G.R. No.

108905 October 23, 1997

GRACE CHRISTIAN HIGH SCHOOL, petitioner,

vs.
THE COURT OF APPEALS, GRACE VILLAGE ASSOCIATION,
INC., ALEJANDRO G. BELTRAN, and ERNESTO L.
GO, respondents.

MENDOZA, J.:

The question for decision in this case is the right of petitioner's

representative to sit in the board of directors of respondent Grace
Village Association, Inc. as a permanent member thereof. For
fifteen years — from 1975 until 1989 — petitioner's representative
had been recognized as a "permanent director" of the association.
But on February 13, 1990, petitioner received notice from the
association's committee on election that the latter was
"reexamining" (actually, reconsidering) the right of petitioner's
representative to continue as an unelected member of the board.
As the board denied petitioner's request to be allowed
representation without election, petitioner brought an action
for mandamus in the Home Insurance and Guaranty Corporation.
Its action was dismissed by the hearing officer whose decision
was subsequently affirmed by the appeals board. Petitioner
appealed to the Court of Appeals, which in turn upheld the
decision of the HIGC's appeals board. Hence this petition for
review based on the following contentions:

1. The Petitioner herein has already acquired a vested

right to a permanent seat in the Board of Directors of
Grace Village Association;
 2. The amended By-laws of the Association drafted and
promulgated by a Committee on December 20, 1975 is
valid and binding; and

3. The Practice of tolerating the automatic inclusion of

petitioner as a permanent member of the Board of
Directors of the Association without the benefit of
election is allowed under the law.1

Briefly stated, the facts are as follows:

Petitioner Grace Christian High School is an educational

institution offering preparatory, kindergarten and secondary
courses at the Grace Village in Quezon City. Private respondent
Grace Village Association, Inc., on the other hand, is an
organization of lot and/or building owners, lessees and residents
at Grace Village, while private respondents Alejandro G. Beltran
and Ernesto L. Go were its president and chairman of the
committee on election, respectively, in 1990, when this suit was
brought.

As adopted in 1968, the by-laws of the association provided in

Article IV, as follows:

The annual meeting of the members of the Association

shall be held on the first Sunday of January in each
calendar year at the principal office of the Association
at 2:00 P.M. where they shall elect by plurality vote and
by secret balloting, the Board of Directors, composed of
eleven (11) members to serve for one (1) year until their
successors are duly elected and have qualified.2

It appears, that on December 20, 1975, a committee of the board

of directors prepared a draft of an amendment to the by-laws,
reading as follows:3
 VI. ANNUAL MEETING

The Annual Meeting of the members of the Association

shall be held on the second Thursday of January of
each year. Each Charter or Associate Member of the
Association is entitled to vote. He shall be entitled to as
many votes as he has acquired thru his monthly
membership fees only computed on a ratio of TEN
(P10.00) PESOS for one vote.

The Charter and Associate Members shall elect the

Directors of the Association. The candidates receiving
the first fourteen (14) highest number of votes shall be
declared and proclaimed elected until their successors
are elected and qualified. GRACE CHRISTIAN HIGH
SCHOOL representative is a permanent Director of the
ASSOCIATION.

This draft was never presented to the general membership for

approval. Nevertheless, from 1975, after it was presumably
submitted to the board, up to 1990, petitioner was given a
permanent seat in the board of directors of the association. On
February 13, 1990, the association's committee on election in a
letter informed James Tan, principal of the school, that "it was the
sentiment that all directors should be elected by members of the
association" because "to make a person or entity a permanent
Director would deprive the right of voters to vote for fifteen (15)
members of the Board," and "it is undemocratic for a person or
entity to hold office in perpetuity." 4 For this reason, Tan was told
that "the proposal to make the Grace Christian High School
representative as a permanent director of the association,
although previously tolerated in the past elections should be
reexamined." Following this advice, notices were sent to the
members of the association that the provision on election of
directors of the 1968 by-laws of the association would be
observed.

Petitioner requested the chairman of the election committee to

change the notice of election by following the procedure in
previous elections, claiming that the notice issued for the 1990
elections ran "counter to the practice in previous years" and was
"in violation of the by-laws (of 1975)" and "unlawfully deprive[d]
Grace Christian High School of its vested right [to] a permanent
seat in the board." 5

As the association denied its request, the school brought suit

for mandamus in the Home Insurance and Guaranty Corporation
to compel the board of directors of the association to recognize its
right to a permanent seat in the board. Petitioner based its claim
on the following portion of the proposed amendment which, it
contended, had become part of the by-laws of the association as
Article VI, paragraph 2, thereof:

The Charter and Associate Members shall elect the

Directors of the Association. The candidates receiving
the first fourteen (14) highest number of votes shall be
declared and proclaimed elected until their successors
are elected and qualified. GRACE CHRISTIAN HIGH
SCHOOL representative is a permanent Director of the
ASSOCIATION.

It appears that the opinion of the Securities and Exchange

Commission on the validity of this provision was sought by the
association and that in reply to the query, the SEC rendered an
opinion to the effect that the practice of allowing unelected
members in the board was contrary to the existing by-laws of the
association and to §92 of the Corporation Code (B.P. Blg. 68).

Private respondent association cited the SEC opinion in its

answer. Additionally, the association contended that the basis of
the petition for mandamus was merely "a proposed by-laws which
has not yet been approved by competent authority nor registered
with the SEC or HIGC." It argued that "the by-laws which was
registered with the SEC on January 16, 1969 should be the
prevailing by-laws of the association and not the proposed
amended by-laws."6

In reply, petitioner maintained that the "amended by-laws is valid

and binding" and that the association was estopped from
questioning the by-laws. 7

A preliminary conference was held on March 29, 1990 but nothing

substantial was agreed upon. The parties merely agreed that the
board of directors of the association should meet on April 17,
1990 and April 24, 1990 for the purpose of discussing the
amendment of the by-laws and a possible amicable settlement of
the case. A meeting was held on April 17, 1990, but the parties
failed to reach an agreement. Instead, the board adopted a
resolution declaring the 1975 provision null and void for lack of
approval by members of the association and the 1968 by-laws to
be effective.

On June 20, 1990, the hearing officer of the HIGC rendered a

decision dismissing petitioner's action. The hearing officer held
that the amended by-laws, upon which petitioner based its claim,
"[was] merely a proposed by-laws which, although implemented in
the past, had not yet been ratified by the members of the
association nor approved by competent authority"; that, on the
contrary, in the meeting held on April 17, 1990, the directors of
the association declared "the proposed by-law dated December
20, 1975 prepared by the committee on by-laws . . . null and void"
and the by-laws of December 17, 1968 as the "prevailing by-laws
under which the association is to operate until such time that the
proposed amendments to the by-laws are approved and ratified
by a majority of the members of the association and duly filed and
approved by the pertinent government agency." The hearing
officer rejected petitioner's contention that it had acquired a
vested right to a permanent seat in the board of directors. He held
that past practice in election of directors could not give rise to a
vested right and that departure from such practice was justified
because it deprived members of association of their right to elect
or to be voted in office, not to say that "allowing the automatic
inclusion of a member representative of petitioner as permanent
director [was] contrary to law and the registered by-laws of
respondent association." 8

The appeals board of the HIGC affirmed the decision of the

hearing officer in its resolution dated September 13, 1990. It cited
the opinion of the SEC based on §92 of the Corporation Code
which reads:

§92. Election and term of trustees. — Unless otherwise

provided in the articles of incorporation or the by-laws,
the board of trustees of non-stock corporations, which
may be more than fifteen (15) in number as may be
fixed in their articles of incorporation or by-laws, shall,
as soon as organized, so classify themselves that the
term of office of one-third (1/3) of the number shall
expire every year; and subsequent elections of trustees
comprising one-third (1/3) of the board of trustees shall
be held annually and trustees so elected shall have a
term of three (3) years. Trustees thereafter elected to fill
vacancies occurring before the expiration of a particular
term shall hold office only for the unexpired period.

The HIGC appeals board denied claims that the school

"[was] being deprived of its right to be a member of the
Board of Directors of respondent association," because the
fact was that "it may nominate as many representatives to
the Association's Board as it may deem appropriate." It said
 that "what is merely being upheld is the act of the incumbent
directors of the Board of correcting a long standing practice
which is not anchored upon any legal basis." 9

Petitioner appealed to the Court of Appeals but petitioner again

lost as the appellate court on February 9, 1993, affirmed the
decision of the HIGC. The Court of Appeals held that there was
no valid amendment of the association's by-laws because of
failure to comply with the requirement of its existing by-laws,
prescribing the affirmative vote of the majority of the members of
the association at a regular or special meeting called for the
adoption of amendment to the by-laws. Article XIX of the by-laws
provides: 10

The members of the Association by an affirmative vote

of the majority at any regular or special meeting called
for the purpose, may alter, amend, change or adopt any
new by-laws.

This provision of the by-laws actually implements §22 of the

Corporation Law (Act No. 1459) which provides:

§22. The owners of a majority of the subscribed capital

stock, or a majority of the members if there be no
capital stock, may, at a regular or special meeting duly
called for the purpose, amend or repeal any by-law or
adopt new by-laws. The owners of two-thirds of the
subscribed capital stock, or two-thirds of the members if
there be no capital stock, may delegate to the board of
directors the power to amend or repeal any by-law or to
adopt new by-laws: Provided, however, That any power
delegated to the board of directors to amend or repeal
any by-law or adopt new by-laws shall be considered as
revoked whenever a majority of the stockholders or of
the members of the corporation shall so vote at a
regular or special meeting. And provided, further, That
 the Director of the Bureau of Commerce and Industry
shall not hereafter file an amendment to the by-laws of
any bank, banking institution or building and loan
association, unless accompanied by certificate of the
Bank Commissioner to the effect that such
amendments are in accordance with law.

The proposed amendment to the by-laws was never approved by

the majority of the members of the association as required by
these provisions of the law and by-laws. But petitioner contends
that the members of the committee which prepared the proposed
amendment were duly authorized to do so and that because the
members of the association thereafter implemented the provision
for fifteen years, the proposed amendment for all intents and
purposes should be considered to have been ratified by them.
Petitioner contends: 11

Considering, therefore, that the "agents" or committee

were duly authorized to draft the amended by-laws and
the acts done by the "agents" were in accordance with
such authority, the acts of the "agents" from the very
beginning were lawful and binding on the homeowners
(the principals) per se without need of any ratification or
adoption. The more has the amended by-laws become
binding on the homeowners when the homeowners
followed and implemented the provisions of the
amended by-laws. This is not merely tantamount to tacit
ratification of the acts done by duly authorized "agents"
but express approval and confirmation of what the
"agents" did pursuant to the authority granted to them.

Corollarily, petitioner claims that it has acquired a vested right to a

permanent seat in the board. Says petitioner:

The right of the petitioner to an automatic membership

in the board of the Association was granted by the
 members of the Association themselves and this grant
has been implemented by members of the board
themselves all through the years. Outside the present
membership of the board, not a single member of the
Association has registered any desire to remove the
right of herein petitioner to an automatic membership in
the board. If there is anybody who has the right to take
away such right of the petitioner, it would be the
individual members of the Association through a
referendum and not the present board some of the
members of which are motivated by personal interest.

Petitioner disputes the ruling that the provision in question,

giving petitioner's representative a permanent seat in the
board of the association, is contrary to law. Petitioner claims
that that is not so because there is really no provision of law
prohibiting unelected members of boards of directors of
corporations. Referring to §92 of the present Corporation
Code, petitioner says:

It is clear that the above provision of the Corporation

Code only provides for the manner of election of the
members of the board of trustees of non-stock
corporations which may be more than fifteen in number
and which manner of election is even subject to what is
provided in the articles of incorporation or by-laws of
the association thus showing that the above provisions
[are] not even mandatory.

Even a careful perusal of the above provision of the

Corporation Code would not show that it prohibits a
non-stock corporation or association from granting one
of its members a permanent seat in its board of
directors or trustees. If there is no such legal prohibition
then it is allowable provided it is so provided in the
 Articles of Incorporation or in the by-laws as in the
instant case.

xxx xxx xxx

If fact, the truth is that this is allowed and is being

practiced by some corporations duly organized and
existing under the laws of the Philippines.

One example is the Plus XII Catholic Center, Inc. Under

the by-laws of this corporation, that whoever is the
Archbishop of Manila is considered a member of the
board of trustees without benefit of election. And not
only that. He also automatically sits as the Chairman of
the Board of Trustees, again without need of any
election.

Another concrete example is the Cardinal Santos

Memorial Hospital, Inc. It is also provided in the by-laws
of this corporation that whoever is the Archbishop of
Manila is considered a member of the board of trustees
year after year without benefit of any election and he
also sits automatically as the Chairman of the Board of
Trustees.

It is actually §§28 and 29 of the Corporation Law — not §92 of the

present law or §29 of the former one — which require members of
the boards of directors of corporations to be elected. These
provisions read:

§28. Unless otherwise provided in this Act, the

corporate powers of all corporations formed under this
Act shall be exercised, all business conducted and all
property of such corporations controlled and held by a
board of not less than five nor more than eleven
directors to be elected from among the holders of stock
or, where there is no stock, from the members of the
corporation: Provided, however, That in corporations,
other than banks, in which the United States has or
may have a vested interest, pursuant to the powers
granted or delegated by the Trading with the Enemy
Act, as amended, and similar Acts of Congress of the
United States relating to the same subject, or by
Executive Order No. 9095 of the President of the United
States, as heretofore or hereafter amended, or both,
the directors need not be elected from among the
holders of the stock, or, where there is no stock from
the members of the corporation. (emphasis added)

§29. At the meeting for the adoption of the original by-

laws, or at such subsequent meeting as may be then
determined, directors shall be elected to hold their
offices for one year and until their successors are
elected and qualified. Thereafter the directors of the
corporation shall be elected annually by the
stockholders if it be a stock corporation or by the
members if it be a nonstock corporation, and if no
provision is made in the by-laws for the time of election
the same shall be held on the first Tuesday after the
first Monday in January. Unless otherwise provided in
the by-laws, two weeks' notice of the election of
directors must be given by publication in some
newspaper of general circulation devoted to the
publication of general news at the place where the
principal office of the corporation is established or
located, and by written notice deposited in the post-
office, postage pre-paid, addressed to each
stockholder, or, if there be no stockholders, then to
each member, at his last known place of residence. If
there be no newspaper published at the place where
the principal office of the corporation is established or
 located, a notice of the election of directors shall be
posted for a period of three weeks immediately
preceding the election in at least three public places, in
the place where the principal office of the corporation is
established or located. (Emphasis added)

The present Corporation Code (B.P. Blg. 68), which took effect on
May 1, 1980, 12 similarly provides:

§23. The Board of Directors or Trustees. — Unless

otherwise provided in this Code, the corporate powers
of all corporations formed under this Code shall be
exercised, all business conducted and all property of
such corporations controlled and held by the board of
directors or trustees to be electedfrom among the
holders of stocks, or where there is no stock, from
among the members of the corporation, who shall hold
office for one (1) year and until their successors are
elected and qualified. (Emphasis added)

These provisions of the former and present corporation law leave

no room for doubt as to their meaning: the board of directors of
corporations must be elected from among the stockholders or
members. There may be corporations in which there are
unelected members in the board but it is clear that in the
examples cited by petitioner the unelected members sit as ex
officio members, i.e., by virtue of and for as long as they hold a
particular office. But in the case of petitioner, there is no reason at
all for its representative to be given a seat in the board. Nor does
petitioner claim a right to such seat by virtue of an office held. In
fact it was not given such seat in the beginning. It was only in
1975 that a proposed amendment to the by-laws sought to give it
one.

Since the provision in question is contrary to law, the fact that for
fifteen years it has not been questioned or challenged but, on the
contrary, appears to have been implemented by the members of
the association cannot forestall a later challenge to its validity.
Neither can it attain validity through acquiescence because, if it is
contrary to law, it is beyond the power of the members of the
association to waive its invalidity. For that matter the members of
the association may have formally adopted the provision in
question, but their action would be of no avail because no
provision of the by-laws can be adopted if it is contrary to law. 13

It is probable that, in allowing petitioner's representative to sit on

the board, the members of the association were not aware that
this was contrary to law. It should be noted that they did not
actually implement the provision in question except perhaps
insofar as it increased the number of directors from 11 to 15, but
certainly not the allowance of petitioner's representative as an
unelected member of the board of directors. It is more accurate to
say that the members merely tolerated petitioner's representative
and tolerance cannot be considered ratification.

Nor can petitioner claim a vested right to sit in the board on the
basis of "practice." Practice, no matter how long continued,
cannot give rise to any vested right if it is contrary to law. Even
less tenable is petitioner's claim that its right is "coterminus with
the existence of the association." 14

Finally, petitioner questions the authority of the SEC to render an

opinion on the validity of the provision in question. It contends that
jurisdiction over this case is exclusively vested in the HIGC.

