dangerous
doctrine. And for two reasons: First. Forcible entry into the land is an open challenge to the right of the possessor.
Violation of that right authorizes the speedy redress – in the inferior court - provided for in the rules. If one year
from the forcible entry is allowed to lapse before suit is filed, then the remedy ceases to be speedy; and the possessor
is deemed to have waived his right to seek relief in the inferior court. Second, if a forcible entry action in the inferior
court is allowed after the lapse of a number of years, then the result may well be that no action of forcible entry can
really prescribe. No matter how long such defendant is in physical possession, plaintiff will merely make a demand,
bring suit in the inferior court – upon a plea of tolerance to prevent prescription to set in - and summarily throw him
out of the land. Such a conclusion is unreasonable. Especially if we bear in mind the postulates that proceedings of
forcible entry and unlawful detainer are summary in nature, and that the one year time-bar to suit is but in pursuance
of the summary nature of the action.18 (Underlining supplied)
It is the nature of defendant’s entry into the land which determines the cause of action, whether it is forcible entry or
unlawful detainer. If the entry is illegal, then the action which may be filed against the intruder is forcible entry. If,
however, the entry is legal but the possession thereafter becomes illegal, the case is unlawful detainer.
Indeed, to vest the court jurisdiction to effect the ejectment of an occupant, it is necessary that the complaint should
embody such a statement of facts as brings the party clearly within the class of cases for which the statutes provide a
remedy, as these proceedings are summary in nature. 19 The complaint must show enough on its face the court
jurisdiction without resort to parol testimony.20
The jurisdictional facts must appear on the face of the complaint. When the complaint fails to aver facts constitutive of
forcible entry or unlawful detainer, as where it does not state how entry was affected or how and when dispossession
started, the remedy should either be an accion publiciana or an accion reivindicatoria in the proper regional trial
court.21 Thus, in Go, Jr. v. Court of Appeals, 22 petitioners filed an unlawful detainer case against respondent alleging
that they were the owners of the parcel of land through intestate succession which was occupied by respondent by
mere tolerance of petitioners as well as their deceased mother. Resolving the issue on whether or not petitioners’ case
for unlawful detainer will prosper, the court ruled23:
 Petitioners alleged in their complaint that they inherited the property registered under TCT No. C-32110 from their
parents; that possession thereof by private respondent was by tolerance of their mother, and after her death, by
their own tolerance; and that they had served written demand on December, 1994, but that private respondent
refused to vacate the property. x x x
It is settled that one whose stay is merely tolerated becomes a deforciant illegally occupying the land the moment he
is required to leave. It is essential in unlawful detainer cases of this kind, that plaintiff’s supposed acts of tolerance
must have been present right from the start of the possession which is later sought to be recovered. This is where
petitioners’ cause of action fails. The appellate court, in full agreement with the MTC made the conclusion that the
alleged tolerance by their mother and after her death, by them, was unsubstantiated. x x x
The evidence revealed that the possession of defendant was illegal at the inception and not merely tolerated as alleged
in the complaint, considering that defendant started to occupy the subject lot and then built a house thereon without
the permission and consent of petitioners and before them, their mother. xxx Clearly, defendant’s entry into the land
was effected clandestinely, without the knowledge of the owners, consequently, it is categorized as possession by
stealth which is forcible entry. As explained in Sarona vs. Villegas, cited in Muñoz vs. Court of Appeals [224 SCRA 216
(1992)] tolerance must be present right from the start of possession sought to be recovered, to categorize a cause of
action as one of unlawful detainer not of forcible entry x x x.
And in the case of Ten Forty Realty and Development Corp. v. Cruz, petitioner’s complaint for unlawful detainer
24
merely contained the bare allegations that (1) respondent immediately occupied the subject property after its sale to
her, an action merely tolerated by petitioner; and (2) her allegedly illegal occupation of the premises was by mere
tolerance. The court, in finding that the alleged tolerance did not justify the action for unlawful detainer, held:
To justify an action for unlawful detainer, the permission or tolerance must have been present at the beginning of
the possession. x x x
xxxx
In this case, the Complaint and the other pleadings do not recite any averment of fact that would substantiate the
claim of petitioner that it permitted or tolerated the occupation of the property by Respondent Cruz. The complaint
contains only bare allegations that 1) respondent immediately occupied the subject property after its sale to her, an
action merely tolerated by petitioner; and 2) her allegedly illegal occupation of the premises was by mere tolerance.
These allegations contradict, rather than support, petitioner’s theory that its cause of action is for unlawful
detainer. First, these arguments advance the view that respondent’s occupation of the property was unlawful at its
inception. Second, they counter the essential requirement in unlawful detainer cases that petitioner’s supposed act
of sufferance or tolerance must be present right from the start of a possession that is later sought to be recovered. 25
In the instant case, the allegations in the complaint do not contain any averment of fact that would substantiate
petitioners’ claim that they permitted or tolerated the occupation of the property by respondents. The complaint
contains only bare allegations that "respondents without any color of title whatsoever occupies the land in question by
building their house in the said land thereby depriving petitioners the possession thereof." Nothing has been said on
how respondents’ entry was effected or how and when dispossession started. Admittedly, no express contract existed
between the parties. This failure of petitioners to allege the key jurisdictional facts constitutive of unlawful detainer is
fatal.26 Since the complaint did not satisfy the jurisdictional requirement of a valid cause for unlawful detainer, the
municipal trial court had no jurisdiction over the case.27 It is in this light that this Court finds that the Court of Appeals
correctly found that the municipal trial court had no jurisdiction over the complaint.
WHEREFORE, the petition is DENIED and the judgment of the Court of Appeals dismissing the complaint in Civil Case
No. 2547 of the MTC Antipolo, Rizal for lack of jurisdiction is hereby AFFIRMED.
64
G.R. No. 149912 January 29, 2004
JACINTO V. CO, Petitioner,
vs.
RIZAL MILITAR and LILIA SONES, Respondents.
Petitioner Jacinto V. Co claims to be the owner of a parcel of land measuring 396 square meters covered by a Transfer
Certificate of Title No. 81792.3 The land was formerly owned by Rolando Dalida, in whose name it was registered under
TCT No. 192224.4
Dalida mortgaged5 the land to petitioner to secure payment of a loan. After Dalida defaulted in the payment of his
obligation, petitioner caused the foreclosure of the mortgage. Subsequently, petitioner acquired the land at the
foreclosure sale held sometime in 1982.
On June 19, 1997, petitioner filed a complaint for unlawful detainer before the Metropolitan Trial Court of Marikina City,
Branch 75, against respondents Rizal Militar and Lilia Sones, who were in possession of the land.
Petitioner alleged that he is the registered owner of the land; that as owner, he declared 6 the same for tax purposes
and has been up to date in the payments of real property taxes; and that respondents’ occupancy of the property was
by his mere tolerance but their continued stay became unlawful after he demanded that they vacate the premises.
In their answer, respondents claimed that they are the owners of 198 square meters each of the disputed land, having
bought the same from Burgos L. Pangilinan and Reynaldo Pangilinan who were the owners-developers of a residential
subdivision project called "Immaculate Conception Village", and whose ownership was covered by TCT No. 13774.
Respondent Militar further claimed that his occupancy of the property could not be by tolerance of petitioner for the
following reasons: one, he constructed his house way back in June 1966, long before petitioner acquired title thereto
on October 10, 1983; two, he bought the one-half portion of the property, consisting of 198 square meters, on April
20, 1966 from B.L. Pangilinan & Sons, Inc. and paid for the same in full on October 3, 1973, or 10 years before
petitioner claimed ownership of said property.7 He also assailed the jurisdiction of the Metropolitan Trial Court, claiming
that it had no jurisdiction over the case as the proper action should have been an accion reinvidicatoria filed before the
Regional Trial Court.8
Respondent Sones, on the other hand, alleged that she bought the other half of the property from the Spouses Burgos
and Juanita Pangilinan on April 6, 1966, and paid for the same in full on October 6, 1973. She also argued that the
Metropolitan Trial Court had no jurisdiction over the nature of the action considering that the same is founded on a
property right. She also averred that petitioner registered the subject property in bad faith inasmuch as he knew that
she was in actual, peaceful, exclusive, adverse and continuous possession of the same and was exercising dominion
and ownership over it when petitioner proceeded with his registration.
After trial, the Metropolitan Trial Court rendered a decision in favor of petitioner, thus:
Wherefore, premises considered, judgment is hereby rendered in favor of plaintiff Jacinto Velasco Co and against
defendants, Rizal Militar and Lilia Sones, as follows:
a. ordering the defendants and/or all persons claiming rights under them to vacate the subject premises and
peacefully surrender possession thereof to plaintiff;
b. ordering the defendants to pay plaintiff reasonable compensation for the use of the premises in question in the
amount of P500.00 for each defendant per month from June 19, 1997 the date of filing of the complaint until the
premises are vacated;
 c. ordering the defendants to pay plaintiff the sum of P 2,000.00 as and for attorney’s fees;
d. to pay the costs of this suit.
Respondents appealed the decision to the Regional Trial Court, which reversed and set aside the same.10 Petitioner
filed a petition for review before the Court of Appeals, which denied due course and ordered the dismissal of the
petition.
Petitioner filed a Motion for Reconsideration which was denied by the Court of Appeals. 11 Hence, the instant petition
raising the following errors:
I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN CONCURRING WITH THE FINDING OF THE LOWER
COURT THAT THE DOCTRINE OF OCCUPANCY BY TOLERANCE, IN AN UNLAWFUL DETAINER CASE, CANNOT BE
VALIDLY INVOKED BY PETITIONER WHO HAD NO PRIOR PHYSICAL POSSESSION OF THE PROPERTY AS HE HAD
BOUGHT THE PROPERTY ONLY IN 1982 VIS-À-VIS THE RESPONDENTS WHO HAD BEEN IN THE PROPERTY SIXTEEN
(16) YEARS EARLIER OR AS EARLY AS 1966.
II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE DISPUTE OVER POSSESSION OF
THE PROPERTY BY THE PETITIONER AND RESPONDENTS BECOMES AN ISSUE AS TO WHO HAS THE BETTER RIGHT
OF OWNERSHIP, THE RESPONDENTS WHO HAD DEEDS OF SALE AND IN POSSESSION OF THE PREMISES OR THE
PETITIONER WHO ACQUIRED TITLE TO THE PROPERTY IN A FORECLOSURE SALE.
As the registered owner, petitioner had a right to the possession of the property, which is one of the attributes of his
ownership. Respondents’ argument that petitioner is not an innocent purchaser for value and was guilty of bad faith in
having the subject land registered in his name is a collateral attack on the title of petitioner, which is not allowed. A
certificate of title cannot be subject to a collateral attack and can be altered, modified or cancelled only in a direct
proceeding in accordance with law.16
WHEREFORE, in view of the foregoing, the instant petition is GRANTED. The June 30, 2000 decision of the Court of
Appeals in CA-G.R. No. 51344 which sustained the October 30, 1998 decision of the Regional Trial Court of Marikina,
Branch 273, in SCA Case No. 98-200-MK is REVERSED and SET ASIDE. The May 26, 1998 decision of the Metropolitan
Trial Court of Marikina, Branch 75, in Civil Case No. 97-6521 declaring petitioner Jacinto V. Co as having a better right
of possession over the subject parcel of land as against respondents Rizal Militar and Lilia Sones is REINSTATED.
Accordingly, respondents are ordered to vacate the subject premises and peacefully surrender possession thereof to
petitioner. Further, respondents are ordered to pay petitioner reasonable compensation for the use of the premises in
the amount of P500.00 per month from June 15, 1997 until the premises are vacated; P2,000.00 as attorney’s fees;
and costs of the suit.

The principal issue to be resolved in the instant petition is: Who between petitioner and respondents has a better right
to possess the subject property?

We have, time and again, held that the only issue for resolution in an unlawful detainer case is physical or material
possession of the property involved, independent of any claim of ownership by any of the party litigants. Moreover, an
ejectment suit is summary in nature and is not susceptible to circumvention by the simple expedient of asserting
ownership over the property.12

In forcible entry and unlawful detainer cases, even if the defendant raises the question of ownership in his pleadings
and the question of possession cannot be resolved without deciding the issue of ownership, the lower courts and the
Court of Appeals, nonetheless, have the undoubted competence to provisionally resolve the issue of ownership for the
sole purpose of determining the issue of possession. 13

Such decision, however, does not bind the title or affect the ownership of the land nor is conclusive of the facts therein
found in a case between the same parties upon a different cause of action involving possession.

In the instant case, the evidence showed that as between the parties, it is the petitioner who has a Torrens Title to the
property. Respondents merely showed their unregistered deeds of sale in support of their claims. The Metropolitan Trial
Court correctly relied on the transfer certificate of title in the name of petitioner.

In Tenio-Obsequio v. Court of Appeals,14 it was held that the Torrens System was adopted in this country because it
was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility
once the claim of ownership is established and recognized.

It is settled that a Torrens Certificate of title is indefeasible and binding upon the whole world unless and until it has
been nullified by a court of competent jurisdiction. Under existing statutory and decisional law, the power to pass upon
the validity of such certificate of title at the first instance properly belongs to the Regional Trial Courts in a direct
proceeding for cancellation of title.15

