Full Text Rules 62-71

G.R. No. 127913. September 13, 2001.
RIZAL COMMERCIAL BANKING CORPORATION,

petitioner, vs. METRO CONTAINER CORPORATION,
respondent.
Angara Abello Concepcion Regala & Cruz for petitioner.
Noel Mingoa for Ley Construction & Development Corp.
Mondragon & Montoya Law Offices for private respondent.
SYNOPSIS
For failure of Ley Construction Corporation (LEYCON) to settle its

loan obligations, Rizal Commercial Banking Corporation (RCBC) instituted
an extrajudicial foreclosure proceeding against it. In a bidding, RCBC was
adjudged the highest bidder. LEYCON promptly filed an action for
Nullification of Extrajudicial Foreclosure Sale and Damages against RCBC
docketed as Civil Case No. 4037-V-93. Meanwhile, RCBC consolidated its
ownership over the property due to LEYCON's failure to redeem the
mortgaged property within the 12-month redemption period. By virtue
thereof, RCBC demanded rental payments from Metro Container
Corporation (METROCAN) which was leasing the mortgaged property from
LEYCON. On the other hand, on 26 May 1994, LEYCON filed an action for
Unlawful Detainer against METROCAN before the Metropolitan Trial Court
(MeTC), Branch 82 of Valenzuela, Metro Manila, docketed as Civil Case No.
6202. Consequently, METROCAN filed a complaint for Interpleader against
LEYCON and RCBC docketed as Civil Case No. 4398-V-94 before the
Regional Trial Court, Branch 75 of Valenzuela to compel them to interplead
and litigate their several claims among themselves and to determine which
among them shall rightfully receive the payment of monthly rentals on the
subject property. During the pre-trial conference of the interpleader case, the
trial court ordered the dismissal of the case insofar as METROCAN and
LEYCON were concerned in view of an amicable settlement they entered
into. On 31 October 1995, judgment was rendered in the Unlawful Detainer
case, which, among other things, ordered METROCAN to pay LEYCON
whatever rentals due on the subject premises. The said decision became final
and executory. By reason thereof, METROCAN and LEYCON separately
filed a motion to dismiss in the interpleader case. However, the said two
motions were dismissed for lack of merit. Thereafter, METROCAN sought
relief from the Court of Appeals via a petition for certiorari and prohibition.
Thus, the Court of Appeals granted the petition and ordered the dismissal of
the interpleader case. Hence, RCBC filed the instant petition.
The Court sustained the Court of Appeals. An action of
interpleader is afforded to protect a person not against double liability but
against double vexation in respect of one liability. It requires, as an
indispensable requisite, that "conflicting claims upon the same subject
matter are or may be made against the plaintiff-in-interpleader who claims
no interest whatever in the subject matter or an interest which in whole or in
part is not disputed by the claimants. The decision in Civil Case No. 6202
resolved the conflicting claims insofar as payment of rentals was concerned.
Petitioner then was correct in saying that it is not bound by the decision in
Civil Case No. 5202. It is not a party thereto. However, it could not compel
METROCAN to pursue Civil Case No. 4398-V-94. RCBC has other avenues
to prove its claim. It is not bereft of other legal remedies. In fact, the issue of
ownership can very well be threshed out in Civil Case No. 4037-V-93, the
case for Nullification of Extrajudicial Foreclosure Sale and Damages filed by
LEYCON against RCBC.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTION; UNLAWFUL DETAINER;

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

action of interpleader is afforded to protect a person not against double liability
but against double vexation in respect of one liability. It requires, as an
indispensable requisite, that "conflicting claims upon the same subject matter are
or may be made against the plaintiff-in-interpleader who claims no interest
whatever in the subject matter or an interest which in whole or in part is not
disputed by the claimants."
3. ID; ID.; INTERPLEADER FOR PAYMENT OF RENTALS; CEASED TO EXIST

WHEN THE DECISION OF THE LOWER COURT IN AN UNLAWFUL
DETAINER CASE INVOLVING THE SAME PROPERTY BECOMES FINAL
AND EXECUTORY. When the decision in Civil Case No. 6202 became final
and executory, METROCAN has no other alternative left but to pay the rentals to
LEYCON. Precisely because there was already a judicial fiat to METROCAN,
there was no more reason to continue with Civil Case No. 4398-V-94. Thus,
METROCAN moved for the dismissal of the interpleader action not because it is
no longer interested but because there is no more need for it to pursue such
cause of action.
4. ID.; ID.; ID.; ID.; CLAIM OF OWNERSHIP BY ONE OF THE DEFENDANTS

IS NOT AFFECTED. Petitioner is correct in saying that it is not bound by the
decision in Civil Case No. 6202. It is not a party thereto. However, it could not
compel METROCAN to pursue Civil Case No. 4398-V-94. RCBC has other
avenues to prove its claim. It is not bereft of other legal remedies. In fact, the
issue of ownership can very well be threshed out in Civil Case No. 4037-V-93, the
case for Nullification of Extrajudicial Foreclosure Sale and Damages filed by
LEYCON against RCBC.
DECISION
KAPUNAN, J p:
Assailed in this petition for review on certiorari are the Decision, promulgated on
18 October 1996 and the Resolution, promulgated on 08 January 1997, of the
Court of Appeals in CA-G.R. SP No. 41294.
The facts of the case are as follows:
On 26 September 1990, Ley Construction Corporation (LEYCON) contracted a

loan from Rizal Commercial Banking Corporation (RCBC) in the amount of
Thirty Million Pesos (P30,000,000.00). The loan was secured by a real estate
mortgage over a property, located in Barrio Ugong, Valenzuela, Metro Manila
(now Valenzuela City) and covered by TCT No. V-17223. LEYCON failed to
settle its obligations prompting RCBC to institute an extrajudicial foreclosure
proceedings against it. After LEYCON's legal attempts to forestall the action of
RBCB failed, the foreclosure took place on 28 December 1992 with RCBC as the
highest bidder.
LEYCON promptly filed an action for Nullification of Extrajudicial Foreclosure

Sale and Damages against RCBC. The case, docketed as Civil Case No. 4037-V-
93, was raffled to the Regional Trial Court (RTC) of Valenzuela, Branch 172.
Meanwhile, RCBC consolidated its ownership over the property due to
LEYCON's failure to redeem it within the 12-month redemption period and TCT
No. V-332432 was issued if favor of the bank. By virtue thereof, RCBC demanded
rental payments from Metro Container Corporation (METROCAN) which was
leasing the property from LEYCON.
On 26 May 1994, LEYCON filed an action for Unlawful Detainer, docketed as

Civil Case No. 6202, against METROCAN before the Metropolitan Trial Court
(MeTC) of Valenzuela, Branch 82. CcTHaD
On 27 May 1994, METROCAN filed a complaint for Interpleader, docketed as

Civil Case No. 4398-V-94 before the Regional Trial Court of Valenzuela, Metro
Manila, Branch 75 against LEYCON and RCBC to compel them to interplead and
litigate their several claims among themselves and to determine which among
them shall rightfully receive the payment of monthly rentals on the subject
property. On 04 July 1995, during the pre-trial conference in Civil Case No. 4398-
V-94, the trial court ordered the dismissal of the case insofar as METROCAN and
LEYCON were concerned in view of an amicable settlement they entered by
virtue of which METROCAN paid back rentals to LEYCON.
On 31 October 1995, judgment was rendered in Civil Case No. 6202, which
among other things, ordered METROCAN to pay LEYCON whatever rentals due
on the subject premises. The MeTC decision became final and executory.
On 01 February 1996, METROCAN moved for the dismissal of Civil Case No.
4398-V-94 for having become moot and academic due to the amicable settlement
it entered with LEYCON on 04 July 1995 and the decision in Civil Case No. 6202
on 31 October 1995. LEYCON, likewise, moved for the dismissal of the case
citing the same grounds cited by METROCAN.
On 12 March 1996, the two motions were dismissed for lack of merit. The
motions for reconsideration filed by METROCAN and LEYCON were also
denied prompting METROCAN to seek relief from the Court of Appeals via a
petition for certiorari and prohibition with prayer for the issuance of a temporary
restraining order and a writ of preliminary injunction. LEYCON, as private
respondent, also sought for the nullification of the RTC orders.
In its Decision, promulgated on 18 October 1996, the Court of Appeals granted

the petition and set aside the 12 March 1996 and 24 June 1996 orders of the RTC.
The appellate court also ordered the dismissal of Civil Case No. 4398-V-94.
RCBC's motion for reconsideration was denied for lack of merit in the resolution
of 08 January 1997.
Hence, the present recourse.
RCBC alleged, that:
(1) THE DECISION OF THE METROPOLITAN TRIAL

COURT IN THE EJECTMENT CASE BETWEEN
METROCAN AND LEYCON DOES NOT AND
CANNOT RENDER THE INTERPLEADER
ACTION MOOT AND ACADEMIC.
(2) WHILE A PARTY WHO INITIATES AN

INTERPLEADER ACTION MAY NOT BE
COMPELLED TO LITIGATE IF HE IS NO
LONGER INTERESTED TO PURSUE SUCH
CAUSE OF ACTION, SAID PARTY MAY NOT
UNILATERALLY CAUSE THE DISMISSAL OF
THE CASE AFTER THE ANSWER HAVE BEEN
FILED. FURTHER, THE DEFENDANTS IN AN
INTERPLEADER SUIT SHOULD BE GIVEN FULL
OPPORTUNITY TO LITIGATE THEIR
RESPECTIVE CLAIMS. 1
We sustain the Court of Appeals.
Section 1, Rule 63 of the Revised Rules of Court 2 provides:
SECTION 1. Interpleader when proper. Whenever

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

action for unlawful detainer (Civil Case No. 6202) against its lessee METROCAN.
The issue in Civil Case No. 6202 is limited to the question of physical or material
possession of the premises. 3 The issue of ownership is immaterial therein 4 and
the outcome of the case could not in any way affect conflicting claims of
ownership, in this case between RCBC and LEYCON. This was made clear when
the trial court, in denying RCBC's "Motion for Inclusion . . . as an Indispensable
Party" declared that "the final determination of the issue of physical possession
over the subject premises between the plaintiff and the defendant shall not in any
way affect RCBC's claims of ownership over the said premises, since RCBC is
neither a co-lessor or co-lessee of the same, hence he has no legal personality to
join the parties herein with respect to the issue of physical possession vis-a-vis the
contract of lease between the parties." 5 As aptly pointed by the MeTC, the issue
in Civil Case No. 6202 is limited to the defendant LEYCON's breach of the
provisions of the Contract of Lease Rentals. 6
Hence, the reason for the interpleader action ceased when the MeTC rendered
judgment in Civil Case No. 6202 whereby the court directed METROCAN to pay
LEYCON "whatever rentals due on the subject premises . . . ." While RCBC, not
being a party to Civil Case No. 6202, could not be bound by the judgment
therein, METROCAN is bound by the MeTC decision. When the decision in Civil
Case No. 6202 became final and executory, METROCAN has no other alternative
left but to pay the rentals to LEYCON. Precisely because there was already a
judicial fiat to METROCAN, there was no more reason to continue with Civil
Case No. 4398-V-94. Thus, METROCAN moved for the dismissal of the
interpleader action not because it is no longer interested but because there is no
more need for it to pursue such cause of action.
It should be remembered that an action of interpleader is afforded to protect a

person not against double liability but against double vexation in respect of one
liability. 7 It requires, as an indispensable requisite, that "conflicting claims upon
the same subject matter are or may be made against the plaintiff-in-interpleader
who claims no interest whatever in the subject matter or an interest which in
whole or in part is not disputed by the claimants." 8 The decision in Civil Case
No. 6202 resolved the conflicting claims insofar as payment of rentals was
concerned.
Petitioner is correct in saying that it is not bound by the decision in Civil Case
No. 6202. It is not a party thereto. However, it could not compel METROCAN to
pursue Civil Case No. 4398-V-94. RCBC has other avenues to prove its claim. Is
not bereft of other legal remedies. In fact, the issue of ownership can very well be
threshed out in Civil Case No. 4037-V-93, the case for Nullification of
Extrajudicial Foreclosure Sale and Damages filed by LEYCON against RCBC.
DcCEHI
WHEREFORE, the petition for review is DENIED and the Decision of the Court
of Appeals, promulgated on 18 October 1996, as well as its Resolution
promulgated on 08 January 1997, are AFFIRMED.
||| (Rizal Commercial Banking Corp. v. Metro Container Corp., G.R. No. 127913,
September 13, 2001)
SECOND DIVISION
[G.R. No. 120060. March 9, 2000.]
CEBU WOMAN'S CLUB, petitioner, vs. HON. LORETO D.

DE LA VICTORIA, in his capacity as Presiding Judge of
RTC, Br. 6, Cebu City, CAMSAC INTERNATIONAL, INC.
& PHANUEL SEORON, respondents.
Fernan Mercado & Cordero for petitioner.
Juan B. Astete, Jr. for CAMSAC International, Inc.
Rufino L. Remoreras, Jr., for Phanuel Seoron.
SYNOPSIS
Petitioner entered into a construction contract with private respondent CAMSAC

for the construction of a school building. The contract provided for a 10%
retention fee. The construction was, however, sub-contracted by respondent
Seoron. Upon its completion, Seoron filed a complaint for a sum of money
against petitioner and CAMSAC seeking to prevent petitioner from releasing the
10% retention fee to CAMSAC. Thereafter, petitioner received several demands
from several suppliers-creditors and from CAMSAC. A complaint for
interpleader was filed by petitioner with the same trial court where the two cases
between Seoron and petitioner, CAMSAC and its officer involving the same
issue is pending. The trial court dismissed the interpleader case and held that
petitioner's proper move would be to file an answer in order that all claims,
including that of the intervenors, may be tried and decided in one proceedings so
as to prevent multiplicity of suits. Petitioner moved for reconsideration, but it
was denied. It then filed this petition directly with this Court claiming that the
trial court acted with grave abuse of discretion when it motu proprio dismissed its
action for interpleader. CIaASH
A party may directly appeal to the Supreme Court from a decision of the trial
court only on pure questions of law. The resolution of the issue raised in the
interpleader case necessitated the factual determination and did not fall within
the ambit of direct appeal to the highest tribunal; that the special civil action of
certiorari is not available in instances of error of judgment which may be assailed
by appeal. It is not a substitute for appeal; and that the hierarchy of courts should
be observed in filing petitions for certiorari. The original jurisdiction of the Court
of Appeals over special civil actions of certiorari is concurrent with the Supreme
Court and the Regional Trial Court.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; APPEAL BY CERTIORARI; DIRECT APPEAL

TO SUPREME COURT ALLOWED ONLY ON PURE QUESTIONS OF LAW.
Petitioner's direct resort to this Court is erroneous. Under the Rules of Court, a
party may directly appeal to the Supreme Court from a decision of the trial court
only on pure questions of law. The case at bench does not involve pure questions
of law as to entitle petitioner to seek immediate redress from this court. A
question of law arises when the doubt or difference arises as to what the law is
on a certain set of facts as distinguished from a question of fact which occurs
when the doubt or difference arises as to the truth or falsehood of the alleged
facts.
2. ID.; ID.; ID.; ID.; FACTUAL ISSUES RAISED IN CASE AT BAR NOT SUBJECT
THERETO. A scrutiny of the issues raised in this case shows that it includes
factual matters. The resolution of the interpleader case necessitates a
determination of whether the other pending cases relied upon by the trial court
in dismissing the former case involves the same matters covered by the latter
cases. There is a need to determine whether the pending civil cases arise out of
the same facts and circumstances as those involved in the interpleader case. As
such, petitioner's direct resort to this court must fail considering that this court is
not a trier of facts. Besides, in a petition for review on certiorari, the trial judge
should not even be made a party to the case as petitioner erroneously did.
3. ID.; SPECIAL CIVIL ACTION; CERTIORARI; CANNOT BE AVAILED OF TO

CORRECT ERRORS OF JUDGMENT. There is no question that grave abuse of
discretion or errors of jurisdiction may be corrected only by the special civil
action of certiorari. Such special remedy does not avail in instances of error of
judgment which can be corrected by appeal or by a petition for review. Since
petitioner availed of the remedy under Rule 45, recourse to Rule 65 cannot be
allowed either as an add-on or as a substitute for appeal.
4. ID.; ID.; ID.; ID.; FAILURE TO OBSERVE PROCEDURE FOR

INTERPLEADER, AN ERROR OF JUDGMENT. Petitioner's claim that the
trial court failed to observe the procedure for an interpleader action does not
constitute grave abuse of discretion for the extraordinary writ to issue. It is only
an error of judgment correctible by an ordinary appeal. The extraordinary writ
does not issue to correct errors of procedure or mistake in the findings and
conclusions of the judge.
5. ID.; ID.; ID.; PARTY SHOULD OBSERVE HIERARCHY OF COURTS IN

FILING PETITION AND SHOULD NOT SEEK IMMEDIATE RECOURSE TO
THIS COURT. On the assumption that this is a proper subject of a certiorari
case, petitioner should have observed the hierarchy of courts and not seek an
immediate recourse to the highest tribunal. The original jurisdiction of the Court
of Appeals over special civil actions for certiorari is concurrent with the Supreme
Court and the Regional Trial Court.
DECISION
BUENA, J p:
Petitioner seeks to set aside the Orders of the Regional Trial Court (RTC), dated
March 9, 1995 and April 11, 1995, in Civil Case No. CEB-17126, which dismissed
its complaint for interpleader and damages against private respondent CAMSAC
International Inc. (hereinafter referred to as "CAMSAC"), Arc Asia Philippines,
Inc., Triple A Marketing Development Corporation, Trinidad Patigayon, Signal
Trading Corporation and Malayan Insurance Co., Inc., due to the pendency of
two other cases. cdphil
The present controversy started with the construction of the Cebu School of
Midwifery Building owned by petitioner. In a bidding held on January 7, 1994,
the construction of the building was awarded by petitioner to respondent
CAMSAC represented by its President/General Manager, Architect Catalino M.
Salazar. The corresponding construction contract was executed between the
parties on January 26, 1994 with a stipulation on retention fee of ten (10%)
percent to be deducted by petitioner from all progress payments to the
contractor, herein respondent CAMSAC, which shall be released thirty (30)
calendar days after inspection and acceptance by petitioner of the project and the
submission of a sworn statement by respondent CAMSAC that all obligations,
including but not limited to salaries, materials used and taxes due in connection
with the construction have been duly paid. cdrep
On February 4, 1994, respondent CAMSAC entered into a "Sub-Contract

Agreement" with respondent Seoron to undertake the construction of the
subject building. After one year, respondent Seoron filed a complaint for "sum
of money with application for a writ of preliminary injunction" against petitioner
and respondent CAMSAC anchored on the "Sub-Contract Agreement" he
entered with the latter. Respondent Seoron sought to prevent petitioner from
paying or releasing any amount to respondent CAMSAC relative to the
construction of the subject building in the event that petitioner heeds CAMSAC's
request for the release of the retention fee.
In the meantime, petitioner allegedly received demand-letters from the

suppliers-creditors as well as from respondent CAMSAC for the release of the
10% retention fee, hence, on February 22, 1995, it filed before the trial court a
complaint for interpleader and damages against respondent CAMSAC, Arc Asia
Philippines, Inc., Triple A Marketing Development Corporation, Trinidad
Patigayon, Signal Trading Corporation and Malayan Insurance Co., Inc., in order
for them to interplead with one another to determine their respective rights and
claims on the retention fee.
On February 23, 1995, respondent CAMSAC filed an action for sum of money
and damages against petitioner 1 for failure of the latter to release the 10%
retention fee. On March 9, 1995, the trial court issued the first assailed Order
dismissing the complaint for interpleader to prevent multiplicity of suits, as there
are pending cases before the respondent court filed by respondent Seoron for
sum of money against petitioner and respondent CAMSAC which also involved
the ten (10%) retention fee. The trial court held:
"As herein before-stated, there is already a pending case by

Seoron against the herein plaintiff, Camsac International
Inc., and Catalino M. Salazar, as president of the Camsac and
in his personal capacity. Consequently, to give due course to
this present action would indeed result in a multiplicity of
suits. Plaintiff's proper move here would be to file an
answer, which it has not yet done up to this point in time
although it managed to file this complaint posthaste
assert a counterclaim and/or a cross claim, etc. in Civil Case
No. CEB-17079. The other defendants herein may intervene
therein if they so desire to protect their respective interest in
the same way that one of them, Arc Asia Phil. Inc., had
already filed its motion for intervention, dated March 6,
1995, in order that all their claims, may be tried and decided
in one proceeding. LLphil
WHEREFORE, the complaint for interpleader is hereby

denied due course, and the same should be, as it is hereby
ordered dismissed.
SO ORDERED." 2
Petitioner filed a motion for reconsideration which was denied in the second
assailed Order dated April 11, 1995. Hence, petitioner's immediate resort to this
Court by a petition for review on certiorari raising the following issues: 3
1. Respondent court acted with grave abuse of discretion, as

it had no jurisdiction, to exercise "due course"
authority and to motu proprio dismiss petitioner's
action for interpleader.
2. Respondent court erred when it correlated the "allegation

of fact" between the petitioner's complaint in Civil
Case No. CEB-17126 with that of the complaint in
Civil Case No. CEB-17079, and to thereafter issue
baseless and unwarranted conclusions patently
adverse to petitioner.
3. Although no hearing has as yet been conducted and in

what may amount to be a judgment on the
pleadings, respondent court's 9 March 1995 Order
is replete with "conclusions of fact and law" which,
if allowed to remain unchallenged, may amount to
a prejudgment of certain issues of fact and law that
are yet to be substantiated. LibLex
Petitioner's direct resort to this Court is erroneous. Under the Rules of Court, a
party may directly appeal to the Supreme Court from a decision of the trial court
only on pure questions of law. 4 The case at bench does not involve pure
questions of law as to entitle petitioner to seek immediate redress from this court.
A question of law arises when the doubt or difference arises as to what the law is
on a certain set of facts as distinguished from a question of fact which occurs
when the doubt or difference arises as to the truth or falsehood of the alleged
facts. 5
A scrutiny of the issues raised in this case shows that it includes factual matters.
The resolution of the interpleader case necessitates a determination of whether
the other pending cases relied upon by the trial court in dismissing the former
case involves the same matters covered by the latter cases. There is a need to
determine whether the pending civil cases arise out of the same facts and
circumstances as those involved in the interpleader case. As such, petitioner's
direct resort to this court must fail considering that this court is not a trier of
facts. 6 Besides, in a petition for review on certiorari, the trial judge should not
even be made a party to the case as petitioner erroneously did. 7
Petitioner's imputation of grave abuse of discretion to respondent court as

alleged in its petition is a vain attempt to justify its erroneous mode of
challenging the trial court's decision. There is no question that grave abuse of
discretion or errors of jurisdiction may be corrected only by the special civil
action of certiorari. 8 Such special remedy does not avail in instances of error of
judgment which can be corrected by appeal or by a petition for review. 9 Since
petitioner availed of the remedy under Rule 45, recourse to Rule 65 cannot be
allowed either as an add-on or as a substitute for appeal. 10
Verily, the alleged grave abuse of discretion and lack of jurisdiction raised in the
petition is misplaced. First, there is no question that the trial court has
jurisdiction over the interpleader case. Second, petitioner's claim that the trial
court failed to observe the procedure for an interpleader action does not
constitute grave abuse of discretion for the extraordinary writ to issue. It is only
an error of judgment correctible by an ordinary appeal. The extraordinary writ
does not issue to correct errors of procedure or mistake in the findings and
conclusions of the judge. 11 Finally, on the assumption that this is a proper
subject of a certiorari case, petitioner should have observed the hierarchy of
courts and not seek an immediate recourse to the highest tribunal. The original
jurisdiction of the Court of Appeals over special civil actions for certiorari is
concurrent with the Supreme Court and the Regional Trial Court. 12
ACCORDINGLY, the petition is denied for lack of merit.
||| (Cebu Woman's Club v. De La Victoria, G.R. No. 120060, March 09, 2000)
THIRD DIVISION
[G.R. No. 193494. March 12, 2014.]
LUI ENTERPRISES, INC., petitioner, vs. ZUELLIG

PHARMA CORPORATION and the PHILIPPINE BANK
OF COMMUNICATIONS, respondents.
DECISION
LEONEN, J p:
There should be no inexplicable delay in the filing of a motion to set aside order
of default. Even when a motion is filed within the required period, excusable
negligence must be properly alleged and proven.
This is a petition for review on certiorari of the Court of Appeals' decision 1 dated
May 24, 2010 and resolution 2 dated August 13, 2010 in CA-G.R. CV No. 88023.
The Court of Appeals affirmed in toto the Regional Trial Court of Makati's
decision 3 dated July 4, 2006.
The facts as established from the pleadings of the parties are as follows:
On March 9, 1995, Lui Enterprises, Inc. and Zuellig Pharma Corporation entered
into a 10-year contract of lease 4 over a parcel of land located in Barrio Tigatto,
Buhangin, Davao City. The parcel of land was covered by Transfer Certificate of
Title No. T-166476 and was registered under Eli L. Lui. 5
On January 10, 2003, Zuellig Pharma received a letter 6 from the Philippine Bank
of Communications. Claiming to be the new owner of the leased property, the
bank asked Zuellig Pharma to pay rent directly to it. Attached to the letter was a
copy of Transfer Certificate of Title No. 336962 under the name of the Philippine
Bank of Communications. 7 Transfer Certificate of Title No. 336962 was derived
from Transfer Certificate of Title No. T-166476. 8
Zuellig Pharma promptly informed Lui Enterprises of the Philippine Bank of

Communications' claim. On January 28, 2003, Lui Enterprises wrote to Zuellig
Pharma and insisted on its right to collect the leased property's rent. 9
Due to the conflicting claims of Lui Enterprises and the Philippine Bank of
Communications over the rental payments, Zuellig Pharma filed a complaint 10
for interpleader with the Regional Trial Court of Makati. In its complaint, Zuellig
Pharma alleged that it already consigned in court P604,024.35 as rental
payments. Zuellig Pharma prayed that it be allowed to consign in court its
succeeding monthly rental payments and that Lui Enterprises and the Philippine
Bank of Communications be ordered to litigate their conflicting claims. 11
The Philippine Bank of Communications filed its answer 12 to the complaint. On

the other hand, Lui Enterprises filed a motion to dismiss 13 on the ground that
Zuellig Pharma's alleged representative did not have authority to file the
complaint for interpleader on behalf of the corporation. Under the secretary's
certificate 14 dated May 6, 2003 attached to the complaint, Atty. Ana L.A. Peralta
was only authorized to "initiate and represent [Zuellig Pharma] in the civil
proceedings for consignation of rental payments to be filed against Lui
Enterprises, Inc. and/or [the Philippine Bank of Communications]." 15
According to Lui Enterprises, an earlier filed nullification of deed of dation in

payment case pending with the Regional Trial Court of Davao barred the filing
of the interpleader case. 16 Lui Enterprises filed this nullification case against the
Philippine Bank of Communications with respect to several properties it
dationed to the bank in payment of its obligations. The property leased by
Zuellig Pharma was among those allegedly dationed to the Philippine Bank of
Communications. 17 EHASaD
In the nullification of deed of dation in payment case, Lui Enterprises raised the
issue of which corporation had the better right over the rental payments. 18 Lui
Enterprises argued that the same issue was involved in the interpleader case. To
avoid possible conflicting decisions of the Davao trial court and the Makati trial
court on the same issue, Lui Enterprises argued that the subsequently filed
interpleader case be dismissed.
To support its argument, Lui Enterprises cited a writ of preliminary injunction 19

dated July 2, 2003 issued by the Regional Trial Court of Davao, ordering Lui
Enterprises and the Philippine Bank of Communications "[to maintain] status
quo" 20 with respect to the rent. By virtue of the writ of preliminary injunction,
Lui Enterprises argued that it should continue collecting the rental payments
from its lessees until the nullification of deed of dation in payment case was
resolved. The writ of preliminary injunction dated July 2, 2003 reads:
WHEREAS, on June 30, 2003, the Court issued an Order, a

portion of which is quoted:
WHEREFORE, PREMISES CONSIDERED, let a

Writ of Preliminary Injunction issue, restraining
and enjoining [the Philippine Bank of
Communications], its agents or [representative], the
Office of the Clerk of Court-Sheriff and all persons
acting on their behalf, from conducting auction sale
on the properties of [Lui Enterprises] in EJF-REM
Case No. 6272-03 scheduled on July 3, 2003 at 10:00
a.m. at the Hall of Justice, Ecoland, Davao City,
until the final termination of the case, upon plaintiff
[sic] filing of a bond in the amount of P1,000,000.00
to answer for damages that the enjoined parties
may sustain by reason of the injunction if the Court
should finally decide that applicant is not entitled
thereto.
WHEREAS, that plaintiff posted a bond of P1,000,000.00

duly approved by this Court.
IT IS HEREBY ORDERED by the undersigned Judge that,

until further orders, [the Philippine Bank of
Communications] and all [its] attorneys, representatives,
agents and any other persons assisting [the bank], are
directed to restrain from conducting auction sale on the
Properties of [Lui Enterprises] in EJF-REM Case No. 6272-03
scheduled on July 3, 2003 at 10:00 a.m. at the Hall of Justice,
Ecoland, Davao City, until the final termination of the case.
21
Zuellig Pharma filed its opposition 22 to the motion to dismiss. It argued that the
motion to dismiss should be denied for having been filed late. Under Rule 16,
Section 1 of the 1997 Rules of Civil Procedure, a motion to dismiss should be filed
within the required time given to file an answer to the complaint, which is 15
days from service of summons on the defendant. 23 Summons was served on Lui
Enterprises on July 4, 2003. It had until July 19, 2003 to file a motion to dismiss,
but Lui Enterprises filed the motion only on July 23, 2003. 24
As to Lui Enterprises' claim that the interpleader case was filed without
authority, Zuellig Pharma argued that an action interpleader "is a necessary
consequence of the action for consignation." 25 Zuellig Pharma consigned its
rental payments because of "the clearly conflicting claims of [Lui Enterprises]
and [the Philippine Bank of Communications]." 26 Since Atty. Ana L.A. Peralta
was authorized to file a consignation case, this authority necessarily included an
authority to file the interpleader case.
Nevertheless, Zuellig Pharma filed in court the secretary's certificate dated