But this case was not decided by the SEC but by the HIGC. The
HIGC merely cited as authority for its ruling the opinion of the
SEC chairman. The HIGC could have cited any other authority for
the view that under the law members of the board of directors of a
corporation must be elected and it would be none the worse for
doing so.
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED.

SO ORDERED.

G.R. No. 117604 March 26, 1997

CHINA BANKING CORPORATION, petitioner,

vs.
COURT OF APPEALS, and VALLEY GOLF and COUNTRY
CLUB, INC., respondents.

KAPUNAN, J.:

Through a petition for review on certiorari under Rule 45 of the

Revised Rules of Court, petitioner China Banking Corporation
seeks the reversal of the decision of the Court of Appeals dated
15 August 1994 nullifying the Securities and Exchange
Commission's order and resolution dated 4 June 1993 and 7
December 1993, respectively, for lack of jurisdiction. Similarly
impugned is the Court of Appeals' resolution dated 4 September
1994 which denied petitioner's motion for reconsideration.

The case unfolds thus:

On 21 August 1974, Galicano Calapatia, Jr. (Calapatia, for

brevity) a stockholder of private respondent Valley Golf & Country
Club, Inc. (VGCCI, for brevity), pledged his Stock Certificate No.
1219 to petitioner China Banking Corporation (CBC, for brevity).1

On 16 September 1974, petitioner wrote VGCCI requesting that

the aforementioned pledge agreement be recorded in its books.2
In a letter dated 27 September 1974, VGCCI replied that the deed
of pledge executed by Calapatia in petitioner's favor was duly
noted in its corporate books.3

On 3 August 1983, Calapatia obtained a loan of P20,000.00 from

petitioner, payment of which was secured by the aforestated
pledge agreement still existing between Calapatia and petitioner.4

Due to Calapatia's failure to pay his obligation, petitioner, on 12

April 1985, filed a petition for extrajudicial foreclosure before
Notary Public Antonio T. de Vera of Manila, requesting the latter
to conduct a public auction sale of the pledged stock.5

On 14 May 1985, petitioner informed VGCCI of the above-

mentioned foreclosure proceedings and requested that the
pledged stock be transferred to its (petitioner's) name and the
same be recorded in the corporate books. However, on 15 July
1985, VGCCI wrote petitioner expressing its inability to accede to
petitioner's request in view of Calapatia's unsettled accounts with
the club.6

Despite the foregoing, Notary Public de Vera held a public auction

on 17 September 1985 and petitioner emerged as the highest
bidder at P20,000.00 for the pledged stock. Consequently,
petitioner was issued the corresponding certificate of sale.7

On 21 November 1985, VGCCI sent Calapatia a notice

demanding full payment of his overdue account in the amount of
P18,783.24. 8 Said notice was followed by a demand letter dated
12 December 1985 for the same amount9 and another notice
dated 22 November 1986 for P23,483.24. 10

On 4 December 1986, VGCCI caused to be published in the

newspaper Daily Express a notice of auction sale of a number of
its stock certificates, to be held on 10 December 1986 at 10:00
a.m. Included therein was Calapatia's own share of stock (Stock
Certificate No. 1219).

Through a letter dated 15 December 1986, VGCCI informed

Calapatia of the termination of his membership due to the sale of
his share of stock in the 10 December 1986 auction. 11

On 5 May 1989, petitioner advised VGCCI that it is the new owner

of Calapatia's Stock Certificate No. 1219 by virtue of being the
highest bidder in the 17 September 1985 auction and requested
that a new certificate of stock be issued in its name. 12

On 2 March 1990, VGCCI replied that "for reason of delinquency"

Calapatia's stock was sold at the public auction held on 10
December 1986 for P25,000.00. 13

On 9 March 1990, petitioner protested the sale by VGCCI of the

subject share of stock and thereafter filed a case with the
Regional Trial Court of Makati for the nullification of the 10
December 1986 auction and for the issuance of a new stock
certificate in its name. 14

On 18 June 1990, the Regional Trial Court of Makati dismissed

the complaint for lack of jurisdiction over the subject matter on the
theory that it involves an intra-corporate dispute and on 27 August
1990 denied petitioner's motion for reconsideration.

On 20 September 1990, petitioner filed a complaint with the

Securities and Exchange Commission (SEC) for the nullification
of the sale of Calapatia's stock by VGCCI; the cancellation of any
new stock certificate issued pursuant thereto; for the issuance of
a new certificate in petitioner's name; and for damages, attorney's
fees and costs of litigation.

On 3 January 1992, SEC Hearing Officer Manuel P. Perea

rendered a decision in favor of VGCCI, stating in the main that
"(c)onsidering that the said share is delinquent, (VGCCI) had valid
reason not to transfer the share in the name of the petitioner in
the books of (VGCCI) until liquidation of
delinquency." 15 Consequently, the case was dismissed. 16

On 14 April 1992, Hearing Officer Perea denied petitioner's

motion for reconsideration. 17

Petitioner appealed to the SEC en banc and on 4 June 1993, the

Commission issued an order reversing the decision of its hearing
officer. It declared thus:

The Commission en banc believes that appellant-

petitioner has a prior right over the pledged share and
because of pledgor's failure to pay the principal debt
upon maturity, appellant-petitioner can proceed with the
foreclosure of the pledged share.

WHEREFORE, premises considered, the Orders of

January 3, 1992 and April 14, 1992 are hereby SET
ASIDE. The auction sale conducted by appellee-
respondent Club on December 10, 1986 is declared
NULL and VOID. Finally, appellee-respondent Club is
ordered to issue another membership certificate in the
name of appellant-petitioner bank.

SO ORDERED. 18

VGCCI sought reconsideration of the abovecited order. However,

the SEC denied the same in its resolution dated 7 December
1993. 19

The sudden turn of events sent VGCCI to seek redress from the
Court of Appeals. On 15 August 1994, the Court of Appeals
rendered its decision nullifying and setting aside the orders of the
SEC and its hearing officer on ground of lack of jurisdiction over
the subject matter and, consequently, dismissed petitioner's
original complaint. The Court of Appeals declared that the
controversy between CBC and VGCCI is not intra-corporate. It
ruled as follows:

In order that the respondent Commission can take

cognizance of a case, the controversy must pertain to
any of the following relationships: (a) between the
corporation, partnership or association and the public;
(b) between the corporation, partnership or association
and its stockholders, partners, members, or officers; (c)
between the corporation, partnership or association and
the state in so far as its franchise, permit or license to
operate is concerned, and (d) among the stockholders,
partners or associates themselves (Union Glass and
Container Corporation vs. SEC, November 28, 1983,
126 SCRA 31). The establishment of any of the
relationship mentioned will not necessarily always
confer jurisdiction over the dispute on the Securities
and Exchange Commission to the exclusion of the
regular courts. The statement made in Philex Mining
Corp. vs. Reyes, 118 SCRA 602, that the rule admits of
no exceptions or distinctions is not that absolute. The
better policy in determining which body has jurisdiction
over a case would be to consider not only the status or
relationship of the parties but also the nature of the
question that is the subject of their controversy (Viray
vs. Court of Appeals, November 9, 1990, 191 SCRA
308, 322-323).

Indeed, the controversy between petitioner and

respondent bank which involves ownership of the stock
that used to belong to Calapatia, Jr. is not within the
competence of respondent Commission to decide. It is
not any of those mentioned in the aforecited case.
 WHEREFORE, the decision dated June 4, 1993, and
order dated December 7, 1993 of respondent Securities
and Exchange Commission (Annexes Y and BB,
petition) and of its hearing officer dated January 3, 1992
and April 14, 1992 (Annexes S and W, petition) are all
nullified and set aside for lack of jurisdiction over the
subject matter of the case. Accordingly, the complaint
of respondent China Banking Corporation (Annex Q,
petition) is DISMISSED. No pronouncement as to costs
in this instance.

SO ORDERED. 20

Petitioner moved for reconsideration but the same was denied by

the Court of Appeals in its resolution dated 5 October 1994. 21

Hence, this petition wherein the following issues were raised:

II

ISSUES

WHETHER OR NOT RESPONDENT COURT OF

APPEALS (Former Eighth Division) GRAVELY ERRED
WHEN:

1. IT NULLIFIED AND SET ASIDE THE DECISION

DATED JUNE 04, 1993 AND ORDER DATED
DECEMBER 07, 1993 OF THE SECURITIES AND
EXCHANGE COMMISSION EN BANC, AND WHEN IT
DISMISSED THE COMPLAINT OF PETITIONER
AGAINST RESPONDENT VALLEY GOLF ALL FOR
LACK OF JURISDICTION OVER THE SUBJECT
MATTER OF THE CASE;

2. IT FAILED TO AFFIRM THE DECISION OF THE

SECURITIES AND EXCHANGE COMMISSION EN
 BANC DATED JUNE 04, 1993 DESPITE
PREPONDERANT EVIDENCE SHOWING THAT
PETITIONER IS THE LAWFUL OWNER OF
MEMBERSHIP CERTIFICATE NO. 1219 FOR ONE
SHARE OF RESPONDENT VALLEY GOLF.

The petition is granted.

The basic issue we must first hurdle is which body has jurisdiction
over the controversy, the regular courts or the SEC.

P. D. No. 902-A conferred upon the SEC the following pertinent

powers:

Sec. 3. The Commission shall have absolute

jurisdiction, supervision and control over all
corporations, partnerships or associations, who are the
grantees of primary franchises and/or a license or
permit issued by the government to operate in the
Philippines, and in the exercise of its authority, it shall
have the power to enlist the aid and support of and to
deputize any and all enforcement agencies of the
government, civil or military as well as any private
institution, corporation, firm, association or person.

xxx xxx xxx

Sec. 5. In addition to the regulatory and adjudicative

functions of the Securities and Exchange Commission
over corporations, partnerships and other forms of
associations registered with it as expressly granted
under existing laws and decrees, it shall have original
and exclusive jurisdiction to hear and decide cases
involving:
a) Devices or schemes employed by or any
acts of the board of directors, business
associates, its officers or partners, amounting
to fraud and misrepresentation which may be
detrimental to the interest of the public and/or
of the stockholders, partners, members of
associations or organizations registered with
the Commission.

b) Controversies arising out of intra-corporate

or partnership relations, between and among
stockholders, members, or associates;
between any or all of them and the
corporation, partnership or association of
which they are stockholders, members or
associates, respectively; and between such
corporation, partnership or association and
the State insofar as it concerns their
individual franchise or right to exist as such
entity;

c) Controversies in the election or

appointment of directors, trustees, officers, or
managers of such corporations, partnerships
or associations.

d) Petitions of corporations, partnerships or

associations to be declared in the state of
suspension of payments in cases where the
corporation, partnership or association
possesses property to cover all of its debts
but foresees the impossibility of meeting
them when they respectively fall due or in
cases where the corporation, partnership or
association has no sufficient assets to cover
 its liabilities, but is under the Management
Committee created pursuant to this Decree.

The aforecited law was expounded upon in Viray v. CA 22 and in

the recent cases of Mainland Construction
Co., Inc. v. Movilla 23 and Bernardo v. CA, 24 thus:

. . . .The better policy in determining which body has

jurisdiction over a case would be to consider not only
the status or relationship of the parties but also the
nature of the question that is the subject of their
controversy.

Applying the foregoing principles in the case at bar, to ascertain

which tribunal has jurisdiction we have to determine therefore
whether or not petitioner is a stockholder of VGCCI and whether
or not the nature of the controversy between petitioner and private
respondent corporation is intra-corporate.

As to the first query, there is no question that the purchase of the

subject share or membership certificate at public auction by
petitioner (and the issuance to it of the corresponding Certificate
of Sale) transferred ownership of the same to the latter and thus
entitled petitioner to have the said share registered in its name as
a member of VGCCI. It is readily observed that VGCCI did not
assail the transfer directly and has in fact, in its letter of 27
September 1974, expressly recognized the pledge agreement
executed by the original owner, Calapatia, in favor of petitioner
and has even noted said agreement in its corporate books. 25 In
addition, Calapatia, the original owner of the subject share, has
not contested the said transfer.

By virtue of the afore-mentioned sale, petitioner became a bona

fide stockholder of VGCCI and, therefore, the conflict that arose
between petitioner and VGCCI aptly exemplies an intra-corporate
controversy between a corporation and its stockholder under Sec.
5(b) of P.D. 902-A.

An important consideration, moreover, is the nature of the

controversy between petitioner and private respondent
corporation. VGCCI claims a prior right over the subject share
anchored mainly on Sec. 3, Art VIII of its by-laws which provides
that "after a member shall have been posted as delinquent, the
Board may order his/her/its share sold to satisfy the claims of the
Club. . ." 26 It is pursuant to this provision that VGCCI also sold the
subject share at public auction, of which it was the highest bidder.
VGCCI caps its argument by asserting that its corporate by-laws
should prevail. The bone of contention, thus, is the proper
interpretation and application of VGCCI's aforequoted by-laws, a
subject which irrefutably calls for the special competence of the
SEC.

We reiterate herein the sound policy enunciated by the Court

in Abejo v. De la Cruz 27:

6. In the fifties, the Court taking cognizance of the move

to vest jurisdiction in administrative commissions and
boards the power to resolve specialized disputes in the
field of labor (as in corporations, public transportation
and public utilities) ruled that Congress in requiring the
Industrial Court's intervention in the resolution of labor-
management controversies likely to cause strikes or
lockouts meant such jurisdiction to be exclusive,
although it did not so expressly state in the law. The
Court held that under the "sense-making and
expeditious doctrine of primary jurisdiction . . . the
courts cannot or will not determine a controversy
involving a question which is within the jurisdiction of an
administrative tribunal, 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, and a uniformity
of ruling is essential to comply with the purposes of the
regulatory statute administered.

In this era of clogged court dockets, the need for

specialized administrative boards or commissions with
the special knowledge, experience and capability to
hear and determine promptly disputes on technical
matters or essentially factual matters, subject to judicial
review in case of grave abuse of discretion, has
become well nigh indispensable. Thus, in 1984, the
Court noted that "between the power lodged in an
administrative body and a court, the unmistakable trend
has been to refer it to the former. 'Increasingly, this
Court has been committed to the view that unless the
law speaks clearly and unequivocably, the choice
should fall on [an administrative agency.]'" The Court in
the earlier case of Ebon v. De Guzman, noted that the
lawmaking authority, in restoring to the labor arbiters
and the NLRC their jurisdiction to award all kinds of
damages in labor cases, as against the previous P.D.
amendment splitting their jurisdiction with the regular
courts, "evidently, . . . had second thoughts about
depriving the Labor Arbiters and the NLRC of the
jurisdiction to award damages in labor cases because
that setup would mean duplicity of suits, splitting the
cause of action and possible conflicting findings and
conclusions by two tribunals on one and the same
claim."

In this case, the need for the SEC's technical expertise cannot be
over-emphasized involving as it does the meticulous analysis and
correct interpretation of a corporation's by-laws as well as the
applicable provisions of the Corporation Code in order to
determine the validity of VGCCI's claims. The SEC, therefore,
took proper cognizance of the instant case.

VGCCI further contends that petitioner is estopped from denying

its earlier position, in the first complaint it filed with the RTC of
Makati (Civil Case No. 90-1112) that there is no intra-corporate
relations between itself and VGCCI.

VGCCI's contention lacks merit.

In Zamora v. Court of Appeals, 28 this Court, through Mr. Justice

Isagani A. Cruz, declared that:

It follows that as a rule the filing of a complaint with one

court which has no jurisdiction over it does not prevent
the plaintiff from filing the same complaint later with the
competent court. The plaintiff is not estopped from
doing so simply because it made a mistake before in
the choice of the proper forum. . . .

We remind VGCCI that in the same proceedings before the RTC

of Makati, it categorically stated (in its motion to dismiss) that the
case between itself and petitioner is intra-corporate and insisted
that it is the SEC and not the regular courts which has jurisdiction.
This is precisely the reason why the said court dismissed
petitioner's complaint and led to petitioner's recourse to the SEC.

Having resolved the issue on jurisdiction, instead of remanding

the whole case to the Court of Appeals, this Court likewise deems
it procedurally sound to proceed and rule on its merits in the same
proceedings.

It must be underscored that petitioner did not confine the instant

petition for review on certiorari on the issue of jurisdiction. In its
assignment of errors, petitioner specifically raised questions on
the merits of the case. In turn, in its responsive pleadings, private
respondent duly answered and countered all the issues raised by
petitioner.