65
G.R. No. 155432 June 9, 2005
CRISPINA UNIDA, married to ANTONIO MABALOT, NANCY UNIDA, married to EUGENIO UNIDA, EDWIN
DAMO, ANDREW MABALOT, RICARDO DAMO and JOCELYN DAMO, Petitioners,
vs.
HEIRS OF AMBROSIO URBAN, represented by LUCIO CABADDU, Respondent.
The present petition for review on certiorari originated from a complaint for unlawful detainer filed by respondent,
"Heirs of Ambrocio Urban represented by Lucio Cabaddu," against the defendants-herein petitioners Crispina Unida et
al. at the Municipal Trial Court (MTC) of Camalaniugan, Cagayan.
Since the main issue raised is one of jurisdiction over the subject matter, a recital of the pertinent allegations of the
complaint is in order.
In its March 3, 1998 Complaint, the plaintiff-herein respondent who claims to be the owner of the property, which had
been subdivided into Lots 298, 299, and 616, subject of the case alleged that:
7. About ten (10) years ago, more or less, without the knowledge or consent of the owners, the defendants[-herein
petitioners], without any legal right whatsoever, entered the premises of the land which is the subject of this suit
and cultivated the same as their own, not giving any share to the owners;
8. Because the location of the land was then infested by the New People’s Army at the time of the instrusion of the
defendants, the owners did nothing but to tolerate their (defendants) stay and cultivation over the land in question;
In their Answer, the defendants-herein petitioners denied, among other things, having any knowledge or information
sufficient to form a belief regarding the authority of Lucio Cabaddu to represent the plaintiff and concluded that "he
has no right and/or personality to represent the alleged [H]eirs"-plaintiff. On the merits, petitioners asserted that
petitioner Crispina Unida has possessed Lots 298 and 616, and that petitioner Nancy Unida has possessed Lot 299,
both in the concept of owner, personally and through their predecessors-in-interest, since time immemorial, and that
the title to the property subject of the complaint, OCT No. P-48306, was fraudulently obtained by respondents.2
By Decision3 of June 7, 1999, the MTC, resolving in the affirmative the issues of 1) whether the plaintiff "impliedly
tolerated the defendants’ act of cultivating the land," and 2) whether the plaintiff is the "lawful owner of the land,"
accordingly rendered judgment against the defendants-herein petitioners.
On appeal to the Regional Trial Court (RTC), the defendants-herein petitioners raised the following assignment of
errors:
1. THE LOWER COURT ERRED IN NOT DISMISSING THE CASE FOR THERE IS ABSOLUTELY NO EVIDENCE ON
RECORD SHOWING THE AUTHORITY OF ALLEGED PLAINTIFF LUCIO CABADDU TO INSTITUTE THE PRESENT SUIT;
2. THE LOWER COURT ERRED IN ORDERING THE EJECTMENT OF THE DEFENDANTS ALTHOUGH THEY ARE IN
ACTUAL, OPEN, PUBLIC AND NOTORIOUS POSSESSION OF THE LOTS IN DISPUTE UNDER BONAFIDE CLAIM OF
OWNERSHIP EVEN BEFORE THE SECOND WORLD WAR HAVING INHERITED SAID LAND FROM THEIR FATHER LUIS
UNIDA.4 (Underscoring supplied)
By Decision5 dated October 26, 1999, Branch 10 of the RTC of Cagayan reversed the MTC decision, it holding that
although Lucio Cabaddu was given a Special Power of Attorney (SPA) subsequent to the filing of the complaint, the
SPA did not contain a specific authorization for him to institute the complaint.
In any event, the RTC held that the complaint was dismissible for while in its title Lucio Cabaddu appeared as the
representative of the plaintiff-Heirs of Ambrocio Urban, paragraph 1 of the complaint alleged as follows:
66
1. Plaintiff[,] of legal age, married to Leticia Urban and a resident of Dugo, Camalaniugan, Cagayan, is the Authorized
representative of the heirs of Ambrocio Urban,6
thus clearly showing that he "instituted it as plaintiff in behalf of the heirs," hence, "not allowed" as he is not the real
party in interest.
On the substantive issue, the RTC held that since the complaint itself asserted that petitioners’ entry into the property
was unlawful from the very beginning, respondents’ alleged "toleration" thereof cannot be considered as toleration in
contemplation of law in unlawful detainer cases, hence, the action for unlawful detainer was improper. Neither was
forcible entry the proper remedy, added the RTC, as the entry of petitioners was not by "means of force, violence,
threats, intimidation, stealth or strategy." The RTC suggested though that the remedy of the plaintiff-herein respondent
was to file an accion publiciana or reivindicatoria before the proper RTC.
On appeal of respondent to the CA, it assigned two errors of the RTC, to wit:
I. THE APPELLATE COURT ERRED IN FINDING THAT PETITIONERS’ REPRESENTATIVE LUCIO CABADDU LACKS THE
PERSONALITY TO SUE DESPITE HIS CONSTITUTION AS AN ATTORNEY-IN-FACT BY PETITIONERS THROUGH A
VALIDLY EXECUTED SPECIAL POWER OF ATTORNEY.
II. THE APPELLATE COURT ERRED IN REVERSING THE DECISION OF THE MUNICIPAL TRIAL COURT AND DISMISSING
THE COMPLAINT ON THE GROUND THAT THE MODE OF ACTION (UNLAWFUL DETAINER) TAKEN BY THE PETITIONER
IS INAPPROPRIATE DESPITE THE ALLEGATIONS IN THE COMPLAINT THAT RESPONDENTS POSSESSION OVER THE
LAND IN DISPUTE WAS ONLY UPON THE MERE TOLERANCE OF THE PETITIONERS.7 (Underscoring supplied)
By Decision promulgated on September 19, 2001,8 the Court of Appeals reversed the decision of the RTC and reinstated
that of the MTC.
In reversing the RTC decision, the appellate court held that the subsequent execution of an SPA in favor of Lucio
Cabaddu cured the defect in the filing of the complaint. And the appellate court "agree[d] with the Municipal Trial Court
that [the plaintiff-herein respondent] had established [its] right of possession as owners of the [property]."
Furthermore, the appellate court held that "an allegation that the defendant is unlawfully withholding possession from
the plaintiff is deemed sufficient for one alleging that the withholding of possession or the refusal to vacate is unlawful,
without necessarily employing the terminology of the law."
Hence, the present Petition for Review with the following assignments of errors:
a) The Honorable Court of Appeals seriously erred in ruling that the subsequent Special Power of Attorney cures the
defect in the Complaint because such conclusion was grounded entirely on speculation, the inference made is
manifestly mistaken, and the judgment was based on misapprehension of facts. 9
b) The Honorable Court of Appeals erred in not finding that the trial court has no jurisdiction over the unlawful
detainer case because the defendants Crispina Unida and husband Antonio Mabalot and Eugenio Unida married to
Nancy Unida are the owners of the land in dispute having possessed the same since pre-war time and inherited said
land from their father Luis Unida who owns seventy two (72) hectares before the Second World War. 10 (Underscoring
supplied)
As stated early on, the main issue, that reflected in herein petitioners’ second assigned error, is one of jurisdiction over
the complaint of herein respondent.
From the earlier quoted material paragraphs-allegations of the complaint, petitioners’ entry into the property was, by
respondent’s own information, unlawful from the very beginning. Respondent, nonetheless, claimed that it merely
tolerated petitioners’ presence in the property. Clearly, an unlawful detainer action does not lie.
For to justify an action for unlawful detainer,
 the permission or tolerance must have been present at the beginning of the possession. Otherwise, if the
possession was unlawful from the start, an action for unlawful detainer would be an improper remedy. Sarona v.
Villegas elucidates thus:
"A close assessment of the law and the concept of the word 'tolerance' confirms our view heretofore expressed that
such tolerance must be present right from the start of possession sought to be recovered, to categorize a cause of
action as one of unlawful detainer not of forcible entry…"11 (Emphasis and underscoring supplied)
As correctly held then by the RTC, the case cannot be considered as an unlawful detainer case, the "tolerance" claimed
by respondents not being that contemplated by law in unlawful detainer cases; neither can the case be considered as
one for forcible entry because the entry of petitioners was not alleged to have been by means of force, intimidation,
threats, stealth or strategy.
Since the complaint did not satisfy the jurisdictional requirement of a valid cause for unlawful detainer or forcible entry,
the MTC had no jurisdiction over the case.12 It is in this light that this Court finds that the RTC correctly found that the
MTC had no jurisdiction over the complaint. Parenthetically, it was error for the RTC to find the complaint dismissible
also on the ground that Lucio Cabaddu was not the real party in interest. That paragraph 1 of the complaint alleged
that "plaintiff [is] of legal age, married to Leticia Urban . . . is the Authorized representative of the heirs of Ambrocio
Urban" did not modify the name of the plaintiff appearing in the title of the complaint. In other words, that the plaintiff
appearing in the title was worded as "Heirs of Ambrocio Urban represented by Lucio Cabaddu" complied with Section
3 of Rule 3 of the Rules of Court which reads:
SEC. 3. Representative as parties. – Where the action is allowed to be prosecuted or defended by a representative
or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed
to be the real party in interest. A representative may be a trustee of an express trust, a guardian, an executor or
administrator, or a party authorized by law or these Rules. An agent acting in his own name and for the benefit of an
undisclosed principal may sue or be sued without joining the principal except when the contract involves things
belonging to the principal. (Underscoring supplied)
The foregoing discussion renders it unnecessary to still rule on the first issue of whether the Special Power of Attorney
presented by Lucio Cabaddu, the representative of respondent, may be validly considered, it not having been formally
offered in evidence before the MTC. Suffice it to state that, as a rule, documents presented as proof of a fact in issue
must be offered in evidence before a trial court.13
A final note. Since the RTC found that the MTC had no jurisdiction over the case, it should have followed the mandate
of Sec. 8, Rule 40, which provides:
Sec. 8. Appeal from orders dismissing case without trial; lack of jurisdiction. – If an appeal is taken from an order of
the lower court dismissing the case without a trial on the merits, the Regional Trial Court may affirm or reverse it,
as the case may be. In case of affirmance and the ground of dismissal is lack of jurisdiction over the subject matter,
the Regional Trial Court, if it has jurisdiction thereover, shall try the case on the merits as if the case was originally
filed with it. In case of reversal, the case shall be remanded for further proceedings.
If the case was tried on the merits by the lower court without jurisdiction over the subject matter, the
Regional Trial Court on appeal shall not dismiss the case if it has original jurisdiction thereof, but shall
decide the case in accordance with the preceding section, without prejudice to the admission of amended
pleadings and additional evidence in the interest of justice. (Emphasis and underscoring supplied)
WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals is REVERSED and SET ASIDE.
Let the records of the case be remanded to Branch 10 of the Regional Trial Court of Cagayan which is hereby directed
to take action on it in accordance with the above-quoted provision of Sec. 8 of Rule 40 of the Rules of Court.
67
G.R. No. 158231 June 19, 2007
BABY ARLENE LARANO,* Petitioner,
vs.
SPS. ALFREDO CALENDACION and RAFAELA T. CALENDACION,** Respondents.
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court assailing the
Decision1 dated May 13, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 68272 which dismissed the complaint for
unlawful detainer of Baby Arlene Laraño (petitioner) against Spouses Alfredo and Rafaela Calendacion (respondents).
Petitioner owns a parcel of riceland situated in Barangay Daniw, Municipality of Victoria, Laguna covered by TCT No.
175241 of the Register of Deeds of Laguna. On September 14, 1998, petitioner and respondents executed a Contract
to Sell whereby the latter agreed to buy a 50,000-square meter portion of petitioner's riceland for ₱5Million, with
₱500,000.00 as down payment and the balance payable in nine installments of ₱500,000.00 each, until September
2001.2
Pending full payment of the purchase price, possession of the riceland was transferred to respondents under the
condition that they shall account for and deliver the harvest from said riceland to petitioner. Respondents, however,
failed to pay the installments and to account for and deliver the harvest from said riceland.3
On March 7, 2000, petitioner sent respondents a demand letter4 to vacate the riceland within 10 days from receipt
thereof, but as her demand went unheeded, she filed on April 5, 2000 a Complaint 5 against respondents for unlawful
detainer before the Municipal Trial Court (MTC), Victoria, Laguna, docketed as Civil Case No. 826, praying that
respondents be directed to vacate the riceland and to pay ₱400,000.00 per year from September 1998 until they
vacate, as reasonable compensation for the use of the property, ₱120,000.00 as attorney’s fees, and ₱50,000.00 as
litigation expenses.6
In their Answer7 dated April 26, 2000, respondents admit the execution of the Contract to Sell but deny that it contains
all the agreements of the parties. They allege that petitioner has no cause of action against them because the three-
year period within which to pay the purchase price has not yet lapsed; that the MTC has no jurisdiction over the case
because the complaint failed to allege that a demand to pay and to vacate the riceland was made upon them. 8
On August 2, 2001, the MTC rendered a Decision,9 the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering defendants, as follows:
1.) To immediately vacate the premises in question;
2.) To pay the amount of THREE HUNDRED SIXTY FIVE THOUSAND (₱365,000.00) PESOS as a reasonable
compensation for the use and occupation of the property;
3.) To pay TWENTY THOUSAND (₱20,000.00) PESOS for and attorney's fees; and
4.) To pay FIVE THOUSAND (₱5,000.00) PESOS as litigation expenses, plus costs.
Respondents filed an appeal with the Regional Trial Court (RTC), Branch 26, Sta. Cruz, Laguna, docketed as Civil Case
No. SC-4141.11 On December 3, 2001, the RTC rendered a Decision,12 the dispositive portion of which reads:
WHEREFORE, the judgment of the trial court is hereby affirmed subject to the modification that defendants are
ordered to pay plaintiff the amount of FOUR HUNDRED THOUSAND (₱400,000.00), as yearly reasonable
compensation for the use and occupation of said riceland computed from 1999 until such time that defendants have
actually vacated the same.
Undaunted, respondents filed a Petition for Review with the CA.14 For failure to file her comment despite receipt of CA
Resolution15 dated May 8, 2002 which required her to file a comment, petitioner was deemed to have waived her right
to file comment to the petition in CA Resolution dated August 28, 2002.16
On May 13, 2003, the CA rendered a Decision17 setting aside the Decision of the RTC and dismissing the complaint for
unlawful detainer. The CA nullified the proceedings before the MTC for want of jurisdiction. It held that the issues in
the case - whether or not there was a violation of the Contract to Sell, whether or not such violation gives the petitioner
the right to terminate the contract and consequently, the right to recover possession and the value of the harvest from
the riceland - extend beyond those commonly involved in unlawful detainer suits where only the issue of possession is
involved; that the case is not a mere detainer suit but one incapable of pecuniary estimation, placing it under the
exclusive original jurisdiction of the RTC, not the MTC.
Dissatisfied, petitioner filed the present petition anchored on the following grounds:
1. The respondent Court of Appeals committed grave error in giving due course to the private respondents' petition
for review notwithstanding the fact that said petition contains no verification to the effect that the allegations therein
were read and understood by the private respondents and that they are true and correct of their own or personal
knowledge or based on authentic records, as required by the rules.
2. The respondent Court of Appeals grievously erred in dismissing the case on the ground that the Municipal Trial
Court has no jurisdiction over the case for unlawful detainer, and thus the Regional Trial Court likewise has no
jurisdiction on appeal to decide the case for unlawful detainer, which allegedly involves a matter incapable of
pecuniary estimation.
3. The respondent Court of Appeals erred in not affirming the decision of the Regional Trial Court dated December 3,
2001, modifying the decision of the Municipal Trial Court dated August 2, 2000 both ordering the eviction of private
respondents from the subject property and payment of the reasonable value of the use of the subject premises. 18
Petitioner contends that the CA should have dismissed outright the petition for review filed before it since it contains
no verification as required by the Rules; and that the CA, in finding that the complaint before the MTC was not one for
unlawful detainer but for specific performance, did not limit itself to the allegations in the complaint but resorted to
unrestrained references, deductions and/or conjectures, unduly influenced by the allegations in the answer.
Respondents, on the other hand, contend that verification is just a formal requirement; that petitioner waived her right
to question the defect when she failed to submit her comment; that the CA correctly pointed out that the present case
involves one that is incapable of pecuniary estimation since the crux of the matter is the rights of the parties based on
the Contract to Sell.
The petition is bereft of merit.
As to the contention of petitioner that the CA should not have taken cognizance of the petition for review because it
was not verified, as required by the Rules, this Court has held in a number of instances that such a deficiency can be
excused or dispensed with in meritorious cases, the defect being neither jurisdictional nor always fatal. 19 The
requirement regarding verification of a pleading is formal.20 Such requirement is simply a condition affecting the form
of pleading, the non-compliance with which does not necessarily render the pleading fatally defective.21 Verification is
simply intended to secure an assurance that the allegations in the pleading are true and correct and not the product of
the imagination or a matter of speculation, and that the pleading is filed in good faith. 22 The court may order the
correction of the pleading if verification is lacking or act on the pleading although it is not verified, if the attending
circumstances are such that strict compliance with the Rules may be dispensed with in order that the ends of justice
may thereby be served.23
68
Besides, petitioner did not raise the issue of lack of verification before the CA. She did not file a comment to the petition
and it is too late in the day to assail such defect, as she is deemed to have waived any objection to the formal flaws of
the petition. Points of law, theories, issues and arguments not brought to the attention of the lower court cannot be
raised for the first time on appeal.24
The main issue being raised in the present petition is whether the complaint is one for unlawful detainer.
Settled is the rule that jurisdiction in ejectment cases is determined by the allegations pleaded in the complaint. 25 It
cannot be made to depend upon the defenses set up in the answer or pleadings filed by the defendant. 26 Neither can
it be made to depend on the exclusive characterization of the case by one of the parties. 27 The test for determining the
sufficiency of those allegations is whether, admitting the facts alleged, the court can render a valid judgment in
accordance with the prayer of the plaintiff.28
The facts upon which an action for unlawful detainer can be brought are specially mentioned in Section 1, Rule 70 of
the Revised Rules of Court, which provides:
Section 1. Who may institute proceedings, and when. – Subject to the provisions of the next succeeding section, a
person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a
lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld
after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or
the legal representatives or assigns of any such lessor, vendor, vendee or other person may, at any time within one
(1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial
Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession, together with damages and costs. (Emphasis supplied)
In unlawful detainer, the possession was originally lawful but became unlawful by the expiration or termination of the
right to possess; hence, the issue of rightful possession is decisive for, in such action, the defendant is in actual
possession and the plaintiff’s cause of action is the termination of the defendant’s right to continue in possession. 29
Applied to the present case, petitioner, as vendor, must comply with two requisites for the purpose of bringing an
ejectment suit: (a) there must be failure to pay the installment due or comply with the conditions of the Contract to
Sell; and (b) there must be demand both to pay or to comply and vacate within the periods specified in Section 2 30 of
Rule 70, namely: 15 days in case of land and 5 days in case of buildings. The first requisite refers to the existence of
the cause of action for unlawful detainer, while the second refers to the jurisdiction requirement of demand in order
that said cause of action may be pursued.31
Both demands – to pay installment due or adhere to the terms of the Contract to Sell and to vacate are necessary to
make the vendee deforciant in order that an ejectment suit may be filed. 32 It is the vendor's demand for the vendee
to vacate the premises and the vendee's refusal to do so which makes unlawful the withholding of the
possession.33 Such refusal violates the vendor's right of possession giving rise to an action for unlawful
detainer.34 However, prior to the institution of such action, a demand from the vendor to pay the installment due or
comply with the conditions of the Contract to Sell and to vacate the premises is required under the aforequoted rule.
Thus, mere failure to pay the installment due or violation of the terms of the Contract to Sell does not automatically
render a person's possession unlawful. Furthermore, the giving of such demand must be alleged in the complaint;
otherwise, the MTC cannot acquire jurisdiction over the case.35
A review of the Complaint of petitioner discloses these pertinent allegations: petitioner owns the subject riceland; she
executed a Contract to Sell in favor of respondents; pending full payment of the purchase price, possession of subject
riceland was transferred to respondents subject to accounting and delivery of the harvest to petitioner; respondents
failed to pay the installments and to account for and deliver the harvest; petitioner asked respondents to vacate the
subject riceland, but they failed to do so. Accordingly, petitioner prayed for judgment ordering respondents to vacate
the subject riceland and to pay ₱400,000.00 per year from September 1998 until they vacate as reasonable
compensation for the use of the property, ₱120,000.00 as attorney's fees, and ₱50,000.00 as litigation expenses.
It is clear from the foregoing that the allegations in the Complaint failed to constitute a case of unlawful detainer. What
is clear is that in the Complaint, petitioner alleged that respondents had violated the terms of the Contract to Sell.
However, the Complaint failed to state that petitioner made demands upon respondents to comply with the conditions
of the contract – the payment of the installments and the accounting and delivery of the harvests from the subject
riceland. The 10-day period granted respondents to vacate even fell short of the 15-day period mandated by law. When
the complaint does not satisfy the jurisdictional requirements of a valid cause for unlawful detainer, the MTC does not
have jurisdiction to hear the case.36
An allegation of a violation of a contract or agreement in a detainer suit may be proved by the presentation of competent
evidence, upon which an MTC judge might make a finding to that effect, but certainly, that court cannot declare and
hold that the contract is rescinded. The rescission of contract is a power vested in the RTC.37 The rescission of the
contract is the basis of, and therefore a condition precedent for, the illegality of a party's possession of a piece of
realty.38 Without judicial intervention and determination, even a stipulation entitling one party to take possession of
the land and building, in case the other party violates the contract, cannot confer upon the former the right to take
possession thereof, if that move is objected to.39
Clearly, the basic issue raised in the complaint of petitioner is not of possession but interpretation, enforcement and/or
rescission of the contract, a matter that is beyond the jurisdiction of the MTC to hear and determine.
WHEREFORE, the instant petition is DENIED. The Decision dated May 13, 2003 of the Court of Appeals in CA-G.R.
SP No. 68272 is AFFIRMED. Costs against petitioner.
69
G.R. No. 204926 December 3, 2014
ANACLETO C. MANGASER, represented by his Attorney-in-fact EUSTAQUIO DUGENIA, Petitioner,
vs.
DIONISIO UGAY, Respondent.
This is a petition for review on certiorari seeking to reverse and set aside the June 13, 2012 Decision 1 and the December
5, 2012 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 122153, entitled "Dionisio Ugay v. Anacleto C.
Mangaser, represented by his Attorney-in-fact Eustaquio Dugenia, "a case of forcible entry and damages.
On October 30, 2007, petitioner Anacleto Mangaser, represented by his attorney-in-fact, Eustaquio Dugenia
(petitioner), filed a complaint for Forcible Entry with Damages against respondent Dionisio Ugay (respondent) before
the Municipal Trial Court of Caba, La Union (MTC). In his complaint, petitioner alleged that he was the registered owner
and possessor of a parcel of land situated in Santiago Sur, Caba, La Union, with an area of 10,632 square meters and
covered by OCT No. RP-174 (FP-13 787) and Tax Declaration No. 014-00707; that on October 31, 2006, petitioner,
discovered that respondent stealthy intruded and occupied a portion of his property by constructing a residential house
thereon without his knowledge and consent; that he referred the matter to the Office of Lupong Tagapamayapa for
conciliation, but no settlement was reached, hence, a certification to file action was issued by the Lupon; and that
demand letters were sent to respondent but he still refused to vacate the premises, thus, he was constrained to seek
judicial remedy.3
Respondent denied the material allegations of the complaint and put up the following defenses, to wit: that he had
been a resident of Samara, Aringay, La Union, since birth and when he reached the age of reason, he started occupying
a parcel of land in that place then known as Sta. Lucia, Aringay, La Union; that years later, this parcel of land was
designated as part of Santiago Sur, Caba, La Union due to a survey made by the government; that he introduced more
improvements on the property by cultivating the land, and in March 2006, he put up a "bahay kubo"; that in October
2006, he installed a fence made of "bolo" to secure the property; that in installing the fence, he was guided by the
concrete monuments which he knew to be indicators of the boundaries of petitioner's property; that while he could not
locate some of the monuments, he based the boundaries on his recollection since he was around when these were
installed; that he knew the boundaries of petitioner's property because he knew the extent of the "iron mining" activities
done by a company on the said property; that petitioner was never in actual possession of the property occupied by
him, and it was only on October 31, 2006 when he discovered the al legccl intrusion; that it was not correct to say that
he refused to vacate and surrender the premises despite receipt of the demand letters because in his letter-reply, he
assured petitioner that he would voluntarily vacate the premises if he would only be shown to have intruded into
petitioner's titled lot after the boundaries were pointed out to him; and that instead of shmving the boundaries to him,
petitioner filed an action for forcible entry before the MTC.4
MTC Ruling
On April 26, 2011, the MTC ruled in favor of respondent. It stated that petitioner failed to adduce any evidence to prove
that the lot occupied by respondent was within his lot titled under OCT No. RP-174 (13 789). The MTC opined that
petitioner could have presented a relocation survey, which would have pinpointed the exact location of the house and
fence put up by respondent, and resolved the issue once and for all. 6 It also explained that petitioner failed to prove
his prior physical possession of the subject property. The OCT No. RP-174(13789) registered under petitioner's name
and the Tax Declaration were not proof of actual possession of the property. The dispositive portion of which reads:
WHEREFORE, the plaintiff (petitioner) having failed to establish his case by preponderance of evidence, the complaint
is hereby DISMISSED.7
RTC Ruling
Aggrieved, petitioner appealed to the Regional Trial Court of Bauang, La Union (RTC) and the case was raffled to Branch
33.
In its August 23, 2011 Decision,8 the RTC reversed the MTC decision and ruled in favor of petitioner. It relied on the
cases of Barba v. Court of Appeals9 and Nunez v. SLTEAS Phoenix Solutions, Inc.,10 which held that in ejectment cases,
possession of the land did not only mean actual or physical possession but also included the subject of the thing to the
action of one's will or by the proper acts and legal formalities established for acquiring such right. The RTC stated that
petitioner had clearly shown his possession of the property as evidenced by his OCT No. RP-174(13 789) issued in
March 1987 and tax declaration, dating back as early as 1995. 11 It added that the boundaries of the property were
clearly indicated in the title, thus, there was no need to conduct a survey. As the owner, petitioner knew the exact
metes and bounds of his property so that when respondent intruded stealthily, he filed the subject suit. 12 The dispositive
portion of the RTC decision reads:
WHEREFORE, after a thorough perusal of the facts and evidence in this case, this Court reverses the decision of the
MTC, Caba, La Union, dated April 26, 2011 and rules in favor of plaintiffappellant (petitioner) and against defendant-
appellee (respondent), ordering the latter and all other persons claiming rights under him to:
1. VACATE the portion of the subject property encroached by him;
2. SURRENDER actual physical possession of the subject portion peacefully to plaintiff-appellant;
3. REMOVE all the improvements he introduced therein;
4. PAY attorney's fees in the amount Php20,000.00 to plaintiff-appellant, and pay the cost of suit.
Undaunted, respondent appealed to the CA.
CA Ruling
The CA reversed and set aside the decision of the RTC. Citing Quizon v. Juan,14 it emphasized that petitioner must
allege and prove that he was in prior physical possession of the property in dispute. The word "possession," as used in
forcible entry and unlawful detainer cases, meant nothing more than physical possession, not legal possession in the
sense contemplated in civil law. The CA wrote that petitioner was not in physical possession despite the presentation
of the OCT No. RP-174(13789) and his tax declarations.15 It reiterated that when the law would speak of possession in
forcible entry cases, it is prior physical possession or possession de facto, as distinguished from possession de Jure.
What petitioner proved was legal possession, not his prior physical possession. Furthermore, the CA stated that the
RTC misquoted Nunez v. SLTEAS Pheonix Solutions16 by giving the wrong notion of what kind of possession was
contemplated in forcible entry cases. In other words, physical possession was the crux in forcible entry, not possession
that stemmed upon ownership.17 The dispositive portion of the assailed decision reads:
WHEREFORE, premises considered, the Petition for Review is GRANTED, accordingly, the Decision dated August 23,
2011 and Order dated October 25, 2011, of the RTC Branch 33, Bauang, La Union in Civil Case No. 2029-BG are
REVERSED and SET ASIDE. The Decision of the MTC dated April 26, 2011 is hereby REINSTATED.
Petitioner filed a motion for reconsideration,19 dated July 6, 2012, but it was subsequently denied by the CA in a
Resolution,20 dated December 5, 2012. It reads:
This Court, after a meticulous study of the arguments set forth in the Motion for Reconsideration filed by respondent,
finds no cogent reason to revise, amend, much less reverse, the assailed Decision dated June 13, 2012. The Motion
for Reconsideration is, thus, DENIED
Hence, this petition, anchored on the following
STATEMENT OF ISSUES
I WHETHER OR NOT THE COURT OF APPEALS FAILED TO CONSIDER THE EVIDENCE OF OWNERSHIP OF PETITIONER
WHICH MAY ESTABLISH PRIOR POSSESSION OVER THE PROPERTY BY HEREIN PETITIONER.
70
II WHETHER OR NOT THE RESOLUTION DATED DECEMBER 5, 2012 OF THE COURT OF APPEALS, FORMER SPECIAL
FOURTH DIVISION, DENYING THE MOTION FOR RECONSIDERATION IS VALID.22
Petitioner argues that in ejectment cases, possession of the land does not only mean actual or physical possession or
occupation but also by the fact that a land is subject to the action of one's will or by proper acts and legal formalities
established for acquiring such right; that the CA should have considered OCT No. RP-174(13789) his tax declaration
as proofs of prior physical possession over the property; and that the issuance of the same are considered to by law
as proper acts and legal formalities established for acquiring such right. Petitioner cited Tolentino, as one of the authors
and experts in Civil law, stating that the "proper acts and formalities" refer to juridical acts, or the acquisition of
possession by sufficient title, inter vivas or mortis causa, onerous or lucrative. These are the acts which the law gives
the force of acts of possession.
Petitioner also avers that the December 5, 2012 CA Resolution was not valid as it did not state the legal basis required
by the Constitution.
On May 28, 2013, respondent filed his Comment23 before this Court. He stated that the issues raised and the arguments
presented by petitioner have been thoroughly resolved and ruled upon by the CA. The appellate court did not err in
reversing the RTC decision because petitioner was never in prior physical possession of the property in dispute.
Respondent asserts that he has been in prior, actual, continuous, public, notorious, exclusive and peaceful possession
in the concept of an owner of the property in dispute.24
On March 28, 2014, petitioner filed his Reply,25 reiterating the case of Nunez v. SLTEAS Phoenix Solutions, Inc., 26 where
a party was able to demonstrate that it had exercised acts of ownership over the property by having it titled in its name
and by paying real property taxes on it. Petitioner also laments the wrongful insistence of respondent that his
possession over the property was one in the concept of an owner. To petitioner's mind, respondent failed to adequately
adduce evidence to show proof of his right to possess the property when his possession came under attack with the
filing of the subject case.27
The Court's Ruling
The Court finds the petition meritorious.
For a forcible entry suit to prosper, the plaintiffs must allege and prove: (a) that they have prior physical possession
of the property; (b) that they were deprived of possession either by force, intimidation, threat, strategy or stealth;
and, (c) that the action was filed within one (1) year from the time the owners or legal possessors learned of their
deprivation of the physical possession of the property.28
There is only one issue in ejectment proceedings: who is entitled to physical or material possession of the premises,
that is, to possession de facto, not possession de Jure? Issues as to the right of possession or ownership are not
involved in the action; evidence thereon is not admissible, except only for the purpose of determining the issue of
possession.29
As a rule, the word "possession" in forcible entry suits indeed refers to nothing more than prior physical possession or
possession de facto, not possession de Jure or legal possession in the sense contemplated in civil law. Title is not the
issue, and the absence of it "is not a ground for the courts to withhold relief from the parties in an ejectment case." 30
The Court, however, has consistently ruled in a number of cases 31 that while prior physical possession is an
indispensable requirement in forcible entry cases, the dearth of merit in respondent's position is evident from the
principle that possession can be acquired not only by material occupation, but also by the fact that a thing is subject
to the action of one's will or by the proper acts and legal formalities established for acquiring such right. The case of
Quizon v. Juan,32 which surprisingly was relied on by the CA, also stressed this doctrine.
Possession can be acquired by juridical acts. These are acts to which the law gives the force of acts of possession.
Examples of these are donations, succession, execution and registration of public instruments, inscription of possessory
information titles and the like.33 The reason for this exceptional rule is that possession in the eyes of the law does not
mean that a man has to have his feet on every square meter of ground before it can be said that he is in possession. 34 It
is sufficient that petitioner was able to subject the property to the action of his will. 35 Here, respondent failed to show
that he falls under any of these circumstances. He could not even say that the subject property was leased to him
except that he promised that he would vacate it if petitioner would be able to show the boundaries of the titled lot.
In the case of Nunez v. SLTEAS Phoenix Solutions, inc., 36 the subject parcel was acquired by the respondent by virtue
of the June 4, 1999 Deed of Assignment executed in its favor by Spouses Ong Tiko and Emerenciana Sylianteng. The
petitioner in the said case argued that, aside from the admission in the complaint that the subject parcel was left idle
and unguarded, the respondent's claim of prior possession was clearly negated by the fact that he had been in
occupancy thereof since 1999. The Court disagreed with the petitioner and said: Although it did not immediately put
the same to active use, respondent appears to have additionally caused the property to be registered in its name as of
February 27, 2002 and to have paid the real property taxes due thereon alongside the sundry expenses incidental
thereto. Viewed in the light of the foregoing juridical acts, it consequently did not matter that, by the time respondent
conducted its ocular inspection in October 2003, petitioner hml already been occupying the land since 1999.
Hence, in that case, the Court ruled that such juridical acts were sufficient to establish the respondent's prior possession
of the subject property.
The case of Habagat Grill v. DMC-Urban Property Developer, Inc.,37 also involves an action for forcible entry. On June
11, 1981, David M. Consunji, Inc. acquired a residential lot situated in Matin a, Davao City, which was covered by TCT
No. T-82338. On June 13, 1981, it transferred the said lot to respondent DMC. Alleging that the petitioner forcibly
entered the property in December 1993, the respondent filed on March 28, 1994 a complaint for forcible entry. One of
the issues raised therein was whether respondent DMC had prior possession of the subject property, to which the Court
answered in the affirmative. It ruled that:
Prior possession of the lot by respondent's predecessor was sufficiently proven by evidence of the execution and
registration of public instruments and by the fact that the lot was subject to its will from then until December 1, 1993,
when petitioner unlawfully entered the premises and deprived the former of possession thereof.
In the case at bench, the Court finds that pet1t1oner acquired possession of the subject property by juridical act,
specifically, through the issuance of a free patent under Commonwealth Act No. 141 and its subsequent registration
with the Register of Deeds on March 18, 1987.38
Before the Court continues any further, it must be determined first whether the issue of ownership is material and
relevant in resolving the issue of possession. The Rules of Court in fact expressly allow this: Section 16, Rule 70 of the
Rules of Court provides that the issue of ownership shall be resolved in deciding the issue of possession if the question
of possession is intertwined with the issue of ownership. But this provision is only an exception and is allowed only in
this limited instance - to determine the issue of possession and only if the question of possession cannot be resolved
without deciding the issue of ownership.39
This Court is of the strong view that the issue of ownership should be provisionally determined in this case. First, the
juridical act from which the right of ownership of petitioner arise would be the registration of the free patent and the
71
issuance of OCT No. RP-174(13789). Apparently, the Torrens title suggests ownership over the land. Second,
respondent also asserts ownership over the land based on his prior, actual, continuous, public, notorious, exclusive
and peaceful possession in the concept of an owner of the property in dispute. 40 Because there are conflicting claims
of ownership, then it is proper to provisionally determine the issue of ownership to settle the issue of possession de
facto.
Returning to the case, this Court cannot agree with the CA that petitioner's OCT No. RP-174(13789) and his tax
declarations should absolutely be disregarded. The issuance of an original certificate of title to the petitioner evidences
ownership and from it, a right to the possession of the property flows. Well-entrenched is the rule that a person who
has a Torrens title over the property is entitled to the possession thereof.41
Moreover, his claim of possession is coupled with tax declarations. While tax declarations are not conclusive proof of
possession of a parcel of land, they are good indicia of possession in the concept of an owner, for no one in his right
mind would be paying taxes for a property that is not in his actual or constructive possession. 42 Together with the
Torrens title, the tax declarations dated 1995 onwards presented by petitioner strengthens his claim of possession over
the land before his dispossession on October 31, 2006 by respondent.
The CA was in error in citing the case of De Grano v. Lacaba 43 to support its ruling. In that case, the respondent tried
to prove prior possession, by presenting only his tax declarations, tax receipt and a certification from the municipal
assessor attesting that he had paid real property tax from previous years. The Court did not give credence to his claim
because tax declarations and realty tax payments are not conclusive proof of possession. The situation in the present
case differs because aside from presenting his tax declarations, the petitioner submitted OCT No. RP-174(13 789)
which is the best evidence of ownership from where his right to possession arises.
Against the Torrens title and tax declarations of petitioner, the bare allegations of respondent that he had prior, actual,
continuous, public, notorious, exclusive and peaceful possession in the concept of an owner, has no leg to stand on.
Thus, by provisionally resolving the issue of ownership, the Court is satisfied that petitioner had prior possession of the
subject property. When petitioner discovered the stealthy intrusion of respondent over his registered prope1iy, he
immediately filed a complaint with the Lupong Tagapamayapa and subsequently filed an action for forcible entry with
the MTC. Instead of taking the law into his own hands and forcefully expelling respondent from his property, petitioner
composed himself and followed the established legal procedure to regain possession of his land.
If the Court were to follow the ruling of the CA and disregard juridical acts to obtain prior possession, then it would
create an absurd situation. It would be putting premium in favor of land intruders against Torrens title holders, who
spent months, or even years, in order to register their land, and who religiously paid real property taxes thereon. They
cannot immediately repossess their properties simply because they have to prove their literal and physical possession
of their property prior to the controversy. The Torrens title holders would have to resort to ordinary civil procedure by
filing either an accion publiciana or accion reinvidicatoria and undergo arduous and protracted litigation while the
intruders continuously enjoy and rip the benefits of another man's land. It will defeat the very purpose of the summary
procedure of an action for forcible entry.
The underlying philosophy behind ejectment suits is to prevent breach of the peace and criminal disorder and to compel
the party out of possession to respect and resort to the law alone to obtain what he claims is his. Ejectment proceedings
are summary in nature so the authorities can speedily settle actions to recover possession because of the overriding
need to quell social disturbances.44
As to the other requirements of an action for forcible entry, the Court agrees with the RTC that petitioner had sufficiently
complied with them. Petitioner proved that he was deprived of possession of the property by stealth.1âwphi1 The
complaint was also filed on October 30, 2007, within the one year reglementary period counted from the discovery of
the stealthy entry by respondent to the property on October 31, 2006.
The second issue raised is the validity of the CA Resolution dated December 5, 2012. Petitioner alleges that the CA
denied his reconsideration without indicating its legal basis in violation of the mandate of Section 14, Article VIII of the
Constitution, which provides that no petition for review or motion for reconsideration of a decision of the court shall be
refused due course or denied without stating the legal basis therefor. This requirement, however, was complied with
when the CA, in its resolution denying petitioner's motion for reconsideration, stated that it "finds no cogent reason to
reverse, amend, much less reverse the assailed Decision, dated June 13, 2012."45
WHEREFORE, the petition is GRANTED. The June 13, 2012 Decision and the December 5, 2012 Resolution of the Court
of Appeals in CA-G.R. SP No. 122153 are hereby REVERSED and SET ASIDE. The August 23, 2011 Decision of the
Regional Trial Court, Branch 33, Bauang, La Union, is hereby REINSTATED.
72
G.R. No. 156995 January 12, 2015
RUBEN MANALANG, CARLOS MANALANG, CONCEPCION GONZALES AND LUIS MANALANG, Petitioners,
vs.
BIENVENIDO AND MERCEDES BACANI, Respondents.
In the exercise of its appellate jurisdiction, the Regional Trial Court (RTC) shall decide the appeal of the judgment of
the Municipal Trial Court (MTC) in unlawful detainer or forcible entry cases on the basis of the entire record of the
proceedings had in the court of origin and such memoranda and/or briefs as may be required by the RTC. There is no
trial de nova of the case.
The petitioners assail the decision promulgated on October 18, 2002 in CA-G.R. SP No. 68419,1 whereby the Court of Appeals (CA)
reversed and set aside the decision of the RTC, Branch 49, in Guagua, Pampanga, and reinstated the judgment rendered on August 31,
2000 by the MTC of Guagua, Pampanga dismissing their complaint for unlawful detainer and the respondents’ counterclaim. They also
hereby assail the resolution promulgated on January 24, 2003 denying their motion for reconsideration. 2
Petitioners Ruben Manalang, Amado Manalang, Carlos Manalang, Concepcion M. Gonzales, Ladislao Manalang and Luis
Manalang were the co-owners of Lot No 4236 with an area of 914 square meters of the Guagua Cadastre, and declared
for taxation purposes in the name of Tomasa B. Garcia. The land was covered by approved survey plan Ap-03-004154.
Adjacent to Lot 4236 was the respondents’ Lot No. 4235 covered by Original Certificate of Title (OCT) No. N-216701.
In 1997, the petitioners caused the relocation and verification survey of Lot 4236 and the adjoining lots, and the result
showed that the respondents had encroached on Lot No. 4236 to the extent of 405 square meters. A preliminary
relocation survey conducted by the Lands Management Section of the Department of Environment and Natural
Resources (DENR) confirmed the result on the encroachment. When the respondents refused to vacate the encroached
portion and to surrender peaceful possession thereof despite demands, the petitioners commenced this action for
unlawful detainer on April 21, 1997 in the MTC of Guagua (Civil Case No. 3309), and the casewas assigned to Branch
2 of that court.3
On September 17, 1998, the MTC (Branch 2) dismissed Civil Case No. 3309 for lack of jurisdiction based onits finding
that the action involved an essentially boundary dispute that should be properly resolved in an accion reivindicatoria.4 It
stated that the complaint did not aver any contract, whether express or implied, between the petitioners and the
respondents that qualified the case as one for unlawful detainer; and that there was also no showing that the
respondents were in possession of the disputed area by the mere tolerance of the petitioners due to the latter having
become aware of the encroachment only after the relocation survey held in 1997.
On appeal, however, the RTC reversed the MTC (Branch 2), and remanded the case for further proceedings, 5 holding
that because there was an apparent withholding of possession of the property and the action was brought within one
year from such withholding of possession the proper action was ejectment which was within the jurisdiction of the MTC;
and that the case was not a boundary dispute that could be resolved in an accion reinvidicatoria, considering that it