August 28, 2003, 27 which expressly stated that Atty. Ana L.A. Peralta was
authorized to file a consignation and interpleader case on behalf of Zuellig
Pharma. 28
With respect to the nullification of deed of dation in payment case, Zuellig

Pharma argued that its pendency did not bar the filing of the interpleader case. It
was not a party to the nullification case. 29
As to the writ of preliminary injunction issued by the Regional Trial Court of

Davao, Zuellig Pharma argued that the writ only pertained to properties owned
by Lui Enterprises. Under the writ of preliminary injunction, the Regional Trial
Court of Davao enjoined the July 3, 2003 auction sale of Lui Enterprises'
properties, the proceeds of which were supposed to satisfy its obligations to the
Philippine Bank of Communications. As early as April 21, 2001, however, the
Philippine Bank of Communications already owned the leased property as
evidenced by Transfer Certificate of Title No. 336962. Thus, the writ of
preliminary injunction did not apply to the leased property. 30
Considering that Lui Enterprises filed its motion to dismiss beyond the 15-day
period to file an answer, Zuellig Pharma moved that Lui Enterprises be declared
in default. 31
In its compliance 32 dated September 15, 2003, the Philippine Bank

of Communications "[joined Zuellig Pharma] in moving to declare [Lui
Enterprises] in default, and in [moving for] the denial of [Lui Enterprises']
motion to dismiss." 33
The Regional Trial Court of Makati found that Lui Enterprises failed to file its
motion to dismiss within the reglementary period. Thus, in its order 34 dated
October 6, 2003, the trial court denied Lui Enterprises' motion to dismiss and
declared it in default. 35
Lui Enterprises did not move for the reconsideration of the order dated October
6, 2003. Thus, the Makati trial court heard the interpleader case without Lui
Enterprises' participation. DTESIA
Despite having been declared in default, Lui Enterprises filed the manifestation
with prayer 36 dated April 15, 2004. It manifested that the Regional Trial Court of
Davao allegedly issued the order 37 dated April 1, 2004, ordering all of Lui
Enterprises' lessees to "observe status quo with regard to the rental payments" 38
and continue remitting their rental payments to Lui Enterprises while the
nullification of deed of dation in payment case was being resolved. The order
dated April 1, 2004 of the Regional Trial Court of Davao reads:
ORDER
Posed for Resolution is the Motion for Amendment of Order

filed by [Lui Enterprises] on September 23, 2003 seeking for
the preservation of status quo on the payment/remittance of
rentals to [it] and the disposal/construction of the properties
subject matter of this case.
xxx xxx xxx
As elsewhere stated, [the Philippine Bank of

Communications] did not oppose the instant motion up to
the present. In fact, during the hearing held on March 15,
2004, [the bank's] counsel manifested in open court that
except for the rentals due from [Zuellig Pharma] which are
the subject of a consignation suit before a Makati Court, the
other rental payments are continuously received by [Lui
Enterprises].
There being no objection from [the Philippine Bank of

Communications], and in order to protect the right of [Lui
Enterprises] respecting the subject of the action during the
pendency of this case, this Court, in the exercise of its
discretion hereby grants the motion.
Accordingly, consistent with the order of this Court dated

June 30, 2003, the parties are hereby directed to further
observe status quo with regard to the rental payments owing
or due from the lessees of the properties subject of the first
set of deeds of dacion and that the defendants are enjoined
from disposing of the properties located at Green Heights
Village, Davao City until the case is finally resolved.
With the order dated April 1, 2004 issued by the Regional Trial Court of Davao as
basis, Lui Enterprises argued that Zuellig Pharma must remit its rental payments
to it and prayed that the interpleader case be dismissed.
The Regional Trial Court of Makati only noted the manifestation with prayer
dated April 15, 2004. 39
It was only on October 21, 2004, or one year after the issuance of the order of
default, that Lui Enterprises filed a motion to set aside order of default 40 in the
Makati trial court on the ground of excusable negligence. Lui Enterprises argued
that its failure to file a motion to dismiss on time "was caused by the negligence
of [Lui Enterprises'] former counsel." 41 This negligence was allegedly excusable
because "[Lui Enterprises] was prejudiced and prevented from fairly presenting
[its] case." 42 TSAHIa
For its allegedly meritorious defense, Lui Enterprises argued that the earlier filed
nullification of deed of dation in payment case barred the filing of the
interpleader case. The two actions allegedly involved the same parties and the
same issue of which corporation had the better right over the rental payments.
To prevent "the possibility of two courts . . . rendering conflicting rulings [on the
same issue]," 43 Lui Enterprises argued that the subsequently filed interpleader
case be dismissed.
Zuellig Pharma filed its opposition 44 to the motion to set aside order of default.
It argued that a counsel's failure to file a timely answer was inexcusable
negligence which bound his client.
Further, Zuellig Pharma argued that the pending case for nullification of deed of
dation in payment "[did] not preclude [Zuellig Pharma] from seeking the relief
prayed for in the [interpleader case]." 45
While the motion to set aside order of default was still pending for resolution,
Lui Enterprises filed the manifestation and motion to dismiss 46 dated April 21,
2005 in the Makati trial court. It manifested that the Davao trial court issued
another order 47 dated April 18, 2005 in the nullification of deed of dation in
payment case. In this order, the Davao trial court directed the Philippine Bank of
Communications to inform Zuellig Pharma to pay rent to Lui Enterprises while
the Davao trial court's order dated April 1, 2004 was subsisting. The order dated
April 1, 2005 of the Davao trial court reads:
ORDER
Plaintiffs move for execution or implementation of the Order

dated September 14, 2004. In substance, [Lui Enterprises]
seek[s] to compel the remittance in their favor of the rentals
from [Zuellig Pharma], one of the lessees alluded to in the
September 14, 2004 Order whose rental payments "must be
remitted to and collected by [Lui Enterprises]." [The
Philippine Bank of Communications] did not submit any
opposition.
It appears from the records that sometime in February 2003,

after being threatened with a lawsuit coming from [the
Philippine Bank of Communications], [Zuellig Pharma]
stopped remitting its rentals to [Lui Enterprises] and instead,
has reportedly deposited the monthly rentals before a
Makati court for consignation. SEHDIC
As aptly raised by the plaintiffs, a possible impasse may

insist should the Makati Court's ruling be contrary to or in
conflict with the status quo order issued by this Court. To
preclude this spectacle, Zuellig Pharma should accordingly
be advised with the import of the Order dated September 14,
2004, the salient portion of which is quoted:
. . . prior to the institution of the instant case and by

agreement of the parties, plaintiffs were given as
they did exercise the right to collect, receive and
enjoy rental payments . . . .
Since the April 1, 2004 status quo order was a

necessary implement of the writ of preliminary
injunction issued on June 30, 2003, it follows that
plaintiff's right to collect and receive rental
payments which he enjoyed prior to the filing of
this case, must be respected and protected and
maintained until the case is resolved. As such, all
rentals due from the above-enumerated lessees
must be remitted to and collected by the Plaintiffs.
Status quo simply means the last actual peaceable

uncontested status that preceded the actual
controversy. (Searth Commodities Corp. v. Court of
Appeals, 207 SCRA 622).
As such, the [Philippine Bank of Communications] [is]

hereby directed to forthwith inform [Zuellig Pharma] of the
April 1, 2004 status quo order and the succeeding September
14, 2004 Order, and consequently, for the said lessee to remit
all rentals due from February 23, 2003 and onwards to [Lui
Enterprises] in the meanwhile that the status quo order is
subsisting.
In its manifestation and motion to dismiss, Lui Enterprises reiterated its prayer
for the dismissal of the interpleader case to prevent "the possibility of [the
Regional Trial Court, Branch 143, Makati City] and [the Regional Trial Court,
Branch 16, Davao City] rendering conflicting rulings [on the same issue of which
corporation has the better right to the rental payments]." 48
Without resolving the motion to set aside order of default, the Makati trial court
denied the manifestation with motion to dismiss dated April 21, 2005 on the
ground that Lui Enterprises already lost its standing in court. 49
Lui Enterprises did not file any motion for reconsideration of the denial of the
manifestation and motion to dismiss dated April 21, 2005.
In its decision 50 dated July 4, 2006, the Regional Trial Court of Makati ruled that
Lui Enterprises "[was] barred from any claim in respect of the [rental payments]"
51 since it was declared in default. Thus, according to the trial court, there was
no issue as to which corporation had the better right over the rental payments. 52
The trial court awarded the total consigned amount of P6,681,327.30 to the
Philippine Bank of Communications and ordered Lui Enterprises to pay Zuellig
Pharma P50,000.00 in attorney's fees. 53
Lui Enterprises appealed to the Court of Appeals. 54
The Court of Appeals found Lui Enterprises' appellant's brief insufficient. Under
Rule 44, Section 13 of the 1997 Rules of Civil Procedure, an appellant's brief must
contain a subject index, page references to the record, table of cases, textbooks
and statutes cited, and the statement of issues, among others. However, Lui
Enterprises' appellant's brief did not contain these requirements. 55
As to the denial of Lui Enterprises' motion to dismiss, the Court of Appeals

sustained the trial court. The Court of Appeals found that Lui Enterprises filed
its motion to dismiss four days late. 56
With respect to Lui Enterprises' motion to set aside order of default, the Court of
Appeals found that Lui Enterprises failed to show the excusable negligence that
prevented it from filing its motion to dismiss on time. On its allegedly
meritorious defense, the Court of Appeals ruled that the nullification of deed of
dation in payment case did not bar the filing of the interpleader case, with
Zuellig Pharma not being a party to the nullification case. 57
On the award of attorney's fees, the Court of Appeals sustained the trial court
since "Zuellig Pharma . . . was constrained to file the action for interpleader with
consignation in order to protect its interests . . . ." 58
Thus, in its decision 59 promulgated on May 24, 2010, the Court of Appeals
dismissed Lui Enterprises' appeal and affirmed in toto the Regional Trial Court of
Makati's decision.
Lui Enterprises filed a motion for reconsideration. 60
The Court of Appeals denied Lui Enterprises' motion for reconsideration in its
resolution promulgated on August 13, 2010. 61 Hence, this petition.
In this petition for review on certiorari, 62 Lui Enterprises argued that the Court
of Appeals applied "the rules of procedure strictly" 63 and dismissed its appeal
on technicalities. According to Lui Enterprises, the Court of Appeals should have
taken a liberal stance and allowed its appeal despite the lack of subject index,
page references to the record, table of cases, textbooks and statutes cited, and the
statement of issues in its appellant's brief. 64 IDcAHT
Lui Enterprises also claimed that the trial court should have set aside the order of
default since its failure to file a motion to dismiss on time was due to excusable
negligence. 65
For its allegedly meritorious defense, Lui Enterprises argued that the pending
interpleader case. The nullification of deed of dation in payment case and the
interpleader case allegedly involved the same issue of which corporation had the
better right to the rent. To avoid conflicting rulings on the same issue, Lui
Enterprises argued that the subsequently filed interpleader case be dismissed. 66
No attorney's fees should have been awarded to Zuellig Pharma as argued by

Lui Enterprises. Zuellig Pharma filed the interpleader case despite its knowledge
of the nullification of deed of dation in payment case filed in the Davao trial
court where the same issue of which corporation had the better right over the
rental payments was being litigated. Thus, Zuellig Pharma filed the interpleader
case in bad faith for which it was not entitled to attorney's fees. 67
The Philippine Bank of Communications filed its comment 68 on the petition for
review on certiorari. It argued that Lui Enterprises failed to raise any error of law
and prayed that we affirm in toto the Court of Appeals' decision.
For Zuellig Pharma, it manifested that it was adopting the Philippine Bank of
Communications' arguments in its comment. 69
The issues for our resolution are:
I.Whether the Court of Appeals erred in dismissing Lui

Enterprises' appeal for lack of subject index, page
references to the record, table of cases, textbooks
and statutes cited, and the statement of issues in
Lui Enterprises' appellant's brief;
II.Whether the Regional Trial Court of Makati erred in

denying Lui Enterprises' motion to set aside order
of default;
III.Whether the annulment of deed of dation in payment

pending in the Regional Trial Court of Davao
barred the subsequent filing of the interpleader case
in the Regional Trial Court of Makati; and
IV.Whether Zuellig Pharma was entitled to attorney's fees.
Lui Enterprises' petition for review on certiorari is without merit. However, we

delete the award of attorney's fees.
I
Lui Enterprises did not comply with the rules on the contents of the
appellant's brief
Under Rule 50, Section 1, paragraph (f) of the 1997 Rules of Civil Procedure, the
Court of Appeals may, on its own motion or that of the appellee, dismiss an
appeal should the appellant's brief lack specific requirements under Rule 44,
Section 13, paragraphs (a), (c), (d), and (f):
Section 1.Grounds for dismissal of appeal. An appeal may be

dismissed by the Court of Appeals, on its own motion or on
that of the appellee, on the following grounds:
xxx xxx xxx
(f)Absence of specific assignment of errors in the appellant's

brief, or of page references to the record as required in
Section 13, paragraphs (a), (c), (d), and (f) of Rule 44.
These requirements are the subject index of the matter in brief, page references to
the record, and a table of cases alphabetically arranged and with textbooks and
statutes cited:
Section 13.Contents of the appellant's brief. The appellant's
brief shall contain, in the order herein indicated, the
following:
(a)A subject index of the matter in brief with a digest of the

arguments and page references, and a table of cases
alphabetically arranged, textbooks and statutes cited with
references to the pages where they are cited;
xxx xxx xxx
(c)Under the heading "Statement of the Case," a clear and

concise statement of the nature of the action, a summary of
the proceedings, the appealed rulings and orders of the
court, the nature of the controversy, with page references to
the record;
(d)Under the heading "Statement of Facts,'' a clear and

concise statement in a narrative form of the facts admitted
by both parties and of those in controversy, together with
the substance of the proof relating thereto in sufficient detail
to make it clearly intelligible, with page references to the
record; AIDTSE
xxx xxx xxx
(f)Under the heading "Argument," the appellant's arguments

on each assignment of error with page references to the
record. The authorities relied upon shall be cited by the page
of the report at which the case begins and the page of the
report on which the citation is found;
xxx xxx xxx
Lui Enterprises' appellant's brief lacked a subject index, page references to the
record, and table of cases, textbooks and statutes cited. Under Rule 50, Section 1
of the 1997 Rules of Civil Procedure, the Court of Appeals correctly dismissed
Lui Enterprises' appeal.
Except for cases provided in the Constitution, 70 appeal is a "purely statutory

right." 71 The right to appeal "must be exercised in the manner prescribed by
law" 72 and requires strict compliance with the Rules of Court on appeals. 73
Otherwise, the appeal shall be dismissed, and its dismissal shall not be a
deprivation of due process of law.
In Mendoza v. United Coconut Planters Bank, Inc., 74 this court sustained the Court
of Appeals' dismissal of Mendoza's appeal. Mendoza's appellant's brief lacked a
subject index, assignment of errors, and page references to the record. In De Liano
v. Court of Appeals, 75 this court also sustained the dismissal of De Liano's appeal.
De Liano's appellant's brief lacked a subject index, a table of cases and
authorities, and page references to the record.
There are exceptions to this rule. In Philippine Coconut Authority v. Corona

International, Inc., 76 the Philippine Coconut Authority's appellant's brief lacked a
clear and concise statement of the nature of the action, a summary of the
proceedings, the nature of the judgment, and page references to the record.
However, this court found that the Philippine Coconut Authority substantially
complied with the Rules. Its appellant's brief "apprise[d] [the Court of Appeals]
of the essential facts and nature of the case as well as the issues raised and the
laws necessary [to dispose of the case]." 77 This court "[deviated] from a rigid
enforcement of the rules" 78 and ordered the Court of Appeals to resolve the
Philippine Coconut Authority's appeal.
In Go v. Chaves, 79 Go's 17-page appellant's brief lacked a subject index.

However, Go subsequently filed a subject index. This court excused Go's
procedural lapse since the appellant's brief "[consisted] only of 17 pages which
[the Court of Appeals] may easily peruse to apprise it of [the case] and of the
relief sought." 80 This court ordered the Court of Appeals to resolve Go's appeal
"in the interest of justice." 81
In Philippine Coconut Authority and Go, the appellants substantially complied with
the rules on the contents of the appellant's brief. Thus, this court excused the
appellants' procedural lapses.
In this case, Lui Enterprises did not substantially comply with the rules on the
contents of the appellant's brief. It admitted that its appellant's brief lacked the
required subject index, page references to the record, and table of cases,
textbooks, and statutes cited. However, it did not even correct its admitted
"technical omissions" 82 by filing an amended appellant's brief with the required
contents. 83 Thus, this case does not allow a relaxation of the rules. The Court of
Appeals did not err in dismissing Lui Enterprises' appeal.
Rules on appeal "are designed for the proper and prompt disposition of cases
before the Court of Appeals." 84 With respect to the appellant's brief, its required
contents are designed "to minimize the [Court of Appeals'] labor in [examining]
the record upon which the appeal is heard and determined." 85
The subject index serves as the brief's table of contents. 86 Instead of "[thumbing]
through the [appellant's brief]" 87 every time the Court of Appeals Justice
encounters an argument or citation, the Justice deciding the case only has to refer
to the subject index for the argument or citation he or she needs. 88 This saves
the Court of Appeals time in reviewing the appealed case. Efficiency allows the
justices of the appellate court to substantially attend to this case as well as other
cases.
Page references to the record guarantee that the facts stated in the appellant's
brief are supported by the record. 89 A statement of fact without a page reference
to the record creates the presumption that it is unsupported by the record and,
thus, "may be stricken or disregarded altogether." 90
As for the table of cases, textbooks, and statutes cited, this is required so that the
Court of Appeals can easily verify the authorities cited "for accuracy and
aptness." 91
record, and a table of cases, textbooks, and statutes cited. These requirements
"were designed to assist the appellate court in the accomplishment of its tasks,
and, overall, to enhance the orderly administration of justice." 92 This court will
not disregard rules on appeal "in the guise of liberal construction." 93 For this
court to liberally construe the Rules, the party must substantially comply with
the Rules and correct its procedural lapses. 94 Lui Enterprises failed to remedy
these errors. cSIACD
All told, the Court of Appeals did not err in dismissing Lui Enterprises' appeal. It
failed to comply with Rule 44, Section 13, paragraphs (a), (c), (d), and (f) of the
1997 Rules of Civil Procedure on the required contents of the appellant's brief.
II
Lui Enterprises failed to show that its failure to answer the complaint
within the required period was due to excusable negligence
When a defendant is served with summons and a copy of the complaint, he or
she is required to answer within 15 days from the day he or she was served with
summons. 95 The defendant may also move to dismiss the complaint "[w]ithin
the time for but before filing the answer." 96
Fifteen days is sufficient time for a defendant to answer with good defenses
against the plaintiff's allegations in the complaint. Thus, a defendant who fails to
answer within 15 days from service of summons either presents no defenses
against the plaintiff's allegations in the complaint or was prevented from filing
his or her answer within the required period due to fraud, accident, mistake or
excusable negligence. 97
In either case, the court may declare the defendant in default on plaintiff's
motion and notice to defendant. 98 The court shall then try the case until
judgment without defendant's participation 99 and grant the plaintiff such relief
as his or her complaint may warrant. 100
A defendant declared in default loses his or her standing in court. 101 He or she
is "deprived of the right to take part in the trial and forfeits his [or her] rights as a
party litigant," 102 has no right "to present evidence [supporting his or her]
allegations," 103 and has no right to "control the proceedings [or] cross-examine
witnesses." 104 Moreover, he or she "has no right to expect that [the court] would
[act] upon [his or her pleadings]" 105 or that he or she "may [oppose] motions
filed against him [or her]." 106
However, the defendant declared in default "does not [waive] all of [his or her]
rights." 107 He or she still has the right to "receive notice of subsequent
proceedings." 108 Also, the plaintiff must still present evidence supporting his or
her allegations "despite the default of [the defendant]." 109
Default, therefore, is not meant to punish the defendant but to enforce the
prompt filing of the answer to the complaint. For a defendant without good
defenses, default saves him or her "the embarrassment of openly appearing to
defend the indefensible." 110 As this court explained in Gochangco v. The Court of
First Instance of Negros Occidental, Branch IV: 111
It does make sense for a defendant without defenses, and

who accepts the correctness of the specific relief prayed for
in the complaint, to forego the filing of the answer or any
sort of intervention in the action at all. For even if he did
intervene, the result would be the same: since he would be
unable to establish any good defense, having none in fact,
judgment would inevitably go against him. And this
would be an acceptable result, if not being in his power to
alter or prevent it, provided that the judgment did not go
beyond or differ from the specific relief stated in the
complaint. . . . . 112 (Emphasis in the original)
On the other hand, for a defendant with good defenses, "it would be unnatural
for him [or her] not to set . . . up [his or her defenses] properly and timely." 113
Thus, "it must be presumed that some insuperable cause prevented him [or her]
from [answering the complaint]." 114 In which case, his or her proper remedy
depends on when he or she discovered the default and whether the default
judgment was already rendered by the trial court.
After notice of the declaration of default but before the court renders the default
judgment, the defendant may file, under oath, a motion to set aside order of
default. The defendant must properly show that his or her failure to answer was
due to fraud, accident, 115 mistake 116 or excusable negligence. 117 The
defendant must also have a meritorious defense. Rule 9, Section 3, paragraph (b)
of the 1997 Rules of Civil Procedure provides:
Section 3.Default; declaration of. . . .
(b)Relief from order of default. A party declared in default

may at any time after notice thereof and before judgment file
a motion under oath to set aside the order of default upon
proper showing that his failure to answer was due to fraud,
accident, mistake or excusable negligence and that he has a
meritorious defense. In such case, the order of default may
be set aside on such terms and conditions as the judge may
impose in the interest of justice.
If the defendant discovers his or her default after judgment but prior to the
judgment becoming final and executory, he or she may file a motion for new trial
under Rule 37, Section 1, paragraph (a) of the 1997 Rules of Civil Procedure. 118
If he or she discovers his or her default after the judgment has become final and
executory, a petition for relief from judgment under Rule 38, Section 1 of the 1997
Rules of Civil Procedure may be filed. 119
Appeal is also available to the defendant declared in default. He or she may

appeal the judgment for being contrary to the evidence or to the law under Rule
41, Section 2 of the 1997 Rules of Civil Procedure. 120 He or she may do so even
if he or she did not file a petition to set aside order of default. 121
A petition for certiorari may also be filed if the trial court declared the defendant
in default with grave abuse of discretion. 122
The remedies of the motion to set aside order of default, motion for new trial,
and petition for relief from judgment are mutually exclusive, not alternative or
cumulative. This is to compel defendants to remedy their default at the earliest
possible opportunity. Depending on when the default was discovered and
whether a default judgment was already rendered, a defendant declared in
default may avail of only one of the three remedies.
Thus, if a defendant discovers his or her default before the trial court renders
judgment, he or she shall file a motion to set aside order of default. If this motion
to set aside order of default is denied, the defendant declared in default cannot
await the rendition of judgment, and he or she cannot file a motion for new trial
before the judgment becomes final and executory, or a petition for relief from
judgment after the judgment becomes final and executory.
Also, the remedies against default become narrower and narrower as the trial
nears judgment. The defendant enjoys the most liberality from this court with a
motion to set aside order of default, as he or she has no default judgment to
contend with, and he or she has the whole period before judgment to remedy his
or her default. TcDIaA
With a motion for new trial, the defendant must file the motion within the period
for taking an appeal 123 or within 15 days from notice of the default judgment.
Although a default judgment has already been rendered, the filing of the motion
for new trial tolls the reglementary period of appeal, and the default judgment
cannot be executed against the defendant.
A petition for relief from judgment is filed after the default judgment has become
final and executory. Thus, the filing of the petition for relief from judgment does
not stay the execution of the default judgment unless a writ of preliminary
injunction is issued pending the petition's resolution. 124
Upon the grant of a motion to set aside order of default, motion for new trial, or a
petition for relief from judgment, the defendant is given the chance to present his
or her evidence against that of plaintiff's. With an appeal, however, the
defendant has no right to present evidence on his or her behalf and can only
appeal the judgment for being contrary to plaintiff's evidence or the law.
Similar to an appeal, a petition for certiorari does not allow the defendant to
present evidence on his or her behalf. The defendant can only argue that the trial
court committed grave abuse of discretion in declaring him or her in default.
Thus, should a defendant prefer to present evidence on his or her behalf, he or

she must file either a motion to set aside order of default, motion for new trial, or
a petition for relief from judgment.
In this case, Lui Enterprises had discovered its default before the Regional Trial
Court of Makati rendered judgment. Thus, it timely filed a motion to set aside
order of default, raising the ground of excusable negligence.
Excusable negligence is "one which ordinary diligence and prudence could not
have guarded against." 125 The circumstances should be properly alleged and
proved. In this case, we find that Lui Enterprises' failure to answer within the
required period is inexcusable.
Lui Enterprises' counsel filed its motion to dismiss four days late. It did not
immediately take steps to remedy its default and took one year from discovery of
default to file a motion to set aside order of default. In its motion to set aside
order of default, Lui Enterprises only "conveniently blamed its . . . counsel [for
the late filing of the answer]" 126 without offering any excuse for the late filing.
This is not excusable negligence under Rule 9, Section 3, paragraph (b) 127 of the
1997 Rules of Civil Procedure. Thus, the Regional Trial Court of Makati did not
err in refusing to set aside the order of default.
Lui Enterprises argued that the Regional Trial Court of Makati should have been
liberal in setting aside its order of default. After it had been declared in default,
Lui Enterprises filed several manifestations informing the Makati trial court of
the earlier filed nullification of deed of dation in payment case which barred the
filing of the interpleader case. Lui Enterprises' president, Eli L. Lui, and counsel
even flew in from Davao to Makati to "formally [manifest that] a [similar] action
between [Lui Enterprises] and [the Philippine Bank of Communications]" 128
was already pending in the Regional Trial Court of Davao. However, the trial
court did not recognize Lui Enterprises' standing in court.
The general rule is that courts should proceed with deciding cases on the merits
and set aside orders of default as default judgments are "frowned upon." 129 As
much as possible, cases should be decided with both parties "given every chance
to fight their case fairly and in the open, without resort to technicality." 130
However, the basic requirements of Rule 9, Section 3, paragraph (b) of the 1997
Rules of Civil Procedure must first be complied with. 131 The defendant's motion
to set aside order of default must satisfy three conditions. First is the time
element. The defendant must challenge the default order before judgment.
Second, the defendant must have been prevented from filing his answer due to
fraud, accident, mistake or excusable negligence. Third, he must have a
meritorious defense. As this court held in SSS v. Hon. Chaves: 132
Procedural rules are not to be disregarded or dismissed