Applicable to this case is the principle succinctly enunciated in the

case of Heirs of Crisanta Y. Gabriel-Almoradie v. Court of
Appeals, 29 citing Escudero v. Dulay 30 and The Roman Catholic
Archbishop of Manila v. Court of Appeals. 31

In the interest of the public and for the expeditious

administration of justice the issue on infringement shall
be resolved by the court considering that this case has
dragged on for years and has gone from one forum to
another.

It is a rule of procedure for the Supreme Court to strive

to settle the entire controversy in a single proceeding
leaving no root or branch to bear the seeds of future
litigation. No useful purpose will be served if a case or
the determination of an issue in a case is remanded to
the trial court only to have its decision raised again to
the Court of Appeals and from there to the Supreme
Court.

We have laid down the rule that the remand of the case
or of an issue to the lower court for further reception of
evidence is not necessary where the Court is in position
to resolve the dispute based on the records before it
and particularly where the ends of justice would not be
subserved by the remand thereof. Moreover, the
Supreme Court is clothed with ample authority to review
matters, even those not raised on appeal if it finds that
their consideration is necessary in arriving at a just
disposition of the case.
In the recent case of China Banking Corp., et al. v. Court of
Appeals, et al., 32 this Court, through Mr. Justice Ricardo J.
Francisco, ruled in this wise:

At the outset, the Court's attention is drawn to the fact

that since the filing of this suit before the trial court,
none of the substantial issues have been resolved. To
avoid and gloss over the issues raised by the parties,
as what the trial court and respondent Court of Appeals
did, would unduly prolong this litigation involving a
rather simple case of foreclosure of mortgage.
Undoubtedly, this will run counter to the avowed
purpose of the rules, i.e., to assist the parties in
obtaining just, speedy and inexpensive determination of
every action or proceeding. The Court, therefore, feels
that the central issues of the case, albeit unresolved by
the courts below, should now be settled specially as
they involved pure questions of law. Furthermore, the
pleadings of the respective parties on file have amply
ventilated their various positions and arguments on the
matter necessitating prompt adjudication.

In the case at bar, since we already have the records of the case
(from the proceedings before the SEC) sufficient to enable us to
render a sound judgment and since only questions of law were
raised (the proper jurisdiction for Supreme Court review), we can,
therefore, unerringly take cognizance of and rule on the merits of
the case.

The procedural niceties settled, we proceed to the merits.

VGCCI assails the validity of the pledge agreement executed by

Calapatia in petitioner's favor. It contends that the same was null
and void for lack of consideration because the pledge agreement
was entered into on 21 August
1974 33 but the loan or promissory note which it secured was
obtained by Calapatia much later or only on 3 August 1983. 34

VGCCI's contention is unmeritorious.

A careful perusal of the pledge agreement will readily reveal that

the contracting parties explicitly stipulated therein that the said
pledge will also stand as security for any future advancements (or
renewals thereof) that Calapatia (the pledgor) may procure from
petitioner:

xxx xxx xxx

This pledge is given as security for the prompt payment

when due of all loans, overdrafts, promissory notes,
drafts, bills or exchange, discounts, and all other
obligations of every kind which have heretofore been
contracted, or which may hereafter be contracted, by
the PLEDGOR(S) and/or DEBTOR(S) or any one of
them, in favor of the PLEDGEE, including discounts of
Chinese drafts, bills of exchange, promissory notes,
etc., without any further endorsement by the
PLEDGOR(S) and/or Debtor(s) up to the sum of
TWENTY THOUSAND (P20,000.00) PESOS, together
with the accrued interest thereon, as hereinafter
provided, plus the costs, losses, damages and
expenses (including attorney's fees) which PLEDGEE
may incur in connection with the collection
thereof. 35 (Emphasis ours.)

The validity of the pledge agreement between petitioner and

Calapatia cannot thus be held suspect by VGCCI. As candidly
explained by petitioner, the promissory note of 3 August 1983 in
the amount of P20,000.00 was but a renewal of the first
promissory note covered by the same pledge agreement.
VGCCI likewise insists that due to Calapatia's failure to settle his
delinquent accounts, it had the right to sell the share in question
in accordance with the express provision found in its by-laws.

Private respondent's insistence comes to naught. It is significant

to note that VGCCI began sending notices of delinquency to
Calapatia after it was informed by petitioner (through its letter
dated 14 May 1985) of the foreclosure proceedings initiated
against Calapatia's pledged share, although Calapatia has been
delinquent in paying his monthly dues to the club since 1975.
Stranger still, petitioner, whom VGCCI had officially recognized as
the pledgee of Calapatia's share, was neither informed nor
furnished copies of these letters of overdue accounts until VGCCI
itself sold the pledged share at another public auction. By doing
so, VGCCI completely disregarded petitioner's rights as pledgee.
It even failed to give petitioner notice of said auction sale. Such
actuations of VGCCI thus belie its claim of good faith.

In defending its actions, VGCCI likewise maintains that petitioner

is bound by its by-laws. It argues in this wise:

The general rule really is that third persons are not

bound by the by-laws of a corporation since they are
not privy thereto (Fleischer v. Botica Nolasco, 47 Phil.
584). The exception to this is when third persons have
actual or constructive knowledge of the same. In the
case at bar, petitioner had actual knowledge of the by-
laws of private respondent when petitioner foreclosed
the pledge made by Calapatia and when petitioner
purchased the share foreclosed on September 17,
1985. This is proven by the fact that prior thereto, i.e.,
on May 14, 1985 petitioner even quoted a portion of
private respondent's by-laws which is material to the
issue herein in a letter it wrote to private respondent.
Because of this actual knowledge of such by-laws then
 the same bound the petitioner as of the time when
petitioner purchased the share. Since the by-laws was
already binding upon petitioner when the latter
purchased the share of Calapatia on September 17,
1985 then the petitioner purchased the said share
subject to the right of the private respondent to sell the
said share for reasons of delinquency and the right of
private respondent to have a first lien on said shares as
these rights are provided for in the by-laws very very
clearly. 36

VGCCI misunderstood the import of our ruling in Fleischer

v. Botica Nolasco Co.: 37

And moreover, the by-law now in question cannot have

any effect on the appellee. He had no knowledge of
such by-law when the shares were assigned to him. He
obtained them in good faith and for a valuable
consideration. He was not a privy to the contract
created by said by-law between the shareholder
Manuel Gonzales and the Botica Nolasco, Inc. Said by-
law cannot operate to defeat his rights as a purchaser.

An unauthorized by-law forbidding a shareholder to sell

his shares without first offering them to the corporation
for a period of thirty days is not binding upon an
assignee of the stock as a personal contract, although
his assignor knew of the by-law and took part in its
adoption. (10 Cyc., 579; Ireland vs. Globe Milling Co.,
21 R.I., 9.)

When no restriction is placed by public law on the

transfer of corporate stock, a purchaser is not affected
by any contractual restriction of which he had no notice.
(Brinkerhoff-Farris Trust & Savings Co. vs. Home
Lumber Co., 118 Mo., 447.)
 The assignment of shares of stock in a corporation by
one who has assented to an unauthorized by-law has
only the effect of a contract by, and enforceable
against, the assignor; the assignee is not bound by
such by-law by virtue of the assignment alone. (Ireland
vs. Globe Milling Co., 21 R.I., 9.)

A by-law of a corporation which provides that transfers

of stock shall not be valid unless approved by the board
of directors, while it may be enforced as a reasonable
regulation for the protection of the corporation against
worthless stockholders, cannot be made available to
defeat the rights of third persons. (Farmers' and
Merchants' Bank of Lineville vs. Wasson, 48 Iowa,
336.) (Emphasis ours.)

In order to be bound, the third party must have acquired

knowledge of the pertinent by-laws at the time the transaction or
agreement between said third party and the shareholder was
entered into, in this case, at the time the pledge agreement was
executed. VGCCI could have easily informed petitioner of its by-
laws when it sent notice formally recognizing petitioner as
pledgee of one of its shares registered in Calapatia's name.
Petitioner's belated notice of said by-laws at the time of
foreclosure will not suffice. The ruling of the SEC en banc is
particularly instructive:

By-laws signifies the rules and regulations or private

laws enacted by the corporation to regulate, govern and
control its own actions, affairs and concerns and its
stockholders or members and directors and officers
with relation thereto and among themselves in their
relation to it. In other words, by-laws are the relatively
permanent and continuing rules of action adopted by
the corporation for its own government and that of the
individuals composing it and having the direction,
management and control of its affairs, in whole or in
part, in the management and control of its affairs and
activities. (9 Fletcher 4166, 1982 Ed.)

The purpose of a by-law is to regulate the conduct and

define the duties of the members towards the
corporation and among themselves. They are self-
imposed and, although adopted pursuant to statutory
authority, have no status as public law. (Ibid.)

Therefore, it is the generally accepted rule that third

persons are not bound by by-laws, except when they
have knowledge of the provisions either actually or
constructively. In the case of Fleisher v. Botica Nolasco,
47 Phil. 584, the Supreme Court held that the by-law
restricting the transfer of shares cannot have any effect
on the transferee of the shares in question as he "had
no knowledge of such by-law when the shares were
assigned to him. He obtained them in good faith and for
a valuable consideration. He was not a privy to the
contract created by the by-law between the
shareholder . . .and the Botica Nolasco, Inc. Said by-
law cannot operate to defeat his right as a purchaser.
(Emphasis supplied.)

By analogy of the above-cited case, the

Commission en banc is of the opinion that said case is
applicable to the present controversy. Appellant-
petitioner bank as a third party can not be bound by
appellee-respondent's by-laws. It must be recalled that
when appellee-respondent communicated to appellant-
petitioner bank that the pledge agreement was duly
noted in the club's books there was no mention of the
shareholder-pledgor's unpaid accounts. The transcript
of stenographic notes of the June 25, 1991 Hearing
reveals that the pledgor became delinquent only in
1975. Thus, appellant-petitioner was in good faith when
the pledge agreement was contracted.

The Commission en banc also believes that for the

exception to the general accepted rule that third
persons are not bound by by-laws to be applicable and
binding upon the pledgee, knowledge of the provisions
of the VGCI By-laws must be acquired at the time the
pledge agreement was contracted. Knowledge of said
provisions, either actual or constructive, at the time of
foreclosure will not affect pledgee's right over the
pledged share. Art. 2087 of the Civil Code provides that
it is also of the essence of these contracts that when
the principal obligation becomes due, the things in
which the pledge or mortgage consists maybe alienated
for the payment to the creditor.

In a letter dated March 10, 1976 addressed to Valley

Golf Club, Inc., the Commission issued an opinion to
the effect that:

According to the weight of authority, the

pledgee's right is entitled to full protection
without surrender of the certificate, their
cancellation, and the issuance to him of new
ones, and when done, the pledgee will be
fully protected against a subsequent
purchaser who would be charged with
constructive notice that the certificate is
covered by the pledge. (12-A Fletcher 502)

The pledgee is entitled to retain possession

of the stock until the pledgor pays or tenders
to him the amount due on the debt secured.
 In other words, the pledgee has the right to
resort to its collateral for the payment of the
debts. (Ibid, 502)

To cancel the pledged certificate outright and

the issuance of new certificate to a third
person who purchased the same certificate
covered by the pledge, will certainly defeat
the right of the pledgee to resort to its
collateral for the payment of the debt. The
pledgor or his representative or registered
stockholders has no right to require a return
of the pledged stock until the debt for which it
was given as security is paid and satisfied,
regardless of the length of time which have
elapsed since debt was created. (12-A
Fletcher 409)

A bona fide pledgee takes free from any latent or secret

equities or liens in favor either of the corporation or of
third persons, if he has no notice thereof, but not
otherwise. He also takes it free of liens or claims that
may subsequently arise in favor of the corporation if it
has notice of the pledge, although no demand for a
transfer of the stock to the pledgee on the corporate
books has been made. (12-A Fletcher 5634, 1982 ed.,
citing Snyder v. Eagle Fruit Co., 75 F2d739) 38

Similarly, VGCCI's contention that petitioner is duty-bound to

know its by-laws because of Art. 2099 of the Civil Code which
stipulates that the creditor must take care of the thing pledged
with the diligence of a good father of a family, fails to convince.
The case of Cruz & Serrano v. Chua A. H. Lee, 39 is clearly not
applicable:
 In applying this provision to the situation before us it
must be borne in mind that the ordinary pawn ticket is a
document by virtue of which the property in the thing
pledged passes from hand to hand by mere delivery of
the ticket; and the contract of the pledge is, therefore,
absolvable to bearer. It results that one who takes a
pawn ticket in pledge acquires domination over the
pledge; and it is the holder who must renew the pledge,
if it is to be kept alive.

It is quite obvious from the aforequoted case that a

membership share is quite different in character from a pawn
ticket and to reiterate, petitioner was never informed of
Calapatia's unpaid accounts and the restrictive provisions in
VGCCI's by-laws.

Finally, Sec. 63 of the Corporation Code which provides that "no

shares of stock against which the corporation holds any unpaid
claim shall be transferable in the books of the corporation" cannot
be utilized by VGCCI. The term "unpaid claim" refers to "any
unpaid claim arising from unpaid subscription, and not to any
indebtedness which a subscriber or stockholder may owe the
corporation arising from any other transaction." 40 In the case at
bar, the subscription for the share in question has been fully paid
as evidenced by the issuance of Membership Certificate No.
1219. 41 What Calapatia owed the corporation were merely the
monthly dues. Hence, the aforequoted provision does not apply.

WHEREFORE, premises considered, the assailed decision of the

Court of Appeals is REVERSED and the order of the SEC en
banc dated 4 June 1993 is hereby AFFIRMED.

SO ORDERED.
.R. No. 121466 August 15, 1997

PMI COLLEGES, petitioner,

vs.
THE NATIONAL LABOR RELATIONS COMMISSION and
ALEJANDRO GA LVA N, respondents.

ROMERO, J.:

Subject of the instant petition for certiorari under Rule 65 of the

Rules of Court is the resolution 1 of public respondent National
Labor Relations Commission 2 rendered on August 4, 1995,
affirming in toto the December 7, 1994 decision 3 of Labor Arbiter
Pablo C. Espiritu declaring petitioner PMI Colleges liable to pay
private respondent Alejandro Galvan P405,000.00 in unpaid
wages and P40,532.00 as attorney's fees.

A chronicle of the pertinent events on record leading to the filing

of the instant petition is as follows:

On July 7, 1991, petitioner, an educational institution offering

courses on basic seaman's training and other marine-related
courses, hired private respondent as contractual instructor with an
agreement that the latter shall be paid at an hourly rate of P30.00
to P50.00, depending on the description of load subjects and on
the schedule for teaching the same. Pursuant to this engagement,
private respondent then organized classes in marine engineering.

Initially, private respondent and other instructors were

compensated for services rendered during the first three periods
of the abovementioned contract. However, for reasons unknown
to private respondent, he stopped receiving payment for the
succeeding rendition of services. This claim of non-payment was
embodied in a letter dated March 3, 1992, written by petitioner's
Acting Director, Casimiro A. Aguinaldo, addressed to its
President, Atty. Santiago Pastor, calling attention to and
appealing for the early approval and release of the salaries of its
instructors including that of private respondent. It appeared further
in said letter that the salary of private respondent corresponding
to the shipyard and plant visits and the ongoing on-the-job training
of Class 41 on board MV "Sweet Glory" of Sweet Lines, Inc. was
not yet included. This request of the Acting Director apparently
went unheeded. Repeated demands having likewise failed,
private respondent was soon constrained to file a
complaint 4 before the National Capital Region Arbitration Branch
on September 14, 1993 seeking payment for salaries earned from
the following: (1) basic seaman course Classes 41 and 42 for the
period covering October 1991 to September 1992; (2) shipyard
and plant visits and on-the-job training of Classes 41 and 42 for
the period covering October 1991 to September 1992 on board
M/V "Sweet Glory" vessel; and (3) as Acting Director of Seaman
Training Course for 3-1/2 months.

In support of the abovementioned claims, private respondent

submitted documentary evidence which were annexed to his
complaint, such as the detailed load and schedule of classes with
number of class hours and rate per hour (Annex "A"); PMI
Colleges Basic Seaman Training Course (Annex "B"); the
aforementioned letter-request for payment of salaries by the
Acting Director of PMI Colleges (Annex "C"); unpaid load of
private respondent (Annex "D"); and vouchers prepared by the
accounting department of petitioner but whose amounts indicated
therein were actually never paid to private respondent (Exhibit
"E").

Private respondent's claims, as expected, were resisted by

petitioner. It alleged that classes in the courses offered which
complainant claimed to have remained unpaid were not held or
conducted in the school premises of PMI Colleges. Only private
respondent, it was argued, knew whether classes were indeed
conducted. In the same vein, petitioner maintained that it
exercised no appropriate and proper supervision of the said
classes which activities allegedly violated certain rules and
regulations of the Department of Education, Culture and Sports
(DECS). Furthermore, the claims, according to petitioner, were all
exaggerated and that, at any rate, private respondent abandoned
his work at the time he should have commenced the same.