involved a sizeable area of property and not a mere transferring of boundary. 6
Upon remand, the MTC, Branch 1,7 ultimately dismissed the complaint and counterclaim for lack ofmerit through the
decision rendered on August 31, 2000,8 ruling that the petitioners failed to adduce clear and convincing evidence
showing that the respondents had encroached on their property and had been occupying and possessing property
outside the metes and bounds described in Bienvenido Bacani’s OCT No. N-216701; that the preponderance of evidence
was in favor of the respondents’ right of possession; and that the respondent’s counterclaim for damages should also
be dismissed, there being no showing that the complaint had been filed in gross and evident bad faith.9
Once more, the petitioners appealed to the RTC.
At that point, the RTC ordered the petitioners to conduct a relocation survey to determine their allegation of
encroachment, and also heard the testimony of the surveyor, Engr. Emmanuel Limpin, then Acting Chief of the Survey
Section of the CENR- DENR.
On September 19, 2001,10 the RTC rendered its judgment whereby it reversed and set aside the MTC’s decision of
August 31, 2000, observing that the respondents had encroached on the petitioners’ property based on the court-
ordered relocation survey, the reports by Engr. Limpin, and his testimony; 11 that the respondents could not rely on
their OCT No. N-216701, considering that although their title covered only 481 squaremeters, the relocation survey
revealed that they had occupied also 560 square meters of the petitioners’ Lot No. 4236;12 that the petitioners did not
substantiate their claims for reasonable compensation, attorney’s fees and litigation expenses; and that, nevertheless,
after it had been established that the respondents had encroached upon and used a portion of the petitioners’ property,
the latter were entitled to ₱1,000.00/month as reasonable compensation from the filing of the complaint up to time
that the respondents actually vacated the encroached property, plus ₱20,000.00 attorney’s fees. 13
The respondents moved for reconsideration, but the RTC denied their motion for its lack of merit. 14
The respondents appealed.
On October 18, 2002, the CA promulgated its assailed decision, viz:15
WHEREFORE, the appealed RTC decision is hereby REVERSED and SET ASIDE, and the decisions of the MTC of
Guagua, Pampanga, Branches 1 and 2, are REINSTATED.
No pronouncement as to costs.
The CA concluded that the RTC,by ordering the relocation and verification survey "in aid of its appellate jurisdiction"
upon motion of the petitioners and over the objection of the respondents, and making a determination of whether there
was an encroachment based on such survey and testimony of the surveyor, had acted as a trial court in complete
disregard of the second paragraph of Section 18, Rule 70 of the Rules of Court. It declared such action by the RTC as
unwarranted because it amounted to the reopening of the trial, which was not allowed under Section 13(3) Rule 70 of
the Rules of Court. It observed that the relocation and verification survey was inconclusive inasmuch as the surveyor
had himself admitted that he could not determine which of the three survey plans he had used was correct without a
full-blown trial.
The CA held that considering that the petitioners’ complaint for unlawful detainer did not set forth when and how the
respondents had entered the land in question and constructed their houses thereon, jurisdiction did not vest in the
MTC totry and decide the case; that the complaint, if at all, made out a case for either accion reivindicatoria or accion
publiciana, either of which fell within the original jurisdiction of the RTC; and that the RTC’s reliance on Benitez v. Court
of Appeals16 and Calubayan v. Ferrer17 was misplaced, because the controlling ruling was that in Sarmiento v. Court of
Appeals,18 in which the complaint was markedly similar to that filed in the case.
The petitioners sought reconsideration, but the CA denied their motion for its lack of merit in the resolution of January
24, 2003.19
Hence, this appeal.
The petitioners contend that the RTC had authority to receive additional evidence on appeal in anejectment case
because it was not absolutely confined to the records of the trial in resolving the appeal; that the respondents were
estopped from assailing the relocation and verification survey ordered by the RTC because they had actively participated
in the survey and had even cross-examined Engr. Limpin, the surveyor tasked to conduct the survey;20 that Engr.
73
Limpin’s testimony must be given credence, honoring the well-entrenched principle of regularity in the performance of
official functions;21 that the RTC did not conduct a trial de novoby ordering the relocation and verification surveyand
hearing the testimony of the surveyor; that the desirability of the relocation and verification survey had always been
part of the proceedings even before the case was appealed to the RTC; 22 that, in any case, the peculiar events that
transpired justified the RTC’s order to conduct a relocation and verification survey;23 that the case, because it involved
encroachment into another’s property, qualified as an ejectment case that was within the jurisdiction of the MTC; and
that the respondents were barred by laches for never questioning the RTC’s February 11, 1999 ruling on the issue of
jurisdiction.24
In contrast, the respondents assail the relocation and verification survey ordered by the RTC as immaterial, because
(a) it could not vest a right of possession or ownership; (b) the petitioners were mere claimants, not the owners of the
property; (c) the petitioner had never been in possession of the area in question; and (d) cadastral surveys were not
reliable. Hence, they maintain that whether or not the relocation and verification survey was considered would not alter
the outcome of the case.25
Ruling of the Court
The appeal has no merit.
To start with, the RTC, in an appeal of the judgment in an ejectment case, shall not conduct a rehearing or trial de
novo.26 In this connection, Section 18, Rule 70 of the Rules of Courtclearly provides:
Sec. 18. Judgment conclusive only on possession; not conclusive in actions involving title or ownership. — x x x.
The judgment or final order shall be appealable to the appropriate Regional Trial Court which shall decide the same
on the basis of the entire record of the proceedings had in the court of origin and such memoranda and/or briefs as
may be submitted by the parties or required by the Regional Trial Court. (7a)
Hence, the RTC violated the foregoing rule by ordering the conduct of the relocation and verification survey "in aid of
its appellate jurisdiction" and by hearing the testimony of the surveyor, for its doing so was tantamount to its holding
of a trial de novo. The violation was accented by the fact that the RTC ultimately decided the appeal based on the
survey and the surveyor’s testimony instead of the record of the proceedings had in the court of origin. Secondly, on
whether or not Civil Case No. 3309 was an ejectment case within the original and exclusive jurisdiction of the MTC,
decisive are the allegations of the complaint. Accordingly, the pertinent allegations of the petitioners’ complaint follow:
2. Plaintiffs are co-owners ofland known as Lot no. 4236 of the Guagua cadastre. Plaintiffs inherited the said parcel
of residential land from Tomasa B. Garcia-Manalang who is the absolute owner of the said property and the same is
declared for taxation purposes in her name under Tax Declaration No. 07014906, a copy of which is hereto attached
as Annex "A";
3. Lot No. 4236 is covered by an approved plan, Plan Ap-03-004154 (a copy made Annex ‘B") and it consists of 914
square meters;
4. Adjacent to plaintiff’s [p]roperty is Lot No. 4235 of the Guagua Cadastre and covered by approved plan As-03-
00533 (copy made Annex "C") which is being claimed by defendants and is the subject matter of Cadastral Case No.
N-229 of the Regional Trial Court of Guagua, Branch 53 where a decision (copy made Annex "D") was rendered by
said court on August 28, 1996 confirming the title over said lot in favor of defendant Bienvenido Bacani. The said
decision is now final and executory …
5. On February 23, 1997, plaintiffs caused the relocation and verification survey of cadastral Not No. 4236 of the
Guagua Cadastre belonging to plaintiff and the adjoining lots, particularly Lot No. 4235 being claimed by defendants;
6. The relocation and verification survey conducted by Engr. Rufo R. Rivera, a duly licensed Geodetic Engineer per
plan (copy made Annex "F") revealed that defendants had encroached an area of 405 square meters of the parcel of
land belonging to plaintiffs. In fact, the whole or part of the houses of the said defendants have been erected in said
encroached portion;
 7. Sometime in June of 1997, plaintiffs through plaintiff Concepcion Gonzales lodged a complaint before the Barangay
Council of San Juan, Guagua, Pampanga against defendants regarding the encroached portion. A preliminary
relocation survey was conducted by the Lands Management Sector of the DENR and it was found that indeed,
defendants encroached into the parcel of land belonging to plaintiffs. This finding was confirmed by the approved
plan Ap-03-004154;
8. Since defendants refused to vacate the premises and surrender the peaceful possession thereof to plaintiff, the
Barangay Captain of San Juan, Guagua, Pampanga issued a certification to file action (copy made Annex "G’) dated
March 4, 1997 to enable the plaintiff to file the appropriate action in court;
9. On March 10, 1997, plaintiffs senta formal demand letter (copy made Annex ‘H") to defendants to vacate the
premises and to pay reasonable compensation for the use of the said encroached portion;
10. Despite receipt of said demand letter per registry return cards attached to the letter, defendants failed and
refused to vacate the encroached portion and surrender the peaceful possession thereof to plaintiffs;
11. Plaintiffs are entitled to a reasonable compensation in the amount of P 3,000.00 from defendants for the illegal
use and occupation of their property by defendants;
12. By reason of the unjust refusal of defendants to vacate the premises and pay reasonable compensation to
plaintiffs, the latter were constrained to engage the services of counsel for ₱30,00.00 plus ₱1,000.00 per appearance
and incur litigation expenses in the amount of ₱10,000.00.27
Given the foregoing allegations, the case should be dismissed without prejudice to the filing of a non-summary action
like accion reivindicatoria. In our view, the CA correctly held that a boundary dispute must be resolved in the context
of accion reivindicatoria, not an ejectment case. The boundary dispute is not about possession, but encroachment, that
is, whether the property claimed by the defendant formed part of the plaintiff’s property. A boundary dispute cannot
be settled summarily under Rule 70 of the Rules of Court, the proceedings under which are limited to unlawful detainer
and forcible entry. In unlawful detainer, the defendant unlawfully withholds the possession of the premises upon the
expiration or termination of his right to hold such possession under any contract, express or implied. The defendant’s
possession was lawful at the beginning, becoming unlawful only because of the expiration or termination of his right of
possession. In forcible entry, the possession of the defendant is illegal from the very beginning, and the issue centers
on which between the plaintiff and the defendant had the prior possession de facto.
Thirdly, the MTC dismissed the action because it did not have jurisdiction over the case. The dismissal was correct. It
is fundamental that the allegations of the complaint and the character of the relief sought by the complaint determine
the nature of the action and the court that has jurisdiction over the action.28 To be clear, unlawful detainer is an action
filed by a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold possession by virtue of any contract, express or
implied.29 To vest in the MTC the jurisdiction to effect the ejectment from the land of the respondents as the occupants
in unlawful detainer, therefore, the complaint should embody such a statement of facts clearly showing the attributes
of unlawful detainer.30 However, the allegations of the petitioners' complaint did not show that they had permitted or
tolerated the occupation of the portion of their property by the respondents; or how the respondents' entry had been
effected, or how and when the dispossession by the respondents had started. All that the petitioners alleged was the
respondents' "illegal use and occupation" of the property. As such, the action was not unlawful detainer.
Lastly, the conclusion by the MTC that the petitioners failed to show by clear and convincing evidence that the
respondents had encroached on the petitioners' property was also warranted. In contrast, the only basis for the RTC's
decision was the result of the relocation and verification survey as attested to by the surveyor, but that basis should
be disallowed for the reasons earlier mentioned. Under the circumstances, the reinstatement of the ruling of the MTC
by the CA was in accord with the evidence.
WHEREFORE, the Court AFFIRMS the decision promulgated on October 18, 2002; and ORDERS the petitioners to pay
the costs of suit.
74
G.R. No. L-66371 May 15, 1985
ARMANDO ANG, petitioner,
vs.
HON. JUDGE JOSE P. CASTRO, Regional Trial Judge, Branch LXXXIV and HON. JUDGE JOSE P. ARRO, Branch
CIII, both of the Regional Trial Court of Rizal, and ASSISTANT FISCAL NARCISO T. ATIENZA of Quezon
City, respondents.
In the supplemenal petition for certiorari, prohibition and mandamus, Armando Ang seeks to set aside the order, dated
February 9, 1984, of respondent Judge Jose P. Castro of the Regional Trial Court, Branch LXXXIV in Quezon City,
denying his appeal from an order holding him in contempt of court. Petitioner likewise asks this Court (1) to order
respondent judge Castro to forward the records of Civil Case No. Q-35466 to the Intermediate Appellate Court; (2) to
enjoin him from enforcing his order for the arrest of petitioner; (3) to restrain respondent Assistant Fiscal Narciso 'I'.
Atienza of Quezon City from conducting preliminary investigation on the libel charge filed against him by respondent
judge; and, (4) to prohibit respondent Judge Jose P. Arro of the Regional Trial Court of Rizal, Branch CIII, Quezon City
from proceeding and or conducting a hearing on the criminal complaint for libel against petitioner in Criminal Case No.
Q-31587.
In November 1983, petitioner, through the Office of the Presidential Assistant on Legal Affairs, lodged with this Court
an administrative complaint against respondent judge for ignorance of the law, gross inexcusable negligence,
incompetence, manifest partiality, grave abuse of discretion, grave misconduct, rendering unjust decision in Civil Case
No. Q-35466 and dereliction of duties in not resolving his motion for reconsideration of the adverse decision in said
civil case.
On December 23, 1983, upon learning of the administrative case filed against him by petitioner, respondent judge
ordered petitioner to appear before him on December 29, 1983 at 8:30 in the morning, and to show cause why he
should not be punished for contempt of court, for malicious, insolent, inexcusable disrespect and contemptuous attitude
towards the court and towards him.
On January 9, 1984, respondent judge found petitioner guilty of contempt of court, sentenced him to suffer five (5)
days imprisonment and ordered his arrest for his failure, despite notice, to appear on the scheduled hearing of the
contempt charge against him.
On February 3, 1984, petitioner filed his notice of appeal from the judgment of conviction in the contempt charge but
the same was denied by the respondent judge in an Order, as follows:
Considering that ARMANDO ANG was found guilty of "Direct Contempt" of court, the notice of appeal filed by him
thru counsel cannot be given due course and is hereby denied, as the pronouncement of guilt in a direct contempt is
not appealable.
Meantime, in view of the fact that said Armando Ang has remained in hiding and has been eluding the officers of the
law in serving the original warrant for his arrest, let an alias warrant be issued for his arrest so that he can serve his
sentence of five (5) days imprisonment. (p. 45, Rollo)
Thereafter, respondent judge instituted before the Office of the City Fiscal of Quezon City a criminal complaint (I.S.
No. 83- 22198) for libel against herein petitioner for using malicious, insolent and contemptuous language against him
in his letter- complaint filed before this Court.
Hence, instant petition.
On February 20, 1984, We issued a temporary restraining order enjoining (1) the respondent judge from carrying out
the warrant of arrest issued in Civil Case No. Q-35466, entitled: "Engson Realty Co., Inc., Plaintiff, versus Lim Eng Si,
Defendant of the Regional Trial Court, Branch LXXXIV at Quezon City; and (2) the respondent fiscal from conducting
the preliminary investigation for libel lodged by respondent judge against petitioner in I.S. No. 83-22198 of Quezon
City.
Asked to comment why he proceeded with the preliminary investigation of the complaint for libel filed by respondent
judge against herein petitioner, despite the restraining order from this Court, Fiscal Narciso T. Atienza explained that
long before the undersigned receive said order, the information for libel against Armando Ang has already been filed
in court." Indeed, records show that the information for libel was lodged on February 2, 1984; whereas, the temporary
restraining order was issued on February 20, 1984.
On February 29,1984, upon knowing that Criminal Case No. Q-31587 for libel was instituted against him by respondent
Fiscal Atienza, petitioner filed a supplemental petition for prohibition against respondent Judge Jose P. Arro of the
Regional Trial Court, Branch CIII, in Quezon City, who was assigned to try and hear said criminal case. Petitioner prays
for a supplemental writ of preliminary injunction to enjoin Judge Arro from proceeding with said Criminal Case No. Q-
31587.
On March 5, 1984, We issued a Temporary Restraining Order enjoining respondent Judge from proceeding and/or
conducting hearing on the criminal complaint for libel.
On June 4, 1984, after considering the allegations, issues, and arguments adduced in the petition and supplemental
petition petition for certiorari, prohibition and mandamus, respondents' comments thereon as well as petitioner's reply
to respondent fiscal's comment with motion to dismiss the aforesaid petition, We resolved to give due course to the
petition and required both parties to submit simultaneously their memoranda on the issues within thirty (30) days from
notice.
Despite the lapse of the period granted both parties, they failed to file their memoranda. Thus, the case is deemed
submitted for decision.
Upon a careful scrutiny of the records of the case, We found that the alleged malicious imputations were not uttered
in the presence or so near respondent Judge Jose P. Castro as to obstruct or interrupt the proceedings before him;
rather, they were contained in the pleadings and/or letters-complaint filed by petitioner before the Office of the
Presidential Assistant on legal Affairs and before this Court in the aforementioned administrative case filed by petitioner
against him.
Section 3, particularly paragraphs (b) and (d), Rule 71 of the New Rules of Court, provide:
SEC. 3. Indirect contempts to be punished after charge and hearing. — After charge in writing has been filed, and an
opportunity given to the accused to be heard by himself or counsel, a person guilty of any of the following acts may
be punished for contempt:
(b) Disobedience of or resistance to a lawful writ, process, order, judgment, or command of a court, or injunction
granted by a court or judge, including the act of a person who, after being dispossessed or ejected from any real
property by the judgment or process of any court of competent jurisdiction, enters or attempts or induces another
to enter into or upon such real property, for the purpose of executing acts of ownership or possession, or in any
manner disturbs the possession given to the person adjudged to be entitled thereto
(d) Any improper conduct tending directly or indirectly, to impede, obstruct, or degrade the administration of
justice;
75
Respondent Judge Castro, in his comment, argues that failure of petitioner to appear, despite notice, on the scheduled
hearing of the contempt charge for the use of derogatory language in his two letters addressed to the Office of the
Presidential Assistant on Legal Affairs and to this Court in an administrative complaint against him, constitutes direct
contempt as the acts actually impeded, embarrassed and obstructed him in the administration of justice.
We do not agree. The Rules of Court cannot be any clearer. The use of disrespectful or contemptuous language against
a particular judge in pleadings presented in another court or proceeding is indirect, not direct, contempt as it is not
tantamount to a misbehavior in the presence of or so near a court or judge as to interrupt the administration of justice.
Stated differently, if the pleading containing derogatory, offensive or malicious statements is submitted in the same
court or judge in which the proceedings are pending, it is direct contempt because it is equivalent to a misbehavior
committed in the presence of or so near a court or judge as to interrupt the administration of justice. Considering the
aforecited provisions, petitioner's conduct if at all, constitutes indirect contempt and, if found guilty he may appeal
pursuant to Section 10, Rule 71 of the Rules of Court. which reads:
SEC. 10. Review of judgment or order by Court of appeals or Supreme Court; bond for stay. — The judgment or
order of a Court of First Instance made in a case of contempt punished after written charge and hearing may be
reviewed by the Court of Appeals or the Supreme Court, but execution of the judgment or order shall not be
suspended until a bond is filed by the person in contempt, in an amount fixed by the Court of First Instance,
conditioned that if the appeal be decided against him he will abide by and perform the judgment or order. The appeal
may be taken as in criminal cases.
Anent the ancillary action for prohibition, We find the same meritorious, considering that the basis of the libel case
(Criminal Case No. Q-31587) filed against petitioner before the respondent Regional Trial Court, Branch CIII, Quezon
City was a communication addressed to the Chief Justice of the Supreme Court which was coursed through the Office
of the Presidential Assistant on legal Affairs, complaining against respondent judge's ignorance of the law, gross
inexcusable negligence, incompetence, disregard for the Supreme Court administrative order, grave misconduct,
rendering an unjust decision and dereliction of duty. It is manifest that as held in the case of Santiago vs. Calvo, 48
Phil. 922, "a communication made in good faith upon any subject matter in which the party making the communication
has an interest or concerning which he has a duty is privileged if made to a person having a corresponding interest or
duty, although it contains incriminatory or derogatory matter which without the privilege would be libelous and
actionable ... that parties, counsel and witnesses are exempted from liability in libel or slander for words otherwise
defamatory published in the course of judicial proceedings, provided the statements are pertinent or relevant to the
case. "
Records show that the libel case had already been instituted in court when the restraining order was issued by Us.
Nonetheless, considering the privileged character of petitioner's communication to the Chief Justice barring a
prosecution for libel, it is proper that the injunction against respondent Regional Trial Court, Branch CIII, Quezon City,
from proceeding with the hearing of Criminal Case No. Q-31587, be made permanent pursuant to the restraining order
and established doctrine against the use of the strong arm of the law as an instrument of arbitrary and oppressive
prosecution.
ACCORDINGLY, the petition with respect to the action against respondent Judge Jose P. Castro of the Regional Trial
Court, Branch LXXXIV, Quezon City is granted and said respondent judge is hereby ordered to elevate the records of
Civil Case No. Q-35466 to the Intermediate Appellate Court at once for disposition in accordance with the terms hereof.
Respondent trial judge is hereby ordered to dismiss the libel case (Criminal Case No. Q-31587).
The temporary restraining order issued on February 20, 1984 enjoining respondent Judge Jose P. Castro from enforcing
or carrying out the warrant of arrest issued in Civil Case No. Q-35466 is made permanent.
G.R. Nos. 115908-09 March 29, 1995
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
DANNY GODOY, accused-appellant.
For separate resolution, as an incident arising from these criminal cases under automatic review by the court, is a
complaint1 filed by judge Eustaquio Z. Gacott, Jr. of the Regional Trial Court of Palawan and Puerto Princesa City,
Branch 47, to cite for indirect contempt Mauricio Reynoso, Jr., a columnist, and Eva P. Ponce de Leon, publisher and
chairman of the editorial board, respectively, of the Palawan Times. His Honor's plaint is based on an article written by
respondent Reynoso, Jr. in his column, "On the Beat," and published in the July 20, 1994 issue of said newspaper which
is of general circulation in Puerto Princesa City.
The pertinent portions of the article complained of are hereunder reproduced, with the alleged contemptuous
statements italicized for ready identification as the particulars equivalent to the innuendo in a libel charge:
Isang maalab na issues (sic) pa ay ang DEATH THREATS laban kono kay Judge Eustaquio Gacott, Jr. ng mga pamilya
ng kanyang sinentensiyahan ng Double Death Penalty. Sinabi ni Wilmar Godoy sa DWRM programa na wala silang
pagbabantang ginawa umano, at hindi nila ito kailan man isinaisip. Umaasa na lamang sila sa magiging resulta ng
review ng Korte Suprema. Ayon naman kay Gacott sa kanyang interview sa DYPR ay totoong pinagbabantaan siya
ng mga Godoy. Kaya ayon marami siyang Security na armado, in full battle gear. Kung totoo ito, bakit hindi niya
kasuhan ang mga ito? Ito rin ang katanungan ni Mr. Tony Omaga Diaz, ang station manager ng DYPR. O bale ba
gumawa siya ng sariling MULTO Pagkatapos ay takot na takot siya sa multong kanyang ginawa.
Usap-usapan pa rin ang kaso ni Godoy. Ito raw ay isang open book maging sa kanyang mga co-teachers sa Pulot na
nagli-live in si Godoy at ang babaing si Mia Taha. Matagal na ang kanilang ugnayan. Meron ding "balita" ewan kung
totoo, na noong si Godoy daw ay nasa Provincial Jail pa ay dinadalaw siya ni Taha At kumakain pa sila sa labas
kasama ang isang Provincial Guard. Ito rin ang dahilan kung bakit ipinagpilitan ni Judge Gacott na madala kaagad sa
Muntinlupa sa National Bilibid Prisons si Godoy kahit na ang kaso ay naka-apela pa.
Pero mayroon payo si Atty. Telesforo Paredes, Jr. sa mga mamamayan ng Palawan, mag-ingat kayo sa paglalakad
at baka kung hindi kayo madapa ay madulas daw kayo. Dahil ayon daw kay Judge Gacott, base sa kanyang interview
sa Magandang Gabi Bayan, "Tagilid na raw and mundo. Maraming nagpapatunay daw dito, maski sa kapitolyo." Joke
lang. Pero isang warning din sa may mga nobya, na mag-ingat sa pag-break sa inyong girlfriend, dahil baka
mademanda kayo at masentensyahan ng double death penalty, lalo na kung kay Judge Gacott, dahil alam na ninyo,
tagilid and laban diyan.
The complaint avers that the article tends to impede, obstruct, belittle, downgrade and degrade the administration of
justice; that the article contains averments which are disrespectful, discourteous, insulting, offensive and derogatory;
that it does not only cast aspersions on the integrity and honesty of complainant as a judge and on his ability to
administer justice objectively and impartially, but is an imputation that he is biased and he prejudges the cases filed
before him; and that the article is sub judice because it is still pending automatic review.
Respondent Mauricio Reynoso, Jr. contends in his Comment2 that his article does not intend to impede nor obstruct the
administration of justice because the same was published after complainant had promulgated his decision in the case;
that such publication will not affect or influence the review by the Supreme Court of the criminal case, considering that
the Palawan Times is circulated only in the City of Puerto Princess and some parts of Palawan; that the comments
made therein were made in good faith and in the exercise of the freedom of expression and of the press; that while
the article may contain unfavorable comments about complainant, it cannot be considered as having the tendency to
76
degrade or impede the administration of justice; and that the complaint, which is for contempt of a judge of a regional
trial court, was erroneously filed with the Supreme Court contrary to Section 4, Rule 71 of the rules of Court.
Respondent Eva P. Ponce de Leon, in her Comment3 and Supplemental Comment,4 asserts that the article is merely in
reaction to the television interview given by complainant in the show, "Magandang Gabi Bayan," last June 18, 1994
wherein the latter defended his decision in Criminal Cases Nos. 11640-41, entitled "People vs. Godoy;" that the article
is no longer sub judice as the same was published only after complainant had rendered his decision and had already
lost jurisdiction over the case; that the article cannot be considered contemptuous and defamatory in the absence of
a clear and present danger that it will tend directly or indirectly to impede, obstruct, or ridicule the administration of
justice; that it constitutes a valid exercise of the constitutionally guaranteed freedom of the press; that a reading of
the subject article in its entirety will show that the same does not constitute contempt but, at most, is merely a fair
criticism which did not intend to malign nor place him in disrepute in the performance of his functions; and that
respondent Ponce de Leon cannot be held liable for contempt because she did not have either actual knowledge of, or
Personal connection with, the authorship or publication of the allegedly contemptuous article, since she had just
returned from the United States when the same was published.
On the issue of whether the specified statements complained of are contumacious in nature, we are inclined, based on
an overall perusal and objective analysis of the subject article, to hold in the negative. We have read and reread the
article in its entirety and we are fully convinced that what is involved here is a situation wherein the alleged disparaging
statements have been taken out of context. If the statements claimed to be contumelious had been read with contextual
care, there would have been no reason for this contempt proceeding.
In our aforestated evaluation, we were sufficiently persuaded to favorably consider the following explanation of
respondent Ponce de Leon in her Supplemental Comment:
On the other hand, a reading of the subject article in its entirety will show that the same does not constitute contempt,
but at most, merely constitutes fair criticism.
The first portion of the article reads:
"Isang maalab na issues (sic) pa ay ang DEATH THREATS laban kono kay Judge Eustaquio Gacott, Jr. ng mga
pamilya ng kanyang sinentensiyahan ng Double Death Penalty. Sinabi ni Wilmar Godoy sa DWRM programa na
wala silang pagbabantang ginawa umano, at hindi nila ito kailan man isinaisip. Ayon naman kay Gacott sa kanyang
interview sa DYPR ay totoong pinagbabantaan siya ng mga Godoy. Kaya ayon marami siyang Security na armado,
in full battle gear. Kung totoo ito, bakit hindi niya kasuhan ang mga ito? Ito rin ang katanungan ni Mr. Tony Omaga
Diaz, ang station manager ng DYPR. O bale ba gumawa siya ng sariling MULTO Pagkatapos ay takot na takot siya
sa multong kanyang ginawa."
The foregoing does not even deal with the merits of the case, but with the public accusations being made by
complainant that he is being given death threats by the family of the accused, Danny Godoy. The article only makes
a justifiable query as to why Complainant does not file the appropriate charges if his accusations are true.
"Usap-usapan pa rin ang kaso ni Godoy. Ito raw ay isang open book maging sa kanyang mga co-teachers sa Pulot
na nagli-live in si Godoy at ang babaing si Mia Taha. Matagal na ang kanilang ugnayan. Meron ding ‘balita’ ewan
kung totoo, na noong si Godoy daw ay nasa Provincial Jail pa ay dinadalaw siya ni Taha At kumakain pa sila sa
labas kasama ang isang Provincial Guard. Ito rin ang dahilan kung bakit ipinagpilitan ni Judge Gacott na madala
kaagad sa Muntinlupa sa National Bilibid Prisons si Godoy kahit na ang kaso ay naka-apela pa." (Emphasis supplied)
The foregoing is merely a report of rumors regarding the accused Danny Godoy. They are not presented as facts by
respondent Mauricio Reynoso, Jr. In fact, he even goes to the extent of acknowledging that he himself does not know
if the rumors are true or not.
 The subject article then offers the following analysis:
"Malaking epekto ang desisyon ng Korte Suprema sa dalawang tao, kay Danny Godoy at Judge Gacott. Kung
babaliktarin ng Supreme Court and decision ni Gacott, lalaya si Godoy, si Gacott naman ang masisira, ang kanyang
aspirations na maitaas sa Court of Appeals at eventually makasama sa mga miyembro ng korte suprema ng bansa.
Kung papaboran naman Gacott ay sigurado na ang kamatayan ni Godoy, at double pa pero si Gacott maitataas pa
ang puwesto. Tayo naman, hintay lamang tayo ng ano mang magiging developments ng kaso."
The foregoing is nothing more than a fair analysis. For indeed, if the Honorable Court affirms the Decision of
Complainant, the accused Danny Godoy would be meted the death sentence. On the other hand, if the decision is
reversed, this may adversely affect the aspirations of Complainant to be promoted to the Court of Appeals, and
eventually to the Honorable Court.
Finally, the subject article reads:
"Pero mayroon payo si Atty. Telesforo Paredes, Jr. sa mga mamamayan ng Palawan, mag-ingat kayo sa paglalakad
at baka kung hindi kayo madapa ay madulas daw kayo. Dahil ayon daw kay Judge Gacott, base sa kanyang
interview sa Magandang Gabi Bayan, 'Tagilid na raw and mundo. Maraming nagpapatunay daw dito, maski sa
kapitolyo.' Joke lang. Pero isang warning din sa may mga nobya, na mag-ingat sa pag-break sa inyong girlfriend,
dahil baka mademanda kayo at masentensyahan ng double death penalty, lalo na kung kay Judge Gacott, dahil
alam na ninyo, tagilid and laban diyan."
Again, the subject article merely reports what Atty. Telesforo Paredes, Jr. allegedly said. But more importantly, the
foregoing is merely a reaction not so much to Complainant's Decision, but to the public statements made by
Complainant in the national television show "Magandang Gabi Bayan."
Snide remarks or sarcastic innuendoes do not necessarily assume that level of contumely which is actionable under
Rule 71 of the Rules of Court. Neither do we believe that the publication in question was intended to influence this
Court for it could not conceivably be capable of doing so. The article has not transcended the legal limits for editorial
comment and criticism. Besides, it has not been shown that there exists a substantive evil which is extremely serious
and that the degree of its imminence is so exceptionally high as to warrant punishment for contempt and sufficient to
disregard the constitutional guaranties of free speech and press.
It has been insightfully explained and suggested that a judge will generally and wisely pass unnoticed any mere hasty
and unguarded expression of passion, or at least pass it with simply a reproof. It is so that in every case where a judge
decides for one party, he decides against another; and oftentimes both parties are beforehand equally confident and
sanguine. The disappointment, therefore, is great, and it is not in human nature that there should be other than a
bitter feeling, which often reaches to the judge as the cause of the supposed wrong. A judge, therefore, ought to be
patient, and tolerate everything which appears as but the momentary outbreak of disappointment. A second thought
will generally make a party ashamed of such, outbreak, and the dignity of the court will suffer none by passing it in
silence.5
Prescinding from the foregoing adjudgment, the Court observes that there are two primary issues presented in this
incident which deserve a more extended disquisition, firstly, because of their importance and frequent involvement in
contempt proceedings filed in the courts, and, secondly, by reason of the fact that there are numerous and variant
pronouncements on the subject of contempt which need to be clarified. The principal issues are (1) whether or not
there can be contempt of court in case of post-litigation statements or publications; and (2) which court has jurisdiction
over a contempt committed against the trial court while the case is pending on appeal. Other cognate and related
issues must also be discussed so as to provide judicial guidance on the present state of our statutory and case laws
thereon.
77
Before we go into a more intensive analysis of said issues, however, it may be beneficial for purposes thereof to
preliminarily revisit and expound on the nature and implications of a special civil action for contempt or of any initiatory
pleading therefor filed as an incident in the main case. That exercise will further explain and justify our disposition of
the contempt charge herein.
I. Prefatorial Considerations
The exercise of the power to punish for contempt has a dual aspect, primarily, the proper punishment of the guilty
party for his disrespect to the court, and, secondarily, his compulsory performance of some act or duty required of him
by the court and which he refuses to perform. Due perhaps to this two fold aspect of the exercise of the power to
punish them, contempts are classified as civil or criminal.6 However, the line of demarcation between acts constituting
criminal contempt, as distinguished from civil contempt, is quite indistinct. The confusion in attempts to classify civil
and criminal contempts is due to the fact that there are contempts in which both elements appear; or there are
contempts which are neither wholly civil nor altogether criminal, but partake of the characteristics of both; or it is also
possible that the same act may constitute both a civil and criminal contempt.
A. As to the Nature of the Offense
A criminal contempt is conduct that is directed against the dignity and authority of the court or a judge acting judicially;
it is an act obstructing the administration of justice which tends to bring the court into disrepute or disrespect. 7 On the
other hand, civil contempt consists in failing to do something ordered to be done by a court in a civil action for the
benefit of the opposing party therein and is, therefore, an offense against the party in whose behalf the violated order
is made.8
A criminal contempt, being directed against the dignity and authority of the court, is an offense against organized
society and, in addition, is also held to be an offense against public justice which raises an issue between the public
and the accused, and the proceedings to punish it are punitive. On the other hand, the proceedings to punish a civil
contempt are remedial and for the purpose of the preservation of the right of private persons. It has been held that
civil contempt is neither a felony nor a misdemeanor, but a power of the court. 9
It has further been stated that intent is a necessary element in criminal contempt, and that no one can be punished
for a criminal contempt unless the evidence makes it clear that he intended to commit it. On the contrary, there is
authority indicating that since the purpose of civil contempt proceedings is remedial, the defendant's intent in
committing the contempt is immaterial. Hence, good faith or the absence of intent to violate the court's order is not a
defense in civil contempt. 10
B. As to the Purpose for which the Power is Exercised
A major factor in determining whether a contempt is civil or criminal is the purpose for which the power is exercised.
Where the primary purpose is to preserve the court’s authority and to punish for disobedience of its orders, the
contempt is criminal. Where the primary purpose is to provide a remedy for an injured suitor and to coerce compliance
with an order, the contempt is civil. A criminal contempt involves no element of personal injury. It is directed against
the power and dignity of the court; private parties have little, if any, interest in the proceedings for punishment.
Conversely, if the contempt consists in the refusal of a person to do an act that the court has ordered him to do for the
benefit or advantage of a party to an action pending before the court, and the contemnor is committed until he complies
with the order, the commitment is in the nature of an execution to enforce the judgment of the court; the party in
whose favor that judgment was rendered is the real party in interest in the proceedings. Civil contempt proceedings
look only to the future. And it is said that in civil contempt proceedings, the contemnor must be in a position to purge
himself. 11
C. As to the Character of the Contempt Proceeding
It has been said that the real character of the proceedings is to be determined by the relief sought, or the dominant
purpose, and the proceedings are to be regarded as criminal when the purpose is primarily punishment, and civil when
the purpose is primarily compensatory or remedial. 12
Criminal contempt proceedings are generally held to be in the nature of criminal or quasi-criminal actions. They are
punitive in nature, and the Government, the courts, and the people are interested in their prosecution. Their purpose
is to preserve the power and vindicate the authority and dignity of the court, and to punish for disobedience of its
orders. Strictly speaking, however, they are not criminal proceedings or prosecutions, even though the contemptuous
act involved is also a crime. The proceeding has been characterized as sui generis, partaking of some of the elements
of both a civil and criminal proceeding, but really constituting neither. In general, criminal contempt proceedings should
be conducted in accordance with the principles and rules applicable to criminal cases, in so far as such procedure is
consistent with the summary nature of contempt proceedings. So it has been held that the strict rules that govern
criminal prosecutions apply to a prosecution for criminal contempt, that the accused is to be afforded many of the
protections provided in regular criminal cases, and that proceedings under statutes governing them are to be strictly
construed. However, criminal proceedings are not required to take any particular form so long as the substantial rights
of the accused are preserved. 13
Civil contempt proceedings are generally held to be remedial and civil in their nature; that is, they are proceedings for
the enforcement of some duty, and essentially a remedy for coercing a person to do the thing required. As otherwise
expressed, a proceeding for civil contempt is one instituted to preserve and enforce the rights of a private party to an
action and to compel obedience to a judgment or decree intended to benefit such a party litigant. So a proceeding is
one for civil contempt, regardless of its form, if the act charged is wholly the disobedience, by one party to a suit, of a
special order made in behalf of the other party and the disobeyed order may still be obeyed, and the purpose of the
punishment is to aid in an enforcement of obedience. The rules of procedure governing criminal contempt proceedings,
or criminal prosecutions, ordinarily are inapplicable to civil contempt proceedings. It has been held that a proceeding
for contempt to enforce a remedy in a civil action is a proceeding in that action. Accordingly, where there has been a
violation of a court order in a civil action, it is not necessary to docket an independent action in contempt or proceed
in an independent prosecution to enforce the order. It has been held, however, that while the proceeding is auxiliary
to the main case in that it proceeds out of the original case, it is essentially a new and independent proceeding in that
it involves new issues and must be initiated by the issuance and service of new process. 14
In general, civil contempt proceedings should be instituted by an aggrieved party, or his successor, or someone who
has a pecuniary interest in the right to be protected. In criminal contempt proceedings, it is generally held that the
State is the real prosecutor. 15
Contempt is not presumed. In proceedings for criminal contempt, the defendant is presumed innocent and the burden
is on the prosecution to prove the charges beyond reasonable doubt. In proceedings for civil contempt, there is no
presumption, although the burden of proof is on the complainant, and while the proof need not be beyond reasonable
doubt, it must amount to more than a mere preponderance of evidence. It has been said that the burden of proof in a
civil contempt proceeding lies somewhere between the criminal "reasonable doubt" burden and the civil "fair
preponderance" burden. 16
On the basis of the foregoing legal principles which are now well settled, it can be safely concluded that under paragraph
(d) of Section 3, Rule 71 of the Rules of Court on indirect contempt, any improper conduct tending, directly or indirectly,
to impede, obstruct, or degrade the administration of justice, constitutes criminal contempt.
II. Whether or not Post-Litigation Publications can be the Subject of Contempt Proceedings
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A. Effect of Freedom of Speech and Press Guaranties
In the case of In re Sotto, 17 this Court had the opportunity to define the relation between the courts and the press,
quoting there in the statements made by Judge Holmes in U.S. vs. Sullen, 18 thus:
The administration of justice and the freedom of the press, though separate and distinct, are equally sacred, and
neither should be violated by the other. The press and the courts have correlative rights and duties and should
cooperate uphold the principles of the Constitution and laws, from which the former receives its prerogative and the
latter its jurisdiction. The right of legitimate publicity must be scrupulously recognized and care taken at all times to
avoid impinging upon it. In a clear case where it is necessary in order to dispose of judicial business unhampered by
publications which reasonably tend to impair the impartiality of verdicts, or otherwise obstruct the administration of
justice, this Court will not hesitate to exercise its undoubted power to punish for contempt. This Court must be
permitted to proceed with the disposition of its business in an orderly manner free from outside interference
obstructive of its constitutional functions. This right will be insisted upon as vital to an impartial court, and, as a last
resort, as an individual exercises the right of self-defense, it will act to preserve its existence as an unprejudiced
tribunal.
Hence, a person charged with contempt of court for making certain utterances or publishing writings which are clearly
opprobrious may not, ordinarily, escape liability therefor by merely invoking the constitutional guaranties of freedom
of speech and press. Liberty of speech and the press must not be confused with an abuse of such liberties. Obstructing,
by means of the spoken or written word, the administration of justice by the courts has been described as an abuse of
the liberty of speech or the press such as will subject the abuser to punishment for contempt of court.
Guaranties of free speech and a free press, as they appear in the Constitution, are frequently couched so as to impute
responsibility for any abuse of the privilege, and it is sometimes recognized that with respect to whether an allegedly
scandalous publication or utterance is to be treated as a contempt, a line must be drawn between those speeches or
writings which are protected by the privilege of free speech and a free press and those which constitute an abuse of it.
The right of freedom of the press is only a specific instance of the general right of freedom of speech; persons engaged
in the newspaper business cannot claim any other or greater right than that possessed by persons not in that
business. 19
B. Different Doctrines or Schools of Thought
In the case of In re Francisco Brillantes, 20 Justice Perfecto explained in his dissenting opinion that "as to whether
contempt may be committed for criticizing a tribunal after the same has rendered decision or taken final action on a
matter which is the subject of criticism, there are two schools of thought represented, respectively, by what we may
call the English doctrine and the American doctrine, the first for the affirmative and the last one for the negative. The
question now is to determine which of the two doctrines is more conformable to reason and justice and, therefore,
should be, adopted and applied by our tribunals."
1. The English Doctrine
According to Justice Perfecto, the rule in England is that there can be contempt of court even after the case has been
terminated. He then proceeded to ramify:
In England comments upon the court's action in a concluded case, where libelous or calculated to bring the court into
disrepute, were freely punishable as contempt under the early common law. Distinction between pending and
concluded matters does not seem to have been made. Any comment impairing the dignity of the court was punishable
as contempt regardless of the time at which made.
 The whole theory of the early common law of contempt is admirably delivered by Wilmot, J., in King vs. Almon, . . .
. The publication there complained of was a volume containing a diatribe against Lord Mansfield for allowing an
amendment of pleading as of course, and apparently from corrupt motives, in a concluded case, and further charging
him with having introduced a practice to defeat the efficacy of the writ of habeas corpus. It is there said: "The
arraignment of the justice of the judges is arraigning the King's justice; it is an impeachment of his wisdom and