simply because their non-observance may have resulted in
prejudice to a party's substantive rights. Like all rules[,] they
are to be followed, except only when for the most persuasive
of reasons they may be relaxed to relieve a litigant of an
injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure
prescribed. . . . . 133
As discussed, Lui Enterprises never explained why its counsel failed to file the
motion to dismiss on time. It just argued that courts should be liberal in setting
aside orders of default. Even assuming that it had a meritorious defense and that
its representative and counsel had to fly in from Davao to Makati to personally
appear and manifest in court its meritorious defense, Lui Enterprises must first
show that its failure to answer was due to fraud, accident, mistake or excusable
negligence. This Lui Enterprises did not do.
Lui Enterprises argued that Zuellig Pharma filed the interpleader case to compel
Lui Enterprises and the Philippine Bank of Communications to litigate their
claims. Thus, "[d]eclaring the other claimant in default would ironically defeat
the very purpose of the suit." 134 The Regional Trial Court of Makati should not
have declared Lui Enterprises in default.
Under Rule 62, Section 1 of the 1997 Rules of Civil Procedure, a person may file a
special civil action for interpleader if conflicting claims are made against him or
her over a subject matter in which he or she has no interest. The action is brought
against the claimants to compel them to litigate their conflicting claims among
themselves. Rule 62, Section 1 of the 1997 Rules of Civil Procedure provides:
Section 1.When interpleader proper. Whenever conflicting

claims upon the same subject matter are or may be made
against a person who claims no interest whatever in the
subject matter, or an interest which in whole or in part is not
disputed by the claimants, he may bring an action against
the conflicting claimants to compel them to interplead and
litigate their several claims among themselves.
An interpleader complaint may be filed by a lessee against those who have

conflicting claims over the rent due for the property leased. 135 This remedy is
for the lessee to protect him or her from "double vexation in respect of one
liability." 136 He or she may file the interpleader case to extinguish his or her
obligation to pay rent, remove him or her from the adverse claimants' dispute,
and compel the parties with conflicting claims to litigate among themselves.
cDSAEI
In this case, Zuellig Pharma filed the interpleader case to extinguish its obligation
to pay rent. Its purpose in filing the interpleader case "was not defeated" 137
when the Makati trial court declared Lui Enterprises in default.
At any rate, an adverse claimant in an interpleader case may be declared in

default. Under Rule 62, Section 5 of the 1997 Rules of Civil Procedure, a claimant
who fails to answer within the required period may, on motion, be declared in
default. The consequence of the default is that the court may "render judgment
barring [the defaulted claimant] from any claim in respect to the subject matter."
138 The Rules would not have allowed claimants in interpleader cases to be
declared in default if it would "ironically defeat the very purpose of the suit." 139
The Regional Trial Court of Makati declared Lui Enterprises in default when it
failed to answer the complaint within the required period. Lui Enterprises filed a
motion to set aside order of default without an acceptable excuse why its counsel
failed to answer the complaint. It failed to prove the excusable negligence. Thus,
the Makati trial court did not err in refusing to set aside the order of default.
III
The nullification of deed in dation in payment case did not bar the filing of
the interpleader case. Litis pendentia is not present in this case.
Lui Enterprises allegedly filed for nullification of deed of dation in payment with
the Regional Trial Court of Davao. It sought to nullify the deed of dation in
payment through which the Philippine Bank of Communications acquired title
over the leased property. Lui Enterprises argued that this pending nullification
case barred the Regional Trial Court of Makati from hearing the interpleader
case. Since the interpleader case was filed subsequently to the nullification case,
the interpleader case should be dismissed.
Under Rule 16, Section 1, paragraph (e) of the 1997 Rules of Civil Procedure, a
motion to dismiss may be filed on the ground of litis pendentia:
Section 1.Grounds. Within the time for but before filing the
answer to the complaint or pleading asserting a claim, a
motion to dismiss may be made on any of the following
grounds:
xxx xxx xxx
(e)That there is another action pending between the

same parties for the same cause;
xxx xxx xxx
Litis pendentia is Latin for "a pending suit." 140 It exists when "another action is
pending between the same parties for the same cause of action . . . ." 141 The
subsequent action is "unnecessary and vexatious" 142 and is instituted to "harass
the respondent [in the subsequent action]." 143 ESTDIA
The requisites of litis pendentia are:
(1)Identity of parties or at least such as represent the same

interest in both actions;
(2)Identity of rights asserted and reliefs prayed for, the

reliefs being founded on the same facts; and
(3)The identity in the two cases should be such that the

judgment that may be rendered in one would,
regardless of which party is successful, amount to
res judicata in the other. 144
All of the requisites must be present. 145 Absent one requisite, there is no litis
pendentia. 146
In this case, there is no litis pendentia since there is no identity of parties in the
nullification of deed of dation in payment case and the interpleader case. Zuellig
Pharma is not a party to the nullification case filed in the Davao trial court.
There is also no identity of rights asserted and reliefs prayed for. Lui Enterprises
filed the first case to nullify the deed of dation in payment it executed in favor of
the Philippine Bank of Communications. Zuellig Pharma subsequently filed the
interpleader case to consign in court the rental payments and extinguish its
obligation as lessee. The interpleader case was necessary and was not instituted
to harass either Lui Enterprises or the Philippine Bank of Communications.
Thus, the pending nullification case did not bar the filing of the interpleader case.
Lui Enterprises cited Progressive Development Corporation, Inc. v. Court of Appeals

147 as authority to set aside the subsequently filed interpleader case. In this cited
case, petitioner Progressive Development Corporation, Inc. entered into a lease
contract with Westin Seafood Market, Inc. The latter failed to pay rent. Thus,
Progressive Development Corporation, Inc. repossessed the leased premises,
inventoried the movable properties inside the leased premises, and scheduled
the public sale of the inventoried properties as they agreed upon in their lease
contract.
Westin Seafood Market, Inc. filed for forcible entry with damages against
Progressive Development Corporation, Inc. It subsequently filed an action for
damages against Progressive Development Corporation for its "forcible takeover
of the leased premises." 148
This court ordered the subsequently filed action for damages dismissed as the
pending forcible entry with damages case barred the subsequently filed damages
case.
Progressive Development Corporation, Inc. does not apply in this case. The action for
forcible entry with damages and the subsequent action for damages were filed by
the same plaintiff against the same defendant. There is identity of parties in both
cases.
In this case, the nullification of deed of dation in payment case was filed by Lui
Enterprises against the Philippine Bank of Communications. The interpleader
case was filed by Zuellig Pharma against Lui Enterprises and the Philippine Bank
of Communications. A different plaintiff filed the interpleader case against Lui
Enterprises and the Philippine Bank of Communications. Thus, there is no
identity of parties, and the first requisite of litis pendentia is absent.
As discussed, Lui Enterprises filed the nullification of deed of dation in payment

to recover ownership of the leased premises. Zuellig Pharma filed the
interpleader case to extinguish its obligation to pay rent. There is no identity of
reliefs prayed for, and the second requisite of litis pendentia is absent.
Since two requisites of litis pendentia are absent, the nullification of deed of dation
in payment case did not bar the filing of the interpleader case.
Lui Enterprises alleged that the Regional Trial Court of Davao issued a writ of
preliminary injunction against the Regional Trial Court of Makati. The Regional
Trial Court of Davao allegedly enjoined the Regional Trial Court of Makati from
taking cognizance of the interpleader case. Lui Enterprises argued that the
Regional Trial Court of Makati "should have respected the orders issued by the
Regional Trial Court of Davao." 149 Lui Enterprises cited Compania General de
Tabacos de Filipinas v. Court of Appeals 150 where this court allegedly held:
. . . [T]he issuance of the said writ by the RTC of Agoo, La

Union not only seeks to enjoin Branch 9 of the RTC of
Manila from proceeding with the foreclosure case but also
has the effect of pre-empting the latter's orders. . . . . 151
Compania General de Tabacos de Filipinas is not an authority for the claim that a
court can issue a writ of preliminary injunction against a co-equal court. The
cited sentence was taken out of context. In Compania General de Tabacos de
Filipinas, this court held that the Regional Trial Court of Agoo had no power to
issue a writ of preliminary injunction against the Regional Trial Court of Manila.
152 A court cannot enjoin the proceedings of a co-equal court.
Thus, when this court said that the Regional Trial Court of Agoo's writ of
preliminary injunction "not only seeks to enjoin . . . [the Regional Trial Court of
Manila] from proceeding with the foreclosure case but also has the effect of pre-
empting the latter's orders," 153 this court followed with "[t]his we cannot
countenance." 154
At any rate, the Regional Trial Court of Davao's order dated April 18, 2005 was
not a writ of preliminary injunction. It was a mere order directing the Philippine
Bank of Communications to inform Zuellig Pharma to pay rent to Lui Enterprises
while the status quo order between Lui Enterprises and the Philippine Bank of
Communications was subsisting. The Regional Trial Court of Davao did not
enjoin the proceedings before the Regional Trial Court of Makati. The order
dated April 18, 2005 provides:
As such, [the Philippine Bank of Communications] [is]

hereby directed to forthwith inform Zuellig Pharma Corp.,
of the April 1, 2004 status quo order and the succeeding
September 14, 2004 Order, and consequently, for the said
lessee to remit all rentals due from February 23, 2003 and
onwards to plaintiff Lui Enterprises, Inc., in the meanwhile
that the status quo order is subsisting. 155
Thus, the Regional Trial Court of Davao did not enjoin the Regional Trial Court
of Makati from hearing the interpleader case.
All told, the trial court did not err in proceeding with the interpleader case. The
nullification of deed of dation in payment case pending with the Regional Trial
Court of Davao did not bar the filing of the interpleader case with the Regional
Trial Court of Makati.
The Court of Appeals erred in awarding attorney's fees

In its ordinary sense, attorney's fees "represent the reasonable compensation [a
client pays his or her lawyer] [for legal service rendered]." 156 In its
extraordinary sense, attorney's fees "[are] awarded . . . as indemnity for damages
[the losing party pays the prevailing party]." 157
The award of attorney's fees is the exception rather than the rule. 158 It is not
awarded to the prevailing party "as a matter of course." 159 Under Article 2208 of
the Civil Code, attorney's fees cannot be recovered in the absence of stipulation,
except under specific circumstances:
(1)When exemplary damages are awarded;
(2)When the defendant's act or omission has compelled the

plaintiff to litigate with third persons or to incur
expenses to protect his interest; TIADCc
(3)In criminal cases of malicious prosecution against the

plaintiff;
(4)In case of a clearly unfounded civil action or proceeding

against the plaintiff;
(5)Where the defendant acted in gross and evident bad faith

in refusing to satisfy the plaintiff's plainly valid,
just and demandable claim;
(6)In actions for legal support;
(7)In actions for the recovery of wages of household helpers,

laborers and skilled workers;
(8)In actions for indemnity under workmen's compensation

and employer's liability laws;
(9)In a separate civil action to recover civil liability arising

from a crime;
(10)When at least double judicial costs are awarded;
(11)In any other case where the court deems it just and
equitable that attorney's fees and expenses of
litigation should be recovered. 160
Even if a party is "compelled to litigate with third persons or to incur expenses to

protect his [or her] rights," 161 attorney's fees will not be awarded if no bad faith
"could be reflected in a party's persistence in a case." 162
To award attorney's fees, the court must have "factual, legal, [and] equitable
justification." 163 The court must state the award's basis in its decision. 164 These
rules are based on the policy that "no premium should be placed on the right to
litigate." 165
In this case, the Court of Appeals awarded attorney's fees as "[Zuellig Pharma]
was compelled to litigate with third persons or to incur expenses to protect [its]
interest[s]." 166 This is not a compelling reason to award attorney's fees. That
Zuellig Pharma had to file an interpleader case to consign its rental payments did
not mean that Lui Enterprises was in bad faith in insisting that rental payments
be paid to it. Thus, the Court of Appeals erred in awarding attorney's fees to
Zuellig Pharma.
All told, the Court of Appeals' award of P50,000.00 as attorney's fees must be
deleted.
WHEREFORE, in view of the foregoing, the petition for review on certiorari is

DENIED. The Court of Appeals' decision and resolution in CA-G.R. CV No.
88023 are AFFIRMED with MODIFICATION. The award of P50,000.00
attorney's fees to Zuellig Pharma Corporation is DELETED.
SO ORDERED.
Velasco, Jr., Peralta, Abad and Mendoza, JJ., concur.
||| (Lui Enterprises, Inc. v. Zuellig Pharma Corp., G.R. No. 193494, March 12, 2014)
THIRD DIVISION
[G.R. No. 128568. April 9, 2003.]
SPOUSES REYNALDO ALCARAZ and ESMERALDA

ALCARAZ, petitioners, vs. PEDRO M. TANGGA-AN,
MENAS R. TANGGA-AN, VIRGINIA III YVETTE R.
TANGGA-AN, CECIL T. VILLAFLOR, HERMES R.
TANGGA-AN, VENUS R. TANGGA-AN, JUPITER R.
TANGGA-AN, YVONNE T. FRI, VIVIEN R. TANGGA-
AN and HON. JUDGE P. BURGOS and THE COURT OF
APPEALS, respondents.
Rolando P. Quimbo for petitioners.
Alfonso Dela Cerna for respondents.
SYNOPSIS
Respondents filed a complaint for unlawful detainer against petitioner spouses.

They alleged that the late Virginia Tangga-an (spouse of Pedro and mother of the
other respondents) leased a residential building to the petitioner spouses. The
land where the building was erected was still owned by the National Housing
Authority (NHA) at the time. After two years, the spouses failed to pay the rent.
Despite repeated demands to pay the rent and to vacate the premises, the
petitioner spouses refused. According to the spouses, however, the ownership of
the lot on which the house stood resulted in the cancellation of the contract of
lease between respondents and petitioner spouses. The transfer of title was
issued in the name of Virgilio (son of respondent Pedro and brothers of the other
respondents). Thereafter, they paid their rent to the new owner of the lot since
the respondents had no longer the right to collect the rentals. The Municipal Trial
Court ruled in favor of the respondents since the petitioner spouses failed to
prove that the subject lot belongs only to Virgilio. On appeal, the Regional Trial
Court affirmed the decision of the MTC. The Court of Appeals affirmed both
decisions of the MTC and the RTC. Hence, this petition for review.
According to the Court, the issue in the case at bar is whether the petitioner
spouses, as lessees, were excused from paying the rent because of the change in
the ownership of the land on which the rented house was built. The main
question, therefore is still the lawful possession of the subject premises by the
petitioner spouses. The petitioner spouses invoked the principle of accessory
follows the principal to which the petitioner spouses were deemed estopped.
Both parties knew that their contract pertained only to the lease of the house,
without including the land. After recognizing the validity of the contract for two
years, the petitioner spouses are deemed barred from alleging the automatic
cancellation of the contract on the ground that the respondents lost ownership of
the house after Virgilio acquired title over the lot. Extrajudicial recession of
contract is not possible without an express stipulation to that effect. Hence, for
violating the terms of the lease contract, that was, payment of the rent,
respondents can legally demand the ejectment of the petitioner spouses. The
Supreme Court affirmed the decision of the Court of Appeals.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; APPEALS; PETITION FOR REVIEW;

ONLY QUESTIONS OF LAW SHOULD BE RAISED BEFORE THE SUPREME
COURT. Pursuant to Section 1, Rule 45 of the 1997 Revised Rules of Civil
Procedure, a petition for review before this Court should only raise questions of
law. In the absence of showing that the case falls under one of the exceptions,
factual findings of the Court of Appeals are conclusive on the parties and not
reviewable by this Court. And they carry even more weight when the Court of
Appeals affirms the factual findings of the trial court. As such, this Court is not
duty-bound to analyze and weigh all over again the evidence already considered
in the proceedings below.
2. CIVIL LAW; CONTRACTS; EXTRAJUDICIAL RECISSION; EXPRESS

STIPULATION TO THAT EFFECT, REQUIRED. Due to the change in
ownership of the land, the petitioner spouses decided to unilaterally cancel the
contract because Virgilio supposedly became the new owner of the house after
acquiring title to the lot. They alleged that there was no reason anymore to
perform their obligations as lessees because the lessor had ceased to be the owner
of the house. But there is nothing in their lease contract that allows the parties to
extrajudicially rescind the same in case of violation of the terms thereof.
Extrajudicial rescission of a contract is not possible without an express
stipulation to that effect. What the petitioner spouses should have done was to
file a special civil action for interpleader for the claimants to litigate their claims
and to deposit the rentals in court. TADIHE
DECISION
CORONA, J p:
Before us is a petition for review of the decision 1 dated January 10, 1997 of the
Court of Appeals 2 affirming the decision 3 dated June 26, 1995 of the Regional
Trial Court (RTC) of Cebu City, Branch 17, which in turn upheld the decision 4
dated January 5, 1995 of the Municipal Trial Court (MTC) of Cebu City, Branch 2,
ordering the ejectment of the petitioner spouses from the house they were
renting from respondents. CIHTac
On October 4, 1994, respondents Pedro Tangga-an, Menas Tangga-an, Virginia III

Yvette Tangga-an, Cecil Villaflor, Hermes Tangga-an, Venus Tangga-an, Jupiter
Tangga-an, Yvonne Fri and Vivien Tangga-an filed a complaint for unlawful
detainer, with damages, docketed as Civil Case No. R-33928, against petitioner
spouses Reynaldo Alcaraz and Esmeralda Alcaraz.
The complaint alleged that the late Virginia Tangga-an (the spouse of respondent
Pedro Tangaa-an and mother of the rest of the respondents) leased a residential
building (house) located at Premier Street, Hipodromo, Cebu City to the
petitioner spouses. The lease contract was limited to the use and occupancy of
the said residential building and did not include the lot on which it was
constructed because the said lot was then owned by the National Housing
Authority (NHA). Under the contract, the petitioner spouses bound themselves
for five years to pay Virginia a monthly rental of P4,000 beginning November 22,
1991. However, since November 1993, they failed to pay rent. Thus, as of
October, 1994, they were in arrears in the amount of P48,000. Despite repeated
demands by respondents to pay the rentals in arrears and to surrender the
possession of the residential building, the petitioner spouses refused to vacate
the same. Respondents sought to repossess the property for their own use and
benefit.
On the other hand, the petitioner spouses alleged that, on July 23, 1993, the
ownership of the lot on which the house stood was transferred by the NHA to
Virgilio and Angelita D. Tangga-an. Virgilio Tangga-an is the son of the late
Virgilia Tangga-an and respondent Pedro Tangga-an, and the brother of the
other respondents. Transfer Certificate of Title No. 125657 was consequently
issued in the name of Virgilio Tangga-an. According to the petitioner spouses,
the subsequent change in ownership of the lot and the house resulted in the
cancellation of the contract of lease between respondents and petitioner spouses.
Thereafter, they paid the rent to the new owners of the lot (Virgilio and Angelita)
and not to respondents since the latter supposedly no longer had the legal right
to collect rentals.
On January 5, 1995, the MTC rendered a decision, the dispositive portion of

which read:
WHEREFORE, Judgment is entered by way of

preponderance of evidence in favor of plaintiffs and against
the defendants, Ordering the latter to vacate the premises
immediately, including all those who are occupying the
subject house in relation to them; They are also jointly
ordered to pay the sum of P48,000 representing rental
payment in arrears from November, 1993 up to October,
1994 and to update monthly payment of P4,000 thereafter
until their vacation therefrom; They are saddled to pay
attorney's fees in the sum of P5,000 and litigation costs in the
amount of P1,000.
SO ORDERED. 5
In ruling in favor of the respondents, the MTC held that the petitioner spouses
clearly violated the contract of lease due to non-payment of rent. They failed to
show that the subject house belonged to Virgilio alone. On the other hand, the
respondents proved that, after the death of Virginia, they registered said house
in the name of their trustees, co-respondents Hermes Tangga-an and his wife.
Furthermore, considering that Virgilio's claim of ownership over the lot was the
subject of a pending litigation for annulment of deed of sale and reconveyance of
property involving the Tangga-ans, the MTC ruled that it "cannot usurp to pass
judgment on the issues, as well as the conflicting claims of the parties therein." 6
On appeal, the RTC affirmed the decision of the MTC, and held that:
. . . [D]efendants failed to present any documentary evidence

modifying or amending the contract of lease (Annex "C",
complaint) to justify the transfer of payment of the monthly
rental to Virgilio Tanga-an who claims only as the registered
owner of the lot on which the leased house is located. It
appears that Virgilio Tanga-an does not possess any proof of
ownership of the rented house. Clearly, defendants had
violated the lease agreement executed between them and the
deceased lessor Virginia R. Tangga-an (sic) the predecessor
in interest of Hermes Tangga-an and his wife as shown in
the Tax Declaration of the said spouses (Annex "A",
complaint) whose name appears under the space for
previous owner by stopping payment of rental to the present
owner despite the existence of the contract of lease which
expires on November 22, 1996. The law on contracts
basically states:
"Obligations arising from contracts have the force

of law between the contracting parties and should
be complied with in good faith." (Article 1159, New
Civil Code of the Philippines).
xxx xxx xxx 7
In denying the petition for review and affirming the judgments of the courts a
quo, the Court of Appeals ruled that:
We also concur with the holding of both courts that as heirs

of Virginia Tangga-an, private respondents have the right to
institute the action for ejectment, in accordance with Article
487 of the Civil Code; and that the claim of petitioner that
Virgilio Tangga-an owns the lot where the leased residential
building stands and occupied by petitioners is still the
subject of a civil action for annulment of the sale of the lot
before the Regional Trial Court of Cebu. It does not follow as
a matter of course that whoever owns the lot owns the
building in question. Ownership of the lot cannot change the
nature and ownership of the building, which belongs to the
plaintiffs as heirs of the late Virginia Tangga-an through
Ernest Tangga-an and his wife. Respondent court correctly
reasoned out that ". . . defendants cannot hide over the cloak
of Virgilio Tangga-an, his claim of ownership over the lot as
far as the Court is concerned being irrelevant to this case . . .
." Most importantly, the action involving the question of
ownership of the lot is not a lawful ground to
suspend/abate the ejectment proceeding. The rationale of
the rule being that an ejectment suit involves only the issue
of material possession or possession de facto (San Pedro vs.
Court of Appeals, 235 SCRA 145, 150, and cases cited ). 8
Hence, this petition on the following assignments of error:
THE LEASE CONTRACT EXECUTED BY PETITIONERS

WITH VIRGINIA TANGGA-AN, PLAINTIFFS'
PREDECESSOR-IN-INTEREST, COVERED NOT ONLY
THE LAND, BUT ALSO THE IMPROVEMENT THEREON,
INCLUDING THE BUILDING.
II
VIRGILIO TANGGA-AN, AS ONE OF THE HEIRS OF

VIRGINIA, HAD THE SAME RIGHTS OVER THE
PROPERTY AS THOSE OF THE OTHER HEIRS, THE
PLAINTIFFS. HENCE, VIRGILIO MAY NOT BE
EXCLUDED UNILATERALLY BY THE OTHER HEIRS IN
HIS ENJOYMENT OF HIS HEREDITARY RIGHTS.
III
THE REGISTRATION OF THE LAND, INCLUDING THE

IMPROVEMENTS THEREON, IN THE NAME OF
VIRGILIO TANGGA-AN UNDER THE TORRENS SYSTEM
IS INDEFEASIBLE AND MAY NOT BE ATTACKED
COLLATERALLY IN THE PRESENT ILLEGAL DETAINER
CASE. 9
We rule in favor of the respondents.
Section 16 of the 1997 Revised Rules of Civil Procedure provides that:

SEC. 16. Resolving defense of ownership. When the
defendant raises the defense of ownership in his pleadings
and the question of possession cannot be resolved without
deciding the issue of ownership, the issue of ownership shall
be resolved only to determine the issue of possession.
The issue of ownership is precisely what the petitioner spouses raised to justify
their non-payment of rent and to resist eviction from the house they leased from
respondents. Being indispensable to the resolution of the issue of possession, we
herein render a provisional ruling on ownership.
Petitioner spouses seek a dismissal of the case for lack of jurisdiction claiming
that the only issue to be resolved is ownership over the house which is improper
in an ejectment case. We disagree. The issue in the case at bar is whether the
petitioner spouses, as lessees, were excused from paying the rent because of the
change in the ownership of the land on which the rented house was built. The
main question therefore is still the lawful possession of the subject premises by
the petitioner spouses. To resolve it, a discussion of the ownership issue is
necessary.
The petitioner spouses insist that the courts a quo erred in not finding that
Virgilio Tangga-an became the new owner not only of the lot but also of the
residential house. They claim that, before she died, Virginia, the original owner
of the subject house, waived and ceded her rights over the land in favor of
Virgilio. The said transfer allegedly included the subject house because, pursuant
to Article 440 of the Civil Code, "the ownership of the property gives the right of
accession to everything which is produced thereby, or which is incorporated or
attached thereto, either naturally or artificially." They also maintain that the
NHA executed a deed of sale of both the house and the lot in favor of Virgilio.
According to the petitioner spouses, the tax declaration over the house in the
name of respondent Hermes Tangga-an, as trustee of the other respondents, was
self-serving and had no probative value compared to the certificate of title over
the lot in the name of Virgilio Tangga-an.
We find no merit in petitioners' arguments.
Pursuant to Section 1, Rule 45 of the 1997 Revised Rules of Civil Procedure, a

petition for review before this Court should only raise questions of law. In the
absence of showing that the case falls under one of the exceptions, 10 factual
findings of the Court of Appeals are conclusive on the parties and not reviewable
by this Court. And they carry even more weight when the Court of Appeals
affirms the factual findings of the trial court. As such, this Court is not duty-
bound to analyze and weigh all over again the evidence already considered in
the proceedings below. 11
The courts a quo were unanimous in holding that the petitioner spouses failed to
substantiate their factual averment that Virgilio not only acquired the lot but also
the house. After examining the records, we found nothing to disprove the facts
determined by the lower courts. All the petitioner spouses presented was
Virgilio's uncertified xerox copy of the certificate of title over the lot. No
document was ever shown evidencing cession of the subject house in Virgilio's
favor. Virgilio's title could not be used to prove ownership over the house built
on said lot as it carried no reference at all to the house. A building by itself is a
real or immovable property distinct from the land on which it is constructed 12
and therefore can be a separate subject of contracts.
On the other hand, the respondents proved that, as compulsory heirs of Virginia,
they were the rightful owners of the subject house. They presented a tax
declaration in the name of their trustees, co-respondent Hermes Tangga-an and
his wife, which tax declaration sufficiently evidences their co-ownership and
acquisition of title following the death of the decedent Virginia. We have ruled
that:
Although tax declarations or realty tax payment of property

are not conclusive evidence of ownership, nevertheless, they
are good indicia of possession in the concept of owner for no
one in his right mind would be paying taxes for a property
that is not in his actual or at least constructive possession.
They constitute at least proof that the holder has a claim of
title over the property. The voluntary declaration of a piece
of property for taxation purposes manifests not only one's
sincere and honest desire to obtain title to the property and
announces his adverse claim against the State and all other
interested parties, but also the intention to contribute needed
revenues to the Government. Such an act strengthens one's
bona fide claim of acquisition of ownership. 13
One of the factual issues raised by the petitioner spouses concerns the alleged
waiver and cession of Virginia's rights over the house and lot to Virgilio. But the
petitioner spouses did not mention any consideration received by Virginia for
the waiver of the house, in effect making said waiver a donation thereof to
Virgilio. However, in order for a donation of real property like a house to be
valid, a public instrument duly signed by the donor and accepted by the donee
(which acceptance must be known to the donor while alive) must be executed. 14
Moreover, said donation must not impair the legitime of the forced heirs of the
donor in order for the same not to be inofficious. 15 In the case at bar, no such
public instrument was presented. Neither was it explained why said waiver did
not impair the rights of the other compulsory heirs of Virginia.
To support their argument that the house necessarily became Virgilio's property
as a result of the acquisition of the lot on which the same was built, the petitioner
spouses invoke the principle that the accessory follows the principal. Being an
accessory, the house is necessarily owned by the owner of the lot on which it is
built.
There is no need, however, to disturb and analyze the applicability of this well-
entrenched principle because the petitioner spouses are estopped from raising
the same. Both parties knew that their contract pertained only to the lease of the
house, without including the land. The contract states: "1. That the lessor is the
owner of a building of mixed materials situated at Premier St., Mabolo,
Hipodromo, Cebu City." 16 At the time of the perfection of the contract, the
petitioner spouses, as lessees, were aware that the NHA, and not Virginia, the
lessor, owned the land on which the rented house stood yet they signed the
same, obliged themselves to comply with the terms thereof for five years and
performed their obligations as lessees for two years. EHSAaD
Now they assume a completely different legal position. They claim that the lease
contract ceased to be effective because Virgilio's assumption of ownership of the
land stripped the respondents of ownership of the building. They argue that,
under Article 440 of the Civil Code, Virgilio's title over the lot necessarily
included the house on the said lot, thus automatically canceling the contract.
Section 2, Rule 131 of the Rules of Court provides as a conclusive presumption

that:
Sec. 2. Conclusive presumptions. The following are

instances of conclusive presumptions:
(a) Whenever a party has, by his own declaration,

act, or omission, intentionally and deliberately led
another to believe a particular thing true, and to act
upon such belief, he cannot, in any litigation arising
out of such declaration, act or omission, be
permitted to falsify it;
xxx xxx xxx

After recognizing the validity of the lease contract for two years, the
petitioner spouses are barred from alleging the automatic cancellation of the
contract on the ground that the respondents lost ownership of the house
after Virgilio acquired title over the lot.
We also note that the petitioner spouses rescinded the contract of lease without
judicial approval. Due to the change in ownership of the land, the petitioner
spouses decided to unilaterally cancel the contract because Virgilio supposedly
became the new owner of the house after acquiring title to the lot. They alleged
that there was no reason anymore to perform their obligations as lessees because
the lessor had ceased to be the owner of the house. But there is nothing in their
lease contract that allows the parties to extrajudicially rescind the same in case of
violation of the terms thereof. Extrajudicial rescission of a contract is not possible
without an express stipulation to that effect. 17 What the petitioner spouses
should have done was to file a special civil action for interpleader for the
claimants to litigate their claims and to deposit the rentals in court.
The petitioner spouses aver that their payments to Virgilio beginning November,
1993 were payments made in good faith to a person in possession of the credit, in
consonance with Article 1242 of the Civil Code. 18 This therefore released them
from their obligation. They claim that Virgilio collected the rentals in his capacity
as a co-owner. Being a son of Virginia, he was also entitled to the rent of the
subject house. We disagree. Virgilio collected the rentals not as a co-owner but as
the alleged sole owner of the subject house. The petitioner spouses themselves
admitted that Virgilio claimed sole ownership of the house and lot. It would be
incongruous for them to now assert payment in good faith to a person they
believed was collecting in behalf of his co-heirs after admitting that they paid
rent to Virgilio as the sole owner thereof.
Hence, for violating the terms of the lease contract, i.e., payment of rent,
respondents can legally demand the ejectment of the petitioner spouses.
WHEREFORE, the decision dated January 10, 1997 of the Court of Appeals is
hereby AFFIRMED. With costs against the petitioners. HEITAD
SO ORDERED.
||| (Spouses Alcaraz v. Tangga-an, G.R. No. 128568, April 09, 2003)
G.R. No. 136409. March 14, 2008.]
SUBHASH C. PASRICHA and JOSEPHINE A.