In reply, private respondent belied petitioner's allegations

contending, among others, that he conducted lectures within the
premises of petitioner's rented space located at 5th Floor,
Manufacturers Bldg., Sta. Cruz, Manila; that his students duly
enrolled with the Registrar's Office of petitioner; that shipyard and
plant visits were conducted at Fort San Felipe, Cavite Naval
Base; that petitioner was fully aware of said shipyard and plant
visits because it even wrote a letter for that purpose; and that
basic seaman courses 41 and 42 were sanctioned by the DECS
as shown by the records of the Registrar's Office.

Later in the proceedings below, petitioner manifested that Mr.

Tomas G. Cloma, Jr., a member of the petitioner's Board of
Trustees wrote a letter 5 to the Chairman of the Board on May 23,
1994, clarifying the case of private respondent and stating
therein, inter alia, that under petitioner's by-laws only the
Chairman is authorized to sign any contract and that private
respondent, in any event, failed to submit documents on the
alleged shipyard and plant visits in Cavite Naval Base.

Attempts at amicable settlement having failed, the parties were

required to submit their respective position papers. Thereafter, on
June 16, 1994, the Labor Arbiter issued an order declaring the
case submitted for decision on the basis of the position papers
which the parties filed. Petitioner, however, vigorously opposed
this order insisting that there should be a formal trial on the merits
in view of the important factual issues raised. In another order
dated July 22, 1994, the Labor Arbiter impliedly denied
petitioner's opposition, reiterating that the case was already
submitted for decision. Hence, a decision was subsequently
rendered by the Labor Arbiter on December 7, 1994 finding for
the private respondent. On appeal, the NLRC affirmed the
same in toto in its decision of August 4, 1995.

Aggrieved, petitioner now pleads for the Court to resolve the

following issues in its favor, to wit:

I. Whether the money claims of private respondent

representing salaries/wages as contractual instructor for
class instruction, on-the-job training and shipboard and plant
visits have valid legal and factual bases;

II. Whether claims for salaries/wages for services relative to

on-the-job training and shipboard and plant visits by
instructors, assuming the same were really conducted, have
valid bases;

III. Whether the petitioner was denied its right to procedural

due process; and

IV. Whether the NLRC findings in its questioned resolution

have sound legal and factual support.

We see no compelling reason to grant petitioner's plea; the same

must, therefore, be dismissed.

At once, a mere perusal of the issues raised by petitioner already

invites dismissal for demonstrated ignorance and disregard of
settled rules on certiorari. Except perhaps for the third issue, the
rest glaringly call for a re-examination, evaluation and
appreciation of the weight and sufficiency of factual evidence
presented before the Labor Arbiter. This, of course, the Court
cannot do in the exercise of its certiorari jurisdiction without
transgressing the well-defined limits thereof. The corrective power
of the Court in this regard is confined only to jurisdictional issues
and a determination of whether there is such grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of
a tribunal or agency. So unyielding and consistent are the
decisional rules thereon that it is indeed surprising why
petitioner's counsel failed to accord them the observance they
deserve.

Thus, in San Miguel Foods, Inc. Cebu B-Men Feed Plant

v. Hon. Bienvenido Laguesma, 6 we were emphatic in declaring
that:

This Court is definitely not the proper venue to consider this

matter for it is not a trier of facts. . . . Certiorari is a remedy
narrow in its scope and inflexible in character. It is not a
general utility tool in the legal workshop. Factual issues are
not a proper subject for certiorari, as the power of the
Supreme Court to review labor cases is limited to the issue
of jurisdiction and grave abuse of discretion. . . . (Emphasis
supplied).

Of the same tenor was our disquisition in Ilocos Sur Electric

Cooperative, Inc. v. NLRC 7 where we made plain that:

In certiorari proceedings under Rule 65 of the Rules of

Court, judicial review by this Court does not go so far as to
evaluate the sufficiency of evidence upon which the Labor
Arbiter and the NLRC based their determinations, the inquiry
being limited essentially to whether or not said public
respondents had acted without or in excess of its jurisdiction
or with grave abuse of discretion. (Emphasis supplied).

To be sure, this does not mean that the Court would disregard
altogether the evidence presented. We merely declare that the
extent of review of evidence we ordinarily provide in other cases
is different when it is a special civil action of certiorari. The latter
commands us to merely determine whether there is basis
established on record to support the findings of a tribunal and
such findings meet the required quantum of proof, which in this
instance, is substantial evidence. Our deference to the expertise
acquired by quasi-judicial agencies and the limited scope granted
to us in the exercise of certiorari jurisdiction restrain us from going
so far as to probe into the correctness of a tribunal's evaluation of
evidence, unless there is palpable mistake and complete
disregard thereof in which case certiorari would be proper. In plain
terms, in certiorari proceedings, we are concerned with mere
"errors of jurisdiction" and not "errors of judgment." Thus:

The rule is settled that the original and exclusive jurisdiction

of this Court to review a decision of respondent NLRC (or
Executive Labor Arbiter as in this case) in a petition
for certiorari under Rule 65 does not normally include an
inquiry into the correctness of its evaluation of the
evidence. Errors of judgment, as distinguished from errors of
jurisdiction, are not within the province of a special civil
action for certiorari, which is merely confined to issues of
jurisdiction or grave abuse of discretion. It is thus incumbent
upon petitioner to satisfactorily establish that respondent
Commission or executive labor arbiter acted capriciously
and whimsically in total disregard of evidence material to or
even decisive of the controversy, in order that the
extraordinary writ of certiorari will lie. By grave abuse of
discretion is meant such capricious and whimsical exercise
of judgment as is equivalent to lack of jurisdiction, and it
must be shown that the discretion was exercised arbitrarily
or despotically. For certiorari to lie there must be capricious,
arbitrary and whimsical exercise of power, the very antithesis
of the judicial prerogative in accordance with centuries of
both civil law and common law traditions. 8
The Court entertains no doubt that the foregoing doctrines apply
with equal force in the case at bar.

In any event, granting that we may have to delve into the facts
and evidence of the parties, we still find no puissant justification
for us to adjudge both the Labor Arbiter's and NLRC's
appreciation of such evidence as indicative of any grave abuse of
discretion.

First. Petitioner places so much emphasis on its argument that

private respondent did not produce a copy of the contract
pursuant to which he rendered services. This argument is, of
course, puerile. The absence of such copy does not in any
manner negate the existence of a contract of employment since
"(C)ontracts shall be obligatory, in whatever form they have
been entered into, provided all the essential requisites for their
validity are present." 9 The only exception to this rule is "when the
law requires that a contract be in some form in order that it may
be valid or enforceable, or that a contract be proved in a certain
way." However, there is no requirement under the law that the
contract of employment of the kind entered into by petitioner with
private respondent should be in any particular form. While it may
have been desirable for private respondent to have produced a
copy of his contract if one really exists, but the absence thereof, in
any case, does not militate against his claims inasmuch as:

No particular form of evidence is required to prove the

existence of an employer-employee relationship. Any
competent and relevant evidence to prove the relationship
may be admitted. For, if only documentary evidence would
be required to show that relationship, no scheming employer
would ever be brought before the bar of justice, as no
employer would wish to come out with any trace of the
illegality he has authored considering that it should take
much weightier proof to invalidate a written instrument. . . . 10
At any rate, the vouchers prepared by petitioner's own accounting
department and the letter-request of its Acting Director asking for
payment of private respondent's services suffice to support a
reasonable conclusion that private respondent was employed with
petitioner. How else could one explain the fact that private
respondent was supposed to be paid the amounts mentioned in
those documents if he were not employed? Petitioner's evidence
is wanting in this respect while private respondent affirmatively
stated that the same arose out of his employment with petitioner.
As between the two, the latter is weightier inasmuch as we accord
affirmative testimony greater value than a negative one. For the
foregoing reasons, we find it difficult to agree with petitioner's
assertion that the absence of a copy of the alleged contract
should nullify private respondent's claims.

Neither can we concede that such contract would be invalid just

because the signatory thereon was not the Chairman of the Board
which allegedly violated petitioner's by-laws. Since by-laws
operate merely as internal rules among the stockholders, they
cannot affect or prejudice third persons who deal with the
corporation, unless they have knowledge of the same." 11 No
proof appears on record that private respondent ever knew
anything about the provisions of said by-laws. In fact, petitioner
itself merely asserts the same without even bothering to attach a
copy or excerpt thereof to show that there is such a provision.
How can it now expect the Labor Arbiter and the NLRC to believe
it? That this allegation has never been denied by private
respondent does not necessarily signify admission of its existence
because technicalities of law and procedure and the rules
obtaining in the courts of law do not strictly apply to proceedings
of this nature.

Second. Petitioner bewails the fact that both the Labor Arbiter and
the NLRC accorded due weight to the documents prepared by
private respondent since they are said to be self-serving. "Self-
serving evidence" is not to be literally taken as evidence that
serves one's selfish interest. 12 The fact alone that most of the
documents submitted in evidence by private respondent were
prepared by him does not make them self-serving since they have
been offered in the proceedings before the Labor Arbiter and that
ample opportunity was given to petitioner to rebut their veracity
and authenticity. Petitioner, however, opted to merely deny them
which denial, ironically, is actually what is considered self-serving
evidence 13 and, therefore, deserves scant consideration. In any
event, any denial made by petitioner cannot stand against the
affirmative and fairly detailed manner by which private respondent
supported his claims, such as the places where he conducted his
classes, on-the-job training and shipyard and plant visits; the rate
he applied and the duration of said rendition of services; the fact
that he was indeed engaged as a contractual instructor by
petitioner; and that part of his services was not yet remunerated.
These evidence, to reiterate, have never been effectively refuted
by petitioner.

Third. As regards the amounts demanded by private respondent,

we can only rely upon the evidence presented which, in this case,
consists of the computation of private respondent, as well as the
findings of both the Labor Arbiter and the NLRC. Petitioner, it
must be stressed, presented no satisfactory proof to the contrary.
Absent such proof, we are constrained to rely upon private
respondent's otherwise straightforward explanation of his claims.

Fourth. The absence of a formal hearing or trial before the Labor

Arbiter is no cause for petitioner to impute grave abuse of
discretion. Whether to conduct one or not depends on the sole
discretion of the Labor Arbiter, taking into account the position
papers and supporting documents submitted by the parties on
every issue presented. If the Labor Arbiter, in his judgment, is
confident that he can rely on the documents before him, he
cannot be faulted for not conducting a formal trial anymore,
unless it would appear that, in view of the particular
circumstances of a case, the documents, without more, are really
insufficient.

As applied to the instant case, we can understand why the Labor

Arbiter has opted not to proceed to trial, considering that private
respondent, through annexes to his position paper, has
adequately established that, first of all, he was an employee of
petitioner; second, the nature and character of his services, and
finally, the amounts due him in consideration of his services.
Petitioner, it should be reiterated, failed to controvert them.
Actually, it offered only four documents later in the course of the
proceedings. It has only itself to blame if it did not attach its
supporting evidence with its position paper. It cannot now insist
that there be a trial to give it an opportunity to ventilate what it
should have done earlier. Section 3, Rule V of the New Rules of
Procedure of the NLRC is very clear on the matter:

Sec. 3. . . .

These verified position papers . . . shall be accompanied

by all supporting documents including the affidavits of their
respective witnesses which shall take the place of the latter's
direct testimony. The parties shall thereafter not be allowed
to allege facts, or present evidence to prove facts, not
referred to and any cause or causes of action not included in
the complaint or position papers, affidavits and other
documents. . . . (Emphasis supplied).

Thus, given the mandate of said rule, petitioner should have

foreseen that the Labor Arbiter, in view of the non-litigious nature
of the proceedings before it, might not proceed at all to trial.
Petitioner cannot now be heard to complain of lack of due
process. The following is apropos:
 The petitioners should not have assumed that after they
submitted their position papers, the Labor Arbiter would call
for a formal trial or hearing. The holding of a trial is
discretionary on the Labor Arbiter, it is not a matter of right of
the parties, especially in this case, where the private
respondents had already presented their documentary
evidence.

xxx xxx xxx

The petitioners did ask in their position paper for a hearing to

thresh out some factual matters pertinent to their case.
However, they had no right or reason to assume that their
request would be granted. The petitioners should have
attached to their position paper all the documents that would
prove their claim in case it was decided that no hearing
should be conducted or was necessary. In fact, the rules
require that position papers shall be accompanied by all
supporting documents, including affidavits of witnesses in
lieu of their direct testimony. 14

It must be noted that adequate opportunity was given to petitioner

in the presentation of its evidence, such as when the Labor
Arbiter granted petitioner's Manifestation and Motion 15 dated July
22, 1994 allowing it to submit four more documents. This
opportunity notwithstanding, petitioner still failed to fully proffer all
its evidence which might help the Labor Arbiter in resolving the
issues. What it desired instead, as stated in its petition, 16 was to
"require presentation of witnesses buttressed by relevant
documents in support thereof." But this is precisely the
opportunity given to petitioner when the Labor Arbiter granted its
Motion and Manifestation. It should have presented the
documents it was proposing to submit. The affidavits of its
witnesses would have sufficed in lieu of their direct testimony 17 to
clarify what it perceives to be complex factual issues. We rule that
the Labor Arbiter and the NLRC were not remiss in their duty to
afford petitioner due process. The essence of due process is
merely that a party be afforded a reasonable opportunity to be
heard and to submit any evidence he may have in support of his
defense. 18

WHEREFORE, in view of the foregoing, the instant petition is

hereby DISMISSED for lack of merit while the resolution of the
National Labor Relations Commission dated August 4, 1995 is
hereby AFFIRMED.

SO ORDERED.

 National Power Corporation v. Vera, G.R. No. 83558, 27

 G.R. No. L-21804 September 25, 1967
 TERESA ELECTRIC AND POWER CO., INC., petitioner,
vs.
PUBLIC SERVICE COMMISSION and FILIPINAS CEMENT
CORPORATION, respondents.
 Lino B. Azicate & Associates for petitioner.
G. A. Borja for respondents.