goodness in the choice of his judges, and excites in the mind of the people a general dissatisfaction with all judicial
determinations, and indisposes their minds to obey them; and, whenever men's allegiance to the laws is so
fundamentally shaken, it is the most fatal and most dangerous obstruction of justice, and, in my opinion, calls for a
more rapid and immediate redress than any other obstruction whatever — not for the sake of the judges as private
individuals, but because they are the channels by which the Kings' justice is conveyed to the people. To be impartial,
and to be universally thought so, are both absolutely necessary for giving justice that free, open, and uninterrupted
current which it has for many ages found all over this Kingdom, and which so eminently distinguishes and exalts it
above all nations upon the earth . . . . The constitution has provided very apt and proper remedies for correcting and
rectifying the involuntary mistakes of judges, and for punishing and removing them for any voluntary perversions of
justice. But, if their authority is to be trampled upon by pamphleteers and newswriters, and the people are to be told
that the power given to the judges for their protection is prostituted to their destruction, the court may retain its
power some little time; but I am sure it will instantly lose all its authority, and the power of the court will not long
survive the authority of it: Is it possible to stab that authority more fatally than by charging the court, and more
particularly the chief justice, with having introduced a rule to subvert the constitutional liberty of the people? A
greater scandal could not be published . . . . It is conceded that an act of violence upon his person when he was
making such an order would be contempt punishable by attachment. Upon what principle? For striking a judge in
walking along the streets would not be a contempt of the court. The reason, therefore, must be, that he is in the
exercise of his office, and discharging the function of a judge of this court; and, if his person is under this protection,
why should not his character be under the same protection? It is not for the sake of the individual, but for the sake
of the public, that his person is under such protection; and, in respect of the public, the imputing of corruption and
the perversion of justice to him, in an order made by him at his chambers, is attended with much more mischievous
consequences than a blow; and therefore the reason of proceeding in this summary manner applies with equal, if not
superior, force, to one case as well as the other. There is no greater obstruction to the execution of justice from the
striking a judge than from the abusing him, because his order lies open to be enforced or discharged, whether the
judge is struck or abused for making it.
2. The American Doctrine
In American jurisprudence, the general rule is that defamatory comments on the conduct of a judge with respect to
past cases or matters finally disposed of do not constitute contempt, even though libelous and reflecting on the integrity
of the judge and the court. 21 It has been said that the power to punish as a contempt a criticism concerning a case
made after its termination is denied under the theory that such a power is not necessary as a safeguard to the proper
functioning of the court as a judicial tribunal. And it has been said that comments, however stringent, relating to judicial
proceedings which are past and ended are not contempt of court even though they may be a libel against the judge or
some other officer of the court. There is even the view that when a case is finished, the courts and judges are subject
to the same criticisms as other people and that no comment published in connection with a completed case,
however libelous or unjust, is punishable as contempt of court. Thus it is said that the remedies of a judge who suffers
abuse at the hands of the press, not amounting to contempt, are the same as those available to persons outside the
judiciary. 22
To the same effect was the holding in People ex rel. Supreme Court vs. Albertson, 23 where it was declared that —
The great weight of authority is to the effect that — in so far as proceedings to punish for contempt are concerned
— comment upon the behavior of the court in cases fully determined in the particular court criticized is unrestricted
under our constitutional guaranty of liberty of the press and free speech, especially in the absence of a statute of
direct application to the contrary. This view in brief is based upon the theory that — keeping our constitutional
79
guaranties in mind — libelous publications which bear upon the proceedings of a court while they are pending may
in some way affect their correct determination, and are properly the subject of contempt proceedings. On the other
hand, such publications or oral utterances of entirely retrospective bearing come within the sphere of authorized
comment unless they affect a judge personally, when he has his remedy in an action of libel or slander, as does any
other individual thus offended. He has the right to bring an action at law before a jury of his peers.
Along similar lines, in Ex Parte Mcleod, 24 the court ruled that:
The right of a court to punish, as for contempts, criticisms of its acts, or even libels upon its officers, not going to the
extent, by improper publications, of influencing a pending trial, . . . would not only be dangerous to the rights of the
people, but its exercise would drag down the dignity and moral influence of these tribunals. Such criticism is the right
of the citizen, and essential not only to the proper administration of justice, but to the public tranquility and
contentment. Withdrawing power from courts to summarily interfere with such exercise of the right of the press and
freedom of speech deprives them of no useful power.
Likewise, the State Supreme Court of Montana in State ex rel. Metcalf vs. District Court, 25 pointed out that the legal
proceeding involved therein was not pending when the alleged libelous article was published, then referred to the
guaranty of freedom of speech and the press, and eventually held that the publication involved was not punishable as
contempt. It declared that so long as the published criticism does not impede the due administration of the law, it is
better to maintain the guaranty of the Constitution than to undertake to compel respect or punish libel by the summary
process of contempt.
Finally, in holding that persons who had published newspaper articles alleging that a designated judge had been
intentionally partial and corrupt in the trial of certain causes which had been decided and were not pending when the
publication occurred could not be punished as for contempt the court, in State ex rel. Attorney General vs. Circuit
Court, 26 cited a number of cases supporting the view that libelous newspaper comments upon the acts of a court in
actions past and ended do not constitute contempt. It pointed out that some of such decisions took the position that
to punish such publications would constitute a serious invasion of constitutional guaranties of free speech and a free
press.
It ratiocinated in this manner: "Important as it is that courts should perform their grave public duties unimpeded and
unprejudiced by illegitimate influences, there are other rights guaranteed to all citizens by our Constitution and form
of government, either expressly or impliedly, which are fully as important, and which must be guarded with an equally
zealous care. These rights are the rights of free speech and of free publication of the citizens' sentiments on all subjects.
It seems clear to us that so extreme a power as to punish for contempt because of libelous publications as to past
litigation, is inconsistent with, and would materially impair, the constitutional rights of free speech and free press."
However, even under American jurisprudence, as shall hereafter be demonstrated, the aforesaid rulings are not without
exceptions. There is ample authority that, under proper circumstances, constitutional guaranties of freedom of speech
and liberty of the press do not protect contemptuous publications relating to court proceedings even though such
publications are not made until after the pendency of the litigation in question. 27
3. The Philippine Doctrine
In the Philippine setting, as we have noted, there are conflicting views on this issue which have to be analyzed and, if
possible, reconciled. On that exordial indication, we have digressed into these aspects of the law on contempt and
seized upon this incident in the criminal cases at bar in order to essay a rapprochement of such views into what we
may call the Philippine doctrine.
In the early cases decided by this Court involving contempts through newspaper publications, the rule was that
contemptuous publications were actionable only if committed with respect to pending suits. Apparently, the weight of
authority then was to the effect that criticism of the conduct of a judge or a court with regard to matters finally disposed
of does not constitute contempt, even though it may be libelous.
That rule first found application in the case of In re Lozano, et al. 28 and was reiterated in the subsequent cases of In
re Abistado, 29 and People vs. Alarcon, et al, 30 where this Court, speaking through Justice Malcolm, tersely stated:
The rule is well established that newspaper publications tending to impede, obstruct, embarrass, or influence the
courts in administering justice in a pending suit proceeding constitute criminal contempt which is summarily
punishable by the courts. The rule is otherwise after the cause is ended. . . . (6 R.C.L., pp. 508-515).
It will be noted that the aforequoted conclusion was arrived at after a short discourse presented by the ponente on the
existing divergence of opinions on the matter between the English and American courts. But the learned justice,
notwithstanding his preference for and application of the American doctrine, nonetheless thereafter made the
recommendatory observation that "(w)ith reference to the applicability of the above authorities, it should be remarked
first of all that this court is not bound to accept any of them absolutely and unqualifiedly. What is best for the
maintenance of the judiciary in the Philippines should be the criterion."
It seems that this view was shared by then Associate Justice Moran when he dissented from the majority opinion in
the aforecited case of People vs. Alarcon, et al., which upheld the doctrine enunciated in Lozano and Abistado, in this
wise: "I know that in the United States, publications about courts, after the conclusion of a pending case, no matter
how perverse or scandalous, are in many instances brought within the constitutional protection of the liberty of the
press. But while this rule may find justification in that country, considering the American temper and psychology and
the stability of its political institutions, it is doubtful whether here a similar toleration of gross misuse of liberty of the
press would, under our circumstances, result in no untoward consequences to our structure of democracy yet in the
process of healthful development and growth."
Such perception could have probably impelled Justice Moran to deviate from the then accepted doctrine, with this
rationalization:
Contempt, by reason of publications relating to courts and to court proceedings, are of two kinds. A publication which
tends to impede, obstruct, embarrass or influence the courts in administering justice in a pending suit or proceeding,
constitutes criminal contempt which is summarily punishable by courts. This is the rule announced in the cases relied
upon by the majority. A publication which tends to degrade the courts and to destroy public confidence in them or
that which tends to bring them in any way into disrepute, constitutes likewise criminal contempt, and is equally
punishable by courts. In the language of the majority, what is sought, in the language of the majority, what is sought,
in the first kind of contempt, to be shielded against the influenced of newspaper comments, is the all-important duty
of the courts to administer justice in the decision of a pending case. In the second kind of contempt, the punitive
hand of justice is extended to vindicate the courts from any act or conduct calculated to bring them into disfavor or
to destroy public confidence in them. In the first, there is no contempt where there is no action pending, as there is
no decision which might in any way be influenced by the newspaper publication. In the second, the contempt exists,
with or without a pending case, as what is sought to be protected is the court itself and its dignity. Courts would lose
their utility if public confidence in them is destroyed.
That dissenting opinion was impliedly adopted in the subsequent case of In re Brillantes, 31 where the editor of the
Manila Guardian was declared in contempt of court for publishing an editorial, stating that the 1944 Bar Examinations
were conducted in a farcical manner, even after the case involving the validity of said examinations had been
terminated. This was followed by In re Almacen 32 where the Court stated categorically that the rule that bars contempt
after a judicial proceeding has terminated had lost much of its validity, invoking therein the ruling in Brillantes and
quoting with approval the dissenting opinion in Alarcon.
80
It appears, therefore, that in the two latest cases decided by this Court, the general rule that there can be no contempt
in post-litigation publications is not necessarily all-embracing under certain situations. From the shift in judicial
approach in Brillantes to the position announced in Almacen, it can inevitably be concluded that the termination of the
case is not a guaranty of immunity from a contempt charge for publications or utterances which are defamatory or
libelous, depending on the purpose and effects thereof. In other words, one may still be cited for contempt of court
even after a case has ended, where such punitive action is necessary to protect the court and its dignity and to vindicate
it from acts or conduct intended or calculated to degrade, ridicule or bring the court into disfavor and thereby erode or
destroy public confidence in that court.
This qualified distinction is not without justification and, in fact, was also foreshadowed by the concurring opinion of
Justice Briones in Brillantes wherein, after noting the conflicting views on the amenability of the contemnor during the
pendency or after the termination of the judicial proceeding in the court involved as illustrated by the English and
American doctrines thereon, he advanced the proposition that —
The rationale for making a qualification to the rule generally considered as the American doctrine, which rule as herein
qualified we now adopt and refer to as the Philippine doctrine on this issue, is profoundly and eloquently explicated by
Justice Moran in Alarcon, to wit:
It is true that the Constitution guarantees the freedom of speech and of the press. But license or abuse of that
freedom should not be confused with freedom in its true sense. Well-ordered liberty demands no less unrelaxing
vigilance against abuse of the sacred guaranties of the Constitution than the fullest protection of their legitimate
exercise. As important as is the maintenance of a free press and the free exercise of the rights of the citizens is the
maintenance of a judiciary unhampered in its administration of justice and secure in its continuous enjoyment of
public confidence. "The administration of justice and freedom of the press, though separate and distinct are equally
sacred, and neither should be violated by the other. The press and the courts have correlative rights and duties and
should cooperate to uphold the principles of the Constitution and the laws, from which the former receives its
prerogatives and the latter its jurisdiction." (U.S. vs. Su liens, 38 Fed., 2d., 230.) Democracy cannot long endure in
a country where liberty is grossly misused any more than where liberty is illegitimately abridged.
If the contemptuous publication made by the respondent herein were directed to this Court in connection with a case
already decided, the effect of the rule laid down by the majority is to deny this court the power to vindicate its dignity.
The mischievous consequences that will follow from the situation thus sought to be permitted, are both too obvious
and odious to be stated. The administration of Justice, no matter how righteous, may be identified with all sorts of
fancied scandal and corruption. Litigants, discontented for having lost their cases, will have every way to give vent
to their resentment. Respect and obedience to Law will ultimately be shattered, and, as a consequence, the utility of
the courts will completely disappear.
It may be said that respect to courts cannot be compelled and that public confidence should be a tribute to judicial
worth, virtue and intelligence. But compelling respect to courts is one thing and denying the courts the power to
vindicate themselves when outraged is another. I know of no principle of law that authorizes with impunity a
discontented citizen to unleash, by newspaper publications, the avalanche of his wrath and venom upon courts and
judges. If he believes that a judge is corrupt and that justice has somewhere been perverted, law and order require
that he follow the processes provided by the Constitution and the statutes by instituting the corresponding
proceedings for impeachment or otherwise. As Mr. Justice Palmer, in speaking of the duty of courts and court officers,
has wisely said:
Would it be just to the persons who are called upon to exercise these powers to compel them to do so, and at the
same time allow them to be maltreated or libeled because they did so? How would a suitor like a juryman trying
his case who might expect he would be assaulted, beaten, his property destroyed, or his reputation blasted, in case
he decided against his opponent? Apply the same thing to judges, or the sheriff, and how long could organized
society hold together? With reference to a judge, if he has acted corruptly, it is worse than a mere contempt. But
 it is apparent it would not be right that the court of which he is a member should determine this, and consequently
the law has provided a plain and easy method of bringing him to justice by a petition to Parliament; but, while the
law authorizes this, it does not allow infamous charges to be made against him by persons, either in the newspapers
or otherwise, with reference to how he has or shall discharge the duties of his office. It must be apparent to all
right thinking men that, if such were allowed to be indulged in, it must end in the usefulness of the court itself
being destroyed, however righteous its judges may act. From what I have said it must not be supposed that I think
that the decisions of the court, or the actions of the judges, or other persons composing the court, are not to be
discussed; on the contrary, I would allow the freest criticism of all such acts if done in a fair spirit, only stopping at
what must injure or destroy the court itself and bring the administration of the law into disrepute, or be an outrage
on the persons whose acts are discussed, or when such discussion would interfere with the right decision of the
cause before the court.
We do not hesitate to hereby give our imprimatur to the aforequoted opinion which, we fully believe, conforms to basic
dogmatic teachings on judicial and professional conduct requiring respect for and the giving of due deference to the
judicial system and its members — ethical standards which this Court has, time and again, been trying to inculcate in
the minds of every member of the Bar and the public in general.
4. Cautela on the Balancing of Interests
On the bases of the foregoing authorities, it is evident that a line has to be drawn between those utterances or writings
which are protected by the privileges of free speech and a free press and those which constitute an abuse thereof, in
determining whether an allegedly scurrilous publication or statement is to be treated as contempt of court. But to find
the line where the permissible right of free speech ends and its reprehensible abuse begins is not always an easy task.
In contempt proceedings, it was held that this line must usually be defined by the courts themselves, and in such cases
its location is to be established with special care and caution. 33
In so doing, it becomes necessary to give the subject that careful examination commensurate with its importance,
mindful that, on the one hand, the dignity and authority of the courts must be maintained, while, on the other, free
speech, a free press, and the liberty of the citizen must be preserved. Both are equally valuable rights. If the court is
shorn of its power to punish for contempt in all proper cases, it cannot preserve its authority, so that even without any
constitutional or statutory guaranty this power is inherent in the court. But the Constitution itself, in the Bill of Rights,
guarantees free speech and liberty of the press. Of course, it was never intended, under the guise of these constitutional
guaranties, that the power of the court should be trenched upon. 34
How to determine whether an act or utterance is covered by the protective mantle of the constitutional guaranty of
liberty of the press or whether it is already outside or an abuse thereof, is an altogether different matter. We have
perforce to draw from tenets in American jurisprudence, although with discriminating choice, since after all our present
doctrines on contempt vis-a-vis constitutional limitations trace their roots in the main to the lessons laid down and
born of the social and judicial experience in that jurisdiction.
The liberty of the press consists in the right to publish with impunity the truth, with good motives and for justifiable
ends, whether it respects governments individuals; the right freely to publish whatever the citizen may please and to
be protected against any responsibility for so doing, except in so far as such publications, from their blasphemy,
obscenity, or scandalous character, may be a public offense, are as by their falsehood and malice they may injuriously
affect the standing, reputation, or pecuniary interests of individuals. The true liberty of the press is amply secured by
permitting every man to publish his opinion; but it is due to the peace and dignity of society to inquire into the motives
of such publications, and to distinguish between those which are meant for use and reformation, and with an eye solely
to the public good, and those which are intended merely to delude and defame. To the latter description, it is impossible
that any good government should afford protection and impunity.
81
The liberty of the press means that anyone can publish anything he pleases, but he is liable for the abuse of this liberty.
If he does this by scandalizing the courts of his country, he is liable to be punished for contempt. In other words, the
abuse of the privilege consists principally in not telling the truth. There is a right to publish the truth, but no right to
publish falsehood to the injury of others with impunity. It, therefore, does not include the right to malign the courts,
to libel and slander and utter the most flagrant and indecent calumnies about the court and its officers, nor to invade
the sanctuaries of the temples. Such practices and such miscreants ought to be condemned, and the courts would
deserve condemnation and abolition if they did not vigorously and fearlessly punish such offenders. Such practices are
an abuse of the liberty of the press, and if the slander relates to the courts, it concerns the whole public and is
consequently punishable summarily as a criminal contempt. It is therefore the liberty of the press that is guaranteed,
not the licentiousness. It is the right to speak the truth, not the right to bear false witness against your neighbor. 35
This brings to fore the need to make a distinction between adverse criticism of the court's decision after the case is
ended and "scandalizing the court itself." The latter is not criticism; it is personal and scurrilous abuse of a judge as
such, in which case it shall be dealt with as a case of contempt. 36
It must be clearly understood and always borne in mind that there is a vast difference between criticism or fair comment
on the one side and defamation on the other. Where defamation commences, true criticism ends. True criticism differs
from defamation in the following particulars; (1) Criticism deals only with such things as invite public attention or call
for public comment. (2) Criticism never attacks the individual but only his work. In every case the attack is on a man's
acts, or on some thing, and not upon the man himself. A true critic never indulges in personalities. (3) True criticism
never imputes or insinuates dishonorable motives, unless justice absolutely requires it, and then only on the clearest
proofs. (4) The critic never takes advantage of the occasion to gratify private malice, or to attain any other object
beyond the fair discussion of matters of public interest, and the judicious guidance of the public taste. 37
Generally, criticism of a court's rulings or decisions is not improper, and may not be restricted after a case has been
finally disposed of and has ceased to be pending. So long as critics confine their criticisms to facts and base them on
the decisions of the court, they commit no contempt no matter how severe the criticism may be; but when they pass
beyond that line and charge that judicial conduct was influenced by improper, corrupt, or selfish motives, or that such
conduct was affected by political prejudice or interest, the tendency is to create distrust and destroy the confidence of
the people in their courts. 38
Moreover, it has been held that criticism of courts after a case is finally disposed of, does not constitute contempt and,
to this effect, a case may be said to be pending so long as there is still something for the court to do therein. But
criticism should be distinguished from insult. A criticism after a case has been disposed of can no longer influence the
court, and on that ground it does not constitute contempt. On the other hand, an insult hurled to the court, even after
a case is decided, can under no circumstance be justified. Mere criticism or comment on the correctness or wrongness,
soundness or unsoundness of the decision of the court in a pending case made in good faith may be tolerated; but to
hurl the false charge that the Supreme Court has been committing deliberately so many blunders and injustices would
tend necessarily to undermine the confidence of the people in the honesty and integrity of its members, and
consequently to lower or degrade the administration of justice, and it constitutes contempt. 39
The Philippine rule, therefore, is that in case of a post-litigation newspaper publication, fair criticism of the court, its
proceedings and its members, are allowed. However, there may be a contempt of court, even though the case has
been terminated, if the publication is attended by either of these two circumstances: (1) where it tends to bring the
court into disrespect or, in other words, to scandalize the court; 40 or (2) where there is a clear and present danger
that the administration of justice would be impeded. And this brings us to the familiar invocation of freedom of
expression usually resorted to as a defense in contempt proceedings.
On the first ground, it has been said that the right of free speech is guaranteed by the Constitution and must be
sacredly guarded, but that an abuse thereof is expressly prohibited by that instrument and must not be permitted to
destroy or impair the efficiency of the courts or the public respect therefor and the confidence therein. 41
Thus, in State vs. Morril, 42 the court said that any citizen has the right to publish the proceedings and decisions of the
court, and if he deems it necessary for the public good, to comment upon them freely, discuss their correctness, the
fitness or unfitness of the judges for their stations, and the fidelity with which they perform the important public trusts
reposed in them; but he has no right to attempt, by defamatory publications, to degrade the tribunal, destroy public
confidence in it, and dispose the community to disregard and set at naught its orders, judgments and decrees. Such
publications are an abuse of the liberty of the press; and tend to sap the very foundation of good order and well-being
in society by obstructing the course of justice. Courts possess the power to punish for contempt libelous publications
regarding their proceedings, present or past, upon the ground that they tend to degrade the tribunals, destroy public
confidence and respect for their judgments and decrees, so essentially necessary to the good order and well-being of
society, and most effectually obstruct the free course of justice.
Then, in In re Hayes, 43 it was said that publishers of newspapers have the right, but no higher right than others, to
bring to public notice the conduct of the courts, provided the publications are true and fair in spirit. The liberty of the
press secures the privilege of discussing in a decent and temperate manner the decisions and judgments of a court of
justice; but the language should be that of fair and honorable criticism, and should not go to the extent of assigning
to any party or the court false or dishonest motives. There is no law to restrain or punish the freest expressions of
disapprobation that any person may entertain of what is done in or by the courts. Under the right of freedom of speech
and of the press the public has a right to know and discuss all judicial proceedings, but this does not include the right
to attempt, by wanton defamation, groundless charges of unfairness and stubborn partisanship, to degrade the tribunal
and impair its efficiency.
Finally, in Weston vs. Commonwealth, 44 it was ruled that the freedom of speech may not be exercise in such a manner
as to destroy respect for the courts, the very institution which is the guardian of that right. The dignity of the courts
and the duty of the citizens to respect them are necessary adjuncts to the administration of justice. Denigrating the
court by libelous attacks upon judicial conduct in an ended case, as well as one which is pending before it, may seriously
interfere with the administration of justice. While such an attack may not affect the particular litigation which has been
terminated, it may very well affect the course of justice in future litigation and impair, if not destroy, the judicial
efficiency of the court or judge subjected to the attack.
Anent the second ground, the rule in American jurisprudence is that false and libelous utterances present a clear and
present danger to the administration of justice. 45 To constitute contempt, criticism of a past action of the court must
pose a clear and present danger to a fair administration of justice, that is, the publication must have an inherent
tendency to influence, intimidate, impede, embarrass, or obstruct the court's administration of justice. 46 It is not
merely a private wrong against the rights of litigants and judges, but a public wrong, a crime against the State, to
undertake by libel or slander to impair confidence in the judicial functions. 47
Elucidating on the matter, this Court, in Cabansag vs. Fernandez, et al., 48
held as follows:
. . . The first, as interpreted in a number of cases, means that the evil consequence of the comment or utterance
must be ''extremely serious and the degree of imminence extremely high" before the utterance can be punished. The
danger to be guarded against is the "substantive evil" sought to be prevented. And this evil is primarily the "disorderly
and unfair administration of justice." This test establishes a definite rule in constitutional law. It provides the criterion
as to what words may be published. Under this rule, the advocacy of ideas cannot constitutionally be abridged unless
there is a clear and present danger that such advocacy will harm the administration of Justice.
82
Thus, speaking of the extent and scope of the application of this rule, the Supreme Court of the United States said:
"Clear and present danger of substantive evils as a result of indiscriminate publications regarding judicial proceedings
justifies an impairment of the constitutional right of freedom of speech and press only if the evils are extremely
serious and the degree of imminence extremely high. . . . The possibility of engendering disrespect for the judiciary
as a result of the published criticism of a judge is not such a substantive evil as will justify impairment of the
constitutional right of freedom of speech and press." . . .
No less important is the ruling on the power of the court to punish for contempt in relation to the freedom of speech
and press. We quote: "Freedom of speech and press should not be impaired through the exercise of the power to
punish for contempt of court unless there is no doubt that the utterances in question are a serious and imminent
threat to the administration of justice. A judge may not hold in contempt one who ventures to publish anything that
tends to make him unpopular or to belittle him. The vehemence of the language used in newspaper publications
concerning a judge's decision is not alone the measure of the power to punish for contempt . The fires which it kindles
must constitute an imminent, not merely a likely, threat to the administration of justice." . . .
And in weighing the danger of possible interference with the courts by newspaper criticism against the free speech
to determine whether such may constitutionally be punished as contempt, it was ruled that "freedom of public
comment should in borderline instances weigh heavily against a possible tendency to influence pending cases." . . .
The question in every case, according to Justice Holmes, is whether the words used are used in such circumstances
and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that
congress has a right to prevent. It is a question of proximity and degree. . . .
Although Cabansag involved a contempt committed during the pendency of a case, no compelling reason exists why
the doctrines enunciated therein should not be made applicable to vituperative publications made after the termination
of the case. Whether a case is pending or not, there is the constant and ever growing need to protect the courts from
a substantive evil, such as invective conduct or utterances which tend to impede or degrade the administration of
justice, or which calumniate the courts and their judges. At any rate, in the case of In re Bozorth, 49 it was there
expressly and categorically ruled that the clear and present danger rule equally applies to publications made after the
determination of a case, with the court declaring that a curtailment of criticism of the conduct of finally concluded
litigation, to be justified, must be in terms of some serious substantive evil which it is designed to avert.
Adverting again to what was further said in State vs. Shepherd, supra, let it here be emphasized that the protection
and safety of life, liberty, property and character, the peace of society, the proper administration of justice and even
the perpetuity of our institutions and form of government, imperatively demand that everyone — lawyer, layman,
citizen, stranger, newspaperman, friend or foe — shall treat the courts with proper respect and shall not attempt to
degrade them, or impair the respect of the people, or destroy the faith of the people in them. When the temples of
justice become polluted or are not kept pure and clean, the foundations of free government are undermined, and the
institution itself threatened.
III. Jurisdiction in Contempt Proceedings where the Alleged Contumely is Committed Against
a Lower Court while the Case is Pending in the Appellate or Higher Court
In whatever context it may arise, contempt of court involves the doing of an act, or the failure to do an act, in such a
manner as to create an affront to the court and the sovereign dignity with which it is clothed. As a matter of practical
judicial administration, jurisdiction has been felt properly to rest in only one tribunal at a time with respect to a given
controversy. Partly because of administrative considerations, and partly to visit the full personal effect of the
punishment on a contemnor, the rule has been that no other court than the one contemned will punish a given
contempt. 50
The rationale that is usually advanced for the general rule that the power to punish for contempt rests with the court
contemned is that contempt proceedings are sui generis and are triable only by the court against whose authority the
contempt are charged; 51 the power to punish for contempt exists for the purpose of enabling a court to compel due
decorum and respect in its presence and due obedience to its judgments, orders and processes: 52 and in order that a
court may compel obedience to its orders, it must have the right to inquire whether there has been any disobedience
thereof, for to submit the question of disobedience to another tribunal would operate to deprive the proceeding of half
its efficiency. 53
There are, however, several jurisprudentially and statutorily recognized exceptions to the general rule, both under
Philippine and American jurisprudence, viz.:
1. Indirect contempt committed against inferior court may also be tried by the proper regional trial court, regardless
of the imposable penalty. 54
2. Indirect contempt against the Supreme Court may be caused to be investigated by a prosecuting officer and the
charge may be filed in and tried by the regional trial court, or the case may be referred to it for hearing and
recommendation where the charge involves questions of fact. 55
3. In People vs. Alarcon, et al., supra, this Court ruled that "in the interrelation of the different courts forming our
integrated judicial system, one court is not an agent or representative of another and may not, for this reason, punish
contempts in vindication of the authority and decorum which are not its own. The appeal transfers the proceedings
to the appellate court , and this last court becomes thereby charged with the authority to deal with contempts
committed after the perfection of the appeal." The apparent reason is that both the moral and legal effect of a
punishment for contempt would be missed if it were regarded as the resentment of personal affronts offered to
judges. Contempts are punished as offenses against the administration of justice, and the offense of violating a
judicial order is punishable by the court which is charged with its enforcement, regardless of the court which may
have made the order. 56 However, the rule presupposes a complete transfer of jurisdiction to the appellate court, and
there is authority that where the contempt does not relate to the subject matter of the appeal, jurisdiction to punish
remains in the trial court. 57
4. A court may punish contempts committed against a court or judge constituting one of its parts or agencies, as in
the case of a court composed of several coordinate branches or divisions. 58
5. The biggest factor accounting for the exceptions is where the singular jurisdiction of a given matter has been
transferred from the contemned court to another court. One of the most common reasons for a transfer of jurisdiction
among courts is improper venue. The cases involving venue deal primarily with the question whether a change of
venue is available after a contempt proceeding has been begun. While generally a change of venue is not available
in a contempt proceeding, some jurisdictions allow such a change in proper circumstances. 59
6. A new court wholly replacing a prior court has jurisdiction to punish for violations of orders entered by its
predecessor, although where the successor court is created by a statute which does not extinguish jurisdiction in the
predecessor, an affirmative transfer of jurisdiction before the contempt occurs is necessary to empower the successor
court to act. 60
7. Transfers of jurisdiction by appellate review have produced numerous instances where contempt against the trial
court has been punished in the appellate court, and vice versa. Some appellate courts have taken the view that a
contempt committed after an appeal is taken is particularly contemptuous of the appellate court because of the
tendency of such contempts to upset the status quo or otherwise interfere with the jurisdiction of such court. 61
8. A judge may disqualify himself, or be disqualified, on a contempt hearing or in the main case, which circumstance
may require a transfer of jurisdiction, but where a judge is disqualified only in the main case, because of matters
which do not disqualify him in a contempt proceeding, the regular judge should sit in the contempt proceeding.
Likewise, where the regular judge, is absent or otherwise unavailable and an order is entered by another judge and
made returnable to the proper court, the regular judge may punish for violations of orders so entered. 62
9. Where the same act is a contempt against two or more courts, it is no bar to contempt proceedings in one of them
that there is also a contempt against the other. 63
10. While professional disciplinary proceedings have been resorted to as a punishment for contempt, the more recent
view is that punishment is of secondary importance to the need to protect the courts and the people from improper
professional practice. To the substantial extent that disciplinary action remains a punishment, disciplinary measures
83
imposed by another court than the one contemned furnish an exception to the rule against punishing for contempt
of another court. 64
11. Some contemptuous acts are also crime, usually misdemeanors, which are often punishable in other courts than
those against which the contemptuous act was done. 65
12. Finally, a conviction for contempt against another court has been allowed to stand on the basis that the failure
of the defendant to make timely objection operated as a waiver of the right to be tried before the court actually
contemned. 66
The rule, as now accepted and deemed applicable to the present incident, is that where the entire case has already
been appealed, jurisdiction to punish for contempt rests with the appellate court where the appeal completely transfers
the proceedings thereto or where there is a tendency to affect the status quo or otherwise interfere with the jurisdiction
of the appellate court. Accordingly, this Court having acquired jurisdiction over the complaint for indirect contempt
against herein respondents, it has taken judicial cognizance thereof and has accordingly resolved the same.
IV. Appropriate Remedies where the Alleged Contemptuous Statement is also Claimed to be Libelous
Under the American doctrine, to repeat, the great weight of authority is that in so far as proceedings to punish for
contempt are concerned, critical comment upon the behavior of the court in cases fully determined by it is unrestricted,
under the constitutional guaranties of the liberty of the press and freedom of speech. Thus, comments, however
stringent, which have relation to judicial proceedings which are past and ended, are not contemptuous of the authority
of the court to which reference is made. Such comments may constitute a libel against the judge, but it cannot be
treated as in contempt of the court's authority.
On this score, it is said that prosecution for libel is usually the most appropriate and effective remedy. 67 The force of
American public opinion has greatly restrained the courts in the exercise of the power to punish one as in contempt for
making disrespectful or injurious remarks, and it has been said that the remedy of a judge is the same as that given
to a private citizen. 68 In such a case, therefore. the remedy of a criminal action for libel is available to a judge who
has been derogated in a newspaper publication made after the termination aid a case tried by him, since such
publication can no longer be made subject of contempt proceedings.
The rule, however, is different in instances under the Philippine doctrine earlier discussed wherein there may still be a
contempt of court even after a case has been decided and terminated. In such case, the offender may be cited for
contempt for uttering libelous remarks against the court or the judge. The availability, however, of the power to punish
for contempt does not and will not prevent a prosecution for libel, either before, during, or after the institution of
contempt proceedings. In other words, the fact that certain contemptuous conduct likewise constitutes an indictable
libel against the judge of the court contemned does not necessarily require him to bring a libel action, rather than
relying on contempt Proceedings. 69
The fact that an act constituting a contempt is also criminal and punishable by indictment. or other method of criminal
prosecution does not prevent the outraged Court from punishing the contempt. 70 This principle stems from the
fundamental doctrine that an act may be punished as a contempt even though it has been punished as a criminal
offense. 71 The defense of having once been in jeopardy, based on a conviction for the criminal offense, would not lie
in bar of the contempt proceedings, on the proposition that a contempt may be an offense against the dignity of a
court and, at the same time, an offense against the peace and dignity of the people of the State. 72 But more
importantly. adherence to the American doctrine by insisting that a judge should instead file an action fur libel will
definitely give rise to an absurd situation and may even cause more harm than good.
Drawing also from American jurisprudence, to compel the judge to descend from the plane of his judicial office to the
level of the contemnor, pass over the matter of contempt, and instead attack him by a civil action to satisfy the judge
in damages for a libel, would be a still greater humiliation of a court. That conduct would be personal; the court is
impersonal. In our jurisdiction, the judicial status is fixed to such a point that our courts and the judges thereof should
be protected from the improper consequences of their discharge of duties so much so that judicial officers have always
been shielded, on the highest considerations of the public good, from being called for questioning in civil actions for
things done in their judicial capacity.
Whenever we subject the established courts of the and to the degradation of private prosecution, we subdue their
independence, and destroy their authority. instead of being venerable before the public, they become contemptible;
and we thereby embolden the licentious to trample upon everything sacred in society, and to overturn those institutions
which have hitherto been deemed the best guardians of civil liberty. 73
Hence, the suggestion that judges who are unjustly attacked have a remedy in an action for libel, has been assailed
as being without rational basis in principle. In the first place, the outrage is not directed to the judge as a private
individual but to the judge as such or to the court as an organ of the administration of justice. In the second place,
public interests will gravely suffer where the judge, as such, will, from time to time, be pulled down and disrobed of
his judicial authority to face his assailant on equal grounds and prosecute cases in his behalf as a private individual.
The same reasons of public policy which exempt a judge from civil liability in the exercise of his judicial functions, most
fundamental of which is the policy to confine his time exclusively to the discharge of his public duties, applies here with
equal, if not superior, force. 74
V. Whether or not the Same Contemptuous Conduct of a Member of the Bar can be the
Subject of both a Contempt Proceeding and an Administrative Disciplinary Action
With the foregoing discussion of the appropriate remedies available to a judge, we feel that this issue with respect to
proper remedies against an erring member or the Bar should consequentially be addressed, by way of reiteration, since
conflicting and erroneous remedies are sometimes resorted to by aggrieved tribunals or parties.
of justice and the orderly discharge of judicial functions. As was succinctly expounded in Zaldivar vs. Sandiganbayan,
et al.: 82
There are, in other words, two (2) related powers which come into play in cases like that before us here: the Court's
inherent power to discipline attorneys and the contempt power. The disciplinary authority of the Court over members
of the Bar is broader than the power to punish for contempt. Contempt of court may be committed both by lawyers
and non-lawyers, both in and out of court. Frequently, where the contemnor is a lawyer, the contumacious conduct
also constitutes professional misconduct which calls into play the disciplinary authority of the Supreme Court. Where
the respondent is a lawyer, however, the Supreme Court's disciplinary authority over lawyers may come into play
whether or not the misconduct with which the respondent is charged also constitutes contempt of court. The power
to punish for contempt of court does not exhaust the scope of disciplinary authority of the Court over lawyers. The
disciplinary authority of the Court over members of the Bar is but corollary to the court's exclusive power of admission
to the bar. A lawyer is not merely a professional but also an officer of the court and as such, he is called upon to
share in the task and responsibilities of dispensing justice and resolving disputes in society. Any act on his part which
visibly tends to obstruct, pervert, or impede and degrade the administration of justice constitutes both professional
misconduct calling for the exercise of disciplinary action against him, and contumacious conduct warranting
application of the contempt power.
With this rounding out of the subordinate and principal issues in resolving the incident, we feel that the guidelines we
have laid down will provide assertive references for the lower courts in disciplinary matters arising before them. Coming
back to the incident fore resolution, arising as a spin-off from the criminal cases at bar, we reiterate what we have
declared at the outset, absolving judge for the reasons therein stated.
WHEREFORE, on the foregoing premises, the complaint for indirect contempt against herein respondents Mauricio
Reynoso, Jr. and Eva P. Ponce de Leon is hereby DISMISSED.