PASRICHA, petitioners, vs. DON LUIS DISON REALTY,
INC., respondent.
DECISION
NACHURA, J p:
This is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking the reversal of the Decision 1 of the Court of Appeals (CA) dated May 26,
1998 and its Resolution 2 dated December 10, 1998 in CA-G.R. SP No. 37739
dismissing the petition filed by petitioners Josephine and Subhash Pasricha.
The facts of the case, as culled from the records, are as follows:
Respondent Don Luis Dison Realty, Inc. and petitioners executed two Contracts
of Lease 3 whereby the former, as lessor, agreed to lease to the latter Units 22, 24,
32, 33, 34, 35, 36, 37 and 38 of the San Luis Building, located at 1006 M.Y. Orosa
cor. T.M. Kalaw Streets, Ermita, Manila. Petitioners, in turn, agreed to pay
monthly rentals, as follows:
For Rooms 32/35:
From March 1, 1991 to August 31, 1991

P5,000.00/P10,000.00
From September 1, 1991 to February 29, 1992

P5,500.00/P11,000.00
From March 1, 1992 to February 28, 1993

P6,050.00/P12,100.00

P6,655.00/P13,310.00

P7,320.50/P14,641.00

P8,052.55/P16,105.10

P8,857.81/P17,715.61

P9,743.59/P19,487.17

P10,717.95/P21,435.89

P11,789.75/P23,579.48 4
For Rooms 22 and 24:
Effective July 1, 1992 P10,000.00 with an increment of 10%

every two years. 5
For Rooms 33 and 34:
Effective April 1, 1992 P5,000.00 with an increment of 10%

every two years. 6
For Rooms 36, 37 and 38:
Effective when tenants vacate said premises P10,000.00

with an increment of 10% every two years. 7
Petitioners were, likewise, required to pay for the cost of electric

consumption, water bills and the use of telephone cables. 8
The lease of Rooms 36, 37 and 38 did not materialize leaving only Rooms 22, 24,
32, 33, 34 and 35 as subjects of the lease contracts. 9 While the contracts were in
effect, petitioners dealt with Francis Pacheco (Pacheco), then General Manager of
private respondent. Thereafter, Pacheco was replaced by Roswinda Bautista (Ms.
Bautista). 10 Petitioners religiously paid the monthly rentals until May 1992. 11
After that, however, despite repeated demands, petitioners continuously refused
to pay the stipulated rent. Consequently, respondent was constrained to refer the
matter to its lawyer who, in turn, made a final demand on petitioners for the
payment of the accrued rentals amounting to P916,585.58. 12 Because petitioners
still refused to comply, a complaint for ejectment was filed by private respondent
through its representative, Ms. Bautista, before the Metropolitan Trial Court
(MeTC) of Manila. 13 The case was raffled to Branch XIX and was docketed as
Civil Case No. 143058-CV.
Petitioners admitted their failure to pay the stipulated rent for the leased
premises starting July until November 1992, but claimed that such refusal was
justified because of the internal squabble in respondent company as to the person
authorized to receive payment. 14 To further justify their non-payment of rent,
petitioners alleged that they were prevented from using the units (rooms) subject
matter of the lease contract, except Room 35. Petitioners eventually paid their
monthly rent for December 1992 in the amount of P30,000.00, and claimed that
respondent waived its right to collect the rents for the months of July to
November 1992 since petitioners were prevented from using Rooms 22, 24, 32,
33, and 34. 15 However, they again withheld payment of rents starting January
1993 because of respondent's refusal to turn over Rooms 36, 37 and 38. 16 To
show good faith and willingness to pay the rents, petitioners alleged that they
prepared the check vouchers for their monthly rentals from January 1993 to
January 1994. 17 Petitioners further averred in their Amended Answer 18 that the
complaint for ejectment was prematurely filed, as the controversy was not
referred to the barangay for conciliation.
For failure of the parties to reach an amicable settlement, the pre-trial conference
was terminated. Thereafter, they submitted their respective position papers.
On November 24, 1994, the MeTC rendered a Decision dismissing the complaint
for ejectment. 19 It considered petitioners' non-payment of rentals as unjustified.
The court held that mere willingness to pay the rent did not amount to payment
of the obligation; petitioners should have deposited their payment in the name of
respondent company. On the matter of possession of the subject premises, the
court did not give credence to petitioners' claim that private respondent failed to
turn over possession of the premises. The court, however, dismissed the
complaint because of Ms. Bautista's alleged lack of authority to sue on behalf of
the corporation.
Deciding the case on appeal, the Regional Trial Court (RTC) of Manila, Branch 1,
in Civil Case No. 94-72515, reversed and set aside the MeTC Decision in this
wise:
WHEREFORE, the appealed decision is hereby reversed and

set aside and another one is rendered ordering defendants-
appellees and all persons claiming rights under them, as
follows:
(1) to vacate the leased premised (sic) and restore

possession thereof to plaintiff-appellant;
(2) to pay plaintiff-appellant the sum of P967,915.80

representing the accrued rents in arrears
as of November 1993, and the rents on the
leased premises for the succeeding months
in the amounts stated in paragraph 5 of
the complaint until fully paid; and
(3) to pay an additional sum equivalent to 25% of

the rent accounts as and for attorney's fees
plus the costs of this suit.
SO ORDERED. 20
The court adopted the MeTC's finding on petitioners' unjustified refusal to

pay the rent, which is a valid ground for ejectment. It, however, faulted the
MeTC in dismissing the case on the ground of lack of capacity to sue.
Instead, it upheld Ms. Bautista's authority to represent respondent
notwithstanding the absence of a board resolution to that effect, since her
authority was implied from her power as a general manager/treasurer of
the company. 21
Aggrieved, petitioners elevated the matter to the Court of Appeals in a petition
for review on certiorari. 22 On March 18, 1998, petitioners filed an Omnibus
Motion 23 to cite Ms. Bautista for contempt; to strike down the MeTC and RTC
Decisions as legal nullities; and to conduct hearings and ocular inspections or
delegate the reception of evidence. Without resolving the aforesaid motion, on
May 26, 1998, the CA affirmed 24 the RTC Decision but deleted the award of
attorney's fees. 25
Petitioners moved for the reconsideration of the aforesaid decision. 26 Thereafter,

they filed several motions asking the Honorable Justice Ruben T. Reyes to inhibit
from further proceeding with the case allegedly because of his close association
with Ms. Bautista's uncle-in-law. 27
In a Resolution 28 dated December 10, 1998, the CA denied the motions for lack
of merit. The appellate court considered said motions as repetitive of their
previous arguments, irrelevant and obviously dilatory. 29 As to the motion for
inhibition of the Honorable Justice Reyes, the same was denied, as the appellate
court justice stressed that the decision and the resolution were not affected by
extraneous matters. 30 Lastly, the appellate court granted respondent's motion
for execution and directed the RTC to issue a new writ of execution of its
decision, with the exception of the award of attorney's fees which the CA
deleted. 31
Petitioners now come before this Court in this petition for review on certiorari
raising the following issues:
I.
Whether this ejectment suit should be dismissed and

whether petitioners are entitled to damages for the
unauthorized and malicious filing by Rosario (sic) Bautista
of this ejectment case, it being clear that [Roswinda]
whether as general manager or by virtue of her subsequent
designation by the Board of Directors as the corporation's
attorney-in-fact had no legal capacity to institute the
ejectment suit, independently of whether Director Pacana's
Order setting aside the SEC revocation Order is a mere scrap
of paper. HDTSIE
II.
Whether the RTC's and the Honorable Court of Appeals'

failure and refusal to resolve the most fundamental factual
issues in the instant ejectment case render said decisions
void on their face by reason of the complete abdication by
the RTC and the Honorable Justice Ruben Reyes of their
constitutional duty not only to clearly and distinctly state
the facts and the law on which a decision is based but also to
resolve the decisive factual issues in any given case.
III.
Whether the (1) failure and refusal of Honorable Justice

Ruben Reyes to inhibit himself, despite his admission by
reason of his silence of petitioners' accusation that the
said Justice enjoyed a $7,000.00 scholarship grant courtesy of
the uncle-in-law of respondent "corporation's" purported
general manager and (2), worse, his act of ruling against the
petitioners and in favor of the respondent "corporation"
constitute an unconstitutional deprivation of petitioners'
property without due process of law. 32
In addition to Ms. Bautista's lack of capacity to sue, petitioners insist that

respondent company has no standing to sue as a juridical person in view of the
suspension and eventual revocation of its certificate of registration. 33 They
likewise question the factual findings of the court on the bases of their ejectment
from the subject premises. Specifically, they fault the appellate court for not
finding that: 1) their non-payment of rentals was justified; 2) they were deprived
of possession of all the units subject of the lease contract except Room 35; and 3)
respondent violated the terms of the contract by its continued refusal to turn
over possession of Rooms 36, 37 and 38. Petitioners further prayed that a
Temporary Restraining Order (TRO) be issued enjoining the CA from enforcing
its Resolution directing the issuance of a Writ of Execution. Thus, in a Resolution
34 dated January 18, 1999, this Court directed the parties to maintain the status
quo effective immediately until further orders.
The petition lacks merit.
We uphold the capacity of respondent company to institute the ejectment case.

Although the Securities and Exchange Commission (SEC) suspended and
eventually revoked respondent's certificate of registration on February 16, 1995,
records show that it instituted the action for ejectment on December 15, 1993.
Accordingly, when the case was commenced, its registration was not yet
revoked. 35 Besides, as correctly held by the appellate court, the SEC later set
aside its earlier orders of suspension and revocation of respondent's certificate,
rendering the issue moot and academic. 36
We likewise affirm Ms. Bautista's capacity to sue on behalf of the company

despite lack of proof of authority to so represent it. A corporation has no powers
except those expressly conferred on it by the Corporation Code and those that
are implied from or are incidental to its existence. In turn, a corporation exercises
said powers through its board of directors and/or its duly authorized officers
and agents. Physical acts, like the signing of documents, can be performed only
by natural persons duly authorized for the purpose by corporate by-laws or by a
specific act of the board of directors. 37 Thus, any person suing on behalf of the
corporation should present proof of such authority. Although Ms. Bautista
initially failed to show that she had the capacity to sign the verification and
institute the ejectment case on behalf of the company, when confronted with
such question, she immediately presented the Secretary's Certificate 38
confirming her authority to represent the company.
There is ample jurisprudence holding that subsequent and substantial

compliance may call for the relaxation of the rules of procedure in the interest of
justice. 39 In Novelty Phils., Inc. v. Court of Appeals, 40 the Court faulted the
appellate court for dismissing a petition solely on petitioner's failure to timely
submit proof of authority to sue on behalf of the corporation. In Pfizer, Inc. v.
Galan, 41 we upheld the sufficiency of a petition verified by an employment
specialist despite the total absence of a board resolution authorizing her to act for
and on behalf of the corporation. Lastly, in China Banking Corporation v.
Mondragon International Philippines, Inc., 42 we relaxed the rules of procedure
because the corporation ratified the manager's status as an authorized signatory.
In all of the above cases, we brushed aside technicalities in the interest of justice.
This is not to say that we disregard the requirement of prior authority to act in
the name of a corporation. The relaxation of the rules applies only to highly
meritorious cases, and when there is substantial compliance. While it is true that
rules of procedure are intended to promote rather than frustrate the ends of
justice, and while the swift unclogging of court dockets is a laudable objective,
we should not insist on strict adherence to the rules at the expense of substantial
justice. 43 Technical and procedural rules are intended to help secure, not
suppress, the cause of justice; and a deviation from the rigid enforcement of the
rules may be allowed to attain that prime objective, for, after all, the dispensation
of justice is the core reason for the existence of courts. 44
As to the denial of the motion to inhibit Justice Reyes, we find the same to be in
order. First, the motion to inhibit came after the appellate court rendered the
assailed decision, that is, after Justice Reyes had already rendered his opinion on
the merits of the case. It is settled that a motion to inhibit shall be denied if filed
after a member of the court had already given an opinion on the merits of the
case, the rationale being that "a litigant cannot be permitted to speculate on the
action of the court . . . (only to) raise an objection of this sort after the decision has
been rendered." 45 Second, it is settled that mere suspicion that a judge is partial
to one of the parties is not enough; there should be evidence to substantiate the
suspicion. Bias and prejudice cannot be presumed, especially when weighed
against a judge's sacred pledge under his oath of office to administer justice
without regard for any person and to do right equally to the poor and the rich.
There must be a showing of bias and prejudice stemming from an extrajudicial
source, resulting in an opinion on the merits based on something other than what
the judge learned from his participation in the case. 46 We would like to reiterate,
at this point, the policy of the Court not to tolerate acts of litigants who, for just
about any conceivable reason, seek to disqualify a judge (or justice) for their own
purpose, under a plea of bias, hostility, prejudice or prejudgment. 47
We now come to the more substantive issue of whether or not the petitioners
may be validly ejected from the leased premises.
Unlawful detainer cases are summary in nature. In such cases, the elements to be
proved and resolved are the fact of lease and the expiration or violation of its
terms. 48 Specifically, the essential requisites of unlawful detainer are: 1) the fact
of lease by virtue of a contract, express or implied; 2) the expiration or
termination of the possessor's right to hold possession; 3) withholding by the
lessee of possession of the land or building after the expiration or termination of
the right to possess; 4) letter of demand upon lessee to pay the rental or comply
with the terms of the lease and vacate the premises; and 5) the filing of the action
within one year from the date of the last demand received by the defendant. 49
It is undisputed that petitioners and respondent entered into two separate

contracts of lease involving nine (9) rooms of the San Luis Building. Records,
likewise, show that respondent repeatedly demanded that petitioners vacate the
premises, but the latter refused to heed the demand; thus, they remained in
possession of the premises. The only contentious issue is whether there was
indeed a violation of the terms of the contract: on the part of petitioners, whether
they failed to pay the stipulated rent without justifiable cause; while on the part
of respondent, whether it prevented petitioners from occupying the leased
premises except Room 35.
This issue involves questions of fact, the resolution of which requires the
evaluation of the evidence presented. The MeTC, the RTC and the CA all found
that petitioners failed to perform their obligation to pay the stipulated rent. It is
settled doctrine that in a civil case, the conclusions of fact of the trial court,
especially when affirmed by the Court of Appeals, are final and conclusive, and
cannot be reviewed on appeal by the Supreme Court. 50 Albeit the rule admits of
exceptions, not one of them obtains in this case. 51
To settle this issue once and for all, we deem it proper to assess the array of
factual findings supporting the court's conclusion.
The evidence of petitioners' non-payment of the stipulated rent is overwhelming.

Petitioners, however, claim that such non-payment is justified by the following:
1) the refusal of respondent to allow petitioners to use the leased properties,
except room 35; 2) respondent's refusal to turn over Rooms 36, 37 and 38; and 3)
respondent's refusal to accept payment tendered by petitioners.
Petitioners' justifications are belied by the evidence on record. As correctly held

by the CA, petitioners' communications to respondent prior to the filing of the
complaint never mentioned their alleged inability to use the rooms. 52 What they
pointed out in their letters is that they did not know to whom payment should be
made, whether to Ms. Bautista or to Pacheco. 53 In their July 26 and October 30,
1993 letters, petitioners only questioned the method of computing their electric
billings without, however, raising a complaint about their failure to use the
rooms. 54 Although petitioners stated in their December 30, 1993 letter that
respondent failed to fulfill its part of the contract, 55 nowhere did they
specifically refer to their inability to use the leased rooms. Besides, at that time,
they were already in default on their rentals for more than a year.
If it were true that they were allowed to use only one of the nine (9) rooms
subject of the contract of lease, and considering that the rooms were intended for
a business purpose, we cannot understand why they did not specifically assert
their right. If we believe petitioners' contention that they had been prevented
from using the rooms for more than a year before the complaint for ejectment
was filed, they should have demanded specific performance from the lessor and
commenced an action in court. With the execution of the contract, petitioners
were already in a position to exercise their right to the use and enjoyment of the
property according to the terms of the lease contract. 56 As borne out by the
records, the fact is that respondent turned over to petitioners the keys to the
leased premises and petitioners, in fact, renovated the rooms. Thus, they were
placed in possession of the premises and they had the right to the use and
enjoyment of the same. They, likewise, had the right to resist any act of intrusion
into their peaceful possession of the property, even as against the lessor itself.
Yet, they did not lift a finger to protect their right if, indeed, there was a violation
of the contract by the lessor.
What was, instead, clearly established by the evidence was petitioners' non-
payment of rentals because ostensibly they did not know to whom payment
should be made. However, this did not justify their failure to pay, because if such
were the case, they were not without any remedy. They should have availed of
the provisions of the Civil Code of the Philippines on the consignation of
payment and of the Rules of Court on interpleader.
Article 1256 of the Civil Code provides:

Article 1256. If the creditor to whom tender of payment has
been made refuses without just cause to accept it, the debtor
shall be released from responsibility by the consignation of
the thing or sum due.
Consignation alone shall produce the same effect in the

following cases:
xxx xxx xxx
(4) When two or more persons claim the same right to

collect;
xxx xxx xxx.
Consignation shall be made by depositing the things due at the disposal of a

judicial authority, before whom the tender of payment shall be proved in a
proper case, and the announcement of the consignation in other cases. 57
In the instant case, consignation alone would have produced the effect of
payment of the rentals. The rationale for consignation is to avoid the
performance of an obligation becoming more onerous to the debtor by reason of
causes not imputable to him. 58 Petitioners claim that they made a written tender
of payment and actually prepared vouchers for their monthly rentals. But that
was insufficient to constitute a valid tender of payment. Even assuming that it
was valid tender, still, it would not constitute payment for want of consignation
of the amount. Well-settled is the rule that tender of payment must be
accompanied by consignation in order that the effects of payment may be
produced. 59
Moreover, Section 1, Rule 62 of the Rules of Court provides:
Section 1. When interpleader proper. Whenever conflicting

Otherwise stated, an action for interpleader is proper when the lessee does not
know to whom payment of rentals should be made due to conflicting claims on
the property (or on the right to collect). 60 The remedy is afforded not to protect
a person against double liability but to protect him against double vexation in
respect of one liability. 61
Notably, instead of availing of the above remedies, petitioners opted to refrain
from making payments.
Neither can petitioners validly invoke the non-delivery of Rooms 36, 37 and 38 as
a justification for non-payment of rentals. Although the two contracts embraced
the lease of nine (9) rooms, the terms of the contracts with their particular
reference to specific rooms and the monthly rental for each easily raise the
inference that the parties intended the lease of each room separate from that of
the others. There is nothing in the contract which would lead to the conclusion
that the lease of one or more rooms was to be made dependent upon the lease of
all the nine (9) rooms. Accordingly, the use of each room by the lessee gave rise
to the corresponding obligation to pay the monthly rental for the same. Notably,
respondent demanded payment of rentals only for the rooms actually delivered
to, and used by, petitioners.
It may also be mentioned that the contract specifically provides that the lease of
Rooms 36, 37 and 38 was to take effect only when the tenants thereof would
vacate the premises. Absent a clear showing that the previous tenants had
vacated the premises, respondent had no obligation to deliver possession of the
subject rooms to petitioners. Thus, petitioners cannot use the non-delivery of
Rooms 36, 37 and 38 as an excuse for their failure to pay the rentals due on the
other rooms they occupied.
In light of the foregoing disquisition, respondent has every right to exercise his
right to eject the erring lessees. The parties' contracts of lease contain identical
provisions, to wit:
In case of default by the LESSEE in the payment of rental on

the fifth (5th) day of each month, the amount owing shall as
penalty bear interest at the rate of FOUR percent (4%) per
month, to be paid, without prejudice to the right of the
LESSOR to terminate his contract, enter the premises,
and/or eject the LESSEE as hereinafter set forth; 62
Moreover, Article 1673 63 of the Civil Code gives the lessor the right to judicially
eject the lessees in case of non-payment of the monthly rentals. A contract of
lease is a consensual, bilateral, onerous and commutative contract by which the
owner temporarily grants the use of his property to another, who undertakes to
pay the rent therefor. 64 For failure to pay the rent, petitioners have no right to
remain in the leased premises.
WHEREFORE, premises considered, the petition is DENIED and the Status Quo
Order dated January 18, 1999 is hereby LIFTED. The Decision of the Court of
Appeals dated May 26, 1998 and its Resolution dated December 10, 1998 in CA-
G.R. SP No. 37739 are AFFIRMED.
||| (Pasricha v. Don Luis Dison Realty, Inc., G.R. No. 136409, March 14, 2008)
THIRD DIVISION
[G.R. No. 181723. August 11, 2014.]
ELIZABETH DEL CARMEN, petitioner, vs. SPOUSES

RESTITUTO SABORDO and MIMA MAHILUM-
SABORDO, respondents.
DECISION
PERALTA, J p:
This treats of the petition for review on certiorari assailing the Decision 1 and
Resolution 2 of the Court of Appeals (CA), dated May 25, 2007 and January 24,
2008, respectively, in CA-G.R. CV No. 75013.
The factual and procedural antecedents of the case are as follows:
Sometime in 1961, the spouses Toribio and Eufrocina Suico (Suico spouses), along
with several business partners, entered into a business venture by establishing a
rice and corn mill at Mandaue City, Cebu. As part of their capital, they obtained
a loan from the Development Bank of the Philippines (DBP), and to secure the
said loan, four parcels of land owned by the Suico spouses, denominated as Lots
506, 512, 513 and 514, and another lot owned by their business partner, Juliana
Del Rosario, were mortgaged. Subsequently, the Suico spouses and their
business partners failed to pay their loan obligations forcing DBP to foreclose the
mortgage. After the Suico spouses and their partners failed to redeem the
foreclosed properties, DBP consolidated its ownership over the same.
Nonetheless, DBP later allowed the Suico spouses and Reginald and Beatriz
Flores (Flores spouses), as substitutes for Juliana Del Rosario, to repurchase the
subject lots by way of a conditional sale for the sum of P240,571.00. The Suico
and Flores spouses were able to pay the downpayment and the first monthly
amortization, but no monthly installments were made thereafter. Threatened
with the cancellation of the conditional sale, the Suico and Flores spouses sold
their rights over the said properties to herein respondents Restituto and Mima
Sabordo, subject to the condition that the latter shall pay the balance of the sale
price. On September 3, 1974, respondents and the Suico and Flores spouses
executed a supplemental agreement whereby they affirmed that what was
actually sold to respondents were Lots 512 and 513, while Lots 506 and 514 were
given to them as usufructuaries. DBP approved the sale of rights of the Suico and
Flores spouses in favor of herein respondents. Subsequently, respondents were
able to repurchase the foreclosed properties of the Suico and Flores spouses.
acHDTA
On September 13, 1976, respondent Restituto Sabordo (Restituto) filed with the
then Court of First Instance of Negros Occidental an original action for
declaratory relief with damages and prayer for a writ of preliminary injunction
raising the issue of whether or not the Suico spouses have the right to recover
from respondents Lots 506 and 514.
In its Decision dated December 17, 1986, the Regional Trial Court (RTC) of San
Carlos City, Negros Occidental, ruled in favor of the Suico spouses directing that
the latter have until August 31, 1987 within which to redeem or buy back from
respondents Lots 506 and 514.
On appeal, the CA, in its Decision 3 in CA-G.R. CV No. 13785, dated April 24,
1990, modified the RTC decision by giving the Suico spouses until October 31,
1990 within which to exercise their option to purchase or redeem the subject lots
from respondents by paying the sum of P127,500.00. The dispositive portion of
the CA Decision reads as follows:
xxx xxx xxx
For reasons given, judgment is hereby rendered modifying

the dispositive portion of [the] decision of the lower court to
read:
1) The defendants-appellees are granted up to

October 31, 1990 within which to exercise their
option to purchase from the plaintiff-appellant
Restituto Sabordo and Mima Mahilum Lot No. 506,
covered by Transfer Certificate of Title No. T-
102598 and Lot No. 514, covered by Transfer
Certificate of Title No. T-102599, both of Escalante
Cadastre, Negros Occidental by reimbursing or
paying to the plaintiff the sum of ONE HUNDRED
TWENTY-SEVEN THOUSAND FIVE HUNDRED
PESOS (P127,500.00); AISHcD
2) Within said period, the defendants-appellees

shall continue to have usufructuary rights on the
coconut trees on Lots Nos. 506 and 514, Escalante
Cadastre, Negros Occidental;
3) The Writ of Preliminary Injunction dated August
12, 1977 shall be effective until defendants-
appellees shall have exercised their option to
purchase within said period by paying or
reimbursing to the plaintiff-appellant the aforesaid
amount.
No pronouncement as to costs.
SO ORDERED. 4
In a Resolution 5 dated February 13, 1991, the CA granted the Suico spouses an
additional period of 90 days from notice within which to exercise their option to
purchase or redeem the disputed lots.
In the meantime, Toribio Suico (Toribio) died leaving his widow, Eufrocina, and
several others, including herein petitioner, as legal heirs. Later, they discovered
that respondents mortgaged Lots 506 and 514 with Republic Planters Bank (RPB)
as security for a loan which, subsequently, became delinquent. AEcIaH
Thereafter, claiming that they are ready with the payment of P127,500.00, but
alleging that they cannot determine as to whom such payment shall be made,
petitioner and her co-heirs filed a Complaint 6 with the RTC of San Carlos City,
Negros Occidental seeking to compel herein respondents and RPB to interplead
and litigate between themselves their respective interests on the abovementioned
sum of money. The Complaint also prayed that respondents be directed to
substitute Lots 506 and 514 with other real estate properties as collateral for their
outstanding obligation with RPB and that the latter be ordered to accept the
substitute collateral and release the mortgage on Lots 506 and 514. Upon filing of
their complaint, the heirs of Toribio deposited the amount of P127,500.00 with
the RTC of San Carlos City, Branch 59.
Respondents filed their Answer 7 with Counterclaim praying for the dismissal of
the above Complaint on the grounds that (1) the action for interpleader was
improper since RPB is not laying any claim on the sum of P127,500.00; (2) that the
period within which the complainants are allowed to purchase Lots 506 and 514
had already expired; (3) that there was no valid consignation, and (4) that the
case is barred by litis pendencia or res judicata.
On the other hand, RPB filed a Motion to Dismiss the subject Complaint on the
ground that petitioner and her co-heirs had no valid cause of action and that they
have no primary legal right which is enforceable and binding against RPB.
On December 5, 2001, the RTC rendered judgment, dismissing the Complaint of

petitioner and her co-heirs for lack of merit. 8 Respondents' Counterclaim was
likewise dismissed.
Petitioner and her co-heirs filed an appeal with the CA contending that the
judicial deposit or consignation of the amount of P127,500.00 was valid and
binding and produced the effect of payment of the purchase price of the subject
lots. CcSTHI
In its assailed Decision, the CA denied the above appeal for lack of merit and
affirmed the disputed RTC Decision.
Petitioner and her co-heirs filed a Motion for Reconsideration, 9 but it was
likewise denied by the CA.
Hence, the present petition for review on certiorari with a lone Assignment of
Error, to wit:
THE COURT OF APPEALS ERRED IN AFFIRMING THE