 DIZON, J.:
 This is a petition to review and set aside the decision of the
Public Service Commission dated March 15, 1963 in Case
No. 62-3521 granting to the Filipinas Cement Corporation —
hereinafter referred to as Filipinas — a certificate of public
convenience and necessity to establish, maintain and
operate an electric plant in its factory site at Teresa, Rizal,
for a period of fifty years from June 26, 1958. By resolution
of September 11, 1963, We denied petitioner's petition for
the issuance of a writ of preliminary mandatory and
prohibitory injunction restraining the Commission from
enforcing its decision during the pendency of the appeal.
 The Teresa Electric Light and Power Co., Inc. — hereinafter
referred to as petitioner — is a domestic corporation
operating an electric plant in Teresa, Rizal, under a
subsisting certificate of public convenience and necessity
issued on June 2, 1960 (PSC Case No. 129940), while the
respondent Filipinas is likewise a domestic corporation
engaged in the manufacture and sale of cement.
 On May 24, 1962 Filipinas filed an application with the Public
Service Commission for a certificate of public convenience to
install, maintain and operate an electric plant in sitio
Kaysapon of barrio Pamanaan, municipality of Teresa, Rizal,
for the purpose of supplying electric power and light to its
cement factory and its employees living within its compound.
 Petitioner filed its written opposition alleging: that it is the
duly authorized operator of an electric light, heat and power
service in Teresa, Rizal; that Filipinas is not authorized by its
articles of incorporation to operate an electric plant; that the
Municipal Council of Teresa had not authorized it either to
operate the proposed service; that it is willing to supply
Filipinas' need for electricity; and that Filipinas' principal
business does not come within the jurisdiction of the
respondent Commission.
 Answering the opposition, Filipinas averred that, under
paragraph 7 of its articles of incorporation, it is authorized to
operate the proposed electric plant; that there is no need for
securing the approval of the Municipal Council before
operating its electric plant as this is not a necessary requisite
for the issuance of a certificate of public convenience
inasmuch as it already possesses the 3 basic requirements
of law namely: Filipino citizenship, financial capacity and the
need for the service in the interest and convenience of the
consuming public.
 During the hearings before the Commission Filipinas
presented its evidence and petitioner's counsel cross-
examined the witnesses. Upon the resumption of the hearing
 on December 17, 1962, petitioner's counsel filed an urgent
motion for the postponement of the presentation of its
evidence that day alleging that he was to attend a
preliminary hearing at Caloocan City. As the date agreed
upon by the parties was set only after the attorneys for the
parties had consulted their respective calendars, the
Commission, in open court, denied said motion and
considered the application as submitted for resolution.
 Upon consideration of the evidence, oral and documentary,
adduced by Filipinas to the effect that the proposed electric
service will be limited to the exclusive needs of its cement
factory and to give light facilities to its employees living in the
compound only, without adversely affecting the interests and
services of petitioner; that like the latter, Filipinas will not
generate its own electric current but buy it from the
MERALCO; and that no municipal streets will be traversed
by its electric wires and posts except small portions of
private properties, the Commission, pursuant to section 15 of
Commonwealth Act 146, as amended, issued a certificate of
public convenience to it on March 15, 1963, subject to the
conditions set forth therein.1awphîl.nèt
 Petitioner filed a motion to set aside the above decision and
re-open the case but the same was denied en banc on
August 12, 1963. Hence the instant petition for review filed
on September 9 of the same year.
 Considering the assignment of errors made in petitioner's
brief, the following are the questions to be resolved in this
appeal: firstly, whether or not Filipinas should have secured
either a municipal or legislative franchise before it could be
entitled to a certificate of public convenience and necessity
to operate and maintain an electric plant; secondly, whether
under its articles of incorporation Filipinas is authorized to
operate and maintain an electric plant; and lastly, whether
Filipinas could be granted a certificate of public convenience
and necessity to operate and maintain an electric plant
 notwithstanding the existence of an electric plant operator in
the same municipality.
 In relation to the first question petitioner contends that under
the provisions of Act No. 667 of the Philippine Commission,
a municipal or legislative franchise is a condition precedent
to the granting to Filipinas of a certificate of public
convenience and necessity to operate and maintain an
electric plant.
 Section 1 of the act mentioned above requires the filing of a
formal application with the Council of the municipality in
which or through which the petitioner desires to construct or
maintain its line, stating, among other things, the rate per
month to be charged for electric light by lamp of specified
standard candle-power, and by amount of electricity
consumed where a meter is used, and the rate per
centum of the gross receipts which petitioner is willing to pay
into the provincial treasury for the franchise. Paragraphs 2
and 3, section 2 of the same act also provide that not less
than one-half of one per centum of the gross earnings shall
be paid into the provincial treasury, and that the rates to be
charged shall always be subject to regulations by act of the
Philippine Commission or the legislative body of the Islands.
 The above requirements show that the act was intended to
apply exclusively to any person or corporation who desires a
franchise to construct and maintain an electric line or power
plant and line for business purposes, that is, to render
service to the general public at such rate of compensation as
may be approved and regulated by the government. Clearly,
therefore, it should not be made to apply to Filipinas who
applied for a certificate of public convenience and service to
operate and maintain an electric plant exclusively for its own
use in connection with the operation of its cement factory
and for the use of its employees living within the compound
of the factory — the latter to receive service free of charge.
 It is, consequently, our view that all that Filipinas needs for
the purpose above mentioned is a certificate of public
convenience and necessity such as the one granted to it by
the respondent Public Service Commission.
 In relation to the second question, it appears that the Articles
of Incorporation of Filipinas (paragraph 7) provide for
authority to secure from any governmental, state,
municipality, or provincial, city or other authority, and to
utilize and dispose of in any lawful manner, rights, powers,
privileges, franchises and concessions — obviously
necessary or at least related to the operation of its cement
factory. Moreover, said Articles of Incorporation also provide
that the corporation may generally perform any and all acts
connected with the business of manufacturing portland
cement or arising therefrom or incidental thereto.
 It can not be denied that the operation of an electric light,
heat and power plant is necessarily connected with the
business of manufacturing cement. If in the modern world
where we live today electricity is virtually a necessity for our
daily needs, it is more so in the case of industries like the
manufacture of cement.
 Upon the last question, petitioner claims that Filipinas is not
entitled to a certificate of public convenience to maintain and
operate electric service for its cement plant and its
employees because petitioner is operating an electric plant
in the same municipality where Filipinas cement plant is
located.
 While it is true that operators of public convenience and
service deserve some protection from unnecessary or
unlawful competition, yet the rule is that nobody has any
exclusive right to secure a franchise or a certificate of public
convenience. Above any or all considerations, the grant of
franchises and certificates of public convenience and service
should be guided by public service and interest; the latter are
the primordial considerations to be taken into account.
 Moreover, it has been established in this case that petitioner
was in no condition to supply the power needs of Filipinas,
because its load capacity was only 200 kilowatts while
Filipinas was in need of 6,000 Kilowatts power to operate its
cement factory.
 IN VIEW OF THE FOREGOING, the decision appealed from
is affirmed, with costs.
 Concepcion, C.J., Reyes, J.B.L., Makalintal, Bengzon, J.P.,
Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ.,
concur.
 G.R. No. 162924 February 4, 2010
 MID-PASIG LAND DEVELOPMENT
CORPORATION, Petitioner,
vs.
MARIO TABLANTE, doing business under the name and
style ECRM ENTERPRISES; ROCKLAND
CONSTRUCTION COMPANY; LAURIE LITAM; and MC
HOME DEPOT, INC., Respondents.
 D E C I S I O N
 NACHURA, J.:
 Assailed in the instant petition are the two (2) Resolutions1 of
the Court of Appeals (CA) dated November 20, 2003 and
March 22, 2004, dismissing the petition for certiorari before it
on technical grounds and denying the motion for
reconsideration thereof, respectively.
 The background facts are as follows:
 Petitioner is the registered owner of a piece of land situated
in Pasig City, bounded by Meralco Avenue, Ortigas Avenue,
Doña Julia Vargas Avenue, and Valle Verde Subdivision. On
December 6, 1999, petitioner, represented by its Chairman
and President, Ronaldo Salonga, and ECRM Enterprises,
represented by its proprietor, Mario P. Tablante, executed an
agreement whereby the former would lease to the latter an
area, approximately one (1) hectare, of the aforesaid land,
for a period of three (3) months, to be used as the staging
 area for the Home and Garden Exhibition Fair. On March 6,
2000, the date of the expiration of the Lease Agreement,
Tablante assigned all his rights and interests under the said
agreement to respondents Laurie M. Litam and/or Rockland
Construction Company, Inc. (Rockland) under a Deed of
Assignment of the same date. Petitioner eventually learned
that respondent Tablante had executed a Contract of Lease
with respondent MC Home Depot, Inc. on November 26,
1999 over the same parcel of land. Thereafter, respondent
MC Home Depot, Inc. constructed improvements on the land
and subdivided the area into fifty-nine (59) commercial stalls,
which it leased to various entities. Upon the expiration of the
lease on March 6, 2000, petitioner demanded that
respondents vacate the land. A final demand was made in a
letter dated December 20, 2000.2
 In order to forestall ejectment from the premises, respondent
Rockland filed a case for Specific Performance with the
Regional Trial Court (RTC), Branch 266, Pasig City, on
January 11, 2001, compelling petitioner to execute a new
lease contract for another three (3) years, commencing in
July 2000. This was docketed as Civil Case No. 68213.
Petitioner moved to dismiss the complaint on the ground that
it was anticipatory in nature.
 Consequently, on August 22, 2001, petitioner filed Civil Case
No. 8788 for unlawful detainer against herein respondents,
raffled to the Municipal Trial Court (MTC), Pasig City, Branch
70. Simultaneously, petitioner filed a supplemental motion to
dismiss Civil Case No. 68213, on the ground of litis
pendentia. Petitioner’s motion to dismiss was denied. The
denial was questioned and eventually elevated to the
Supreme Court.3
 Meantime, on April 29, 2002, the MTC rendered judgment in
the unlawful detainer (ejectment) case. In the main, the trial
court ruled that the issue did not involve material or physical
possession, but rather, whether or not ECRM had the right to
 exercise an option to renew its lease contract. The MTC
stated that, considering that this issue was incapable of
pecuniary estimation, jurisdiction over the case was vested
in the RTC. The trial court, therefore, disposed, as follows:
 WHEREFORE, judgment is hereby rendered DISMISSING
the complaint for lack of merit. In the meantime, the plaintiff
is hereby ordered to pay the defendants attorney’s fees and
expenses of litigation in the amount of TWENTY
THOUSAND PESOS (₱20,000.00).4
 On appeal, the RTC, Pasig City, Branch 160, affirmed in
toto. In its decision dated July 10, 2003, the RTC ruled that:
 Relative to the issue raised by the appellant that the lower
court erred in finding it had no jurisdiction over the subject
matter of this case as the question of whether or not ECRM
under the provisions of the lease agreement (pars. 3 and 13)
has the right to exercise an option to renew its lease contract
is one incapable of pecuniary estimation and therefore
jurisdiction is vested in the Regional Trial Court. Republic
Act No. 7691 grants Metropolitan Trial Courts the exclusive
jurisdiction over cases of forcible entry and unlawful
detainer. Since it has been sufficiently established under the
facts obtaining that the contract of lease has been renewed
before the expiration of the lease period, and the appellant
has consented to the renewal and assignment of the lease, it
necessarily follows that the issue on whether the lower court
erred in finding that it did not have jurisdiction over the
subject matter raised by the appellant, deserves scant
consideration and this court need not delve into it anymore.5
 A petition for certiorari was consequently filed with the CA.
 In the assailed resolution dated November 20, 2003, the CA
resolved to dismiss the petition on the following grounds:
 1) The verification and certification against non-forum
shopping was signed by a certain Antonio A. Merelos as
General Manager of the petitioner-corporation without
attaching therewith a Corporate Secretary’s certificate or
 board resolution that he is authorized to sign for and on
behalf of the petitioner; and
 2) Lack of pertinent and necessary documents which are
material portions of the record as required by Section 2, Rule
42 of the Rules of Civil Procedure.6
 The motion for reconsideration was denied;7 hence, the
instant petition assigning the following errors:
 THE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN HOLDING THAT THE
VERIFICATION AND CERTIFICATION AGAINST
FORUM-SHOPPING IN THE PETITION FAILED TO
ATTACH THE BOARD RESOLUTION SHOWING THE
AUTHORITY OF THE AFFIANT.
 THE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN HOLDING THAT THE
PETITION LACKED THE PERTINENT AND
NECESSARY DOCUMENTS REQUIRED BY THE
RULES.
 THE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR IN DISMISSING THE
PETITION THUS EFFECTIVELY UPHOLDING THE
DECISION OF THE REGIONAL TRIAL COURT, TO
WIT: (a) THAT THE LEASE AGREEMENT WAS
UNILATERALLY RENEWED AND THAT PETITIONER
IS ESTOPPED FROM DENYING SUCH UNILATERAL
RENEWAL; (b) THAT RESPONDENTS
TABLANTE/ECRM, ROCKLAND AND MC HOME
DEPOT COULD VALIDLY OCCUPY THE PROPERTY
IN THE ABSENCE OF ANY VALID LEASE
AGREEMENT CONSENTED TO BY PETITIONER; (c)
PETITIONER [IS] LIABLE FOR ATTORNEY’S FEES
AND COSTS OF SUIT.8
 The petition is granted.
 In Cagayan Valley Drug Corporation v. Commissioner of
Internal Revenue,9 the Court had occasion to explain that:
 It must be borne in mind that Sec. 23, in relation to Sec. 25
of the Corporation Code, clearly enunciates that all corporate
powers are exercised, all business conducted, and all
properties controlled by the board of directors. A corporation
has a separate and distinct personality from its directors and
officers and can only exercise its corporate powers through
the board of directors. Thus, it is clear that an individual
corporate officer cannot solely exercise any corporate power
pertaining to the corporation without authority from the board
of directors. This has been our constant holding in cases
instituted by a corporation.
 In a slew of cases, however, we have recognized the
authority of some corporate officers to sign the verification
and certification against forum shopping. In Mactan-Cebu
International Airport Authority v. CA, we recognized the
authority of a general manager or acting general manager to
sign the verification and certificate against forum shopping; x
x x.
 In sum, we have held that the following officials or
employees of the company can sign the verification and
certification without need of a board resolution: (1) the
Chairperson of the Board of Directors, (2) the President of a
corporation, (3) the General Manager or Acting General
Manager, (4) Personnel Officer, and (5) an Employment
Specialist in a labor case.1avvphi1
 While the above cases do not provide a complete listing of
authorized signatories to the verification and certification
required by the rules, the determination of the sufficiency of
the authority was done on a case to case basis. The
rationale applied in the foregoing cases is to justify the
authority of corporate officers or representatives of the
corporation to sign the verification or certificate against
forum shopping, being "in a position to verify the truthfulness
and correctness of the allegations in the petition."10
 From the foregoing, it is thus clear that the failure to attach
the Secretary’s Certificate, attesting to General Manager
Antonio Merelos’s authority to sign the Verification and
Certification of Non-Forum Shopping, should not be
considered fatal to the filing of the petition. Nonetheless, the
requisite board resolution was subsequently submitted to the
CA, together with the pertinent documents.11 Considering
that petitioner substantially complied with the rules, the
dismissal of the petition was, therefore, unwarranted. Time
and again, we have emphasized that dismissal of an appeal
on a purely technical ground is frowned upon especially if it
will result in unfairness. The rules of procedure ought not to
be applied in a very rigid, technical sense for they have been
adopted to help secure, not override, substantial justice. For
this reason, courts must proceed with caution so as not to
deprive a party of statutory appeal; rather, they must ensure
that all litigants are granted the amplest opportunity for the
proper and just ventilation of their causes, free from the
constraint of technicalities.12
 After a finding that the CA erred in dismissing the petition
before it, a remand of the case is in order. However, a
perusal of the records reveals that this is no longer
necessary in light of relevant developments obtaining in the
case at bar.
 Petitioner, in its Memorandum dated October 28, 2005,
alleged that respondents’ possessory claims had lapsed
and, therefore, had become moot and academic.
Respondent Rockland prayed that a three-year lease period
be granted to it in order that it would be able to plan its
activities more efficiently. Since the claimed "lease contract"
had already expired as of July or August 2003, there
appears no reason why respondents should continue to
have any claim to further possession of the property.13
 Respondent Rockland also stated in its Memorandum dated
March 16, 2006 that it was no longer in possession of the
subject property considering that:
 50. In a Resolution dated 17 September 2004, in the case of
"Rockland Construction Company, Inc. vs. Mid-Pasig Land
Development Corporation, et al.," docketed as SCA No.
2673, and the Omnibus Order dated 12 November 2004,
affirming the aforesaid Resolution, Branch 67 Pasig City
Regional Trial Court Presiding Judge Mariano M. Singzon
awarded possession (albeit erroneously) of subject property
to Pasig Printing Corporation, an intervenor in the SCA case.
 51. At present, petitioner does not have a cause of action
against herein respondent Rockland. Respondent is not
unlawfully withholding possession of the property in question
as in fact respondent is not in possession of the subject
property. The issue of possession in this ejectment case has
therefore been rendered moot and academic.14
 This allegation was confirmed by respondent MC Home
Depot, Inc. in its Comment/Memorandum dated May 22,
2007 submitted to the Court. It stated therein that "the
passage of time has rendered the issue of possession moot
and academic with respect to respondent Rockland, as the
three-year period has long been expired in
2003."15Furthermore, respondent MC Home Depot, Inc.
asserts that it is in rightful possession of the land on the
strength of a Memorandum of Agreement dated November
22, 2004 between the latter and Pasig Printing Corporation.
By petitioner’s admission that while it remains the registered
owner of the land, possession of the same had been
adjudicated in favor of Pasig Printing Corporation, another
entity without any contractual relationship with petitioner, on
the strength of an Order from the RTC of Pasig City.
Considering that Pasig Printing Corporation has the jus
possessionis over the subject property, it granted the MC
Home Depot, Inc. actual occupation and possession of the
 subject property for a period of four (4) years, renewable for
another four (4) years upon mutual agreement of the
parties.16
 WHEREFORE, the petition is GRANTED. The assailed
Resolutions of the Court of Appeals are REVERSED and
SET ASIDE. However, in view of the developments which
have rendered the issue of the right of possession over the
subject property moot and academic, the main case is
hereby considered CLOSED AND TERMINATED.
 No pronouncement as to costs.
 SO ORDERED.
 ANTONIO EDUARDO B. NACHURA
Associate Justice