The basic rule here is that the power to punish for contempt and the power to disbar are separate and distinct, and
that the exercise of one does not exclude the exercise of the other. 75 A contempt proceeding for misbehavior in court
is designed to vindicate the authority of the court; on the other hand, the object of a disciplinary proceeding is to deal
with the fitness of the court's officer to continue in that office, to preserve and protect the court and the public from
the official ministrations of persons unfit or unworthy to hold such office. 76 The principal purpose of the exercise of the
power to cite for contempt is to safeguard the functions of the court and should thus be used sparingly on a preservative
and not, on the vindictive principle. 77 The principal purpose of the exercise of disciplinary authority by the Supreme
Court is to assure respect for orders of such court by attorneys who, as much as judges, are responsible for the orderly
administration of justice. 78

Moreover, it has been held that the imposition a fine as a penalty in a contempt proceeding is not considered res
judicata to a subsequent charge for unprofessional conduct. 79 In the same manner an attorney's conviction for
contempt was not collaterally estopped by reason of a subsequent disbarment proceeding in which the court found in
his favor on essentially the same facts leading to conviction. 80 It has likewise been the rule that a notice to a lawyer
to show cause why he should not be punished for contempt cannot be considered as a notice to show cause why he
should not be suspended from the practice of law, considering that they have distinct objects and for each of them a
different procedure is established. Contempt of court is governed by the procedures laid down under Rule 71 of the
Rules of Court, whereas disciplinary actions in the Practice of law are governed by file 138 and 139 thereof. 81