DECISION OF THE LOWER COURT WHICH HELD
THAT THE JUDICIAL DEPOSIT OF P127,500.00 MADE
BY THE SUICOS WITH THE CLERK OF COURT OF THE
RTC, SAN CARLOS CITY, IN COMPLIANCE WITH THE
FINAL AND EXECUTORY DECISION OF THE COURT
OF APPEALS IN CA-G.R. CV-13785 WAS NOT VALID.
10
Petitioner's main contention is that the consignation which she and her co-heirs
made was a judicial deposit based on a final judgment and, as such, does not
require compliance with the requirements of Articles 1256 11 and 1257 12 of the
Civil Code.
At the outset, the Court quotes with approval the discussion of the CA regarding
the definition and nature of consignation, to wit: CDAHaE
. . . consignation [is] the act of depositing the thing due with

the court or judicial authorities whenever the creditor cannot
accept or refuses to accept payment, and it generally
requires a prior tender of payment. It should be
distinguished from tender of payment which is the
manifestation by the debtor to the creditor of his desire to
comply with his obligation, with the offer of immediate
performance. Tender is the antecedent of consignation, that
is, an act preparatory to the consignation, which is the
principal, and from which are derived the immediate
consequences which the debtor desires or seeks to obtain.
Tender of payment may be extrajudicial, while consignation
is necessarily judicial, and the priority of the first is the
attempt to make a private settlement before proceeding to
the solemnities of consignation. Tender and consignation,
where validly made, produces the effect of payment and
extinguishes the obligation. 13 ISDCHA
In the case of Arzaga v. Rumbaoa, 14 which was cited by petitioner in support of

his contention, this Court ruled that the deposit made with the court by the
plaintiff-appellee in the said case is considered a valid payment of the amount
adjudged, even without a prior tender of payment thereof to the defendants-
appellants, because the plaintiff-appellee, upon making such deposit, expressly
petitioned the court that the defendants-appellees be notified to receive the
tender of payment. This Court held that while "[t]he deposit, by itself alone, may
not have been sufficient, but with the express terms of the petition, there was full
and complete offer of payment made directly to defendants-appellants." 15 In the
instant case, however, petitioner and her co-heirs, upon making the deposit with
the RTC, did not ask the trial court that respondents be notified to receive the
amount that they have deposited. In fact, there was no tender of payment.
Instead, what petitioner and her co-heirs prayed for is that respondents and RPB
be directed to interplead with one another to determine their alleged respective
rights over the consigned amount; that respondents be likewise directed to
substitute the subject lots with other real properties as collateral for their loan
with RPB and that RPB be also directed to accept the substitute real properties as
collateral for the said loan. Nonetheless, the trial court correctly ruled that
interpleader is not the proper remedy because RPB did not make any claim
whatsoever over the amount consigned by petitioner and her co-heirs with the
court.
In the cases of Del Rosario v. Sandico 16 and Salvante v. Cruz, 17 likewise cited as
authority by petitioner, this Court held that, for a consignation or deposit with
the court of an amount due on a judgment to be considered as payment, there
must be prior tender to the judgment creditor who refuses to accept it. The same
principle was reiterated in the later case of Pabugais v. Sahijwani. 18 As stated
above, tender of payment involves a positive and unconditional act by the
obligor of offering legal tender currency as payment to the obligee for the
former's obligation and demanding that the latter accept the same. 19 In the
instant case, the Court finds no cogent reason to depart from the findings of the
CA and the RTC that petitioner and her co-heirs failed to make a prior valid
tender of payment to respondents. aDHCAE
It is settled that compliance with the requisites of a valid consignation is

mandatory. 20 Failure to comply strictly with any of the requisites will render
the consignation void. One of these requisites is a valid prior tender of payment.
21
Under Article 1256, the only instances where prior tender of payment is excused
are: (1) when the creditor is absent or unknown, or does not appear at the place
of payment; (2) when the creditor is incapacitated to receive the payment at the
time it is due; (3) when, without just cause, the creditor refuses to give a receipt;
(4) when two or more persons claim the same right to collect; and (5) when the
title of the obligation has been lost. None of these instances are present in the
instant case. Hence, the fact that the subject lots are in danger of being foreclosed
does not excuse petitioner and her co-heirs from tendering payment to
respondents, as directed by the court.
WHEREFORE, the instant petition is DENIED. The Decision of the Court of

Appeals, dated May 25, 2007, and its Resolution dated January 24, 2008, both in
CA-G.R. CV No. 75013, are AFFIRMED.
SO ORDERED.
||| (Del Carmen v. Spouses Sabordo, G.R. No. 181723, August 11, 2014)
G.R. No. 144101. September 16, 2005.]
ANTONIO P. TAMBUNTING, JR. and COMMERCIAL

HOUSE OF FINANCE, INC., petitioners, vs. SPOUSES
EMILIO SUMABAT and ESPERANZA BAELLO,
respondents.
Soo Gutierrez Leogardo & Lee for respondents.
SYLLABUS
1.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; DECLARATORY RELIEF; A

COURT HAS NO MORE JURISDICTION OVER AN ACTION FOR
DECLARATORY RELIEF IF THE STATUTE, DEED, CONTRACT, ETC.,
SUBJECT THEREOF, HAS ALREADY BEEN INFRINGED OR TRANSGRESSED
BEFORE THE INSTITUTION OF THE ACTION. An action for declaratory
relief should be filed by a person interested under a deed, will, contract or other
written instrument, and whose rights are affected by a statute, executive order,
regulation or ordinance before breach or violation thereof. The purpose of the
action is to secure an authoritative statement of the rights and obligations of the
parties under a statute, deed, contract, etc. for their guidance in its enforcement
or compliance and not to settle issues arising from its alleged breach. It may be
entertained only before the breach or violation of the statute, deed, contract, etc.
to which it refers. Where the law or contract has already been contravened prior
to the filing of an action for declaratory relief, the court can no longer assume
jurisdiction over the action. In other words, a court has no more jurisdiction over
an action for declaratory relief if its subject, i.e., the statute, deed, contract, etc.,
has already been infringed or transgressed before the institution of the action.
Under such circumstances, inasmuch as a cause of action has already accrued in
favor of one or the other party, there is nothing more for the court to explain or
clarify short of a judgment or final order.
2.ID.; ID.; ID.; ID.; ABSENT JURISDICTION, THE TRIAL COURT'S DECISION
OVER THE ACTION FOR DECLARATORY RELIEF IS VOID AND WITHOUT
LEGAL EFFECT; CASE AT BAR. Here, an infraction of the mortgage terms
had already taken place before the filing of Civil Case No. C-7496. Thus, the CFI
lacked jurisdiction when it took cognizance of the case in 1979. And in the
absence of jurisdiction, its decision was void and without legal effect. As this
Court held in Arevalo v. Benedicto: Furthermore, the want of jurisdiction by a
court over the subject-matter renders its judgment void and a mere nullity, and
considering that a void judgment is in legal effect no judgment, by which no
rights are divested, from which no rights can be obtained, which neither binds
nor bars any one, and under which all acts performed and all claims flowing out
of are void, and considering further, that the decision, for want of jurisdiction of
the court, is not a decision in contemplation of law, and, hence, can never become
executory, it follows that such a void judgment cannot constitute a bar to another
case by reason of res judicata.
3.CIVIL LAW; PRESCRIPTION; AN ACTION TO ENFORCE A RIGHT ARISING

FROM A MORTGAGE SHOULD BE ENFORCED WITHIN TEN YEARS FROM
THE TIME THE RIGHT OF ACTION ACCRUES; CASE AT BAR. Article 1142
of the Civil Code is clear. A mortgage action prescribes after ten years. An action
to enforce a right arising from a mortgage should be enforced within ten years
from the time the right of action accrues. Otherwise, it will be barred by
prescription and the mortgage creditor will lose his rights under the mortgage.
Here, petitioners' right of action accrued in May 1977 when respondents
defaulted in their obligation to pay their loan amortizations. It was from that
time that the ten-year period to enforce the right under the mortgage started to
run. The period was interrupted when respondents filed Civil Case No. C-6329
sometime after May 1977 and the CFI restrained the intended foreclosure of the
property. However, the period commenced to run again on November 9, 1977
when the case was dismissed.
4.ID.; ID.; ID.; FILING OF AN ACTION FOR DECLARATORY RELIEF WILL

NOT INTERRUPT THE RUNNING OF THE TEN-YEAR PRESCRIPTIVE
PERIOD WHERE THE COURT LACKS JURISDICTION OVER THE ACTION.
The respondents' institution of Civil Case No. C-7496 in the CFI on March 16,
1979 did not interrupt the running of the ten-year prescriptive period because, as
discussed above, the court lacked jurisdiction over the action for declaratory
relief. All proceedings therein were without legal effect. Thus, petitioners could
have enforced their right under the mortgage, including its foreclosure, only
until November 7, 1987, the tenth year from the dismissal of Civil Case No. C-
6329. Thereafter, their right to do so was already barred by prescription. The
foreclosure held on February 8, 1995 was therefore some seven years too late. The
same thing can be said about the public auction held on March 27, 1995, the
consolidation of title in CHFI's favor and the issuance of TCT No. 310191 in its
name. They were all void and did not exist in the eyes of the law.
DECISION
CORONA, J p:
This petition for review on certiorari under Rule 45 of the Rules of Court assails
the February 11, 2000 decision of the Regional Trial Court (RTC) of Caloocan
City, Branch 120, in Civil Case No. C-16822.
This case involves a dispute over a parcel of land situated in Caloocan City
covered by TCT No. (87655) 18837. It was previously registered in the names of
respondents, spouses Emilio Sumabat and Esperanza Baello. On May 3, 1973,
respondents mortgaged it to petitioner Antonio Tambunting, Jr. to secure the
payment of a P7,727.95 loan. In August 1976, respondents were informed that
their indebtedness had ballooned to P15,000 for their failure to pay the monthly
amortizations. In May 1977, because respondents defaulted in their obligation,
petitioner Commercial House of Finance, Inc. (CHFI), as assignee of the
mortgage, initiated foreclosure proceedings on the mortgaged property but the
same did not push through. It was restrained by the then Court of First Instance
(CFI) of Caloocan City, Branch 33 (now RTC Branch 123) in Civil Case No. C-
6329, a complaint for injunction filed by respondents against petitioners.
However, the case was subsequently dismissed for failure of the parties to
appear at the hearing on November 9, 1977.
On March 16, 1979, respondents filed an action for declaratory relief with the CFI
of Caloocan City, Branch 33, seeking a declaration of the extent of their actual
indebtedness. It was docketed as Civil Case No. C-7496. Petitioners were
declared in default for failure to file an answer within the reglementary period.
They moved for the dismissal of the action on the ground that its subject, the
mortgage deed, had already been breached prior to the filing of the action. The
motion was denied for having been filed out of time and petitioners had already
been declared in default.
On January 8, 1981, the CFI rendered its decision. It fixed respondents' liability at
P15,743.83 and authorized them to consign the amount to the court for proper
disposition. In compliance with the decision, respondents consigned the required
amount on January 9, 1981.
In March 1995, respondents received a notice of sheriffs sale indicating that the
mortgage had been foreclosed by CHFI on February 8, 1995 and that an
extrajudicial sale of the property would be held on March 27, 1995.
On March 27, 1995, respondents instituted Civil Case No. C-16822, a petition for
preliminary injunction, damages and cancellation of annotation of encumbrance
with prayer for the issuance of a temporary restraining order, with the RTC of
Caloocan City, Branch 120. However, the public auction scheduled on that same
day proceeded and the property was sold to CHFI as the highest bidder.
Respondents failed to redeem the property during the redemption period.
Hence, title to the property was consolidated in favor of CHFI and a new
certificate of title (TCT No. 310191) was issued in its name. In view of these
developments, respondents amended their complaint to an action for
nullification of foreclosure, sheriff's sale and consolidation of title, reconveyance
and damages.
On February 11, 2000, the RTC issued the assailed decision. It ruled that the 1981
CFI decision in Civil Case No. C-7496 (fixing respondents' liability at P15,743.83
and authorizing consignation) had long attained finality. The mortgage was
extinguished when respondents paid their indebtedness by consigning the
amount in court. Moreover, the ten-year period within which petitioners should
have foreclosed the property was already barred by prescription. They abused
their right to foreclose the property and exercised it in bad faith. As a
consequence, the trial court nullified the foreclosure and extrajudicial sale of the
property, as well as the consolidation of title in CHFI's name in 1995. It then
ordered the register of deeds of Caloocan City to cancel TCT No. 310191 and to
reconvey the property to respondents. It also held petitioners liable for moral
damages, exemplary damages and attorney's fees.
Petitioners moved for a reconsideration of the trial court's decision but it was
denied. Hence, this petition. cICHTD
Petitioners claim that the trial court erred when it affirmed the validity of the
consignation. They insist that the CFI was barred from taking cognizance of the
action for declaratory relief since, petitioners being already in default in their
loan amortizations, there existed a violation of the mortgage deed even before
the institution of the action. Hence, the CFI could not have rendered a valid
judgment in Civil Case No. C-7496 and the consignation made pursuant to a void
judgment was likewise void. Respondents also fault the trial court for holding
that their right to foreclose the property had already prescribed.
True, the trial court erred when it ruled that the 1981 CFI decision in Civil Case
No. C-7496 was already final and executory.
An action for declaratory relief should be filed by a person interested under a

deed, will, contract or other written instrument, and whose rights are affected by
a statute, executive order, regulation or ordinance before breach or violation
thereof. 1 The purpose of the action is to secure an authoritative statement of the
rights and obligations of the parties under a statute, deed, contract, etc. for their
guidance in its enforcement or compliance and not to settle issues arising from its
alleged breach. 2 It may be entertained only before the breach or violation of the
statute, deed, contract, etc. to which it refers. 3 Where the law or contract has
already been contravened prior to the filing of an action for declaratory relief, the
court can no longer assume jurisdiction over the action. 4 In other words, a court
has no more jurisdiction over an action for declaratory relief if its subject, i.e., the
statute, deed, contract, etc., has already been infringed or transgressed before the
institution of the action. Under such circumstances, inasmuch as a cause of action
has already accrued in favor of one or the other party, there is nothing more for
the court to explain or clarify short of a judgment or final order.
Here, an infraction of the mortgage terms had already taken place before the
filing of Civil Case No. C-7496. Thus, the CFI lacked jurisdiction when it took
cognizance of the case in 1979. And in the absence of jurisdiction, its decision was
void and without legal effect. As this Court held in Arevalo v. Benedicto: 5
Furthermore, the want of jurisdiction by a court over the

subject-matter renders its judgment void and a mere nullity,
and considering that a void judgment is in legal effect no
judgment, by which no rights are divested, from which no
rights can be obtained, which neither binds nor bars any one,
and under which all acts performed and all claims flowing
out of are void, and considering further, that the decision,
for want of jurisdiction of the court, is not a decision in
contemplation of law, and, hence, can never become
executory, it follows that such a void judgment cannot
constitute a bar to another case by reason of res judicata.
Nonetheless, the petition must fail.
Article 1142 of the Civil Code is clear. A mortgage action prescribes after ten
years.
An action to enforce a right arising from a mortgage should be enforced within

ten years from the time the right of action accrues. 6 Otherwise, it will be barred
by prescription and the mortgage creditor will lose his rights under the
mortgage.
Here, petitioners' right of action accrued in May 1977 when respondents

defaulted in their obligation to pay their loan amortizations. It was from that
time that the ten-year period to enforce the right under the mortgage started to
run. The period was interrupted when respondents filed Civil Case No. C-6329
sometime after May 1977 and the CFI restrained the intended foreclosure of the
property. However, the period commenced to run again on November 9, 1977
when the case was dismissed.
The respondents' institution of Civil Case No. C-7496 in the CFI on March 16,
1979 did not interrupt the running of the ten-year prescriptive period because, as
discussed above, the court lacked jurisdiction over the action for declaratory
relief. All proceedings therein were without legal effect. Thus, petitioners could
have enforced their right under the mortgage, including its foreclosure, only
until November 7, 1987, the tenth year from the dismissal of Civil Case No. C-
6329. Thereafter, their right to do so was already barred by prescription.
The foreclosure held on February 8, 1995 was therefore some seven years too late.
The same thing can be said about the public auction held on March 27, 1995, the
consolidation of title in CHFI's favor and the issuance of TCT No. 310191 in its
name. They were all void and did not exist in the eyes of the law.
WHEREFORE, the petition is hereby DENIED.
||| (Tambunting, Jr. v. Spouses Sumabat, G.R. No. 144101, September 16, 2005)
G.R. No. 137538. September 3, 2001.]
OFFICE OF THE OMBUDSMAN, petitioner, vs. HON.

FRANCISCO B. IBAY, in his capacity as Presiding Judge
of the Regional Trial Court, Makati City, Branch 135,
UNION BANK OF THE PHILIPPINES, and LOURDES T.
MARQUEZ, in her capacity as Branch Manager of UBP
Julia Vargas Branch, respondents.
The Solicitor General for petitioner.
Fortun Narvasa & Salazar for private respondents.
SYNOPSIS
Petitioner, during its investigation on the alleged "scam" on the
Public Estates Authority-Amari Coastal Bay Development Corporation,
directed private respondent Lourdes Marquez, Branch Manager of Union
Bank of the Philippines, to produce bank account application forms,
signature cards, transactions history, bank statements, bank ledgers, debit
and credit memo, deposit and withdrawal slips, application for purchase of
manager's checks, used manager's checks, check microfilms and several
other documents for an in camera inspection relative to Accounts Nos. 001-
37270-5, 240-020718, 245-30317-3 and 245-30318-1. Private respondent, who
earlier refused to comply, was directed anew by petitioner, in an order, to
produce the requested documents and to show cause why she should not be
cited for contempt in case she fails to comply. Instead of complying, private
respondent filed a petition for declaratory relief before the Regional Trial
Court averring absence of legal obligation to divulge any information
relative to all deposits under Sections 2 and 3 of R.A. No. 1405 (Law on
Secrecy of Bank Deposits). Petitioner countered that under Section 15 (8) of
R.A. 6770 it has the power to examine and have access to bank accounts and
records. Meanwhile, private respondent filed with this Court a petition for
certiorari and prohibition assailing petitioner's order to institute indirect
contempt. Petitioner moved to dismiss the petition for declaratory relief on
ground of lack of jurisdiction, but the same was denied. Hence, the present
action.
The special civil action of declaratory relief falls under the exclusive
jurisdiction of the Regional Trial Courts. It is not among the actions within
the original jurisdiction of the Supreme Court even if only questions of law
are involved. For an action for declaratory relief to prosper, the following
requisites must concur: 1) there must be a justiciable controversy; 2) the
controversy must be between persons whose interests are adverse; 3) the
party seeking the relief has a legal interest in the controversy; and 4) the
issue is ripe for judicial determination. In the case at bar, the interests of the
parties are adverse considering the antagonistic assertion of the power of the
Ombudsman to examine bank deposits and refusal of private respondent to
allow petitioner to inspect in camera certain bank accounts and is ripe for
judicial determination as litigation is inevitable. Thus, the Regional Trial
Court may take cognizance of the petition.
In any event, the relief being sought had been squarely addressed
in Marquez vs. Desierto, wherein this Court ruled that before an in camera
inspection of bank accounts may be allowed, there must be a pending case
before a court of competent jurisdiction, with the account clearly identified
and the inspection limited to the subject matter of the pending case. Without
any pending litigation, any order for the opening of a bank account for
inspection is clearly premature and legally unjustified.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; DECLARATORY RELIEF;

FALLS WITHIN EXCLUSIVE JURISDICTION OF REGIONAL TRIAL COURTS.
The special civil action of declaratory relief falls under the exclusive
jurisdiction of the Regional Trial Courts. It is not among the actions within the
original jurisdiction of the Supreme Court even if only questions of law are
involved. Similarly, the Rules of Court is explicit that such action shall be
brought before the appropriate Regional Trial Court.
2. ID.; ID.; ID.; REQUISITES. The requisites of an action for declaratory relief
are: (1) there must be a justiciable controversy; (2) the controversy must be
between persons whose interests are adverse; (3) that the party seeking the relief
has a legal interest in the controversy; and (4) that the issue is ripe for judicial
determination.
3. ID.; ID.; ID.; ID.; CASE AT BAR. In this case, the controversy concerns the
extent of the power of petitioner to examine bank accounts under Section 15 (8)
of R.A. 6770 vis--vis the duty of banks under Republic Act 1405 not to divulge
any information relative to deposits of whatever nature. The interests of the
parties are adverse considering the antagonistic assertion of a legal right on one
hand, that is the power of Ombudsman to examine bank deposits, and on the
other, the denial thereof apparently by private respondent who refused to allow
petitioner to inspect in camera certain bank accounts. The party seeking relief,
private respondent herein, asserts a legal interest in the controversy. The issue
invoked is ripe for judicial determination as litigation is inevitable. Note that
petitioner has threatened private respondent with "indirect contempt" and
"obstruction" charges should the latter not comply with its order. Circumstances
considered, we hold that public respondent has jurisdiction to take cognizance of
the petition for declaratory relief. Nor can it be said that public respondent
gravely abused its discretion in doing so. We are thus constrained to dismiss the
instant petition for lack of merit.
4. ID.; ID.; ID.; IN CAMERA INSPECTION OF BANK ACCOUNT; REQUISITES.

In any event, the relief being sought by private respondent in her action for
declaratory relief before the RTC of Makati City has been squarely addressed by
our decision in Marquez vs. Desierto. In that case, we ruled that before an in camera
inspection of bank accounts may be allowed, there must be a pending case before
a court of competent jurisdiction. Further, the account must be clearly identified,
and the inspection limited to the subject matter of the pending case before the
court of competent jurisdiction. The bank personnel and the account holder must
be notified to be present during the inspection, and such inspection may cover
only the account identified in the pending case. In the present case, since there is
no pending litigation yet before a court of competent authority, but only an
investigation by the Ombudsman on the so-called "scam", any order for the
opening of the bank account for inspection is clearly premature and legally
unjustified.
RESOLUTION
QUISUMBING, J p:
This special civil action for certiorari seeks to annul the Orders of public
respondent dated August 19, 1998 and December 22, 1998, and to dismiss the
proceedings in Civil Case No. 98-1585.
The factual antecedents of this case are as follows:
Sometime in 1998, petitioner conducted an investigation on the alleged "scam" on

the Public Estates Authority-Amari Coastal Bay Development Corporation. The
case, entitled Fact-Finding and Intelligence Bureau vs. Amadeo Lagdameo, et al., was
docketed as OMB-0-97-0411. Initial result of the investigation revealed that the
alleged anomaly was committed through the issuance of checks which were
subsequently deposited in several financial institutions. On April 29, 1998,
petitioner issued an Order directing private respondent Lourdes Marquez,
branch manager of Union Bank of the Philippines branch at Julia Vargas Avenue,
Pasig City, to produce several bank documents for inspection relative to Account
Nos. 011-37270-5, 240-020718, 245-30317-3 and 245-30318-1, reportedly
maintained in the said branch. The documents referred to include bank account
application forms, signature cards, transactions history, bank statements, bank
ledgers, debit and credit memos, deposit and withdrawal slips, application for
purchase of manager's checks, used manager's checks and check microfilms. The
inspection would be done "in camera" wherein the bank records would be
examined without bringing the documents outside the bank premises. Its
purpose was to identify the specific bank records prior to the issuance of the
required information not in any manner needed in or relevant to the
investigation. 1
Private respondent failed to comply with petitioner's order. She explained that
the subject accounts pertain to International Corporate Bank (Interbank) which
merged with Union Bank in 1994. She added that despite diligent efforts, the
bank could not identify these accounts since the checks were issued in cash or
bearer forms. She informed petitioner that she had to first verify from the
Interbank records in its archives the whereabouts of said accounts. 2
Petitioner found private respondent's explanation unacceptable. Petitioner

reminded private respondent that her acts constitute disobedience or resistance
to a lawful order and is punishable as indirect contempt under Section 3 (b), Rule
71 of the Revised Rules of Court, in relation to Section 15 (9) of R.A. 6770
(Ombudsman Act of 1989). The same might also constitute willful obstruction of
the lawful exercise of the functions of the Ombudsman, which is punishable
under Section 36 of R.A. 6770. On June 16, 1998, petitioner issued an order to
private respondent to produce the requested bank documents for "in camera"
inspection. In the event of her failure to comply as directed, private respondent
was ordered to show cause why she should not be cited for contempt and why
she should not be charged for obstruction. 3
Instead of complying with the order of petitioner, private respondent filed a

petition for declaratory relief with an application for temporary restraining order
and/or preliminary injunction before the Regional Trial Court of Makati City,
Branch 135, presided by respondent Judge Francisco Ibay. The petition was
docketed as Civil Case No. 98-1585. In her petition, private respondent averred
that under Sections 2 and 3 of R.A. 1405 (Law on Secrecy of Bank Deposits), she
had the legal obligation not to divulge any information relative to all deposits of
whatever nature with banks in the Philippines. But petitioner's Order cited
Section 15(8) of R.A. 6770 stating that the Ombudsman had the power to examine
and have access to bank accounts and records. Private respondent, therefore,
sought a definite ruling and/or guidelines as regards her rights as well as
petitioner's power to inspect bank deposits under the cited provisions of law.
Meanwhile, private respondent filed with this Court a petition for certiorari and
prohibition, assailing petitioner's order to institute indirect contempt
proceedings against her. 4
Petitioner moved to dismiss the aforesaid petition for declaratory relief on the
ground that the RTC has no jurisdiction over the subject matter thereof. In an
order dated August 19, 1998, now being assailed, public respondent denied
petitioner's motion to dismiss. Petitioner then filed an ex-parte motion for extended
ruling. On December 22, 1998, public respondent issued an order declaring that it
has jurisdiction over the case since it is an action for declaratory relief under Rule
63 of the Rules of Court.
Seasonably, petitioner filed before this Court the instant petition assailing the
Orders dated August 19, 1998 and December 22, 1998 of public respondent on
the ground that public respondent assumed jurisdiction over the case and issued
orders with grave abuse of discretion and clear lack of jurisdiction. Petitioner
sought the nullification of the impugned orders, the immediate dismissal of Civil
Case No. 98-1585, and the prohibition of public respondent from exercising
jurisdiction on the investigation being conducted by petitioner in the alleged
PEA-AMARI land "scam".
The only question raised by petitioner for resolution public whether or not public
respondent acted without jurisdiction and discretion in entertaining the cited
petition for declaratory relief. DaAISH
Petitioner contends that the RTC of Makati City lacks jurisdiction over the
petition for declaratory relief. It asserts that respondent judge should have
dismissed the petition outright in view of Section 14 of R.A. 6770.
Section 14 of R.A. 6770 provides:
Restrictions. No writ of injunction shall be issued by any

court to delay an investigation being conducted by the
Ombudsman under this Act, unless there is a prima facie
evidence that the subject matter of the investigation is
outside the jurisdiction of the Office of the Ombudsman.
No court shall hear any appeal or application for remedy

against the decision or findings of the Ombudsman, except
the Supreme Court, on pure question of law.
Petitioner's invocation of the aforequoted statutory provision is misplaced. The

special civil action of declaratory relief falls under the exclusive jurisdiction of
the Regional Trial Courts. 5 It is not among the actions within the original
jurisdiction of the Supreme Court even if only questions of law are involved. 6
Similarly, the Rules of Court is explicit that such action shall be brought before
the appropriate Regional Trial Court. Section 1, Rule 63 of the Rules of Court
provides:
SECTION 1. Who may file petition. Any person interested