 THIRD DIVISION
 [ G.R. Nos. 201044 & 222691, May 05, 2021 ]
 JORGENETICS SWINE IMPROVEMENT CORPORATION,
PETITIONER, VS. THICK & THIN AGRI-PRODUCTS, INC.,
RESPONDENT.
 D E C I S I O N
 HERNANDO, J.:
 Before this Court are two (2) consolidated Petitions for
Review on Certiorari under Rule 45 of the Rules of Court.
 The Petition in G.R. No. 201044 assails the March 29, 2011
Decision1 and February 29, 2012 Resolution2 of the Court of
Appeals (CA) in CA-G.R. SP. No. 114682 which, set aside
the February 4, 2010 Order of the trial court and reinstated
the complaint for replevin filed by Thick & Thin Agri-
Products, Inc. (TTAI) in Civil Case No. Q-08-63757.
 On the other hand, the Petition in G.R. No. 222691 assails
the CA's October 29, 2014 Decision3 and January 8, 2016
Resolution4 in CA-G.R. SP No. 130075, which found the trial
court in Civil Case No. Q-08-63757 to have acted with grave
abuse of discretion for refusing to reinstate the complaint for
replevin and ordering the implementation of the February 4,
 2010 Order of the trial court despite the issuance of the CA's
March 29, 2011 Decision in CA G.R. SP. No. 114682.
 The Factual Antecedents:
 On November 10, 2008, TTAI filed a complaint for replevin
with damages5 against Jorgenetics Swine Improvement
Corporation (Jorgenetics), seeking possession of 4,765
heads of hogs that were the subject of a chattel mortgage
between the parties. In its complaint, TTAI alleged that the
parties entered into an agreement where TTAI would supply,
on credit, feeds and other supplies necessary for
Jorgenetics' hog raising business. As security for payment of
their obligation amounting to Php20,000,000.00, Jorgenetics
executed a chattel mortgage6 over its hog livestock
inventories in favor of TTAI. While TTAI delivered feeds and
supplies pursuant to the agreement, Jorgenetics failed to
pay for the same despite demand.7
 Thus, TTAI alleged in its complaint that as mortgagee it was
entitled to take immediate possession of the livestock
subject of the mortgage which was wrongfully withheld by
Jorgenetics to avoid compliance of its obligation.8 It prayed
for the immediate issuance of a writ of replevin commanding
the immediate seizure of the hogs, for judgment to be
rendered adjudicating rightful possession of the hogs subject
of the mortgage to TTAI, or in the event possession could
not be secured, the payment of Php20,000,000.00 with
interest, and for damages, attorney 's fees, and costs.9
 The complaint was raffled to the Regional Trial Court (RTC)
of Quezon City, Branch 92. The next day, the trial court
issued a writ of replevin and required Jorgenetics to post a
bond in the amount of Php40,000,000.00.10
 While the writ of replevin was served on May 29, 2009, the
return thereon indicated that the writ, together with a copy of
TTAI's affidavit and bond, as well as the summons and
TTAI's complaint, were served on petitioner's farm through
its purchasing officer Rowena Almirol (Almirol), who refused
 acknowledgment of the documents. The return likewise
stated that the 4,765 heads of hog livestock subject of the
writ were seized and delivered to respondent.11
 Jorgenetics moved to dismiss the complaint for replevin on
the ground of invalid service of summons since service was
made on its farm in Rizal instead of its place of business in
Quezon City, and in view of the lack of justification from the
sheriff for availing of substituted service to the person of
Almirol. In its motion to dismiss, Jorgenetics likewise prayed
for the quashal of the writ of replevin and for the replevin
bond to be made wholly answerable for the damages it
allegedly suffered.12
 The case was re-raffled to Branch 93 and subsequently to
Branch 75.13 Thereafter, the trial court issued the February
4, 2010 Order,14 directing the dismissal of the complaint for
replevin for failure to acquire jurisdiction over the person of
Jorgenetics by reason of the invalid service of summons.
The fallo of the February 4, 2010 Order reads:
 WHEREFORE, premises considered, this case is
ordered dismissed.
 Accordingly, the properties seized by virtue of the writ
of replevin are ordered returned to the defendant-
movant.
 SO ORDERED.15
 TTAI moved for reconsideration. However, this was denied
by the trial court.16
 Thereafter, Jorgenetics filed on June 18, 2010 a Motion for
the Issuance of a Writ of Execution with Application for
Damages against the replevin bond, alleging that it incurred
damages on account of the alleged wrongful seizure of the
hogs. Among others, Jorgenetics vowed to present proof of
the damages it incurred in the hearing on the application for
Damages.17 The trial court set the hearing on the Motion for
the Issuance of a Writ of Execution with Application for
Damages on the same day, and ordered TTAI to file its
 comment or opposition thereto and, upon receipt thereof, for
Jorgenetics to file a reply within the same period.18
 Aggrieved, TTAI filed a Petition for Certiorari19 under Rule
65 against Jorgenetics and Hon. Alexander S. Balut (Judge
Balut) in his capacity as presiding judge of Branch 75. In the
petition docketed as CA G.R. SP. No. 114682, TTAI faulted
the trial court for taking cognizance of the Motion for the
Issuance of a Writ of Execution with Application for
Damages and continuing to conduct trial on the merits in the
guise of execution proceedings despite the dismissal of the
case. TTAI thus prayed for the annulment of the February 4,
2010 and May 6, 2010 Orders of the trial court, which
dismissed the complaint for replevin, in view of Jorgenetics'
voluntary submission to the jurisdiction of the trial court.
 While CA G.R. SP. No. 114682 was pending before the
appellate court, proceedings before the trial court continued.
In the meantime, TTAI filed a petition for extrajudicial
foreclosure of the chattel mortgage covering the hogs. After
winning the bid at public auction, a certificate of sale of the
hogs subject of the chattel mortgage was issued in TTAI's
favor.20
 In an October 6, 2010 Order21 resolving the application for
damages against the replevin bond and motion for the
issuance of a writ of execution, the trial court ordered
Jorgenetics to present its evidence in support of its claim for
damages against the replevin bond. The trial court opined
that the February 4, 2010 order dismissing the complaint for
replevin became final and executory in view of TTAI's failure
to appeal, and that the application for damages was corollary
to the motion to issue writ of execution under Section 6, Rule
39 of the Rules of Court.
 Further, the trial court stated that Jorgenetics was entitled to
damages against the replevin bond , since the patties must
necessarily revert to their status prior to litigation. However,
given the physical impossibility for the return of the hogs,
 logical and equitable consideration dictate the application
against the bond for damages.
 TTAI moved for reconsideration of the October 6, 2010
Order and the voluntary inhibition of Judge Balut. However,
this was denied.22 Thereafter, the trial court granted
Jorgenetics' motion for issuance of a writ of execution on the
ground that the February 4, 2010 order of dismissal had long
become final and executory.23 The writ of execution was
issued on January 18, 2011.24
 TTAI moved to quash the writ of execution. It alleged that it
was already the rightful owner of the property subject of the
writ of replevin as the winning bidder in the foreclosure sale
for the hogs subject of the chattel mortgage, as evidenced
by the Certificate of Sale.25 In turn, Jorgenetics filed an
urgent ex-parte Motion for deposit of the auction proceeds
with the court.26
 Judge Balut granted the latter motion on the basis of the final
and executory nature of the February 4, 2010 Order. He also
ordered the deposit of the proceeds of the sale of the hogs
with the Office of the Clerk of Court and set the hearing date
for the reception of evidence in support of Jorgenetics'
application for damages.27 TTAI moved for reconsideration
of the said Order.28
 Thereafter, Judge Balut inhibited himself from conducting
further proceedings. The case was raffled to RTC Branch
226, then presided by Judge Ma. Luisa C. Quijano-Padilla.29
 Ruling of the Court of Appeals in CA-G.R. SP. No. 114682
(now G.R. No. 201044):
 On March 29, 2011, the appellate court issued the
Decision30 in CA-G.R. SP No. 114682 nullifying the order of
dismissal and reinstating TTAI's complaint for replevin.
The fallo of the March 29, 2011 Decision reads:
 WHEREFORE, the petition is GRANTED. The assailed
orders of the Regional Trial Court of Quezon City,
Branch 75 are ANNULLED and SET ASIDE.
 Petitioner's complaint for replevin with damages is
ordered reinstated. Accordingly, the case
is REMANDED to said court for further proceedings.
 SO ORDERED.31
 In so ruling, the appellate court noted that Jorgenetics
voluntarily submitted itself to the jurisdiction of the trial court
in filing the application for damages against the bond and
motion for the issuance of a writ of execution without
objecting to the trial court's jurisdiction.32 Moreover, the
dismissal of the action for replevin is wholly inconsistent with
the trial court's cognizance of Jorgenetics' application for
damages against the replevin bond. It opined that the
dismissal of an action without prejudice means that no trial
shall be conducted thereon unless plaintiff refiles the case,
while an application for damages against the replevin bond
presupposes that a trial on the merits of the case was had
and that the defendant obtained a favorable judgment from
the court.33
 Jorgenetics moved for reconsideration, which was denied in
a February 29, 2012 Resolution.34 Thus, on May 8, 2012, it
filed a Petition for Review on Certiorari before this Court,
assailing the CA's reinstatement of the replevin case. This
was docketed as G.R. No. 201044.
 Proceedings in G.R. No. 222691:
 In the meantime, proceedings continued in RTC Branch 226.
In its April 29, 2011 Resolution, the trial court granted (a)
TTAI's motion for reconsideration of Judge Balut's order to
deposit the proceeds of auction sale and setting the date for
the reception of evidence in support of Jorgenetics'
application for damages, and (b) the motion to quash writ of
execution, holding therein that all subsequent proceedings
held after the dismissal of the complaint for replevin is
without force and effect. It also held that although the Order
dated February 4, 2010 gave Jorgenetics a clear right to
 recover the hogs or the value thereof, the same must be
done in a separate proceeding.35
 In view thereof, Jorgenetics filed a separate petition for the
issuance of a writ of possession with Branch 98, which was
dismissed in view of the finality of the February 10, 2010
Order. Branch 98 opined that Branch 226 still has residual
jurisdiction to carry into effect the February 10, 2010 Order in
accordance with Section 6, Rule 39 of the 1997 Rules of
Civil Procedure, prompting Jorgenetics to file a Motion for
Writ for Execution and/or Writ of Possession dated 13
January 2012.36
 In its May 7, 2012 Resolution, Branch 226 denied
Jorgenetics' Motion for Writ for Execution and/or Writ of
Possession. Taking heed of the appellate court's March 29,
2011 Decision, it also ordered that the case be reinstated
and for Jorgenetics to file its answer to the complaint for
replevin.37 Jorgenetics moved for reconsideration of the
May 7, 2012 Resolution while TTAI moved for Jorgenetics to
be declared in default for failure to file an answer to the
complaint for replevin.38
 Meanwhile, then Presiding Judge Quijano-Padilla of Branch
226 was appointed to the CA, which paved the way for
Judge Cleto R. Villacorta's (Judge Villacorta) designation as
Presiding Judge of Branch 226. In an October 18, 2012
Order39, Judge Villacorta granted Jorgenetics' motion for
reconsideration, thus denying the motion to declare
Jorgenetics in default. Despite the March 29, 2011 Decision
of the appellate court in CA G.R. SP. No. 114682 nullifying
the order of dismissal and reinstating TTAI's complaint for
replevin, Judge Villacorta opined that the February 4, 2010
Order dismissing the complaint must be enforced since the
same lapsed into finality despite the filing of the petition
for certiorari assailing the same, because the CA did not
issue any injunctive relief while the case was still pending
 before the trial court. Thus, Judge Villacorta ordered the
return of the properties subject of replevin to Jorgenetics.
 The fallo of the October 18, 2012 Order reads:
 WHEREFORE, the Motion for Reconsideration filed by
defendant is granted. The Motion to Declare Defendant
in Default filed by plaintiff is denied. The Order of May
7, 2012 is modified. The Order of February 4,
2010 must be enforced, implemented or
executed pursuant to A.M. No. 07-7-12-SC, which
states in part "[t]he petition shall not interrupt the course
of the principal case unless a temporary restraining
order or a writ of preliminary injunction has been issued
against public respondent from further proceeding in
the case." Hence, this case remains dismissed and
plaintiff is directed to comply with the directive in the
Order that "the properties seized by virtue of the writ of
replevin are ordered returned to the defendant-movant"
within thirty (30) days from receipt of this Order. Notify
the parties and counsel.
 SO ORDERED.40
 TTAI moved for reconsideration and the voluntary inhibition
of Judge Villacorta. Thus, Judge Villacorta inhibited himself
from hearing the case, which was re-raffled to Branch 216
presided by Judge Alfonso C. Ruiz II (Judge Ruiz).41
 On March 15, 2013, Judge Ruiz ordered the reinstatement of
the case pursuant to the March 29, 2011 Decision of the
appellate court in CA G.R. SP. No. 114682 and the return of
the properties subject of the writ to
Jorgenetics.42 The fallo of the March 15, 2013 Order reads:
 WHEREFORE, pursuant to the Decision of the Court of
Appeals on March 29, 2011 in CA-G.R. SP. No.
114682, setting aside the Orders dated February 4,
2010 and May 6, 2010, this case is
hereby REINSTATED and placed on the active file of
this court.
 The defendant is ordered to file its Answer to the
Complaint within five (5) days from receipt of this Order.
 Meanwhile, the plaintiff is ordered to return to the
defendant the properties seized by virtue of the writ of
replevin.
 SO ORDERED.43
 In so ruling, Judge Ruiz opined that Jorgenetics' voluntary
submission to the jurisdiction of the trial court did not cure
the defect in the service of the writ of replevin, that the only
issue resolved in the March 29, 2011 Decision in CA G.R.
SP. No. 114682 was the issue on the acquisition of the court
of jurisdiction over the person of Jorgenetics, and that the
court a quo did not overrule the finding of the court on the
impropriety of the service of the writ of replevin.44
 Aggrieved, TTAI assailed the October 18, 2012 and March
15, 2013 Order of the trial court with the CA via a Petition
for Certiorari docketed as CA-G.R. SP No. 130075.45
 The appellate court granted the Petition for Certiorari.
The fallo of the CA's October 29, 2014 Decision reads:
 WHEREFORE, finding merit in the petition, the
Court GRANTS the petition for certiorari and
hereby DECLARES the assailed order of October 18,
2012 issued by the trial court NULL and VOID and is
hereby SET ASIDE. As for the order of March 15, 2013,
the same is hereby AFFIRMED with MODIFICATION in
that the portion invalidating the writ of replevin and
ordering the return of the hogs to respondent is
hereby DELETED.
 SO ORDERED.46
 Anent the October 18, 2012 Order, the CA stressed that the
trial court acted in grave abuse of discretion in refusing to
reinstate TTAI's complaint for replevin and ordering the
implementation of the February 4, 2010 Order even though
the March 29, 2011 Decision in CA G.R. SP. No. 114682
 had already declared the February 4, 2010 Order dismissing
the complaint as void.47
 The appellate court likewise noted that the February 4, 2010
order, as a void judgment, could not have lapsed into finality
and its execution has no basis in law.48 As regards the
March 15, 2013 Order, the appellate court noted that while
the voluntary submission of Jorgenetics did not cure the
defect in the service of the writ of replevin, the writ of
replevin must be maintained until Jorgenetics seeks to
quash the writ of replevin or have the order of seizure
vacated through an appropriate motion, but not through a
motion for execution of a void order.49
 Jorgenetics moved for reconsideration, which was denied in
a January 8, 2016 Resolution.50 Hence, it filed a Petition for
Review on Certiorari docketed as G.R. No. 222691, seeking
the reversal of the CA's October 29, 2014 Decision in CA-
G.R. SP No. 130075 and for the affirmation in toto of the trial
court's: (a) October 18, 2012 Order, which mandated the
enforcement of the February 4, 2010 Order of dismissal of
the trial court and the return of the properties subject of
replevin to Jorgenetics; and (b) March 15, 2013 Order, which
mandated the reinstatement of the case pursuant to the
March 29, 2011 Decision in CA G.R. SP. No. 114682 but
which likewise ordered the return of the properties subject of
replevin to Jorgenetics.51
 Notably, TTAI filed a Manifestation and Motion52 on
December 13, 2017, where it manifested that the trial court
has rendered a May 2, 2017 decision on the merits in the
main case, declaring TTAI as the rightful possessor of the
hogs and ordering Jorgenetics to pay TTAI the deficiency
judgment in the amount of P14,999,980.00 along with
interest, attorney's fees, and costs of the suit. TTAI
manifested that in view of the lapse of the period to move for
the reconsideration or appeal the above indicated Decision
without any action on the part of the parties, the said
 Decision had become final and executory which renders the
Petitions moot and academic. Accordingly, TTAI moved for
the dismissal of the instant petitions before this Court.
 Issues
 The main issues for resolution are:
 (a) Whether the resolution of the Petitions has become moot
in view of the decision on the merits in Civil Case No. Q-08-
63757;
 (b) Whether the Petitions should be dismissed for failure of
Jorgenetics to comply with the rules on verification and
certification of non-forum shopping;
 (c) Whether the February 4, 2010 Order became final and
executory upon the lapse of the 15-day period to file an
ordinary appeal under Rule 41 of the Rules of Civil
Procedure;
 (d) Whether Jorgenetics, in filing an application for damages
and motion for issuance of a writ of execution after the trial
court's issuance of a decision dismissing the complaint for
replevin, may be considered to have submitted itself to the
jurisdiction of the trial court; and
 (e) Whether the return of the hogs seized by virtue of the writ
of replevin is proper.
 Our Ruling
 The Petitions are denied for lack of merit.
 The instant Petitions have not been mooted despite the
issuance of a decision on the merits in the main case.
 Before the Court delves into the issues raised in the
Petitions, We shall resolve first TTAI's Manifestation and
Motion which seeks the dismissal of the Petitions for being
moot and academic, in view of the favorable ruling on the
merits TTAI secured in the main case which has become
final and executory. In the said decision, the trial court
declared TTAI as the rightful possessor of the livestock
subject of the chattel mortgage in view of Jorgenetics' default
in the payment of its obligations, and the eventual sale by
 public auction of the mortgaged property to respondent
which were found by the trial court to be legitimate.53
 An issue becomes moot when it ceases to present a
justiciable controversy such that a determination thereof
would be without practical value.54 In such cases, there is
"no actual substantial relief to which petitioner would be
entitled to and which would be negated by the dismissal of
the petition."55 Courts will not determine questions that have
become moot and academic because there is no longer any
justiciable controversy to speak of. The judgment will not
serve any useful purpose or have any practical legal effect
because, in the nature of things, it cannot be enforced.56