Although apparently different in legal bases, the authority to punish for contempt and to discipline lawyers are both
inherent in the Supreme Court and are equally incidents of the court's basic power to oversee the proper administration

84
G.R. No. 155849 August 31, 2011
LORENZO SHIPPING CORPORATION, OCEANIC CONTAINER LINES, INC., SOLID SHIPPING LINES
CORPORATION, SULPICIO LINES, INC., ET AL., Petitioners,
vs.
DISTRIBUTION MANAGEMENT ASSOCIATION OF THE PHILIPPINES, LORENZO CINCO, and CORA
CURAY, Respondents.
The petitioners filed this petition to charge the respondents with indirect contempt of court for including allegedly
contemptuous statements in their so-called Sea Transport Update concerning the Court’s resolutions dated June 5,
2002 and August 12, 2002 issued in G.R. No. 152914 entitled Distribution Management Association of the Philippines,
et al. v. Administrator Oscar Sevilla, Maritime Industry Authority, et al.
Antecedents
On June 4, 2001, the Maritime Industry Authority (MARINA) issued a Letter-Resolution,1 advising respondent
Distribution Management Association of the Philippines (DMAP) that a computation of the required freight rate
adjustment by MARINA was no longer required for freight rates officially considered or declared deregulated in
accordance with MARINA Memorandum Circular No. 153 (MC 153).
For clarity, MARINA issued MC 153 pursuant to Executive Order No. 213 (EO 213) entitled Deregulating Domestic
Shipping Rates promulgated by President Fidel V. Ramos on November 24, 1994.2
On July 2, 2001, in order to challenge the constitutionality of EO 213, MC 153, and the Letter-Resolution dated June
4, 2001, DMAP commenced in the Court of Appeals (CA) a special civil action for certiorari and prohibition, with prayer
for preliminary mandatory injunction or temporary restraining order (CA-G.R. SP No. 65463). On November 29,
2001,3 however, the CA dismissed the petition for certiorari and prohibition and upheld the constitutionality of EO 213,
MC 153, and the Letter-Resolution dated June 4, 2001.4 Later, on April 10, 2002, the CA denied DMAP’s motion for
reconsideration.5
DMAP appealed to the Court (G.R. No. 152914), but on June 5, 2002,6 the Court denied DMAP’s petition for review on
certiorari "for petitioners’ failure to: (a) take the appeal within the reglementary period of fifteen (15) days in
accordance with Section 2, Rule 45 in relation to Section 5(a), Rule 56, in view of the foregoing denial of petitioners'
motion for extension of time to file the petition; and (b) pay the deposit for sheriff's fee and clerk's commission in the
total amount of ₱202.00 in accordance with Sections 2 and 3, Rule 45 in relation to Section [c], Rule 56 and paragraph
1 of Revised Circular No. 1-88 of this Court."
On August 12, 2002,7 the Court denied with finality DMAP’s motion for reconsideration.
In October 2002, DMAP held a general membership meeting (GMM) on the occasion of which DMAP, acting through its
co-respondents Lorenzo Cinco, its President, and Cora Curay, a consultant/adviser to Cinco, publicly circulated the Sea
Transport Update,8 which is reproduced as follows:
SEA TRANSPORT UPDATE
Oct. 2002 GMM
20% GRI RATE INCREASE ISSUE
1. The Motion for Reconsideration filed with the Supreme Court was denied based on technicalities and not on the legal
issue DMAP presented.
85
Small technical matter which should not be a cause for denial (like the amount of filing fee lacking & failure to indicate
date of receipt of court resolution)
> Some technical matters that could cause denial
- Failure to file on time and to file necessary pleadings
- Failure to provide copies to respondents.
> Legal issue DMAP presented
- Public Service Act
- Regulated or Deregulated
- MC 153
- Supreme Court ruling issued in one month only, normal leadtime is at least 3 to 6 months.
WHAT TO EXPECT?
1. Liners will pressure members to pay the 20% GRI
WHAT TO DO?
1. As advised by DMAP counsel, use the following arguments:
- DMAP case was denied based on technicalities and not on merits of the case
- Court of Appeals has ruled that computation of reasonableness of freight is not under their jurisdiction but
with MARINA
- DSA's argument that DMAP's case prematurely (sic) file (sic) as there is a pending case filed before MARINA.
- Therefore, DSA & DMAP will be going back to MARINA for resolution
2. Meantime, DMAP members enjoined not to pay until resolved by MARINA
3. However, continue collaboration with liners so shipping service may not suffer
NEXT MOVE
Another group (most likely consumers) or any party will file the same case and may be using the same arguments.
(emphasis supplied)
Thereupon, the petitioners brought this special civil action for contempt against the respondents, insisting that the
publication of the Sea Transport Update constituted indirect contempt of court for patently, unjustly and baselessly
insinuating that the petitioners were privy to some illegal act, and, worse, that the publication unfairly debased the
Supreme Court by making "scurrilous, malicious, tasteless, and baseless innuendo"9 to the effect that the Supreme
Court had allowed itself to be influenced by the petitioners as to lead the respondents to conclude that the "Supreme
Court ruling issued in one month only, normal lead time is at least 3 to 6 months."10 They averred that the respondents’
purpose, taken in the context of the entire publication, was to "defy the decision, for it was based on technicalities,
and the Supreme Court was influenced!"11
In their comment dated January 20, 2003,12 the respondents denied any intention to malign, discredit, or criticize the
Court.13 They explained that their statement that the "Supreme Court ruling issued in one month time only, normal
lead time is at least three to six months" 14 was not per se contemptuous, because the normal and appropriate time
frame for the resolution of petitions by the Court was either less than a month, if the petition was to be denied on
technicality, and more or less from three to six months, if the petition was to be given due course; that what made the
petitioners describe the statement as contemptuous was not the real or actual intention of the author but rather the
petitioners’ false, malicious, scurrilous and tasteless insinuations and interpretation; and that the petitioners, not being
themselves present during the GMM, had no basis to assert that the DMAP’s presentor, the author of the material, or
any of the speakers during the GMM had any evil intention or made any malicious insinuations. 15
The respondents further stated that the term time frame was layman’s parlance to explain to DMAP members that the
petition had been dismissed due to a technicality, considering that the appeals process in the case before the Court
had taken only a month instead of the expected three to six months;16 that the term lead time, although not the proper
legal term to describe the process that the respondents’ petition had undergone in the Court, was common parlance in
the business sector in which the respondents belonged; that the discussions during the presentation focused on the
legal options of DMAP with respect to the 20% increase, i.e., to go back to MARINA for the resolution of the propriety
and reasonableness of the 20% increase;17 that a lead time was indicated in the presentation material simply to tell
DMAP members that the lead time to go back to MARINA had been cut short in view of the denial of the petition for
review; and that, on the other hand, had the Court given due course to the petition, the expected time for the Court
to resolve the appeal on the merits would have been from three to six months, a normal expectation. 18
Lastly, the respondents submitted that a serious study and analysis of the decision of the CA, which the Court affirmed,
revealed that the decision of the CA centered only on the constitutionality of the assailed executive issuances, and did
not include any determination of the reasonableness and propriety of the 20% increase; that, accordingly, the
discussion of the recourse with respect to the 20% increase, which was to go back to MARINA for the resolution on the
matter, could not be considered as a defiance of the order of the Court because the CA itself decreed that the propriety
and reasonableness of the 20% increase should be brought to and resolved by MARINA; 19 and that considering that
there was yet no entry of judgment in relation to the denial of the petition at the time of the GMM on October 17, 2002,
the respondents were not defying any final order or writ of the Court and thereby commit any act of indirect contempt.20
Issue
Did the statements contained in the Sea Transport Update constitute or amount to indirect contempt of court?
Ruling
We dismiss the petition.
I. Contempt of Court: Concept and Classes
Contempt of court has been defined as a willful disregard or disobedience of a public authority. In its broad sense,
contempt is a disregard of, or disobedience to, the rules or orders of a legislative or judicial body or an interruption of
its proceedings by disorderly behavior or insolent language in its presence or so near thereto as to disturb its
proceedings or to impair the respect due to such a body. In its restricted and more usual sense, contempt comprehends
a despising of the authority, justice, or dignity of a court. 21 The phrase contempt of court is generic, embracing within
its legal signification a variety of different acts. 22
The power to punish for contempt is inherent in all courts,23 and need not be specifically granted by statute.24 It lies at
the core of the administration of a judicial system.25 Indeed, there ought to be no question that courts have the power
by virtue of their very creation to impose silence, respect, and decorum in their presence, submission to their lawful
mandates, and to preserve themselves and their officers from the approach and insults of pollution.26 The power to
punish for contempt essentially exists for the preservation of order in judicial proceedings and for the enforcement of
judgments, orders, and mandates of the courts, and, consequently, for the due administration of justice.27 The reason
behind the power to punish for contempt is that respect of the courts guarantees the stability of their institution;
without such guarantee, the institution of the courts would be resting on a very shaky foundation. 28
Contempt of court is of two kinds, namely: direct contempt, which is committed in the presence of or so near the judge
as to obstruct him in the administration of justice; and constructive or indirect contempt, which consists of willful
disobedience of the lawful process or order of the court.29
The punishment for the first is generally summary and immediate, and no process or evidence is necessary because
the act is committed in facie curiae.30 The inherent power of courts to punish contempt of court committed in the
presence of the courts without further proof of facts and without aid of a trial is not open to question, considering that
this power is essential to preserve their authority and to prevent the administration of justice from falling into disrepute;
86
such summary conviction and punishment accord with due process of law. 31 There is authority for the view, however,
that an act, to constitute direct contempt punishable by summary proceeding, need not be committed in the immediate
presence of the court, if it tends to obstruct justice or to interfere with the actions of the court in the courtroom
itself.32 Also, contemptuous acts committed out of the presence of the court, if admitted by the contemnor in open
court, may be punished summarily as a direct contempt, 33 although it is advisable to proceed by requiring the person
charged to appear and show cause why he should not be punished when the judge is without personal knowledge of
the misbehavior and is informed of it only by a confession of the contemnor or by testimony under oath of other
persons.34
In contrast, the second usually requires proceedings less summary than the first. The proceedings for the punishment
of the contumacious act committed outside the personal knowledge of the judge generally need the observance of all
the elements of due process of law, that is, notice, written charges, and an opportunity to deny and to defend such
charges before guilt is adjudged and sentence imposed.35
Plainly, therefore, the word summary with respect to the punishment for contempt refers not to the timing of the action
with reference to the offense but to the procedure that dispenses with the formality, delay, and digression that result
from the issuance of process, service of complaint and answer, holding hearings, taking evidence, listening to
arguments, awaiting briefs, submission of findings, and all that goes with a conventional court trial. 36
A distinction between in-court contempts, which disrupt court proceedings and for which a hearing and formal
presentation of evidence are dispensed with, and out-of-court contempts, which require normal adversary procedures,
is drawn for the purpose of prescribing what procedures must attend the exercise of a court’s authority to deal with
contempt. The distinction does not limit the ability of courts to initiate contempt prosecutions to the summary
punishment of in-court contempts that interfere with the judicial process.37
The court may proceed upon its own knowledge of the facts without further proof and without issue or trial in any form
to punish a contempt
committed directly under its eye or within its view.38 But there must be adequate facts to support a summary order for
contempt in the presence of the court.39 The exercise of the summary power to imprison for contempt is a delicate one
and care is needed to avoid arbitrary or oppressive conclusions.40 The reason for the extraordinary power to punish
criminal contempt in summary proceedings is that the necessities of the administration of justice require such summary
dealing with obstructions to it, being a mode of vindicating the majesty of the law, in its active manifestation, against
obstruction and outrage.41
Proceedings for contempt are sui generis, in nature criminal, but may be resorted to in civil as well as criminal actions,
and independently of any action.42 They are of two classes, the criminal or punitive, and the civil or remedial. A criminal
contempt consists in conduct that is directed against the authority and dignity of a court or of a judge acting judicially,
as in unlawfully assailing or discrediting the authority and dignity of the court or judge, or in doing a duly forbidden
act. A civil contempt consists in the failure to do something ordered to be done by a court or judge in a civil case for
the benefit of the opposing party therein. 43 It is at times difficult to determine whether the proceedings are civil or
criminal. In general, the character of the contempt of whether it is criminal or civil is determined by the nature of the
contempt involved, regardless of the cause in which the
contempt arose, and by the relief sought or dominant purpose.44 The proceedings are to be regarded as criminal when
the purpose is primarily punishment, and civil when the purpose is primarily compensatory or remedial. 45 Where the
dominant purpose is to enforce compliance with an order of a court for the benefit of a party in whose favor the order
runs, the contempt is civil; where the dominant purpose is to vindicate the dignity and authority of the court, and to
protect the interests of the general public, the contempt is criminal.46 Indeed, the criminal proceedings vindicate the
dignity of the courts, but the civil proceedings protect, preserve, and enforce the rights of private parties and compel
obedience to orders, judgments and decrees made to enforce such rights. 47
Indirect contempt is defined by and punished under Section 3, Rule 71 of the Rules of Court, which provides:
Section 3. Indirect contempt to be punished after charge and hearing. — After a charge in writing has been filed, and
an opportunity given to the respondent to comment thereon within such period as may be fixed by the court and to
be heard by himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt:
(a) Misbehavior of an officer of a court in the performance of his official duties or in his official transactions;
(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court, including the act of a
person who, after being dispossessed or ejected from any real property by the judgment or process of any court of
competent jurisdiction, enters or attempts or induces
another to enter into or upon such real property, for the purpose of executing acts of ownership or possession, or
in any manner disturbs the possession given to the person adjudged to be entitled thereto;
(c) Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct
contempt under section 1 of this Rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of
justice;
(e) Assuming to be an attorney or an officer of a court, and acting as such without authority;
(f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an order or
process of a court held by him.
But nothing in this section shall be so construed as to prevent the court from issuing process to bring the respondent
into court, or from holding him in custody pending such proceedings. (3a)
Misbehavior means something more than adverse comment or disrespect. 48 There is no question that in contempt the
intent goes to the gravamen of the offense.49 Thus, the good faith, or lack of it, of the alleged contemnor should be
considered.50 Where the act complained of is ambiguous or does not clearly show on its face that it is contempt, and
is one which, if the party is acting in good faith, is within his rights, the presence or absence of a contumacious intent
is, in some instances, held to be determinative of its character. 51 A person should not be condemned for contempt
where he contends for what he believes to be right and in good faith institutes proceedings for the purpose, however
erroneous may be his conclusion as to his rights. 52 To constitute contempt, the act must be done willfully and for an
illegitimate or improper purpose.53
Unfounded accusations or allegations or words tending to embarrass the court or to bring it into disrepute have no
place in a pleading. Their employment serves no useful purpose. On the contrary, they constitute direct contempt of
court or contempt in facie curiae and, when committed by a lawyer, a violation of the lawyer’s oath and a transgression
of the Code of Professional Responsibility.
II. Utterances in Sea Transport Update, Not Contemptuous
The petitioners did not sufficiently show how the respondents’ publication of the Sea Transport Update constituted any
of the acts punishable as indirect contempt of court under Section 3 of Rule 71, supra.
The petitioners’ mere allegation, that "said publication unfairly debases the Supreme Court because of the scurrilous,
malicious, tasteless, and baseless innuendo therein that the Court allowed itself to be influenced by the petitioners as
concocted in the evil minds of the respondents thus leading said respondents to unjustly conclude: Supreme Court
ruling issued in one month only, normal lead time is at least 3 to 6 months,"54 was insufficient, without more, to sustain
the charge of indirect contempt.
87
Nor do we consider contemptuous either the phrase contained in the Sea Transport Update stating: "The Motion for
Reconsideration filed with the Supreme Court was denied based on technicalities and not on the legal issue DMAP
presented",55 or the phrase in the Sea Transport Update reading "Supreme Court ruling issued in one month only,
normal leadtime is at least 3 to 6 months." Contrary to the petitioners’ urging that such phrases be considered as
"scurrilous, malicious, tasteless and baseless innuendo" 56 and as indicative that "the Court allowed itself to be
influenced by the petitioners"57 or that "the point that respondents wanted to convey was crystal clear: ‘defy the
decision, for it was based on technicalities, and the Supreme Court was influenced!’",58 we find the phrases as not
critical of the Court and how fast the resolutions in G.R. No. 152914 were issued, or as inciting DMAP’s members to
defy the resolutions. The unmistakable intent behind the phrases was to inform DMAP’s members of the developments
in the case, and on the taking of the next viable move of going back to MARINA on the issues, as the ruling of the
Court of Appeals instructed.1avvphi1
We have long recognized and respected the right of a lawyer, or of any other person, for that matter, to be critical of
the courts and their judges as long as the criticism is made in respectful terms and through legitimate channels. We
have no cause or reason to depart from such recognition and respect, for the Court has long adhered to the sentiment
aptly given expression to in the leading case of In re: Almacen:59
xxx every citizen has the right to comment upon and criticize the actuations of public officers. This right is not
diminished by the fact that the criticism is aimed at a judicial authority, or that it is articulated by a lawyer. Such
right is especially recognized where the criticism concerns a concluded litigation, because then the court’s actuation
are thrown open to public consumption.
xxx
Courts and judges are not sacrosanct. They should and expect critical evaluation of their performance. For like the
executive and the legislative branches, the judiciary is rooted in the soil of democratic society, nourished by the
periodic appraisal of the citizens whom it is expected to serve.
Well-recognized therefore is the right of a lawyer, both as an officer of the court and as a citizen, to criticize in
properly respectful terms and through legitimate channels the acts of courts and judges.xxx
xxx
Hence, as a citizen and as officer of the court, a lawyer is expected not only to exercise the right, but also to consider
it his duty to avail of such right. No law may abridge this right. Nor is he "professionally answerable for a scrutiny
into the official conduct of the judges, which would not expose him to legal animadversion as a citizen." xxx
xxx
But it is the cardinal condition of all such criticism that it shall be bona fide, and shall not spill over the walls of
decency and propriety. A wide chasm exists between fair criticism, on the one hand, and abuse and slander of courts
and the judges thereof, on the other. Intemperate and unfair criticism is a gross violation of the duty of respect to
courts. It is such a misconduct that subjects a lawyer to disciplinary action. (bold emphasis supplied)60
The test for criticizing a judge’s decision is, therefore, whether or not the criticism is bona fide or done in good faith,
and does not spill over the walls of decency and propriety. Viewed through the prism of the test, the Sea Transport
Update was not disrespectful, abusive, or slanderous, and did not spill over the walls of decency and propriety. Thereby,
the respondents were not guilty of indirect contempt of court. In this regard, then, we need to remind that the power
to punish for contempt of court is exercised on the preservative and not on the vindictive principle, and only occasionally
should a court invoke its inherent power in order to retain that respect without which the administration of justice must
falter or fail.61 As judges we ought to exercise our power to punish contempt judiciously and sparingly, with utmost
restraint, and with the end in view of utilizing the power for the correction and preservation of the dignity of the Court,
not for retaliation or vindictiveness.62
WHEREFORE, the petition for indirect contempt is DISMISSED.
G.R. No. 156829 June 8, 2004
RAMON D. MONTENEGRO, petitioner,
vs.
MA. TERESA L. MONTENEGRO, for herself and as the mother and natural guardian of the minors, ANTONIO
AMELO and ANA MARIA PIA ISABEL, both surnamed "MONTENEGRO," respondents.
In this petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner Ramon D.
Montenegro seeks the reversal of the 8 November 2002 Order1 in Civil Case No. 94-8467 of the Regional Trial Court,
Branch 41, Bacolod City, holding him guilty of indirect contempt for his repeated failure to appear at the scheduled
hearings for his examination as judgment obligor and imposing on him the penalty of three (3) months imprisonment
and a fine of twenty thousand pesos (₱20,000), and of the subsequent 3 January 2003 Order 2 denying his motion for
the reconsideration of the 8 November 2002 Order.
On 14 June 1994, respondent Ma. Teresa V. Lizares-Montenegro (hereinafter, respondent Teresa), for herself and as
mother and guardian of her two minor children Antonio Amelo and Ana Maria Pia Isabel, filed with the trial court below
a complaint for support against her husband, herein petitioner Ramon D. Montenegro. The case was docketed as Civil
Case No. 94-8467. Four years after the filing of the complaint, petitioner and respondent Teresa executed a compromise
agreement which was submitted to the trial court for approval on 13 October 1998. On the same date, the trial court
rendered a Decision approving the compromise agreement and ordering the parties to comply with it. The parties did
not appeal from the Decision; hence, it became final and executory.
Under the terms of the compromise agreement, petitioner obligated himself to:
(1) Pay the respondent the amount of One Million Pesos (₱1,000,000) representing her entire share in their conjugal
partnership of gains, Five Hundred Thousand (₱500,000) of which is payable upon signing of the compromise
agreement while the remaining balance of Five Hundred Thousand (₱500,000) must be paid within one (1) year from
the execution of the compromise agreement.
(2) Establish a trust fund in the amount of Three Million Pesos (₱3,000,000) in favor of his children Antonio Amelo
and Ana Maria Pia Isabel within sixty (60) days from the approval of the compromise agreement.
(3) Obtain an educational plan or an investment plan to cover tuition and other matriculation fees for the college
education of Ana Maria Pia Isabel within one (1) year from the approval of the compromise agreement.
Since petitioner failed to comply with his obligations under the compromise agreement despite the lapse of the periods
provided therein, respondent Teresa filed a motion for the execution of the judgment. The trial court granted the motion
and issued a writ of execution on 15 February 1999.
A second writ of execution and a notice of garnishment, issued by the trial court on 21 May 2001 and and a notice of
garnishment issued on 28 May 2001 weon 28 May 2001, respectively, were returned unsatisfied.
In several conferences3 called by the trial court, petitioner admitted his failure to comply with his obligations under the
compromise agreement but alleged that he was no longer in a position to do so as he was already insolvent. In the
conference held on 6 March 2002, respondent Teresa manifested that she would file a motion for examination of
petitioner as judgment obligor. The trial court gave her 30 days within which to file the appropriate motion and informed
petitioner that he would have 30 days to file a comment or reply to the motion.
On 14 March 2002, respondent Teresa filed a motion to examine petitioner as judgment obligor under Sections 36 and
38 of Rule 39 of the Rules of Court. In her motion, she alleged that there is an urgency for the examination to be
conducted at the earliest time since petitioner was about to migrate to Canada. Acting on the said motion, the trial
court issued on 19 March 2002 an Order granting the motion for examination of petitioner as judgment obligor and
88
setting his examination on 22 March 2002. On the same day the motion for examination was granted, petitioner filed
with the court a Manifestation alleging that the grant of the motion for examination iwas premature because he still
would have 30 days from receipt of the motion, or until April 14, 2002, within which to file a comment or opposition
thereto as agreed upon during the conference on 6 March 2002.
Thus, oOn 22 March 2002, neither petitioner nor his counsel appeared for the scheduled hearing. On that date, the
trial court issued an order re-scheduling the hearing to 10 April 2002 and requiring the petitioner to explain why he
should not be held in contempt of court for disobeying the 19 March 2002 Order.
On 26 March 2002, petitioner filed a Compliance with Motion to Re-schedule Proceedings. He explained that he did not
attend the 22 March 2002 hearing because he was under the impression that he still had 30 days from the filing of the
motion to examine him as judgment obligor within which to respond to the motion; besides, his counsel was not
available on 22 March 2002 due to previously scheduled hearings.
At the hearing on 4 April 2002 of the Compliance with Motion to Re-schedule Proceedings, counsel for petitioner
manifested that his client already left for Canada on 26 March 2002 and will be unable to attend the 10 April 2002
hearing, and that petitioner would be available for examination on the last week of July or first week of August 2002.
Counsel prayed that the hearing be thus reset accordingly. The trial court denied the motion and informed the parties
that the hearing scheduled on 10 April 2002 will proceed as scheduled.
On 5 April 2002, petitioner filed a manifestation reiterating that he would be unable to attend the 10 April 2002 hearing
because he was already in Canada. Counsel for petitioner likewise manifested that he would also be unavailable on the
said date because he would be in Manila to attend to his other cases.
On 17 June 2002, the trial court issued an Order directing the petitioner to show cause why he should not held in
contempt of court for failure to appear on the 10 April 2002 at the hearing for his examination as judgment obligor. In
his Compliance and Explanation filed on 28 June 2002, petitioner alleged that he was unable to attend the 10 April
2002 hearing because he was in Canada and had no intention to abscond from his obligation.
On 13 June 2002, the trial court issued an Order setting the case for the hearing for examination of the petitioner on
3 July 2002. A subpoena was issued against the petitioner and served at his address of record. Respondent Teresa also
caused the service of the subpoena at 8051 Estrella Avenue, San Antonio Village, Makati City where petitioner is
allegedly residing.
The 3 July 2002 hearing did not push through as the petitioner filed a Motion to Quash Subpoena Ad Testificandum4 on
28 June 2002. In the motion, petitioner admitted that 8051 Estrella Avenue, San Antonio Village, Makati City, is his
present address but alleged that Makati City is more than 100 kilometers away from Bacolod City; thus, he may not
be compelled by subpoena to attend the 3 July 2002 hearing in Bacolod City. In this motion, petitioner did not allege
that he was still in Canada.
In its Order of 2 September 2002, the trial court denied the Motion to Quash Subpoena Ad Testificandum, but re-
scheduled the hearing to 23 October 2002. On 22 October 2002, the day before the scheduled hearing, petitioner filed
a manifestation manifestation informing the trial court that he was still in Canada and would not be able to attend the
23 October 2002 hearing; however, he would be in Manila on the first week of December 2002. He moved that the
hearing be re-scheduled on 9 December 2002. The manifestation, however, did not contain a notice of hearing.
On 23 October 2002, petitioner did not appear at the scheduled hearing, prompting the trial court to issue an order
citing him in contempt of court.
In its Order of 8 November 2002, the trial court declared petitioner in contempt of court under Section 38 of Rule 39
of the Rules of Court5 and imposed on him the penalty of imprisonment for three months and ordered him to pay a fine
of ₱20,000. His motion for reconsideration of the Order having been denied by the trial court in its Order of 3 January
2003, petitioner filed the petition in the case at bar.
The petition raises pure questions of law. After the issues were joined, we resolved to give due course to the petition.
Having raised only questions of law, petitioner is bound by the trial court’s findings of fact.
The core issue to be determined is whether, based on the facts found by the trial court, the latter erred in holding the
petitioner guilty of indirect contempt for willfully disobeying the orders of the trial court requiring him to appear for
purposes of examination as a judgment obligor at in the hearings scheduled on 22 March 2002, 10 April 2002, and 23
October 2002.
We rule in the negative.
The totality of petitioner’s acts clearly indicated a deliberate, and unjustified refusal to be examined as a judgment
obligor at the time the examination was scheduled for hearing by the trial court. His Such acts tended to degrade the
authority and respect for court processes and impaired the judiciary’s duty to deliver and administer justice. Petitioner
tried to impose his will on the trial court.
Contempt of court involves the doing of an act, or the failure to do an act, in such a manner as to create an affront to
the court and the sovereign dignity with which it is clothed. 6 It is defined as "disobedience to the court by acting in
opposition to its authority, justice and dignity."7 The power to punish contempt is inherent in all courts, because it is
essential to the preservation of order in judicial proceedings, and to the enforcement of judgments, orders and
mandates of the courts; and, consequently, to the due administration of justice. 8
The Rules of Court penalizes two types of contempt, namely, direct contempt and indirect contempt. Direct contempt
is committed in the presence of or so near a court as to obstruct or interrupt the proceedings before the same, and
includes disrespect toward the court, offensive personalities toward others, or refusal to be sworn or to answer as a
witness, or to subscribe an affidavit or deposition when lawfully required to do so. 9
On the other hand, Section 3 of Rule 71 of the Rules of Court enumerates particular acts which constitute indirect
contempt, thus:
(a) Misbehavior of an officer of a court in the performance of his official duties or in his official transactions;
(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court, including the act of a person
who, after being dispossessed or ejected from any real property by the judgment or process of any court of competent
jurisdiction, enters or attempts or induces another to enter into or upon such real property, for the purpose of
executing acts of ownership or possession, or in any manner disturbs the possession given to the person adjudged
to be entitled thereto;
(c) Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct
contempt under section 1 of this Rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice;
(e) Assuming to be an attorney or an officer of a court, and acting as such without authority;
(f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an order or
process of a court held by him.
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In relation to the foregoing, Section 38 of Rule 39 of the Rules of Court also provides that "a party or other person may
be compelled, by an order or subpoena, to attend before the court or commissioner to testify as provided in the two
preceding sections, and upon failure to obey such order or subpoena or to be sworn, or to answer as a witness or to
subscribe his deposition, may be punished for contempt as in other cases." This provision relates specifically to Section
3(b) of Rule 71 of the Rules of Court.
Indirect contempt may either be initiated (1) motu proprio by the court by issuing an order or any other formal charge
requiring the respondent to show cause why he should not be punished for contempt or (2) by the filing of a verified
petition, complying with the requirements for filing initiatory pleadings. 10 In the present case, the trial court initiated
the proceedings for indirect contempt by issuing two orders11 directing the petitioner to show cause why he should not
be punished for indirect contempt.
Contempt, whether direct or indirect, may be civil or criminal depending on the nature and effect of the contemptuous
act. Criminal contempt is "conduct directed against the authority and dignity of the court or a judge acting judicially;
it is an act obstructing the administration of justice which tends to bring the court into disrepute or disrespect."12 On
the other hand, civil contempt is the failure to do something ordered to be done by a court or a judge for the benefit
of the opposing party therein and is therefore, an offense against the party in whose behalf the violated order was
made.13 If the purpose is to punish, then it is criminal in nature; but if to compensate, then it is civil. 14
In the present case, the contemptuous act was the petitioner’s refusal to attend a hearing for his examination as
judgment obligor, upon motion by the respondent Teresa. It must be pointed out that the purpose of Section 36 of
Rule 39 is to provide the judgment obligee a remedy in case where the judgment obligor continues to fail to comply
with its obligation under the judgment. Petitioner’s refusal to be examined, without justifiable reason, constituted
indirect contempt which is civil in nature.
Petitioner’s deliberate willfulness and even malice in disobeying the orders of the trial court are clearly shown in the
pleadings he himself had filed before the trial court.
In his Manifestation of 19 March 2002 petitioner insisted on his right to file a reply or comment on the Motion to
Examine Defendant as Judgment Obligor until 14 April 2002 solely on the basis of the purported agreement at the
conference on 6 March 2002. Petitioner merely brushed aside the Order of the trial court requiring him to appear on
22 March 2002 for the hearing by not appearing in court. Petitioner cannot simply assume that his manifestation would
suffice for the trial court to re-schedule the 22 March 2002 hearing. That portion of the manifestation filed by petitioner
on 19 March 2002, which reads:
3. In the meantime, we have no other option but to cancel the setting on March 22, 2002 until Respondent shall have
submitted his Reply/Comment and the issue is finally laid to rest by the issuance of a final Order for that purpose.
demonstrates beyond doubt arrogance, haughtiness and disrespect. While petitioner apparently disagrees with the 19
March 2002 Order of by the trial court, he did not file a motion for its reconsideration. Neither did he file a motion to
reset the scheduled hearing on 22 March 2002. We have ruled that a motion for continuance or postponement is not a
matter of right but is addressed to the sound discretion of the court.15 Petitioner sought to deprive the trial court of
the discretion; he took it upon himself to cancel or to order the court to cancel the 22 March 2002 scheduled hearing.
Petitioner makes a belated claim in the present petition that his failure to attend the 22 March 2002 hearing was due
to the fact that he was already on his way to Manila on 22 March 2002 in preparation for his 26 March 2002 trip to
Canada. However, such explanation was not stated in the 19 March 2002 Manifestation and 5 April 2002 Compliance
and Motion to Re-schedule Proceedings. The explanation is either a delayed afterthought or an unguarded confession
of a deliberate plan to delay or even avoid his examination as a judgment obligor.
Neither can petitioner rely on the alleged irregularity in the trial court’s grant of the motion to examine him as judgment
obligor before he was able to file a reply or comment. Section 36 of, Rule 39 of the Rules of Court allows, as a matter
of right, the plaintiff who is a judgment obligee to examine the defendant as judgment obligor, at any time after the
return of the writ of execution is made. Section 36 reads as follows:
Sec. 36. Examination of judgment obligor when judgment unsatisfied. — When the return of a writ of execution
issued against property of a judgment obligor, or any one of several obligors in the same judgment, shows that the
judgment remains unsatisfied, in whole or in part, the judgment obligee, at any time after such return is made,
shall be entitled to an order from the court which rendered the said judgment, requiring such judgment obligor
to appear and be examined concerning his property and income before such court or before a commissioner appointed
by it, at a specified time and place; and proceedings may thereupon be had for the application of the property and
income of the judgment obligor towards the satisfaction of the judgment. But no judgment obligor shall be so required
to appear before a court or commissioner outside the province or city in which such obligor resides or is found.
(Emphasis supplied)
coercive power.16 It has been held that "when a person or party is legally and validly required by a court to appear
before it for a certain purpose, when that requirement is disobeyed, the only remedy left for the court is to use force
to bring such person or party before it."17
The reason for indefinite incarceration in civil contempt proceedings, in proper cases, is that it is remedial, preservative,
or coercive in nature. The punishment is imposed for the benefit of a complainant or a party to a suit who has been
injured. Its object is to compel performance of the orders or decrees of the court, which the contemnor refuses to obey
although able to do so.18 In effect, it is within the power of the person adjudged guilty of contempt to set himself free.
In the present case, however, the act which the trial court ordered the petitioner to do has already been performed,
albeit belatedly and not without delay for an unreasonable length of time. As such, the penalty of imprisonment may
no longer be imposed despite the fact that its non-implementation was due to petitioner’s absence in the Philippines.