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

The requisites of an action for declaratory relief are: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are
adverse; (3) that the party seeking the relief has a legal interest in the
controversy; and (4) that the issue is ripe for judicial determination. 7 In this case,
the controversy concerns the extent of the power of petitioner to examine bank
accounts under Section 15 (8) of R.A. 6770 vis-a-vis the duty of banks under
Republic Act 1405 not to divulge any information relative to deposits of
whatever nature. The interests of the parties are adverse considering the
antagonistic assertion of a legal right on one hand, that is the power of
Ombudsman to examine bank deposits, and on the other, the denial thereof
apparently by private respondent who refused to allow petitioner to inspect in
camera certain bank accounts. The party seeking relief, private respondent herein,
asserts a legal interest in the controversy. The issue invoked is ripe for judicial
determination as litigation is inevitable. Note that the petitioner has threatened
private respondent with "indirect contempt" and "obstruction" charges should
the latter not comply with its order.
Circumstances considered, we hold that public respondent has jurisdiction to

take cognizance of the petition for declaratory relief. Nor can it be said that
public respondent gravely abused its discretion in doing so. We are thus
constrained to dismiss the instant petition for lack of merit.
In any event, the relief being sought by private respondent in her action for
declaratory relief before the RTC of Makati City has been squarely addressed by
our decision in Marquez vs. Desierto 8 In that case, we ruled that before an in
camera inspection of bank accounts may be allowed, there must be a pending case
before a court of competent jurisdiction. Further, the account must be clearly
identified, and the inspection limited to the subject matter of the pending case
before the court of competent jurisdiction. The bank personnel and the account
holder must be notified to be present during the inspection, and such inspection
may cover only the account identified in the pending case. In the present case,
since there is no pending litigation yet before a court of competent authority, but
only an investigation by the Ombudsman on the so-called "scam", any order for
the opening of the bank account for inspection is clearly premature and legally
unjustified. HICSaD
WHEREFORE, the instant petition is DISMISSED.
||| (Office of the Ombudsman v. Ibay, G.R. No. 137538, September 03, 2001)
EN BANC
[G.R. No. 161400. September 2, 2005.]
ZENAIDA ORTEGA, represented by Her Attorney-in Fact

OCTAVIO ALVAREZ and/or ZEMVE ORTEGA
ALVAREZ, petitioners, vs. THE QUEZON CITY
GOVERNMENT, THE NATIONAL HOUSING
AUTHORITY & THE NATIONAL HOME MORTGAGE
CORP., respondents.
Jose V. Regalado, Jr. for petitioners.
Office of the City Attorney for Quezon City Government.
The Solicitor General for NHA and NHMC.
SYLLABUS
1.POLITICAL LAW; JUDICIAL DEPARTMENT; SUPREME COURT;

JURISDICTION; THERE MUST BE FIRST A FINAL JUDGMENT RENDERED
BY AN INFERIOR COURT BEFORE THIS COURT CAN ASSUME
JURISDICTION OVER A CASE. This Court can thus only review, revise,
reverse, modify on appeal or certiorari final judgments and orders of lower
courts in all cases in which the constitutionality or validity of, among other
things, an ordinance is in question. Foremost, therefore, is that there must be first
a final judgment rendered by an inferior court before this Court can assume
jurisdiction over a case of this nature.
2.ID.; ID.; ID.; ID.; IT DOES NOT CONDUCT ORIGINAL AND FULL TRIAL OF
A MAIN FACTUAL ISSUE. Verily, this Court does not conduct original and
full trial of a main factual issue like what petitioner is raising in the present
petition. It does not analyze or weigh evidence brought before it at the first
instance, otherwise, it would preempt the primary function of the lower court to
try the case on the merits, receive evidence, and decide the case definitively. Its
jurisdiction in cases which assail the validity of an ordinance is limited to
reviewing or revising final judgments or orders of lower courts and applying the
law based on their findings of facts brought before it.
3.ID.; ID.; ID.; ID.; JUDICIAL POLICY MUST REMAIN THAT THIS COURT
WILL NOT ENTERTAIN DIRECT RESORT TO IT. In another vein, if this
petition was to be considered as one for declaratory relief, as observed by the
OSG, it is not embraced within the original jurisdiction of this Court. . . . At all
events, even if this petition delves on questions of law, there is no statutory or
jurisprudential basis for according to this Court original and exclusive
jurisdiction over declaratory relief which advances only questions of law. Finally,
while a petition for declaratory relief may be treated as one for prohibition if it
has far reaching implications and raises questions that need to be resolved, there
is no allegation of facts by petitioner tending to show that she is entitled to such a
writ. The judicial policy must thus remain that this Court will not entertain direct
resort to it, except when the redress sought cannot be obtained in the proper
courts or when exceptional and compelling circumstances warrant availment of a
remedy within and calling for the exercise of this Court's primary jurisdiction.
DECISION
CARPIO MORALES, J p:
Petitioner Zenaida Ortega comes directly to this Court assailing the validity of
Quezon City Ordinance No. SP 1304, Series of 2003, and praying that the
following agencies, National Housing Authority (NHA), Housing and Land Use
Regulatory Board (HLURB), Department of Environment and Natural Resources
Bureau of Land Management, National Home Mortgage Financing
Corporation, and Home Insurance Guarantee Corporation, be restrained from
implementing the said ordinance.
Proposed Ordinance No. 2002-07 (PO 2002-07) was filed on January 10, 2002
before the City Council. PO 2002-07 sought to approve "the Subdivision Plan of
Samahang Kapitbahayan ng Barangay Vasra (Samahang Kapitbahayan), a Socialized
Housing Project (B.P. Blg. 220) with seventeen (17) lots (Community Mortgage
Program) containing [a total] area of Six Hundred Sixty Seven (667) square
meters, covered by Original Certificate of Title No. 735, owned by the City
Government of Quezon City (Vendor) located at a portion of [an] easement [in]
Barangay Vasra, Quezon City, Metro Manila, as applied for by the Samahang
Kapitbahayan ng Barangay Vasra (Vendee) subject to the conditions prescribed
under Quezon City Ordinance No. SP-56, S-93 and Batas Pambansa Blg. 220." 1
Proposed Resolution No. 2003-13 (PR 2003-13) was subsequently filed on January
20, 2002 to complement PO 2002-07. The proposed resolution sought to authorize
Quezon City Mayor Feliciano R. Belmonte to enter into a contract to sell a
portion of an easement located at Barangay Vasra, Quezon City with the
SAMAHANG KAPITBAHAYAN to be represented by its President, through the
Community Mortgage Program (CMP) of the National Home Mortgage Finance
Corporation (NHMFC). 2
On August 5, 2003, the Quezon City government enacted Ordinance No. SP-1304,
Series of 2003 (the ordinance), which is being challenged in the present petition, 3
reclassifying "as residential or converted from its original classification to
residential for distribution or for sale to its informal settlers" a "parcel of land
which may be considered an accretion/excess lot and previously conceived and
referred to in Proposed Ordinance No. 2002-07 and Proposed [Resolution] 2002-
13 as portion of [an] easement situated between Block 14, Psd-39577 of the
original subdivision plan and Culiat Creek, Barangay Vasra, Quezon City." 4
The provisions of the assailed ordinance read:
SECTION 1. A parcel of land which may be considered an

accretion/excess lot and previously conceived and referred
to in proposed ordinance no. PO 2002-07 and proposed
ordinance no. PO 2002-13 as portion of easement, situated
between Block 14. Psd-39577 of the original subdivision plan
and Culiat Creek, Barangay Vasra, Quezon City, is hereby
classified as residential or converted from its original
classification to residential for distribution or for sale to its
informal settlers.
SECTION 2. This Ordinance shall take effect immediately

upon its approval. 5
Petitioner, who claims to be the rightful owner of the land subject of the
ordinance, alleges that in enacting the ordinance, her various letter-protests to
the City Council against proposed Resolutions No. 2002-13, 2002-07 and 2002-239
6 were not heeded in the City Council, thus violating her constitutional rights to
due process and equal protection of the law. HAIDcE
Petitioner further claims that the lot referred to in the ordinance overlaps her
properties as their technical descriptions in Transfer Certificates of Title Nos. RT-
70472 (296026) and N-152137 issued in her name show; 7 and that assuming that
there exists accretion or easement of the Culiat Creek, she, being the owner of the
adjoining land, is the rightful owner thereof following Articles 457 8 and Article
620 9 of the Civil Code.
Petitioner likewise claims that the intended beneficiaries under the proposed
ordinance and resolution are not informal settlers as required under City
Ordinance No. SP-56, Series of 1993, 10 but lessees of her properties who had
been ordered ejected after she filed several unlawful detainer cases against them.
11
By Comment 12 filed on April 14, 2004, the Quezon City Government, through
the Office of the City Attorney, alleges that the present petition is premature and
raises questions of fact which entail reception of evidence; and that petitioner has
not yet established her right of ownership over the property referred to in the
ordinance, whereas its clear right thereover is evidenced by Original Certificate
of Title No. 735 issued in its name. 13
The NHA, by Comment 14 filed on May 17, 2004, prayed for the dismissal of the
petition, pointing out that the petition is actually one for declaratory relief under
Section 1, Rule 63 of the Rules of Court over which this Court has no original
jurisdiction.
The NHMFC, by Comment 15 filed on June 17, 2004, alleged that it is not a party
to any of the transactions with any of the parties in the present case. It
nevertheless adopted the comment of the Quezon City government that the
petition is premature and alleges facts which still need to be proven. 16
The petition must be dismissed.
Article VIII, Section 5 of the Constitution provides:
SECTION 5. The Supreme Court shall have the following

powers:
xxx xxx xxx
(2)Review, revise, reverse, modify, or affirm on appeal or

certiorari, as the law or the Rules of Court may provide,
final judgments and orders of lower courts in:
(a)All cases in which the constitutionality or

validity of any treaty, international or executive
agreement, law, presidential decree, proclamation,
order, instruction, ordinance, or regulation is in
question.
xxx xxx xxx (Emphasis and underscoring supplied).

This Court can thus only review, revise, reverse, modify on appeal or
certiorari final judgments and orders of lower courts in all cases in which the
constitutionality or validity of, among other things, an ordinance is in
question. Foremost, therefore, is that there must be first a final judgment
rendered by an inferior court 17 before this Court can assume jurisdiction
over a case of this nature.
Verily, this Court does not conduct original and full trial of a main factual issue
like what petitioner is raising in the present petition. 18 It does not analyze or
weigh evidence brought before it at the first instance, otherwise, it would
preempt the primary function of the lower court to try the case on the merits,
receive evidence, and decide the case definitively. 19 Its jurisdiction in cases
which assail the validity of an ordinance is limited to reviewing or revising final
judgments or orders of lower courts and applying the law based on their
findings of facts brought before it. 20
In another vein, if this petition was to be considered as one for declaratory relief,
as observed by the OSG, it is not embraced within the original jurisdiction of this
Court. 21 Rule 63 of the Rules of Court provides:
SECTION 1. Who may file petition. Any person interested
under a deed, will, contract or other written instrument, or
whose rights are affected by a statute, executive order or
regulation, ordinance, or any other government regulation
may, before breach or violation thereof, bring an action in
the appropriate Regional Trial Court to determine any
question of construction or validity arising from, and for a
declaration of his rights or duties, thereunder.
An action for the reformation of an instrument, or to quiet

title to real property or remove clouds therefrom, or to
consolidate ownership under Article 1607 of the Civil Code
may be brought under this Rule.
xxx xxx xxx
SEC. 4.Local government ordinances. In any action involving

the validity of a local government ordinance, the
corresponding prosecutor or attorney of the local
government unit involved shall be similarly notified and
entitled to be heard. (Emphasis and underscoring supplied)
Respecting petitioner's contention that since the ordinance violates national laws,
the present petition delves on questions of law over which this Court has original
jurisdiction, 22 the same fails. IATSHE
As reflected above, petitioner's assertion that the invalidity of the ordinance is

premised on her claim that she has a better right to the parcel of land referred to
in the ordinance is a factual issue.
At all events, even if this petition delves on questions of law, there is no statutory
or jurisprudential basis for according to this Court original and exclusive
jurisdiction over declaratory relief which advances only questions of law. 23
Finally, while a petition for declaratory relief may be treated as one for
prohibition if it has far reaching implications and raises questions that need to be
resolved, 24 there is no allegation of facts by petitioner tending to show that she
is entitled to such a writ. The judicial policy must thus remain that this Court will
not entertain direct resort to it, except when the redress sought cannot be
obtained in the proper courts or when exceptional and compelling circumstances
warrant availment of a remedy within and calling for the exercise of this Court's
primary jurisdiction. 25
WHEREFORE, the petition is hereby DISMISSED.
||| (Ortega v. Quezon City Gov't., G.R. No. 161400, September 02, 2005)
G.R. No. 126911. April 30, 2003.]
PHILIPPINE DEPOSIT INSURANCE CORPORATION,

petitioner, vs. THE HONORABLE COURT OF APPEALS
and JOSE ABAD, LEONOR ABAD, SABINA ABAD,
JOSEPHINE "JOSIE" BEATA ABAD-ORLINA, CECILIA
ABAD, PIO ABAD, DOMINIC ABAD, TEODORA ABAD,
respondents.
The Chief Legal Counsel for petitioner.
Dolores P. Abad and Leonora P. Abad for private respondents.
SYNOPSIS
Respondents filed claims with the Philippine Deposit Insurance Corporation

(PDIC) for the payment of the twenty insured golden time deposits (GTDs) at the
Manila Banking Corporation (MBC), Iloilo Branch. PDIC paid respondents the
value of three claims; however, it withheld the payment of the seventeen
remaining claims. Subsequently, PDIC filed a petition for declaratory relief
against respondents for a judicial declaration of the insurability of respondents'
GTDs. The trial court declared the GTDs of respondents to be deposit liabilities
of MBC, hence, are liabilities of PDIC as statutory insurer. The Court of Appeals
(CA) affirmed the decision of the trial court, except as to the award of legal
interest which it deleted. Hence, this petition.
In affirming the decision of the CA, the Supreme Court ruled that PDIC is liable
only for deposits received by a bank in the usual course of business. That no
actual money in bills and/or coins was handed by respondents to MBC does not
mean that the transactions on the new GTDs did not involve money and that
there was no consideration therefor, for the outstanding balance of respondents'
71 GTDs in MBC prior to May 26, 1987 was re-deposited by respondents under
28 new GTDs, eight of which were pre-terminated and withdrawn by respondent
Abad. MBC had cash on hand more than double the outstanding balance of
respondents' 71 GTDs at the start of the banking day on May 25, 1987. Since
respondent Abad was at MBC soon after it opened at 9:00 a.m. of that day,
petitioner should not presume that MBC had no cash to cover the new GTDs of
respondents and conclude that there was no consideration for said GTDs.
Petitioner having failed to overcome the presumption that the ordinary course of
business was followed, the Court found that the 28 new GTDs were deposited in
the usual course of business of MBC.
SYLLABUS
1. COMMERCIAL LAW; INSURANCE LAW; PHILIPPINE DEPOSIT

INSURANCE CORPORATION; LIABLE ONLY FOR DEPOSITS RECEIVED BY
A BANK IN THE USUAL COURSE OF BUSINESS; CASE AT BAR. Under its
charter, PDIC (hereafter petitioner) is liable only for deposits received by a bank
"in the usual course of business." . . . That no actual money in bills and/or coins
was handed by respondents to MBC does not mean that the transactions on the
new GTDs did not involve money and that there was no consideration therefor.
For the outstanding balance of respondents' 71 GTDs in MBC prior to May 26,
1987 in the amount of P1,115,889.15 as earlier mentioned was re-deposited by
respondents under 28 new GTDs. Admittedly, MBC had P2,841,711.90 cash on
hand more than double the outstanding balance of respondents' 71 GTDs at
the start of the banking day on May 25, 1987. Since respondent Jose Abad was at
MBC soon after it opened at 9:00 a.m. of that day, petitioner should not presume
that MBC had no cash to cover the new GTDs of respondents and conclude that
there was no consideration for said GTDs. Petitioner having failed to overcome
the presumption that the ordinary course of business was followed, this Court
finds that the 28 new GTDs were deposited "in the usual course of business" of
MBC. THCSEA

DOES NOT PROSCRIBE THE FILING OF COUNTERCLAIM BASED ON THE
SAME TRANSACTION, DEED OR CONTRACT SUBJECT OF THE
COMPLAINT. [A] petition for declaratory relief does not essentially entail an
executory process. There is nothing in its nature, however, that prohibits a
counterclaim from being set-up in the same action. "Now, there is nothing in the
nature of a special civil action for declaratory relief that proscribes the filing of a
counterclaim based on the same transaction, deed or contract subject of the
complaint. A special civil action is after all not essentially different from an
ordinary civil action, which is generally governed by Rules 1 to 56 of the Rules of
Court, except that the former deals with a special subject matter which makes
necessary some special regulation. But the identity between their fundamental
nature is such that the same rules governing ordinary civil suits may and do
apply to special civil actions if not inconsistent with or if they may serve to
supplement the provisions of the peculiar rules governing special civil actions."
DECISION
The present petition for review assails the decision of the Court of Appeals
affirming that of the Regional Trial Court of Iloilo City, Branch 30, finding
petitioner Philippine Deposit Insurance Corporation (PDIC) liable, as statutory
insurer, for the value of 20 Golden Time Deposits belonging to respondents Jose
Abad, Leonor Abad, Sabina Abad, Josephine "Josie" Beata Abad-Orlina, Cecilia
Abad, Pio Abad, Dominic Abad, and Teodora Abad at the Manila Banking
Corporation (MBC), Iloilo Branch. cDCEIA
Prior to May 22, 1997, respondents had, individually or jointly with each other,
71 certificates of time deposits denominated as "Golden Time Deposits" (GTD)
with an aggregate face value of P1,115,889.96. 1
On May 22, 1987, a Friday, the Monetary Board (MB) of the Central Bank of the
Philippines, now Bangko Sentral ng Pilipinas, issued Resolution 505 2
prohibiting MBC to do business in the Philippines, and placing its assets and
affairs under receivership. The Resolution, however, was not served on MBC
until Tuesday the following week, or on May 26, 1987, when the designated
Receiver took over. 3
On May 25, 1987, the next banking day following the issuance of the MB
Resolution, respondent Jose Abad was at the MBC at 9:00 a.m. for the purpose of
pre-terminating the 71 aforementioned GTDs and re-depositing the fund
represented thereby into 28 new GTDs in denominations of P40,000.00 or less
under the names of herein respondents individually or jointly with each other. 4
Of the 28 new GTDs, Jose Abad pre-terminated 8 and withdrew the value thereof
in the total amount of P320,000.00. 5
Respondents thereafter filed their claims with the PDIC for the payment of the
remaining 20 insured GTDs. 6
On February 11, 1988, PDIC paid respondents the value of 3 claims in the total
amount of P120,000.00. PDIC, however, withheld payment of the 17 remaining
claims after Washington Solidum, Deputy Receiver of MBC-Iloilo, submitted a
report to the PDIC 7 that there was massive conversion and substitution of trust
and deposit accounts on May 25, 1987 at MBC-Iloilo. 8 The pertinent portions of
the report stated:
xxx xxx xxx
On May 25, 1987 (Monday) or a day prior to the official

announcement and take-over by CB of the assets and
liabilities of The Manila Banking Corporation, the Iloilo
Branch was found to have recorded an unusually heavy
movements in terms of volume and amount for all types of
deposits and trust accounts. It appears that the impending
receivership of TMBC was somehow already known to
many depositors on account of the massive withdrawals
paid on this day which practically wiped out the branch's
entire cash position. . . .
xxx xxx xxx
. . . The intention was to maximize the availment of PDIC

coverage limited to P40,000 by spreading out big accounts to
as many certificates under various nominees. . . . 9
xxx xxx xxx
Because of the report, PDIC entertained serious reservation in recognizing

respondents' GTDs as deposit liabilities of MBC-Iloilo. Thus, on August 30, 1991,
it filed a petition for declaratory relief against respondents with the Regional
Trial Court (RTC) of Iloilo City, for a judicial declaration determination of the
insurability of respondents' GTDs at MBC-Iloilo. 10
In their Answer filed on October 24, 1991 and Amended Answer 11 filed on
January 9, 1992, respondents set up a counterclaim against PDIC whereby they
asked for payment of their insured deposits. 12
In its Decision of February 22, 1994, 13 Branch 30 of the Iloilo RTC declared the
20 GTDs of respondents to be deposit liabilities of MBC, hence, are liabilities of
PDIC as statutory insurer. It accordingly disposed as follows:
WHEREFORE, premises considered, judgment is hereby

rendered:
1. Declaring the 28 GTDs of the Abads which were

issued by the TMBC-Iloilo on May 25, 1987 as
deposits or deposit liabilities of the bank as the
term is defined under Section 3 (f) of R.A. No. 3591,
as amended;
2. Declaring PDIC, being the statutory insurer of

bank deposits, liable to the Abads for the value of
the remaining 20 GTDs, the other 8 having been
paid already by TMBC Iloilo on May 25,1987;
3. Ordering PDIC to pay the Abads the value of

said 20 GTDs less the value of 3 GTDs it paid on
February 11, 1988, and the amounts it may have
paid the Abads pursuant to the Order of this Court
dated September 8, 1992;
4. Ordering PDIC to pay immediately the Abads
the balance of its admitted liability as contained in
the aforesaid Order of September 8, 1992, should
there be any, subject to liquidation when this case
shall have been finally decide; and
5. Ordering PDIC to pay legal interest on the

remaining insured deposits of the Abads from
February 11, 1988 until they are fully paid.
SO ORDERED.
On appeal, the Court of Appeals, by the assailed Decision of October 21, 1996, 14
affirmed the trial court's decision except as to the award of legal interest which it
deleted.
Hence, PDIC's present Petition for Review which sets forth this lone assignment
of error:
THE HONORABLE COURT OF APPEALS ERRED IN

AFFIRMING THE HOLDING OF THE TRIAL COURT
THAT THE AMOUNT REPRESENTED IN THE FACES OF
THE SO CALLED "GOLDEN TIME DEPOSITS" WERE
INSURED DEPOSITS EVEN AS THEY WERE MERE
DERIVATIVES OF RESPONDENTS' PREVIOUS ACCOUNT
BALANCES WHICH WERE PRE-
TERMINATED/TERMINATED AT THE TIME THE
MANILA BANKING CORPORATION WAS ALREADY IN
SERIOUS FINANCIAL DISTRESS.
In its supplement to the petition, PDIC adds the following assignment of error:
THE HONORABLE COURT OF APPEALS ERRED IN

AFFIRMING THE HOLDING OF THE TRIAL COURT
ORDERING PETITIONER TO PAY RESPONDENTS'
CLAIMS FOR PAYMENT OF INSURED DEPOSITS FOR
THE REASON THAT AN ACTION FOR DECLARATORY
RELIEF DOES NOT ESSENTIALLY ENTAIL AN
EXECUTORY PROCESS AS THE ONLY RELIEF THAT
SHOULD HAVE BEEN GRANTED BY THE TRIAL COURT
IS A DECLARATION OF THE RIGHTS AND DUTIES OF
PETITIONER UNDER R.A. 3591, AS AMENDED,
PARTICULARLY SECTION 3(F) THEREOF AS
CONSIDERED AGAINST THE SURROUNDING
CIRCUMSTANCES OF THE MATTER IN ISSUE SOUGHT
TO BE CONSTRUED WITHOUT PREJUDICE TO OTHER
MATTERS THAT NEED TO BE CONSIDERED BY
PETITIONER IN THE PROCESSING OF RESPONDENTS'
CLAIMS. TcHDIA
Under its charter, 15 PDIC (hereafter petitioner) is liable only for deposits
received by a bank "in the usual course of business." 16 Being of the firm
conviction that, as the reported May 25, 1987 bank transactions were so massive,
hence, irregular, petitioner essentially seeks a judicial declaration that such
transactions were not made "in the usual course of business" and, therefore, it
cannot be made liable for deposits subject thereof. 17
Petitioner points that as MBC was prohibited from doing further business by MB
Resolution 505 as of May 22, 1987, all transactions subsequent to such date were
not done "in the usual course of business."
Petitioner further posits that there was no consideration for the 20 GTDs subject
of respondents' claim. In support of this submission, it states that prior to March
25, 1987, when the 20 GTDs were made, MBC had been experiencing liquidity
problems, e.g., at the start of banking operations on March 25, 1987, it had only
P2,841,711.90 cash on hand and at the end of the day it was left with P27,805.81
consisting mostly of mutilated bills and coins. 18 Hence, even if respondents had
wanted to convert the face amounts of the GTDs to cash, MBC could not have
complied with it.
Petitioner theorizes that after MBC had exhausted its cash and could no longer
sustain further withdrawal transactions, it instead issued new GTDs as
"payment" for the pre-terminated GTDs of respondents to make sure that all the
newly-issued GTDs have face amounts which are within the statutory coverage
of deposit insurance. DHATcE
Petitioner concludes that since no cash was given by respondents and none was
received by MBC when the new GTDs were transacted, there was no
consideration therefor and, thus, they were not validly transacted "in the usual
course of business" and no liability for deposit insurance was created. 19
Petitioner's position does not persuade.
While the MB issued Resolution 505 on May 22, 1987, a copy thereof was served
on MBC only on May 26, 1987. MBC and its clients could be given the benefit of
the doubt that they were not aware that the MB resolution had been passed,
given the necessity of confidentiality of placing a banking institution under
receivership. 20
The evident implication of the law, therefore, is that the

appointment of a receiver may be made by the Monetary
Board without notice and hearing but its action is subject to
judicial inquiry to insure the protection of the banking
institution. Stated otherwise, due process does not
necessarily require a prior hearing; a hearing or an
opportunity to be heard may be subsequent to the closure.
One can just imagine the dire consequences of a prior hearing:
bank runs would be the order of the day, resulting in panic and
hysteria. In the process, fortunes may be wiped out, and
disillusionment will run the gamut of the entire banking
community. (Italics supplied). 21
Mere conjectures that MBC had actual knowledge of its impending closure do
not suffice. The MB resolution could not thus have nullified respondents'
transactions which occurred prior to May 26, 1987.
That no actual money in bills and/or coins was handed by respondents to MBC
does not mean that the transactions on the new GTDs did not involve money and
that there was no consideration therefor. For the outstanding balance of
respondents' 71 GTDs in MBC prior to May 26, 1987 22 in the amount of
P1,115,889.15 as earlier mentioned was re-deposited by respondents under 28 new
GTDs. Admittedly, MBC had P2,841,711.90 cash on hand more than double
the outstanding balance of respondent's 71 GTDs at the start of the banking
day on May 25, 1987. Since respondent Jose Abad was at MBC soon after it
opened at 9:00 a.m. of that day, petitioner should not presume that MBC had no
cash to cover the new GTDs of respondents and conclude that there was no
consideration for said GTDs.
Petitioner having failed to overcome the presumption that the ordinary course of
business was followed, 23 this Court finds that the 28 new GTDs were deposited
"in the usual course of business" of MBC.
In its second assignment of error, petitioner posits that the trial court erred in
ordering it to pay the balance of the deposit insurance to respondents,
maintaining that the instant petition stemmed from a petition for declaratory
relief which does not essentially entail an executory process, and the only relief
that should have been granted by the trial court is a declaration of the parties'
rights and duties. As such, petitioner continues, no order of payment may arise
from the case as this is beyond the office of declaratory relief proceedings. 24
Without doubt, a petition for declaratory relief does not essentially entail an
executory process. There is nothing in its nature, however, that prohibits a
counterclaim from being set-up in the same action. 25
Now, there is nothing in the nature of a special civil action

for declaratory relief that proscribes the filing of a
counterclaim based on the same transaction, deed or
contract subject of the complaint. A special civil action is
after all not essentially different from an ordinary civil
action, which is generally governed by Rules 1 to 56 of the
Rules of Court, except that the former deals with a special
subject matter which makes necessary some special
regulation. But the identity between their fundamental
nature is such that the same rules governing ordinary civil
suits may and do apply to special civil actions if not
inconsistent with or if they may serve to supplement the
provisions of the peculiar rules governing special civil
actions. 26
Petitioner additionally submits that the issue of determining the amount of

deposit insurance due respondents was never tried on the merits since the trial
dwelt only on the "determination of the viability or validity of the deposits" and
no evidence on record sustains the holding that the amount of deposit due
respondents had been finally determined. 27 This issue was not raised in the
court a quo, however, hence, it cannot be raised for the first time in the petition at
bar. 28
Finally, petitioner faults respondents for availing of the statutory limits of the
PDIC law, presupposing that, based on the conduct of respondent Jose Abad on
March 25, 1987, he and his co-respondents "somehow knew" of the impending
closure of MBC. Petitioner ascribes bad faith to respondent Jose Abad in
transacting the questioned deposits, and seeks to disqualify him from availing
the benefits under the law. 29
Good faith is presumed. This, petitioner failed to overcome since it offered mere
presumptions as evidence of bad faith.
WHEREFORE, the assailed decision of the Court of Appeals is hereby