 The crux of the controversy in the case at bench is whether
the trial court has obtained jurisdiction over the person of
petitioner or alternatively, whether the February 4, 2010
order of the trial court dismissing the complaint for lack of
jurisdiction over petitioner had already become final and
executory and thus may no longer be disturbed. In
connection thereto, it must be stressed that any judgment
rendered or any proceedings conducted by a court which
has no jurisdiction over the person of the defendant is null
and void.57
 Thus, should the Court rule in favor of petitioner, the
complaint for replevin will be dismissed and all proceedings
conducted, including the decision on the merits invoked by
respondent in its Manifestation and Motion, will be
considered null and void. "A void judgment is in effect no
judgment at all," and "[a]ll acts performed under it and all
claims flowing out of it are void."58 "The judgment is
vulnerable to attack even when no appeal h as been taken,"
and "does not become final in the sense of depriving a party
of [their] right to question its validity."59
 Guided by the foregoing, We find that the Petitions are not
moot as a favorable ruling to Jorgenetics will entail the
 setting aside of the trial court's judgment on the merits in
view of lack of jurisdiction over its person.
 The chairperson and president of a corporation may sign the
verification and certification without need of board resolution.
Moreover, lack of authority of a corporate officer to
undertake an action on behalf of the corporation may be
cured by ratification through the subsequent issuance of a
board resolution.
 TTAI contends that Mr. Romeo J. Jorge, the chairperson and
president of petitioner, had no authority to file the Petition in
G.R. No. 201044 on behalf of Jorgenetics at the time of the
filing thereof, and that the belated submission of the Board
Resolution indicating Mr. Jorge's authority and ratifying the
filing of the Petition will not cure the defect.
 We disagree.
 In Cagayan Valley Drug Corp. v. Commissioner of Internal
Revenue,60 this Court ruled that certain officials or
employees of a corporation can sign the verification and
certification on its behalf without need of a board resolution,
such as but not limited to the chairperson of the board of
directors, the president of a corporation, the general
manager or acting general manager, personnel officer, and
an employment specialist in a labor case. Moreover, the
"lack of authority of a corporate officer to undertake an action
on behalf of the corporation may be cured by ratification
through the subsequent issuance of a board resolution,
recognizing the validity of the action or the authority of the
concerned officer."61
 Given the foregoing, Mr. Jorge, as the chairperson and
president of petitioner, is sufficiently authorized to sign the
verification and certification on behalf of Jorgenetics. Any
doubt on his authority to sign the verification and certification
is likewise obviated by the secretary's certificate it submitted
upon the orders of this Court, which ratified Mr. Jorge's
 authority to represent petitioner and file the Petition in G.R.
No. 201044.
 A variance in the date of the verification with the date of
the Petition is not fatal to petitioner's case.
 TTAI alleges that the Petition in G.R. No. 222691 should be
dismissed outright, since the verification and certification of
non-forum shopping was signed by Mr. Jorge and notarized
a day prior to the date of the Petition.
 This contention must fail.
 The purpose of a verification in the petition is to secure an
assurance that the allegations of a pleading are true and
correct, are not speculative or merely imagined, and have
been made in good faith. To achieve this purpose, the
verification of a pleading is made through an affidavit or
sworn statement, confirming that the affiant has read the
pleading whose allegations are true and correct of the
affiant's personal knowledge or based on authentic
records.62
 In connection thereto, a variance in the date of the
verification with the date of the petition is not necessarily
fatal to Jorgenetics' case since the variance does not
necessarily lead to the conclusion that no verification was
made, or that the verification was false. It does not
necessarily contradict the categorical declaration made by
Jorgenetics in its affidavit that its representatives read and
understood the contents of the pleading.
 To demand the litigants to read the very same document that
is to be filed in court is too rigorous a requirement.
 [W]hat the Rules require is for a party to read the contents of
a pleading without any specific requirement on the form or
manner in which the reading is to be done. [W]hat is
important is that efforts were made to satisfy the objective of
the Rule, that is, to ensure good faith and veracity i n the
allegations of a pleading, thereby allowing the courts to act
 on the case with reasonable certainty that the petitioners'
real positions have been pleaded.63
 We find the verification and certification of non-forum
shopping attached to the Petition in G.R. No 222691
sufficiently compliant in achieving the said objective.
 An order dismissing an action for lack of jurisdiction over the
parties to the case is cognizable under a special civil action
for certiorari.
 Jorgenetics asserts that the proper remedy to assail the
February 4, 2010 Order of the trial court, which dismissed
the complaint for replevin due to lack of jurisdiction over the
person of defendant, is through an ordinary appeal under
Section 1, Rule 41 of the Rules of Court. Thus, it claims that
the 15-day period to file an appeal under Rule 41 had
already lapsed and the February 4, 2010 Order had long
become final and executory when TTAI filed a petition
for certiorari to assail the same, and that the appellate court
no longer had the power to reinstate the complaint in view of
the finality of the said order.
 We find no error in the ruling of the appellate court that a
petition for certiorari under Rule 65 of the Rules of Court is
the proper remedy to question the trial court's order
dismissing the replevin case on the ground of lack of
jurisdiction. An order granting a motion to dismiss on the
ground that the court has no jurisdiction over the person of
the defendant is without prejudice to the refiling of the same
action or claim.64 In connection thereto, Section 1, Rule 41
clearly provides that an order dismissing an action without
prejudice may not be appealed via a Rule 41 petition, and
must instead be assailed through a petition
for certiorari under Rule 65:
 SECTION 1. Subject of Appeal. — An appeal may be taken
from a judgment or final order that completely disposes of
the case, or of a particular matter therein when declared by
these Rules to be appealable.
 No appeal may be taken from:
 xxxx
 (h) An order dismissing an action without prejudice.
 In all the above instances where the judgment or final order
is not appealable, the aggrieved party may file an
appropriate special civil action under Rule 65. (n) [Emphasis
supplied]
 Under the circumstances, the special civil action
for certiorari under Rule 65 availed of by TTAI – and not an
appeal via Rule 41 – was the correct remedy to challenge
the February 4, 2010 Order, which dismissed the complaint
for replevin for lack of jurisdiction.
 Jorgenetics' insistence that the order of dismissal has
become final and executory and may no longer be set aside
by the court a quo must likewise fail. TTAI's timely filing of a
Motion for Reconsideration over the order of dismissal and
thereafter, a Rule 65 petition before the CA, clearly
prevented the February 4, 2010 Order from becoming final
and executory. To find otherwise would result in an
anomalous situation where TTAI would be deprived of its
right to file a petition for certiorari to assail the February 4,
2010 Order, which is a remedy clearly afforded to it under
the Rules of Court.
 Considering that the February 4, 2010 Order did not attain
finality, We agree with the appellate court's ruling that the
trial court acted in grave abuse of discretion in ordering the
implementation of the February 4, 2010 Order, moreso
because the court a quo already reversed and set aside the
March 29, 2011 Decision in CA G.R. SP. No. 114682 at the
time it ordered the implementation of the same.
 Jorgenetics, in seeking to recover damages in the main
action on the bond of the writ of replevin, is deemed to have
voluntarily submitted to the jurisdiction of the court.
 Jorgenetics alleges that the appellate court erred in finding
that its filing of the Motion for the Issuance of a Writ of
 Execution with Application for Damages amounted to a
voluntary submission to the trial court's jurisdiction.
 We disagree.
 Jurisdiction over the person of the defendant in civil cases is
acquired by service of summons. However, "even without
valid service of summons, a court may still acquire
jurisdiction over the person of the defendant if the latter
voluntarily appears before it."65 "If the defendant knowingly
does an act inconsistent with the right to object to the lack of
personal jurisdiction as to [them], like voluntarily appearing in
the action, [they are] deemed to have submitted
[themselves] to the jurisdiction of the court."66
 Thus, a defendant is deemed to have voluntarily submitted
themselves to the jurisdiction of the court if they seek
affirmative relief from the court. This includes the filing of
motions to admit answer, for additional time to file answer,
for reconsideration of a default judgment, and to lift order of
default with motion for reconsideration.67
 We have likewise held that a party is deemed to have
submitted themselves to the jurisdiction of the court when,
after the opposing party sought the execution of the
decision, they file a motion asking for the resetting of the
hearing without reserving their continuing objection to the
lower court's lack of jurisdiction over their person.68 "[T]he
active participation of a party in the proceedings is
tantamount to an invocation of the court's jurisdiction and a
willingness to abide by the resolution of the case, and will
bar said party from later on impugning the court or body's
jurisdiction."69
 However, this rule is "tempered by the concept of conditional
appearance, such that a party who makes a special
appearance to challenge, among others, the court's
jurisdiction over [their] person cannot be considered to have
submitted to its authority x x x A special appearance
operates as an exception to the general rule on voluntary
 appearance," but only when the defendant explicitly and
unequivocably poses objections to the jurisdiction of the
court over their person.70
 Applying the foregoing principles to the instant case, the
Court finds that Jorgenetics voluntarily submitted itself to the
jurisdiction of the trial court when it filed a motion for the
issuance of a writ of execution and an application for
damages against the replevin bond without objecting to the
jurisdiction of the trial court.
 The Rules provide that an application for damages on the
replevin bond shall only be claimed, ascertained, and
granted in accordance with Section 20, Rule 57 of the Rules
of Court, which provides:
 SEC. 20. Claim for damages on account of illegal
attachment. — If the judgment on the action be in favor of
the party against whom attachment was issued, he may
recover, upon the bond given or deposit made by the
attaching creditor, any damages resulting from the
attachment. Such damages may be awarded only upon
application and after proper hearing, and shall be included in
the final judgment. The application must be filed before the
trial or before appeal is perfected or before the judgment
becomes executory, with due notice to the attaching creditor
and his surety or sureties, setting forth the facts showing his
right to damages and the amount thereof.
 If the judgment of the appellate court be favorable to the
party against whom the attachment was issued, he must
claim damages sustained during the pendency of the appeal
by filing an application with notice to the party in whose favor
the attachment was issued or his surety or sureties, before
the judgment of the appellate court becomes executory. The
appellate court may allow the application to be heard and
decided by the trial court. [Emphases supplied]
 Under the said provision, an application for damages against
the bond presupposes that a trial on the merits in the main
 case was conducted and the defendant obtained a favorable
judgment from the court.71 Moreover, the damages to which
the defendant would be entitled to, if any, would require the
conduct of a hearing. In other words, petitioner's act of filing
an application for damages against the replevin bond in the
same action is tantamount to requesting the trial court to
conduct a trial on the merits of the case and adjudicating
rightful possession to Jorgenetics, and to thereafter conduct
a hearing on Jorgenetics' application for damages. This is
clearly an invocation of the court's jurisdiction and a
willingness to abide by the resolution of the case. Hence,
Jorgenetics is deemed to have submitted itself to the
jurisdiction of the court.
 Jorgenetics' assertion that it was merely invoking the
residual authority of the trial court when it requested the
latter to rule on its application for damages comes up empty.
In Development Bank of the Philippines v. Carpio,72 We
clarified that a trial court acquires residual jurisdiction over a
case once a trial on the merits has been conducted, the
court renders judgment, and the aggrieved party appeals
therefrom.
 Hence, We ruled therein that the trial court may not be
considered to have acquired residual jurisdiction over a
replevin case if the complaint is dismissed without prejudice,
and the trial court may not rule on the application for
damages on the assumption that it has residual powers over
the case:
 The "residual jurisdiction" of the trial court is available at a
stage in which the court is normally deemed to have lost
jurisdiction over the case or the subject matter involved in
the appeal. This stage is reached upon the perfection of the
appeals by the parties or upon the approval of the records
on appeal, but prior to the transmittal of the original records
or the records on appeal. In either instance, the trial court
still retains its so-called residual jurisdiction to issue
 protective orders, approve compromises, permit appeals of
indigent litigants, order execution pending appeal, and allow
the withdrawal of the appeal.
 From the foregoing, it is clear that before the trial court can
be said to have residual jurisdiction over a case, a trial on
the merits must have been conducted; the court rendered
judgment; and the aggrieved party appealed therefrom.
 xxxx
 Here, the RTC dismissed the replevin case on the ground of
improper venue. Such dismissal is one without prejudice and
does not bar the refiling of the same action; hence, it is not
appealable. Clearly, the RTC did not reach, and could not
have reached, the residual jurisdiction stage as the case was
dismissed due to improper venue, and such order of
dismissal could not be the subject of an appeal. Without the
perfection of an appeal, let alone the unavailability of the
remedy of appeal, the RTC did not acquire residual
jurisdiction. Hence, it is erroneous to conclude that the RTC
may rule on DBP's application for damages pursuant to its
residual powers.73 [Emphasis supplied]
 Moreover, Jorgenetics argues that the trial court had yet to
rule on its application for damages and motion for writ of
execution at the time of filing of the petition
for certiorari before the CA. Thus, it is erroneous to claim
that the trial court committed grave abuse of discretion when
there is no action yet that may be regarded as such at the
time of the filing of CA G.R. SP. No. 114682. On the other
hand, TTAI argues that the fact petitioner's application for
damages was given due course amounts to grave abuse of
discretion, as the trial court essentially recognized an
affirmative relief, like the prayer for damages, from a party
that it has no jurisdiction over.
 We agree with TTAI. It is undisputed that at the time of the
filing of the petition with the appellate court, the trial court
already took cognizance of the application for damages by
 setting the hearing for the same and requiring the parties to
file their respective pleadings thereto despite its previous
order dismissing the case for replevin for lack of jurisdiction.
And while the trial court had yet to rule on the application for
damages at the time of the filing of the petition
for certiorari with the appellate court, the records clearly
show that the trial court, while CA G.R. SP. No. 114682 was
pending, explicitly ruled that Jorgenetics was entitled to
damages against the replevin bond despite its earlier order
dismissing the complaint.
 In any event, any doubt on the voluntary submission of
Jorgenetics to the trial court's jurisdiction has been
eliminated by the multiple affirmative reliefs it sought from
the trial court as shown in the record, such as its urgent ex-
parte motion for deposit of auction proceeds, motion for
inhibition, and motion for writ of execution and/or writ of
possession. These motions are clearly affirmative reliefs
sought by Jorgenetics tantamount to voluntary submission to
the jurisdiction of the trial court.
 In light of the foregoing, We find that the CA did not commit
any error in reinstating the complaint for replevin in view of
Jorgenetics' active participation in the proceedings before
the trial court, and in finding that the trial court committed
grave abuse of discretion in taking cognizance of the
application for damages despite its earlier order dismissing
the complaint for lack of jurisdiction.
 The issue on the validity and efficacy of the writ of replevin is
mooted in view of the final and executory decision on the
merits in the main case.
 Finally, it may be noted that one of the issues raised by the
parties in the G.R. No. 222691 is the validity and efficacy of
the writ of replevin and in connection thereto, whether the
return of the hogs seized by virtue of the writ, and as ordered
in the trial court's October 18, 2012 and March 15, 2013
Orders, is proper. In view of the trial court's final and
 executory decision in the main case adjudicating rightful
possession to TTAI, We find the issue to be moot and
academic.
 Replevin is an action for the recovery of personal property. It
is both a principal remedy and a provisional relief. When
utilized as a principal remedy, the objective is to recover
possession of personal property that may have been
wrongfully detained by another. When sought as a
provisional relief, it allows a plaintiff to retain the contested
property during the pendency of the action.74
 Being provisional and ancillary in character, the existence
and efficacy of the writ of repl evin depends on the outcome
of the case.75 Ancillary writs are not causes of action in
themselves, but mere adjuncts to the main suit with the sole
object of preserving the status quo until the merits of the
case can be heard.76 An ancillary writ "cannot survive the
main case of which it is an incident because an ancillary writ
loses its force and effect after the decision in the main
petition."77
 Considering that a decision has already been rendered in
the main case, adjudicating rightful possession of the
livestock to TTAI, and which may be maintained in light of
the Court's foregoing ruling that the trial court validly
acquired jurisdiction over Jorgenetics, We find that any
disposition by this Court on the validity and efficacy of the
writ of replevin, which was merely ancillary to the main
action, serves no practical purpose. Thus, a discussion on
the said issue is moot and may be dispensed with.
 WHEREFORE, the Petitions in G.R. No. 201044 and 222691
are DENIED. Accordingly, the March 29, 2011 Decision and
February 29, 2012 Resolution of the Court of Appeals in CA-
G.R. SP. No. 114682 and the October 29, 2014 Decision
and January 8, 2016 Resolution in C.A.-G.R. SP No. 130075
are AFFIRMED.
 SO ORDERED.