Thus, the trial court committed no abuse of discretion in scheduling the examination of petitioner on 22 March 2002.
On the contrary, it acted with utmost judiciousness to avoid a miscarriage of justice because petitioner was reported
to be about to leave for Canada, a fact which petitioner did not refute in his Manifestation of 19 March 2002.
It is noteworthy that while petitioner insisted that he still had until 14 April 2002 to file a reply or comment on the
motion for examination, he also manifested through counsel on 5 April 2002 that he already left for Canada on 26
March 2002 and will not be back until the last week of July or the first week of August 2002. It is obvious then that
petitioner wanted to gain time to avoid being examined.
With respect to the 10 April 2002 hearing, it is established that petitioner was already in Canada at the time of the
scheduled hearing. Nonetheless, it must be stressed that the re-scheduling of the hearing to 10 April 2002 was brought
about by his unjustifiable failure to attend the 22 March 2002 hearing.
We are not unmindful of the nature of the judgment from which the present controversy arose. Six years have elapsed
from the time the compromise agreement for the support of the children of petitioner and respondent was executed.
We take judicial notice of the amount of expenses which a travel outside the country, particularly to Canada, entails,
much more so when the person traveling to Canada is trying to establish himself in the said country as an immigrant.
Petitioner’s claim for insolvency is negated by his frequent travels to Canada. We thus exhort the parties, specifically
the petitioner, to resort to all reasonable means to fully satisfy the judgment for support based on the compromise
agreement, for the paramount interests of their minor children.
WHEREFORE, the petition is hereby PARTIALLY GRANTED. The 8 November 2002 Order of the Regional Trial Court,
Branch 41, Bacolod City in with Civil Case No. 94-8467 is modified. As modified, the penalty of for imprisonment is
deleted therefrom, while the penalty of fine of ₱20,000 is affirmed.