AFFIRMED.
||| (Philippine Deposit Insurance Corp. v. Court of Appeals, G.R. No. 126911, April
30, 2003)
EN BANC
[G.R. No. 169466. May 9, 2007.]
DEPARTMENT OF BUDGET AND MANAGEMENT,

represented by SECRETARY ROMULO L. NERI,
PHILIPPINE NATIONAL POLICE, represented by
POLICE DIRECTOR GENERAL ARTURO L. LOMIBAO,
NATIONAL POLICE COMMISSION, represented by
CHAIRMAN ANGELO T. REYES, AND CIVIL SERVICE
COMMISSION, represented by CHAIRPERSON KARINA
C. DAVID, petitioners, vs. MANILA'S FINEST RETIREES
ASSOCIATION, INC., represented by P/COL.
FELICISIMO G. LAZARO (RET.), AND ALL THE OTHER
INP RETIREES, respondents.
DECISION
GARCIA, J p:
Assailed and sought to be set aside in this petition for review on certiorari under
Rule 45 of the Rules of Court are the following issuances of the Court of Appeals
(CA) in CA-G.R. CV No. 78203, to wit:
1. Decision 1 dated July 7, 2005 which affirmed in toto the

decision of the Regional Trial Court of Manila,
Branch 32, in Civil Case No. 02-103702, a suit for
declaratory relief, declaring the herein respondents
entitled to the same retirement benefits accorded
upon retirees of the Philippine National Police
(PNP) under Republic Act (R.A.) No. 6975, as
amended by R.A. No. 8551, and ordering the herein
petitioners to implement the proper adjustments on
respondents' retirement benefits; and
2. Resolution 2 dated August 24, 2005 which denied the

petitioners' motion for reconsideration.
The antecedent facts:
In 1975, Presidential Decree (P.D.) No. 765 was issued constituting the Integrated
National Police (INP) to be composed of the Philippine Constabulary (PC) as the
nucleus and the integrated police forces as components thereof. Complementing
P.D. No. 765 was P.D. No. 1184 3 dated August 26, 1977 (INP Law, hereinafter)
issued to professionalize the INP and promote career development therein.
On December 13, 1990, Republic Act (R.A.) No. 6975, entitled "AN ACT
ESTABLISHING THE PHILIPPINE NATIONAL POLICE UNDER A
REORGANIZED DEPARTMENT OF THE INTERIOR AND LOCAL
GOVERNMENT, AND FOR OTHER PURPOSES," hereinafter referred to as PNP
Law, was enacted. Under Section 23 of said law, the Philippine National Police
(PNP) would initially consist of the members of the INP, created under P.D. No.
765, as well as the officers and enlisted personnel of the PC. In part, Section 23
reads:
SEC. 23. Composition. Subject to the limitation provided

for in this Act, the Philippine National Police, hereinafter
referred to as the PNP, is hereby established, initially
consisting of the members of the police forces who were
integrated into the Integrated National Police (INP)
pursuant to Presidential Decree No. 765, and the officers and
enlisted personnel of the Philippine Constabulary (PC).
DaAISH
A little less than eight (8) years later, or on February 25, 1998, R.A. No. 6975 was
amended by R.A. No. 8551, otherwise known as the "PHILIPPINE NATIONAL
POLICE REFORM AND REORGANIZATION ACT OF 1998." Among other
things, the amendatory law reengineered the retirement scheme in the police
organization. Relevantly, PNP personnel, under the new law, stood to collect
more retirement benefits than what INP members of equivalent rank, who had
retired under the INP Law, received.
The INP retirees illustrated the resulting disparity in the retirement benefits
between them and the PNP retirees as follows: 4
Retirement Rank Monthly Pension Difference
INP PNP INP PNP
Corporal SPO3 P3,225.00 P11,310.00 P8,095.00
Captain P. Sr.
Insp. P5,248.00 P15,976.00 P10,628.00
Brig. Gen. P. Chief

Supt. P10,054.24 P18,088.00 P8,033.76
Hence, on June 3, 2002, in the Regional Trial Court (RTC) of Manila, all INP
retirees, spearheaded by the Manila's Finest Retirees Association, Inc., or the
MFRAI (hereinafter collectively referred to as the INP Retirees), filed a petition
for declaratory relief, 5 thereunder impleading, as respondents, the Department
of Budget and Management (DBM), the PNP, the National Police Commission
(NAPOLCOM), the Civil Service Commission (CSC) and the Government Service
Insurance System (GSIS). Docketed in the RTC as Civil Case No. 02-103702, which
was raffled to Branch 22 thereof, the petition alleged in gist that INP retirees
were equally situated as the PNP retirees but whose retirement benefits prior to
the enactment of R.A. No. 6975, as amended by R.A. No. 8551, were
unconscionably and arbitrarily excepted from the higher rates and adjusted
benefits accorded to the PNP retirees. Accordingly, in their petition, the
petitioning INP retirees pray that a
DECLARATORY JUDGMENT be rendered in their favor,

DECLARING with certainty that they, as INP-retirees, are
truly absorbed and equally considered as PNP-retirees and
thus, entitled to enjoy the SAME or IDENTICAL retirement
benefits being bestowed to PNP-retirees by virtue of said
PNP Law or Republic Act No. 6975, as amended by Republic Act
8551, with the corollary mandate for the respondents-
government agencies to effect the immediate adjustment on
their previously received disparate retirement benefits,
retroactive to its effectivity, and with due payment thereof.
The GSIS moved to dismiss the petition on grounds of lack of jurisdiction and
cause of action. On the other hand, the CSC, DBM, NAPOLCOM and PNP, in
their respective answers, asserted that the petitioners could not claim the more
generous retirement benefits under R.A. No. 6975 because at no time did they
become PNP members, having retired prior to the enactment of said law. DBM,
NAPOLCOM and PNP afterwards filed their respective pre-trial briefs.
The ensuing legal skirmish is not relevant to the disposition of the instant case.
The bottom line is that, on March 21, 2003, the RTC came out with its decision 6
holding that R.A. No. 6975, as amended, did not abolish the INP but merely
provided for the absorption of its police functions by the PNP, and accordingly
rendered judgment for the INP retirees, to wit:
WHEREFORE, this Court hereby renders JUDGMENT

DECLARING the INP Retirees entitled to the same or
identical retirement benefits and such other benefits being
granted, accorded and bestowed upon the PNP Retirees
under the PNP Law (RA No. 6975, as amended).
The respondents Government Departments and Agencies

shall IMMEDIATELY EFFECT and IMPLEMENT the proper
adjustments on the INP Retirees' retirement and such other
benefits, RETROACTIVE to its date of effectivity, and
RELEASE and PAY to the INP Retirees the due payments of
the amounts. cSaADC
SO ORDERED.
On April 2, 2003, the trial court issued what it denominated as Supplement to the
Decision whereunder it granted the GSIS' motion to dismiss and thus considered
the basic petition as withdrawn with respect to the latter.
From the adverse decision of the trial court, the remaining respondents, namely,
DBM, PNP, NAPOLCOM and CSC, interposed an appeal to the CA whereat
their appellate recourse was docketed as CA-G.R. CV No. 78203.
As stated at the threshold hereof, the CA, in its decision of July 7, 2005, 7
affirmed that of the trial court upholding the entitlement of the INP retirees to
the same or identical retirement benefits accorded upon PNP retirees under R.A.
No. 6975, as amended.
Their motion for reconsideration having been denied by the CA in its equally
assailed resolution of August 24, 2005, 8 herein petitioners are now with this
Court via the instant recourse on their singular submission that
THE COURT OF APPEALS COMMITTED A SERIOUS

ERROR IN LAW IN AFFIRMING THE DECISION OF
THE TRIAL COURT NOTWITHSTANDING THAT IT IS
CONTRARY TO LAW AND ESTABLISHED
JURISPRUDENCE.
We DENY.
In the main, it is petitioners' posture that R.A. No. 6975 clearly abolished the INP
and created in its stead a new police force, the PNP. Prescinding therefrom,
petitioners contend that since the PNP is an organization entirely different from
the INP, it follows that INP retirees never became PNP members. Ergo, they
cannot avail themselves of the retirement benefits accorded to PNP members
under R.A. No. 6975 and its amendatory law, R.A. No. 8551. HDIATS
A flashback at history is proper.
As may be recalled, R.A. No. 6975 was enacted into law on December 13, 1990, or
just about four (4) years after the 1986 Edsa Revolution toppled down the
dictatorship regime. Egged on by the current sentiment of the times generated by
the long period of martial rule during which the police force, the PC-INP, had a
military character, being then a major service of the Armed Forces of the
Philippines, and invariably moved by a fresh constitutional mandate for the
establishment of one police force which should be national in scope and, most
importantly, purely civilian in character, 9 Congress enacted R.A. No. 6975
establishing the PNP and placing it under the Department of Interior and Local
Government. To underscore the civilian character of the PNP, R.A. No. 6975
made it emphatically clear in its declaration of policy the following:
Section 2. Declaration of policy It is hereby declared to be
the policy of the State to promote peace and order, ensure
public safety and further strengthen local government
capability aimed towards the effective delivery of the basic
services to the citizenry through the establishment of a
highly efficient and competent police force that is national in
scope and civilian in character. . . . .
The police force shall be organized, trained and equipped

primarily for the performance of police functions. Its
national scope and civilian character shall be paramount.
No element of the police force shall be military nor shall
any position thereof be occupied by active members of the
[AFP]. (Emphasis and word in bracket supplied.)
Pursuant to Section 23, supra, of R.A. No. 6975, the PNP initially consisted of the
members of the police forces who were integrated into the INP by virtue of P.D.
No. 765, while Section 86 10 of the same law provides for the assumption by the
PNP of the police functions of the INP and its absorption by the former,
including its appropriations, funds, records, equipment, etc., as well as its
personnel. 11 And to govern the statute's implementation, Section 85 of the Act
spelled out the following absorption phases: DACcIH
Phase I Exercise of option by the uniformed members of

the [PC], the PC elements assigned with the Narcotics
Command, CIS, and the personnel of the technical services
of the AFP assigned with the PC to include the regular CIS
investigating agents and the operatives and agents of the
NAPOLCOM Inspection. Investigation and Intelligence
Branch, and the personnel of the absorbed National Action
Committee on Anti-Hijacking (NACAH) of the Department
of National Defense to be completed within six (6) months
from the date of the effectivity of this Act. At the end of this
phase, all personnel from the INP, PC, AFP Technical
Services, NACAH, and NAPOLCOM Inspection,
Investigation and Intelligence Branch shall have been
covered by official orders assigning them to the PNP, Fire
and Jail Forces by their respective units.
Phase II Approval of the table of organization and

equipment of all bureaus and offices created under this Act,
preparation and filling up of their staffing pattern, transfer
of assets to the [DILG] and organization of the Commission,
to be completed within twelve (12) months from the
effectivity date hereof. At the end of this phase, all personnel
to be absorbed by the [DILG] shall have been issued
appointment papers, and the organized Commission and the
PNP shall be fully operational. DASEac
The PC officers and enlisted personnel who have not opted

to join the PNP shall be reassigned to the Army, Navy or Air
Force, or shall be allowed to retire under existing AFP rules
and regulations. Any PC-INP officer or enlisted personnel
may, within the twelve-month period from the effectivity
of this Act, retire and be paid retirement benefits
corresponding to a position two (2) ranks higher than his
present grade, subject to the conditions that at the time he
applies for retirement, he has rendered at least twenty (20)
years of service and still has, at most, twenty-four (24)
months of service remaining before the compulsory
retirement age as provided by existing law for his office.
Phase III Adjustment of ranks and establishment of one (1)

lineal roster of officers and another for non-officers, and the
rationalization of compensation and retirement systems;
taking into consideration the existing compensation schemes
and retirement and separation benefit systems of the
different components of the PNP, to ensure that no member
of the PNP shall suffer any diminution in basic longevity
and incentive pays, allowances and retirement benefits due
them before the creations of the PNP, to be completed within
eighteen (18) months from the effectivity of this Act. . . . .
Upon the effectivity of this Act, the [DILG] Secretary shall

exercise administrative supervision as well as operational
control over the transferred, merged and/or absorbed AFP
and INP units. The incumbent Director General of the PC-
INP shall continue to act as Director General of the PNP
until . . . replaced . . . . (Emphasis and words in brackets
supplied.)
From the foregoing, it appears clear to us that the INP was never, as posited by
the petitioners, abolished or terminated out of existence by R.A. No. 6975. For
sure, nowhere in R.A. No. 6975 does the words "abolish" or "terminate" appear in
reference to the INP. Instead, what the law provides is for the "absorption,"
"transfer," and/or "merger" of the INP, as well as the other offices comprising the
PC-INP, with the PNP. To "abolish" is to do away with, to annul, abrogate or
destroy completely; 12 to "absorb" is to assimilate, incorporate or to take in. 13
"Merge" means to cause to combine or unite to become legally absorbed or
extinguished by merger 14 while "transfer" denotes movement from one position
to another. Clearly, "abolition" cannot be equated with "absorption."
True it is that Section 90 15 of R.A. No. 6975 speaks of the INP "[ceasing] to exist"
upon the effectivity of the law. It ought to be stressed, however, that such
cessation is but the logical consequence of the INP being absorbed by the PNP.
Far from being abolished then, the INP, at the most, was merely transformed to
become the PNP, minus of course its military character and complexion.
Even the petitioners' effort at disclosing the legislative intent behind the
enactment of R.A. No. 6975 cannot support their theory of abolition. Rather, the
Senate and House deliberations on the bill that eventually became R.A. No. 6975
reveal what has correctly been held by the CA in its assailed decision: that the
PNP was precisely created to erase the stigma spawned by the militarization of
the police force under the PC-INP structure. The rationale behind the passage of
R.A. No. 6975 was adequately articulated by no less than the sponsor 16 of the
corresponding House bill in his sponsorship speech, thus:
By removing the police force from under the control and

supervision of military officers, the bill seeks to restore and
underscore the civilian character of police work an otherwise
universal concept that was muddled up by the martial law years.
Indeed, were the legislative intent was for the INP's abolition such that nothing
would be left of it, the word "abolish" or what passes for it could have easily
found its way into the very text of the law itself, what with the abundant use of
the word during the legislative deliberations. But as can be gleaned from said
deliberations, the lawmakers' concern centered on the fact that if the entire PC-
INP corps join the PNP, then the PC-INP will necessarily be abolished, for who
then would be its members? Of more consequence, the lawmakers were one in
saying that there should never be two national police agencies at the same time.
cIHSTC
With the conclusion herein reached that the INP was not in fact abolished but
was merely transformed to become the PNP, members of the INP which include
the herein respondents are, therefore, not excluded from availing themselves of
the retirement benefits accorded to PNP retirees under Sections 74 17 and 75 18
of R.A. No. 6975, as amended by R.A. No. 8551. It may be that respondents were
no longer in the government service at the time of the enactment of R.A. No.
6975. This fact, however, without more, would not pose as an impediment to the
respondents' entitlement to the new retirement scheme set forth under the
aforecited sections. As correctly ratiocinated by the CA to which we are in full
accord:
For sure, R.A. No. 6975 was not a retroactive statute since it
did not impose a new obligation to pay the INP retirees the
difference between what they received when they retired
and what would now be due to them after R.A. No. 6975
was enacted. Even so, that did not render the RTC's
interpretation of R.A. No. 6975 any less valid. The
[respondents'] retirement prior to the passage of R.A. No.
6975 did not exclude them from the benefits provided by
R.A. No. 6975, as amended by R.A. No. 8551, since their
membership in the INP was an antecedent fact that
nonetheless allowed them to avail themselves of the benefits
of the subsequent laws. R.A. No. 6975 considered them as
PNP members, always referring to their membership and
service in the INP in providing for their retirement benefits.
19
Petitioners maintain, however, that NAPOLCOM Resolution No. 8, 20

particularly Section 11 21 thereof, bars the payment of any differential in
retirement pay to officers and non-officers who are already retired prior to the
effectivity of R.A. No. 6975. SAHIaD
The contention does not commend itself for concurrence.
Under the amendatory law (R.A. No. 8551), the application of rationalized
retirement benefits to PNP members who have meanwhile retired before its (R.A.
No. 8551) enactment was not prohibited. In fact, its Section 38 22 explicitly states
that the rationalized retirement benefits schedule and program "shall have
retroactive effect in favor of PNP members and officers retired or separated from the time
specified in the law." To us, the aforesaid provision should be made applicable to
INP members who had retired prior to the effectivity of R.A. No. 6975. For, as
afore-held, the INP was, in effect, merely absorbed by the PNP and not
abolished.
Indeed, to bar payment of retirement pay differential to INP members who were
already retired before R.A. No. 6975 became effective would even run counter to
the purpose of NAPOLCOM Resolution No. 8 itself, as expressed in its
preambulatory clause, which is to rationalize the retirement system of the PNP
taking into consideration existing retirement and benefit systems (including R.A.
No. 6975 and P.D. No. 1184) of the different components thereof "to ensure that no
member of the PNP shall suffer any diminution in the retirement benefits due them
before the creation of the PNP." 23
Most importantly, the perceived restriction could not plausibly preclude the
respondents from asserting their entitlement to retirement benefits adjusted to
the level when R.A. No. 6975 took effect. Such adjustment hews with the
constitutional warrant that "the State shall, from time to time, review to upgrade
the pensions and other benefits due to retirees of both the government and
private sectors," 24 and the implementing mandate under the Senior Citizen's
Law 25 that "to the extent practicable and feasible, retirement benefits . . . shall be
upgraded to be at par with the current scale enjoyed by those in actual service."
EcAISC
Certainly going for the respondents in their bid to enjoy the same retirement
benefits granted to PNP retirees, either under R.A. No. 6975 or R.A. No. 8551, is
Section 34 of the latter law which amended Section 75 of R.A. No. 6975 by adding
thereto the following proviso:
Section 75. Retirement benefits. . . . : Provided, finally, That

retirement pay of the officers/non-officers of the PNP shall be
subject to adjustments based on the prevailing scale of base pay of
police personnel in the active service.
Then, too, is the all familiar rule that:
Retirement laws should be liberally construed in favor of the

retiree because their intention is to provide for his
sustenance and hopefully, even comfort, when he no longer
has the stamina to continue earning his livelihood. The
liberal approach aims to achieve the humanitarian purposes
of the law in order that efficiency, security and well-being of
government employees may be enhanced. 26
The petitioners parlay the notion of prospective application of statutes, noting in

this regard that R.A. No. 6975, as amended, cannot be applied retroactively, there
being no provision to that effect.
We are not persuaded.
As correctly found by the appellate court, R.A. No. 6975 itself contextually
provides for its retroactive application to cover those who had retired prior to its
effectivity. In this regard, we invite attention to the three (3) phases of
implementation under Section 85 for the absorption and continuation in the
service of, among others, the INP members under the newly-established PNP.
IHEDAT
In a further bid to scuttle respondents' entitlement to the desired retirement

benefits, the petitioners fault the trial court for ordering the immediate
adjustments of the respondents' retirement benefits when the basic petition filed
before it was one for declaratory relief. To the petitioners, such petition does not
essentially entail an executory process, the only relief proper under that setting
being a declaration of the parties' rights and duties.
Petitioners' above posture is valid to a point. However, the execution of

judgments in a petition for declaratory relief is not necessarily indefensible. In
Philippine Deposit Insurance Corporation[PDIC] v. Court of Appeals, 27 wherein the
Court affirmed the order for the petitioners therein to pay the balance of the
deposit insurance to the therein respondents, we categorically ruled:
Now, there is nothing in the nature of a special civil action

for declaratory relief that proscribes the filing of a
counterclaim based on the same transaction, deed or
contract subject of the complaint. A special civil action is
after all not essentially different from an ordinary civil
action, which is generally governed by Rules 1 to 56 of the
Rules of Court, except that the former deals with a special
subject matter which makes necessary some special
regulation. But the identity between their fundamental
nature is such that the same rules governing ordinary civil
suits may and do apply to special civil actions if not
inconsistent with or if they may serve to supplement the
provisions of the peculiar rules governing special civil
actions. 28 IHEaAc
Similarly, in Matalin Coconut Co., Inc. v. Municipal Council of Malabang, Lanao del
Sur: 29 the Court upheld the lower court's order for a party to refund the
amounts paid by the adverse party under the municipal ordinance therein
questioned, stating:
. . . Under Sec. 6 of Rule 64, the action for declaratory relief

may be converted into an ordinary action and the parties
allowed to file such pleadings as may be necessary or
proper, if before the final termination of the case "a breach or
violation of an . . . ordinance, should take place." In the
present case, no breach or violation of the ordinance
occurred. The petitioner decided to pay "under protest" the
fees imposed by the ordinance. Such payment did not affect
the case; the declaratory relief action was still proper
because the applicability of the ordinance to future
transactions still remained to be resolved, although the
matter could also be threshed out in an ordinary suit for the
recovery of taxes paid . . . In its petition for declaratory relief,
petitioner-appellee alleged that by reason of the enforcement
of the municipal ordinance by respondents it was forced to
pay under protest the fees imposed pursuant to the said
ordinance, and accordingly, one of the reliefs prayed for by
the petitioner was that the respondents be ordered to refund
all the amounts it paid to respondent Municipal Treasurer
during the pendency of the case. The inclusion of said
allegation and prayer in the petition was not objected to by
the respondents in their answer. During the trial, evidence of
the payments made by the petitioner was introduced.
Respondents were thus fully aware of the petitioner's claim
for refund and of what would happen if the ordinance were
to be declared invalid by the court.
The Court sees no reason for treating this case differently from PDIC and
Matalin. This disposition becomes all the more appropriate considering that the
respondents, as petitioners in the RTC, pleaded for the immediate adjustment of
their retirement benefits which, significantly, the herein petitioners, as
respondents in the same court, did not object to. Being aware of said prayer, the
petitioners then already knew the logical consequence if, as it turned out, a
declaratory judgment is rendered in the respondents' favor.
At bottom then, the trial court's judgment forestalled multiplicity of suits which,
needless to stress, would only entail a long and arduous process. Considering
their obvious advanced years, the respondents can hardly afford another
protracted proceedings. It is thus for this Court to already write finis to this case.
WHEREFORE, the instant petition is DENIED and the assailed decision and
resolution of the CA, respectively dated July 7, 2005 and August 24, 2005, are
AFFIRMED.
||| (Department of Budget and Management v. Manila's Finest Retirees Association,

Inc., G.R. No. 169466, May 09, 2007)
EN BANC
[G.R. No. 141386. November 29, 2001.]
THE COMMISSION ON AUDIT OF THE PROVINCE OF

CEBU, Represented by Provincial Auditor ROY L. URSAL,
petitioner, vs. PROVINCE OF CEBU, Represented by
Governor PABLO P. GARCIA, respondent.

Cebu Provincial Legal Office for respondent.
SYNOPSIS
The Commission on Audit (COA) of the Province of Cebu issued Notices of

Suspension to the Province of Cebu, saying that disbursements for the salaries of
teachers appointed by the province for the extension classes and scholarship
grants of the province are not chargeable to the provincial Special Education
Fund (SEF). Consequently, the Province of Cebu filed a petition for declaratory
relief with the trial court. The court a quo rendered its decision declaring the
questioned expenses as authorized expenditures of the SEF. Hence, the instant
petition filed by COA.
The Special Education Fund was created by virtue of Republic Act No. 5447.
What was expressly repealed by the Local Government Code was only Section 3
of R.A. No. 5447. The provisions allocating funds for the salaries of teachers
under Section 1 of R.A. No. 5447, which are not inconsistent with Sections 272
and 100 (c) of the Local Government Code, remain in force and effect. Even
under the doctrine of necessary implication, the allocation of the SEF for the
establishment and maintenance of extension classes logically implies the hiring
of teachers who should, as a matter of course, be compensated for their services.
With respect, however, to college scholarship grants, a reading of the pertinent

laws of the Local Government Code revealed that said grants are not among the
projects for which the proceeds of the SEF may be appropriated. In the same
vein, however noble the intention of the province in extending said scholarship
to deserving students, this Court cannot apply the doctrine of necessary
implication inasmuch as the grant of scholarship is neither necessary nor
indispensable to the operation and maintenance of public schools. Instead, such
scholarship grants may be charged to the General Funds of the province.
SYLLABUS
1. POLITICAL LAW; STATUTORY CONSTRUCTION; INTENT OF

LEGISLATURE IS THE CONTROLLING FACTOR IN THE INTERPRETATION
OF A STATUTE. It is a basic precept in statutory construction that the intent
of the legislature is the controlling factor in the interpretation of a statute.
2. ID.; ADMINISTRATIVE LAW; Republic Act No. 5447; CREATED SPECIAL

EDUCATION FUND. The Special Education Fund was created by virtue of
R.A. No. 5447, which is an act creating a special education fund to be constituted
from the proceeds of an additional real property tax and a certain portion of the
taxes on Virginia-type cigarettes and duties on imported leaf tobacco, defining
the activities to be financed, creating school boards for the purpose, and
appropriating funds therefrom, which took effect on January 1, 1969. Pursuant
thereto, P.D. No. 464, also known as the Real Property Tax Code of the
Philippines, imposed an annual tax of 1% on real property which shall accrue to
the SEF.
3. ID.; ID.; ID.; ONLY SECTION 3 THEREOF WAS REPEALED BY THE LOCAL
GOVERNMENT CODE; PROVISIONS ALLOCATING FUNDS FOR THE
SALARIES OF TEACHERS REMAIN IN FORCE AND EFFECT. Evidently,
what was expressly repealed by the Local Government Code was only Section 3,
of R.A. No. 5447, which deals with the "Allocation of taxes on Virginia type
cigarettes and duties on imported leaf tobacco." The legislature is presumed to
know the existing laws, such that whenever it intends to repeal a particular or
specific provision of law, it does so expressly. The failure to add a specific
repealing clause particularly mentioning the statute to be repealed indicates that
the intent was not to repeal any existing law on the matter, unless an
irreconcilable inconsistency and repugnancy exists in the terms of the new and
the old laws. Hence, the provisions allocating funds for the salaries of teachers
under Section 1, of R.A. No. 5447, which are not inconsistent with Sections 272
and 100 (c) of the Local Government Code, remain in force and effect.
4. ID.; ID.; ID.; ESTABLISHMENT AND MAINTENANCE OF EXTENSION

CLASSES LOGICALLY IMPLIES THE HIRING OF TEACHERS WHO SHOULD
BE COMPENSATED FOR THEIR SERVICES. Even under the doctrine of
necessary implication, the allocation of the SEF for the establishment and
maintenance of extension classes logically implies the hiring of teachers who
should, as a matter of course be compensated for their services. Every statute is
understood, by implication, to contain all such provisions as may be necessary to
effectuate its object and purpose, or to make effective rights, powers, privileges
or jurisdiction which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from its terms. Ex necessitate
legis. Verily, the services and the corresponding compensation of these teachers
are necessary and indispensable to the establishment and maintenance of
extension classes. Indeed, the operation and maintenance of public schools is
lodged principally with the DECS. This is the reason why only salaries of public
school teachers appointed in connection with the establishment and maintenance
of extension classes, inter alia, pertain to the supplementary budget of the local
school boards. Thus, it should be made clear that not every kind of personnel-
related benefits of public school teachers may be charged to the SEF. The SEF
may be expended only for the salaries and personnel-related benefits of teachers
appointed by the local school boards in connection with the establishment and
maintenance of extension classes. Extension classes as referred to mean
additional classes needed to accommodate all children of school age desiring to
enter in public schools to acquire basic education.
5. ID.; ID.; LOCAL GOVERNMENT CODE; OMITTED SCHOLARSHIP TO
POOR BUT DESERVING STUDENTS; SCHOLARSHIP GRANTS MAY BE
CHARGED TO THE GENERAL FUNDS OF THE PROVINCE. With respect,
however, to college scholarship grants, a reading of the pertinent laws of the
Local Government Code reveals that said grants are not among the projects for
which the proceeds of the SEF may be appropriated. It should be noted that
Sections 100 (c) and 272 of the Local Government Code substantially reproduced
Section 1 of R.A. No. 5447. But, unlike payment of salaries of teachers which falls
within the ambit of "establishment and maintenance of extension classes" and
"operation and maintenance of public schools," the "granting of government
scholarship to poor but deserving students" was omitted in Sections 100 (c) and
272 of the Local Government Code. Casus omissus pro omisso habendus est. A
person, object, or thing omitted from an enumeration in a statute must be held to
have been omitted intentionally. It is not for this Court to supply such grant of
scholarship where the legislature has omitted it. In the same vein, however noble
the intention of the province in extending said scholarship to deserving students,
we cannot apply the doctrine of necessary implication inasmuch as the grant of
scholarship is neither necessary nor indispensable to the operation and
maintenance of public schools. Instead, such scholarship grants may be charged
to the General Funds of the province.