 [G.R. No. 63201. May 27, 1992.]

PHILIPPINE NATIONAL BANK, Petitioner, v. THE COURT

OF FIRST INSTANCE OF RIZAL, PASIG — BRANCH XXI,
PRESIDED BY JUDGE GREGORIO G. PINEDA, CHUNG
SIONG PEK @ BONIFACIO CHUNG SIONG PEK AND
VICTORIA CHING GENG TY @ VICTORIA CHENG GENG
TY, AND THE REGISTER OF DEEDS OF RIZAL, PASIG,
METRO MANILA AND/OR HIS DEPUTIES AND
AGENTS, Respondents.


 DECISION


 MEDIALDEA, J.:


 This is a petition for certiorari under Rule 65 of the Rules of

Court seeking to annul and set aside the orders of
respondent Court of First Instance of Rizal, Pasig, Branch 21
(now Regional Trial Court) dated April 22, 1982, September
14, 1982 and January 12, 1983 in LRC Case No. R-2744 on
the ground that they had been issued without or in excess of
jurisdiction and with grave abuse of discretion.

The antecedent facts of this case are as follows:chanrob1es

virtual 1aw library

Private respondents are the registered owners of three

parcels of land in Pasig, Metro Manila covered by OCT No.
853, TCT Nos. 32843 and 32897 of the Registry of Deeds of
Rizal.
On March 1, 1954, private respondents entered into a
contract of lease with Philippine Blooming Mills, Co., Inc.,
(PBM for brevity) whereby the latter shall lease the
aforementioned parcels of land as factory site. PBM was
duly organized and incorporated on January 19, 1952 with a
corporate term of twenty-five (25) years. This leasehold right
of PBM covering the parcels of land was duly annotated at
the back of the above stated certificates of title as Entry No.
9367/T-No. 32843.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

The contract of lease provides that the term of the lease is

for twenty years beginning from the date of the contract and
"is extendable for another term of twenty years at the option
of the LESSEE should its term of existence be extended in
accordance with law." (p. 76, Rollo). The contract also states
that the lessee agrees to "use the property as factory site
and for that purpose to construct whatever buildings or
improvements may be necessary or convenient and/or . . .
for any purpose it may deem fit; and before the termination
of the lease to remove all such buildings and improvements"
(pp. 76-77 Rollo).

In accordance with the contract, PBM introduced on the

land, buildings, machineries and other useful improvements.
These constructions and improvements were registered with
the Registry of Deeds of Rizal and annotated at the back of
the respondents’ certificates of title as Entry No. 85213/T-
No. 43338.

On October 11, 1963, PBM executed in favor of Philippine

National Bank (PNB for brevity), petitioner herein, a deed of
assignment, conveying and transferring all its rights and
interests under the contract of lease which it executed with
private respondents. The assignment was for and in
consideration of the loans granted by PNB to PBM. The
deed of assignment was registered and annotated at the
back of the private respondents’ certificates of title as Entry
No. 85215/T-No. 32843.

On November 6, 1963 and December 23, 1963 respectively,

PBM executed in favor of PNB a real estate mortgage for a
loan of P100,000.00 and an addendum to real estate
mortgage for another loan of P1,590,000.00, covering all the
improvements constructed by PBM on the leased premises.
These mortgages were registered and annotated at the back
of respondents’ certificates as Entry No. 85214/T-No. 43338
and Entry No. 870971/T-No. 32843,
respectively.chanrobles.com.ph : virtual law library

PBM filed a petition for registration of improvements in the

titles of real property owned by private respondents
docketed as Case No. 6530.

On October 7, 1981, private respondents filed a motion in

the same proceedings which was given a different case
number to wit, LRC Case No. R-2744, because of the
payment of filing fees for the motion. The motion sought to
cancel the annotations on respondents’ certificates of title
pertaining to the assignment of PBM to PNB of the former’s
leasehold rights, inclusion of improvements and the real
estate mortgages made by PBM in favor of PNB, on the
ground that the contract of lease entered into between PBM
and respondents-movants had already expired by the failure
of PBM and/or its assignee to exercise the option to renew
the second 20-year lease commencing on March 1, 1974
and also by the failure of PBM to extend its corporate
existence in accordance with law. The motion also states
that since PBM failed to remove its improvements on the
leased premises before the expiration of the contract of
lease, such improvements shall accrue to respondents as
owners of the land.

On April 22, 1982, respondent court issued an order

directing the cancellation of the inscriptions on respondents’
certificates of title. The dispositive portion of the order
provides:jgc:chanrobles.com.ph

"WHEREFORE, the Register of Deeds having jurisdiction

over the movant’s land Certificates of Title Nos. 853, 32843
and 32897 is hereby ordered, upon the payment of the
corresponding fees, to cancel therein
memoranda/inscriptions/entries Nos. 85213/T-No. 43338,
85215/T-No. 32843, 85214/T-No. 43338 and 87097/T-No.
32843.

"SO ORDERED." (pp. 147-148, Rollo).

Petitioner PNB filed a motion for reconsideration of the

above order of the respondent court but the latter denied it
on June 28, 1982. On August 25, 1982, private respondents
filed a motion for entry of final judgment and issuance of a
writ of execution of the order of April 22, 1982.

On September 14, 1982, respondent court granted the

aforesaid motion for entry of final judgment and ordered the
Register of Deeds of Pasig, Rizal to cancel the entries on
respondents’ certificates of title stated in the order of April
22, 1982.

Petitioner PNB filed an omnibus motion to set aside the entry

of judgment as ordered by the respondent court on the
ground that it has no prior notice or knowledge of the order
of respondent court dated June 28, 1982 which denied its
motion for reconsideration of the order of April 22, 1982 and
that while there was a certification from the Bureau of Posts
that three registry notices were sent to petitioner’s
whatsoever that said notices were actually received by the
addressee.cralawnad

On January 12, 1983, the respondent court denied the

omnibus motion.

Hence, this petition.

Petitioner alleges that respondent court acted capriciously

and arbitrarily in issuing the orders of September 14, 1982
and January 12, 1983 which considered its previous order of
April 22, 1982 as having become final on the ground that it
had no notice or knowledge that the order of June 28, 1982
denying its motion for reconsideration was issued; that the
notices of registered mail allegedly containing the order of
June 28, 1982 were not received by petitioner’s counsel of
record, and that the certification of the Bureau of Posts
refers only to the fact that registry notices were sent, and not
to the fact that the notices were actually received by the
addressee.

In resolving this matter, the respondent court stated in the

questioned order of January 12, 1983 as
follows:jgc:chanrobles.com.ph

"The respondent PNB filed a motion of May 20, 1982 to set

aside the Order of April 22, 1982. This was denied by the
Order of June 28, 1982. Then the movants filed a motion of
August 25, 1982 for entry of judgment, based on the
postmaster’s certification that not only one but three notices
of the registered mail containing a copy of the order of June
28, 1982 was sent to respondent PNB’s counsel at the PNB
Building at Escolta, Manila which is his address of record in
 this case. Consequently the entry of judgment Order of
September 14, 1982.
 x x x


"The respondent PNB’s counsel at the hearing of said

incidents on October 12, 1982 admitted that the aforesaid
registered notices could have been received by PNB’s
regular Receiving Section at the PNB Building at the Escolta
but could not have been forwarded by said Receiving
Section to said counsel’s Litigation and Collection Division,
Legal Department at an upper floor of the same building.
Thus the presumption that official duty was regularly
performed by the postmaster was not overcome, as most
recently reiterated by the Supreme Court in Feraren v.
Santos promulgated on April 27, 1982, 113 SCRA 707 . . . ."
(p. 195, Rollo)

Section 8 of Rule 13 of the Rules of Court, as amended,

provides that service by registered mail is complete upon
actual receipt by the addressee; but if he fails to claim his
mail from the post office within five (5) days from the date of
first notice of the postmaster, service shall take effect at the
expiration of such time. The fair and just application of that
exception depends upon the conclusive proof that the first
notice was sent by the postmaster to the addressee. The
best evidence of that fat would be the certification from the
postmaster (Barrameda v. Castillo, L-27211, July 6, 1977, 78
SCRA 1).

In the instant case, the respondent court found that the

postmaster’s certification stated that three (3) notices of the
registered mail which contained the order of June 28, 1982
denying the motion for reconsideration of the order of April
22, 1982, were sent to petitioner PNB’s counsel at Escolta,
Manila which is the address stated in the record of the case.
The factual findings of the trial court bear great weight and is
binding upon this Court. Hence, as between the denial of the
petitioners’ counsel that he received the notice of the
registered mail and the postmaster’s certification that said
notices were sent to him, the postmaster’s claim should
prevail. The postmaster has the official duty to send notices
of registered mail and the presumption is that official duty
was regularly performed (Aportadera, Sr. v. Court of
Appeals, G.R. No. 41358, March 16, 1988, 158 SCRA
695).chanrobles lawlibrary : rednad

Petitioner alleges that it is not the respondent court but the

Securities and Exchange Commission which has jurisdiction
over the private respondents’ motion, which raised as issue
the corporate existence of PBM. Petitioner further submits
that the respondent court committed grave abuse of
discretion in ordering the cancellation of entries in the
certificates of title of respondents on the following grounds:
1) the motion for cancellation would amount to a collateral
attack upon the due incorporation of PBM which cannot be
done legally, 2) the contract of lease between PBM as
petitioner’s assignor and private respondents did not expire
since PBM exercised its option to renew the lease with the
acquiescence of private respondents, and 3) respondent
court’s ruling that ownership over the improvements passed
from PBM to private respondents upon the expiration of
lease violates the law and the contract between the parties.

Even if We were to set aside the questioned orders directing

the entry of finality of the order canceling entries in the titles,
petitioner’s case must still fail on the merits.

Private respondent’s motion with the respondent court was

for the cancellation of the entries on their titles on the ground
that the contract of lease executed between them and PBM
had expired. This action is civil in nature and is within the
jurisdiction of the respondent court. The circumstance that
PBM as one of the contracting parties is a corporation whose
corporate term had expired and which fact was made the
basis for the termination of the lease is not sufficient to
confer jurisdiction on the Securities and Exchange
Commission over the case. Presidential Decree No. 902-A,
as amended, enumerates the cases over which the SEC has
exclusive jurisdiction and authority to resolve. The case at
bar is not covered by the enumeration.

Anent the issue of whether the cancellation of the entries on

respondent’s certificates of title is valid and proper, We find
that the respondent court did not act in excess of its
jurisdiction, in ordering the same.

The contract of lease expressly provides that the term of the

lease shall be twenty years from the execution of the
contract but can be extended for another period of twenty
years at the option of the lessee should the corporate term
be extended in accordance with law. Clearly, the option of
the lessee to extend the lease for another period of twenty
years can be exercised only if the lessee as corporation
renews or extends its corporate term of existence in
accordance with the Corporation Code which is the
applicable law. Contracts are to be interpreted according to
their literal meaning and should not be interpreted beyond
their obvious intendment. Thus, in the instant case, the initial
term of the contract of lease which commenced on March 1,
1954 ended on March 1, 1974. PBM as lessee continued to
occupy the leased premises beyond that date with the
acquiescence and consent of the respondents as lessor.
Records show however, that PBM as a corporation had a
corporate life of only twenty-five (25) years which ended on
January 19, 1977. It should be noted however that PBM
allowed its corporate term to expire without complying with
the requirements provided by law for the extension of its
corporate term of existence.

Section 11 of Corporation Code provides that a corporation

shall exist for a period not exceeding fifty (50) years from the
date of incorporation unless sooner dissolved or unless said
period is extended. Upon the expiration of the period fixed in
the articles of incorporation in the absence of compliance
with the legal requisites for the extension of the period, the
corporation ceases to exist and is dissolved ipso facto (16
Fletcher 671 cited by Aguedo F. Agbayani, Commercial
Laws of the Philippines, Vol. 3, 1988 Edition p. 617). When
the period of corporate life expires, the corporation ceases to
be a body corporate for the purpose of continuing the
business for which it was organized. But it shall nevertheless
be continued as a body corporate for three years after the
time when it would have been so dissolved, for the purpose
of prosecuting and defending suits by or against it and of
enabling it gradually to settle and close its affairs, to dispose
of and convey its property and to divide its assets (Sec. 122,
Corporation Code). There is no need for the institution of a
proceeding for quo warranto to determine the time or date of
the dissolution of a corporation because the period of
corporate existence is provided in the articles of
incorporation. When such period expires and without any
extension having been made pursuant to law, the
corporation is dissolved automatically insofar as the
continuation of its business is concerned. The quo warranto
proceeding under Rule 66 of the Rules of Court, as
amended, may be instituted by the Solicitor General only for
the involuntary dissolution of a corporation on the following
grounds: a) when the corporation has offended against a
provision of an Act for its creation or renewal; b) when it has
forfeited its privileges and franchises by non-user; c) when it
has committed or omitted an act which amounts to a
surrender of its corporate rights, privileges or franchises; d)
when it has misused a right, privilege or franchise conferred
upon it by law, or when it has exercised a right, privilege or
franchise in contravention of law. Hence, there is no need for
the SEC to make an involuntary dissolution of a corporation
whose corporate term had ended because its articles of
incorporation had in effect expired by its own limitation.

Considering the foregoing in relation to the contract of lease

between the parties herein, when PBM’s corporate life
ended on January 19, 1977 and its 3-year period for winding
up and liquidation expired on January 19, 1980, the option of
extending the lease was likewise terminated on January 19,
1977 because PBM failed to renew or extend its corporate
life in accordance with law. From then on, the respondents
can exercise their right to terminate the lease pursuant to the
stipulations in the contract.chanrobles.com.ph : virtual law
library

We now come to the question of the ownership over the

improvements constructed by PBM over the leased
premises, which improvements were mortgaged in favor of
PNB, petitioner herein.

The rights of the lessor and the lessee over the

improvements which the latter constructed on the leased
premises is governed by Article 1678 of the Civil Code which
provides:red:chanrobles.com.ph

"Art. 1678. If the lessee makes, in good faith, useful

improvements which are suitable to the use for which the
lease is intended, without altering the form or substance of
the property leased, the lessor upon the termination of the
lease shall pay the lessee one-half of the value of the
improvements at that time. Should the lessor refuse to
reimburse said amount, the lessee may remove the
improvements, even though the principal thing may suffer
damage thereby. He shall not however, cause any more
impairment upon the property leased than is necessary.

x x x"

The aforequoted provision gives the lessee the right to

remove the improvements if the lessor chooses not to pay
one-half of the value thereof. However, in the case at bar,
the law will not apply because the parties herein have
stipulated in the contract their own terms and conditions
concerning the improvements, to wit, that the lessee, namely
PBM, bound itself to remove the improvements before the
termination of the lease. Petitioner PNB, as assignee of PBM
succeeded to the obligation of the latter under the contract of
lease. It could not possess rights more than what PBM had
as lessee under the contract. Hence, petitioner was duty
bound to remove the improvements before the expiration of
the period of lease as what we have already discussed in the
preceding paragraphs. Its failure to do so when the lease
was terminated was tantamount to a waiver of its rights and
interests over the improvements on the leased premises.

In view of the foregoing, this Court finds that respondent

court did not act with grave abuse of discretion in directing
the cancellation of entries on private respondents’
certificates of title as set forth in the questioned order.

ACCORDINGLY, the petition is DISMISSED and the

assailed orders of respondent court dated April 22, 1982,
September 14, 1982 and January 12, 1983 are AFFIRMED.
SO ORDERED.