Subsequently, despite petitioner’s 19 March 2002 and 5 April 2002 manifestations that he would return to the
Philippines sometime during the last week of July or first week of August 2002, petitioner did not attend the 23 October
2002 hearing. Again, instead of filing a motion to reset the hearing, petitioner filed a manifestation the day before the
scheduled hearing, informing the court that he will be unable to attend the hearing and suggesting the hearing to be
reset to 9 December 2002. Such manifestation to re-schedule the 23 October 2002 hearing was, for all intents and
purposes, a motion to postpone the hearing , but the pleading did not contain a notice of hearing.

It is of no moment that petitioner was eventually examined as judgment obligor on 17 December 2002, nine (9) months
after the original setting. His subsequent appearance at the hearing did not wipe out his contemptuous conduct.

We shall now take up the penalties imposed by the trial court.

Under Section 7 of Rule 71 of the Rules of Court, a person found guilty of contempt of court against a Regional Trial
Court may be punished with a fine not exceeding thirty thousand pesos or imprisonment not exceeding six (6) months,
or both. The penalties ofor imprisonment for three months and a fine of twenty thousand pesos are within the allowable
penalties the trial court itit may impose. However, the penalties of imprisonment and fine may be imposed one at a
time, or together.

In the present case, the nature of the contemptuous acts committed are civil in nature. Section 7 of Rule 71 of the
Rules of Court provides for indefinite incarceration in civil contempt proceedings to compel a party to comply with the
order of the court. This may be resorted to where the attendant circumstances are such that the non-compliance with
the court order is an utter disregard of the authority of the court which has then no other recourse but to use its

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