PROPERLY APPLIED SINCE THE APPLICABILITY OF THE STATUTE IN
QUESTION REMAINS TO BE RESOLVED IN FUTURE TRANSACTIONS. As
held in Shell Company of the Philippines, Ltd. v. Municipality of Sipocot, any breach
of the statute subject of the controversy will not affect the case; the action for
declaratory relief will prosper because the applicability of the statute in question
to future transactions still remains to be resolved. Absent a definite ruling in the
instant case for declaratory relief, doubts as to the disposition of the SEF will
persist. Hence, the trial court did not err in giving due course to the petition for
declaratory relief filed by the province of Cebu. ASaTHc
DECISION
YNARES-SANTIAGO, J p:
May the salaries and personnel-related benefits of public school teachers

appointed by local chief executives in connection with the establishment and
maintenance of extension classes; as well as the expenses for college scholarship
grants, be charged to the Special Education Fund (SEF) of the local government
unit concerned?
The instant petition for review, which raises a pure question of law, seeks to
annul and set aside the decision 1 of the Regional Trial Court of Cebu, Branch 20,
in a petition for declaratory relief, docketed as Civil Case No. CEB-24422.
The provincial governor of the province of Cebu, as chairman of the local school
board, under Section 98 of the Local Government Code, appointed classroom
teachers who have no items in the DECS plantilla to handle extension classes that
would accommodate students in the public schools.
In the audit of accounts conducted by the Commission on Audit (COA) of the

Province of Cebu, for the period January to June 1998, it appeared that the
salaries and personnel-related benefits of the teachers appointed by the province
for the extension classes were charged against the provincial SEF. Likewise
charged to the SEF were the college scholarship grants of the province.
Consequently, the COA issued Notices of Suspension to the province of Cebu, 2
saying that disbursements for the salaries of teachers and scholarship grants are
not chargeable to the provincial SEF.
Faced with the Notices of Suspension issued by the COA, the province of Cebu,
represented by its governor, filed a petition for declaratory relief with the trial
court.
On December 13, 1999, the court a quo rendered a decision declaring the
questioned expenses as authorized expenditures of the SEF. The dispositive
portion thereof reads:
WHEREFORE, in view of all the foregoing premises

considered, judgment is hereby rendered giving due course
to this instant petition for declaratory relief declaring and
confirming that petitioner is vested with the authority to
disburse the proceeds from the Special Educational Fund
[SEF] for the payment of salaries, allowances or honoraria
for teachers and non-teaching personnel in the public
schools in the Province of Cebu and its component cities,
and, municipalities, as well as the expenses for scholarship
grants of petitioners specially to poor but deserving students
therein.
Declaring, further, respondents audit findings on pages 36

and 37 in the Annual Audit Report on the Province of Cebu
for the year ending December 31, 1999 as null and void. 3
Hence, the instant petition by the Commission on Audit.

The Special Education Fund was created by virtue of R.A. No. 5447, which is An
act creating a special education fund to be constituted from the proceeds of an
additional real property tax and a certain portion of the taxes on Virginia-type
cigarettes and duties on imported leaf tobacco, defining the activities to be
financed, creating school boards for the purpose, and appropriating funds
therefrom, which took effect on January 1, 1969. Pursuant thereto, P.D. No. 464,
also known as the Real Property Tax Code of the Philippines, imposed an annual
tax of 1% on real property which shall accrue to the SEF. 4
Under R.A. No. 5447, the SEF may be expended exclusively for the following
activities of the DECS
(a) the organization and operation of such number of

extension classes as may be needed to
accommodate all children of school age desiring
to enter Grade I, including the creation of
positions of classroom teachers, head teachers
and principals for such extension classes . . . ;
(b) the programming of the construction and repair

of elementary school buildings, acquisition
of sites, and the construction and repair of
workshops and similar buildings and
accessories thereof to house laboratory,
technical and similar equipment and
apparatus needed by public schools
offering practical arts, home economics
and vocational courses, giving priority to
elementary schools on the basis of the
actual needs and total requirements of the
country . . . ;
(c) the payment and adjustment of salaries of public

school teachers under and by virtue of
Republic Act Numbered Five Thousand One
Hundred Sixty-Eight and all the benefits in
favor of public school teachers provided under
Republic Act Numbered Four Thousand Six
Hundred Seventy;
(d) preparation, printing and/or purchase of

textbooks, teacher's guides, forms and
pamphlets . . . ;
(e) the purchase and/or improvement, repair and

refurbishing of machinery, laboratory,
technical and similar equipment and
apparatus, including spare parts needed
by the Bureau of Vocational Education
and secondary schools offering courses;
(f) the establishment of printing plant to be used

exclusively for the printing needs of the
Department of Education and the
improvement of regional printing plants
in the vocational schools;
(g) the purchase of teaching materials such as work

books, atlases, flip charts, science and
mathematics teaching aids, and simple
laboratory devices for elementary and
secondary classes;
(h) the implementation of the existing program for

citizenship development in barrio high
schools, folk schools and adult education
classes;
(i) the undertaking of education research, including

that of the Board of National Education;
(j) the granting of government scholarships to poor but

deserving students under Republic Act
Numbered Four Thousand Ninety; and
(k) the promotion of physical education, such as

athletic meets. (Italics supplied)
With the effectivity of the Local Government Code of 1991, petitioner contends
that R.A. No. 5447 was repealed, leaving Sections 235, 272 and 100 (c) of the Code
to govern the disposition of the SEF, to wit:
SEC. 235. Additional Levy on Real Property for the Special

Education Fund (SEF). A province or city or a municipality
within the Metropolitan Manila Area, may levy and collect
an annual tax of one percent (1%) on the assessed value of
real property which shall be in addition to the basic real
property tax. The proceeds thereof shall exclusively accrue
to the Special Education Fund (SEF).
SEC. 272. Application of Proceeds of the Additional One Percent

SEF Tax. The proceeds from the additional one percent
(1%) tax on real property accruing to the SEF shall be
automatically released to the local school boards: Provided,
That, in case of provinces, the proceeds shall be divided
equally between the provincial and municipal school boards:
Provided, however, That the proceeds shall be allocated for the
operation and maintenance of public schools, construction and
repair of school buildings, facilities and equipment, educational
research, purchase of books and periodicals, and sports
development as determined and approved by the local school board.
(Italics supplied) aHSTID
SEC. 100. Meeting and Quorum; Budget
xxx xxx xxx
(c) The annual school board budget shall give

priority to the following:
(1) Construction, repair, and maintenance

of school buildings and other
facilities of public elementary and
secondary schools;
(2) Establishment and maintenance of

extension classes where necessary;
and
(3) Sports activities at the division, district,

municipal, and barangay levels.
(Italics supplied)
Invoking the legal maxim "expressio unius est exclusio alterius," petitioner alleges
that since salaries, personnel-related benefits and scholarship grants are not
among those authorized as lawful expenditures of the SEF under the Local
Government Code, they should be deemed excluded therefrom.
Moreover, petitioner claims that since what is allowed for local school boards to
determine under Section 99 5 of the Local Government Code is only the "annual
supplementary budgetary needs for the operation and maintenance of public
schools," as well as the "supplementary local cost to meet such needs," the budget
of the local school boards for the establishment and maintenance of extension
classes should be construed to refer only to the upkeep and maintenance of
public school building, facilities and similar expenses other than personnel-
related benefits. This is because, petitioner argued, the maintenance and
operation of public schools pertain principally to the DECS.
The contentions are without merit. It is a basic precept in statutory construction
that the intent of the legislature is the controlling factor in the interpretation of a
statute. 6 In this connection, the following portions of the deliberations of the
Senate on the second reading of the Local Government Code on July 30, 1990 are
significant:
Senator Guingona.
Mr. President.
The President.
Senator Guingona is recognized.
Senator Guingona.
Just for clarification, Mr. President. In this transfer, will it

include everything eventually lock, stock and
barrel, including curriculum?
Senator Pimentel.
Mr. President, our stand in the Committee is to respect the

decision of the National Government in terms of
curriculum.
Senator Guingona.
But, supposing the Local Education Board wishes to adopt a

certain curriculum for that particular region?
Senator Pimentel.
Mr. President, pursuant to the wording of the proposed

transfer of this elementary school system to local
government units, what are specifically covered
here are merely the construction, repair, and
maintenance of elementary school buildings and
other structures connected with public elementary
school education, payment of salaries, emoluments,
allowances et cetera, procurement of books, other
teaching materials and equipment needed for the
proper implementation of the program. There is
nothing here that will indicate that the local
government will have any right to alter the
curriculum. (Italics supplied)
Senator Guingona.
Thank you, Mr. President.
Similarly instructive are the foregoing deliberations in the House of

Representatives on August 16, 1990:
INTERPELLATION OF MS. RAYMUNDO
(Continuation)
Continuing her interpellation, Ms. Raymundo then adverted

to subsection 4 of Section 101 [now Section 100, paragraph
(c)] and asked if the budget is limited only to the three
priority areas mentioned. She also asked what is meant by
the phrase "maintenance of extension classes."
In response, Mr. De Pedro clarified that the provision is not

limited to the three activities, to which may be added other
sets of priorities at the proper time. As to extension classes, he
pointed out that the school boards may provide out of its own
funds, for additional teachers or other requirements if the national
government cannot provide funding therefor. Upon Ms.
Raymundo's query, Mr. de Pedro further explained that
support for teacher tools could fall under the priorities cited
and is covered by certain circulars.
Undoubtedly, the aforecited exchange of views clearly demonstrates that the

legislature intended the SEF to answer for the compensation of teachers handling
extension classes. STECDc
Furthermore, the pertinent portion of the repealing clause of the Local

Government Code, provides:
SEC. 534. Repealing Clause. . . .
(c) The provisions of . . . Sections 3, a (3) and b (2) of

Republic Act No. 5447, regarding the Special Education
Fund . . . are hereby repealed and rendered of no force and
effect.
Evidently, what was expressly repealed by the Local Government Code was only
Section 3, of R.A. No. 5447, which deals with the "Allocation of taxes on Virginia
type cigarettes and duties on imported leaf tobacco." The legislature is presumed
to know the existing laws, such that whenever it intends to repeal a particular or
specific provision of law, it does so expressly. The failure to add a specific
repealing clause particularly mentioning the statute to be repealed indicates that
the intent was not to repeal any existing law on the matter, unless an
irreconcilable inconsistency and repugnancy exists in the terms of the new and
the old laws. 7 Hence, the provisions allocating funds for the salaries of teachers
under Section 1, of R.A. No. 5447, which are not inconsistent with Sections 272
and 100 (c) of the Local Government Code, remain in force and effect. TSIEAD
Even under the doctrine of necessary implication, the allocation of the SEF for the
establishment and maintenance of extension classes logically implies the hiring
of teachers who should, as a matter of course be compensated for their services.
Every statute is understood, by implication, to contain all such provisions as may
be necessary to effectuate its object and purpose, or to make effective rights,
powers, privileges or jurisdiction which it grants, including all such collateral
and subsidiary consequences as may be fairly and logically inferred from its
terms. Ex necessitate legis. 8 Verily, the services and the corresponding
compensation of these teachers are necessary and indispensable to the
establishment and maintenance of extension classes.
Indeed, the operation and maintenance of public schools is lodged principally

with the DECS. This is the reason why only salaries of public school teachers
appointed in connection with the establishment and maintenance of extension
classes, inter alia, pertain to the supplementary budget of the local school boards.
Thus, it should be made clear that not every kind of personnel-related benefits of
public school teachers may be charged to the SEF. The SEF may be expended
only for the salaries and personnel-related benefits of teachers appointed by the
local school boards in connection with the establishment and maintenance of
extension classes. Extension classes as referred to mean additional classes needed
to accommodate all children of school age desiring to enter in public schools to
acquire basic education. 9
With respect, however, to college scholarship grants, a reading of the pertinent

laws of the Local Government Code reveals that said grants are not among the
projects for which the proceeds of the SEF may be appropriated. It should be
noted that Sections 100 (c) and 272 of the Local Government Code substantially
reproduced Section 1, of R.A. No. 5447. But, unlike payment of salaries of
teachers which falls within the ambit of "establishment and maintenance of
extension classes" and "operation and maintenance of public schools," the
"granting of government scholarship to poor but deserving students" was
omitted in Sections 100 (c) and 272 of the Local Government Code. Casus omissus
pro omisso habendus est. A person, object, or thing omitted from an enumeration in
a statute must be held to have been omitted intentionally. It is not for this Court
to supply such grant of scholarship where the legislature has omitted it. 10
In the same vein, however noble the intention of the province in extending said
scholarship to deserving students, we cannot apply the doctrine of necessary
implication inasmuch as the grant of scholarship is neither necessary nor
indispensable to the operation and maintenance of public schools. Instead, such
scholarship grants may be charged to the General Funds of the province.
Pursuant to Section 1, Rule 63 11 of the 1997 Rules of Civil Procedure, a petition

for declaratory relief may be filed before there is a breach or violation. The
Solicitor General claims that the Notices of Suspension issued by the COA to the
respondent province amounted to a breach or violation, and therefore, the
petition for declaratory relief should have been denied by the trial court.
We are not convinced. As held in Shell Company of the Philippines, Ltd. v.

Municipality of Sipocot, 12 any breach of the statute subject of the controversy will
not affect the case; the action for declaratory relief will prosper because the
applicability of the statute in question to future transactions still remains to be
resolved. Absent a definite ruling in the instant case for declaratory relief, doubts
as to the disposition of the SEF will persist. Hence, the trial court did not err in
giving due course to the petition for declaratory relief filed by the province of
Cebu.
WHEREFORE, in view of all the foregoing, the Decision of the Regional Trial
Court of Cebu City, Branch 20, in Civil Case No. CEB-24422, is AFFIRMED with
MODIFICATION. The salaries and personnel-related benefits of the teachers
appointed by the provincial school board of Cebu in connection with the
establishment and maintenance of extension classes, are declared chargeable
against the Special Education Fund of the province. However, the expenses
incurred by the provincial government for the college scholarship grants should
not be charged against the Special Education Fund, but against the General
Funds of the province of Cebu.
SO ORDERED.
||| (COA of the Province of Cebu v. Province of Cebu, G.R. No. 141386, November 29,
2001)
EN BANC
[G.R. No. 160031. December 18, 2008.]
SOCIAL JUSTICE SOCIETY (SJS), petitioner, vs. HON.

JOSE D. LINA, in his capacity as Secretary of the
Department of Interior and Local Government (DILG),
Lipa City Mayor HON. VILMA SANTOS-RECTO,
Pampanga Provincial Governor HON. LITO LAPID, and
Paraaque City Mayor HON. JOEY MARQUEZ,
respondents.
DECISION
NACHURA, J p:
Assailed in this Rule 45 petition are the June 30, 2003 1 and the September 12,
2003 2 Orders of the Regional Trial Court (RTC) of Manila, Branch 14 in Civil
Case No. 02-104585. TICaEc
Filed with the trial court on September 12, 2002, by petitioner Social Justice
Society, a registered political party, was a petition for declaratory relief against
the then Secretary of the Department of Interior and Local Government (DILG),
respondent Jose D. Lina, 3 praying for the proper construction of Section 90 of
Republic Act (R.A.) No. 7160, which provides that:
SEC. 90. Practice of Profession.
(a) All governors, city and municipal mayors are prohibited

from practicing their profession or engaging in any
occupation other than the exercise of their functions as local
chief executives.
(b) Sanggunian members may practice their professions,

engage in any occupation, or teach in schools except during
session hours: Provided, That sanggunian members who are
members of the Bar shall not:
(1) Appear as counsel before any court in any civil

case wherein a local government unit or any office,
agency, or instrumentality of the government is the
adverse party;
(2) Appear as counsel in any criminal case wherein

an officer or employee of the national or local
government is accused of an offense committed in
relation to his office;
(3) Collect any fee for their appearance in

administrative proceedings involving the local
government unit of which he is an official; and
(4) Use property and personnel of the Government

except when the sanggunian member concerned is
defending the interest of the Government.
(c) Doctors of medicine may practice their profession even

during official hours of work only on occasions of
emergency: Provided, That the officials concerned do not
derive monetary compensation therefrom. [Underscoring
supplied.]
Based on the said provision, specifically paragraph (a) thereof, petitioner posited
that actors who were elected as governors, city and municipal mayors were
disallowed by law to appear in movies and television programs as one of the
characters therein, for this would give them undue advantage over their political
opponents, and would considerably reduce the time that they must devote to
their constituents. 4 THIASE
To strengthen its point, petitioner later amended its petition to implead as

additional respondents then Lipa City Mayor Vilma Santos, then Pampanga
Provincial Governor Lito Lapid, and then Paraaque City Mayor Joey Marquez.
5
Summing up the arguments of the other respondents in their respective

pleadings, the DILG, through the Office of the Solicitor General (OSG), moved
for the dismissal of the petition on the grounds that: (1) petitioner has no legal
standing to file the petition, because it is not a "person whose rights are affected"
by the statute; (2) it is not the real party-in-interest; (3) there is no judicial
controversy; (4) there is no need for construction of the subject provision; (5)
there is already a breach of the statute as alleged in the petition itself; and (6)
declaratory relief is not the proper remedy. 6
In the assailed June 30, 2003 Order, 7 the trial court, sustaining the arguments of
the DILG, dismissed the petition for declaratory relief. It further denied, in the
September 12, 2003 Order, 8 petitioner's motion for reconsideration.
Dissatisfied, petitioner filed the instant petition for review on certiorari before this
Court on the following grounds:
I.
THE REGIONAL TRIAL COURT SERIOUSLY ERRED IN

DISMISSING PETITIONER'S PETITION FOR
DECLARATORY RELIEF ON PURELY TECHNICAL
GROUNDS.
II.
THE REGIONAL TRIAL COURT SERIOUSLY ERRED IN
NOT RESOLVING THE ISSUE RAISED IN THE PETITION
FOR DECLARATORY RELIEF. 9
Petitioner contends that it, a registered political party composed of citizens,

established to relentlessly pursue social justice in the Philippines, and allowed to
field candidates in the elections, has the legal interest and the right to be
informed and enlightened, on whether or not their public officials, who are paid
out of public funds, can, during their tenure, lawfully appear as heroes or villains
in movies, or comedians in television shows, and flaunt their disdain for legal
and ethical standards. The determination further of a party's legal standing in
actions for declaratory relief involving laws should not be as rigid as when such
action involves a deed, will or contract. 10 cDCHaS
It also argues that a party's legal standing is a procedural technicality which may
be set aside where the issues raised are of paramount public interest. In the
instant case, the importance of the issue can never be minimized or discounted.
The appearance of incumbent city or municipal mayors and provincial
governors, who are actors, in movies and television programs enhances their
income but reduces considerably the time that they should devote to their
constituents. This is in violation of Section 90 of R.A. No. 7160 and Section 7 of
R.A. No. 6713 or the Code of Conduct and Ethical Standards for Public Officials
and Employees. Their appearance further gives them undue advantage in future
elections over their opponents who are not actors. 11
The Court agrees with petitioner's contentions on locus standi considering the
liberal attitude it has taken in recent decisions.
However, following rules of procedure, we find as proper the trial court's

dismissal of the petition for declaratory relief in Civil Case No. 02-104585.
Readily discernable is that the same is an inappropriate remedy to enforce
compliance with Section 90 of R.A. 7160, and to prevent local chief executives
Santos-Recto, Lapid and Marquez from taking roles in movies and television
shows. The Court, thus, grants the OSG's move to dismiss the case.
Indeed, an action for declaratory relief should be filed by a person interested

under a deed, a will, a contract or other written instrument, and whose rights are
affected by a statute, an executive order, a regulation or an ordinance. The
purpose of the remedy is to interpret or to determine the validity of the written
instrument and to seek a judicial declaration of the parties' rights or duties
thereunder. 14 For the action to prosper, it must be shown that (1) there is a
justiciable controversy; (2) the controversy is between persons whose interests
are adverse; (3) the party seeking the relief has a legal interest in the controversy;
and (4) the issue is ripe for judicial determination. 15 Suffice it to state that, in the
petition filed with the trial court, petitioner failed to allege the ultimate facts
which satisfy these requisites. Not only that, as admitted by the petitioner, the
provision the interpretation of which is being sought has already been breached
by the respondents. Declaratory relief cannot thus be availed of. 16
WHEREFORE, premises considered, the petition is DENIED. No pronouncement

as to costs. EaHDcS
SO ORDERED.
||| (Social Justice Society v. Lina, G.R. No. 160031, December 18, 2008)
EN BANC
[G.R. No. 101783. January 23, 2002.]
MANILA ELECTRIC COMPANY, petitioner, vs.

PHILIPPINE CONSUMERS FOUNDATION, INC.,
EDGARDO S. ISIP, HON. JUDGE MANUEL M.
CALANOG, JR., and HON. JUDGE TIRSO D' C.
VELASCO, respondents.
Quiazon Makalintal Barot Torres Ibarra & Sison for petitioner.
The Solicitor General for public respondent.
Eduardo A. Claudio II & Associates, Tomas C. Llamas for private respondents.
Pascua & Zuniga for respondent PCFI.
SYNOPSIS
On February 5, 1982, the Philippine Consumers Foundation, Inc.

(PCFI) filed with the Board of Energy (BOE) a "Petition for Specific
Performance, Damages and Violation of P.D. 551" against Manila Electric
Company (MERALCO) docketed as BOE Case No. 82-198. PCFI sought,
among others, for the immediate refund by Meralco to its customers, all
savings it realized under P.D. No. 551, by reason of the reduction of its
franchise tax from 5% to 2%. On November 25, 1982, the BOE dismissed
PCFI's petition by declaring that Meralco was indeed authorized by the BOE
to retain the disputed savings under P.D. No. 551. Relative thereto, the PCFI
filed a petition for certiorari with this Court docketed as G.R. No. 63018 but
was dismissed for lack of merit. Four years thereafter, PCFI and a certain
Edgardo S. Isip filed with the Regional Trial Court (RTC), Branch 76,
Quezon City, a petition for declaratory relief docketed as Civil Case No. Q-
89-3659. Once again, they insisted that pursuant to Section 4 of P.D. 551, the
savings belong to the ultimate consumers. In its answer, Meralco prayed for
the dismissal of the petition on the ground of res judicata. Subsequently, the
RTC rendered the assailed decision declaring null and void the resolution of
this Court in G.R. No. 63018 and held that the disputed savings belong to the
consumers. Hence, the instant petition.
In granting the petition, the Court ruled that respondent RTC's
decision granting PCFI and Isip's petition for declaratory relief was in direct
derogation of the principle of res judicata. Twice, it had been settled that
Meralco is duly authorized to retain the savings it realized under P.D. No.
551 as long as its rate of return falls below the 12% allowable rate. The
pronouncement of the BOE in BOE Case No. 82-198 finding such fact to be
"beyond question" was clear and not susceptible of equivocation. This
pronouncement was sustained by this Court in G.R. No. 63018. In finding no
grave abuse of discretion on the part of the BOE, this Court saw the wisdom
of its assailed decision.
Moreover, a lower court cannot reverse or set aside decisions or
orders of a superior court, especially of the Supreme Court, for to do so will
negate the principle of hierarchy of courts and nullify the essence of review.
A final judgment, albeit erroneous, is binding on the whole world. Thus, it is
the duty of the lower court to obey the decisions of this Court and render
obeisance to its status as the apex of the hierarchy of courts. There is only
one Supreme Court from whose decisions all other courts should take their
bearings. SICaDA
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; EFFECT OF JUDGMENT; RES

JUDICATA; ELUCIDATED. Res judicata means a matter adjudged, a thing
judicially acted upon or decided; a thing or matter settled by judgment. In res
judicata, the judgment in the first action is considered conclusive as to every
matter offered and received therein, as to any other admissible matter which
might have been offered for that purpose, and all other matters that could have
been adjudged therein. For a claim of res judicata to prosper, the following
requisites must concur: 1) there must be a final judgment or order; 2) the court
rendering it must have jurisdiction over the subject matter and the parties; 3) it
must be a judgment or order on the merits; and 4) there must be, between the
two cases identity of parties, subject matter and causes of action.
2. ID.; ID.; ID.; ID.; THERE MUST BE A FINAL JUDGMENT; PRESENT IN CASE
AT BAR. It is beyond question that this Court's Resolution dated October 22,
1985 in G.R. No. 63018, sustaining the BOE's Decision dated November 25, 1982
in BOE Case No. 82-198 which dismissed PCFI's petition, attained finality on
December 4, 1985. As a matter of fact, this Court had long ago issued an Entry of
Judgment stating that the said Resolution "became final and executory and is . . .
recorded in the Book of Entries of Judgments." Prior thereto, or on March 10,
1980, the BOE's Order in BOE Case No. 79-672 became final when the oppositors
therein did not appeal.
3. ID.; ID.; ID.; ID.; COURT WHICH RENDERED THE FINAL JUDGMENT HAS
JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES; CASE AT
BAR. There is no question that the BOE has jurisdiction over the subject
matter and the parties therein. Under P.D. No. 1206, The BOE is the agency
authorized to "regulate and fix the power rates to be charged by electric
companies." As such, it has jurisdiction over Meralco, an electric company, and
over the savings it realized under P.D. No. 551. It bears stressing that P.D. No.
551 was passed precisely to enable the grantees of electric franchises to reduce
their rates within the reach of consumers. Clearly, the matter on how the
disputed savings should be disposed of in order to realize a reduction of rates is
within the competence of the BOE. aHSTID
4. ID.; ID.; ID.; ID.; JUDGMENT OR ORDER WAS ON THE MERITS. The
BOE's Decision in BOE Case No. 82-198 is a judgment on the merits. A judgment
is on the merits when it determines the rights and liabilities of the parties based
on the disclosed facts, irrespective of formal, technical or dilatory objections.
After according both parties the opportunities to be heard, the BOE disposed of
the controversy by resolving the rights of the parties under P.D. No. 551. In its
Decision, the BOE declared in clear and unequivocal manner that Meralco "has
been duly authorized to retain the savings realized under the provisions of P.D.
No. 551" and that private respondent PCFI's argument to the contrary is
"untenable." The BOE's Decision was upheld by this Court in G.R. No. 63018.
5. ID.; ID.; ID.; ID.; DOES NOT REQUIRE ABSOLUTE BUT ONLY
SUBSTANTIAL IDENTITY OF PARTIES. There is identity of parties between
the two cases. BOE Case No. 82-198 was a contest between private respondent
PCFI, as petitioner, and Meralco, as respondent. Civil Case No. Q-89-3659
involves the same contenders, except that respondent Edgardo Isip joined PCFI
as a plaintiff. But his inclusion as such plaintiff is inconsequential. A party by
bringing forward, in a second case, additional parties cannot escape the effects of
the principle of res judicata when the facts remain the same. Res judicata is not
defeated by a minor difference of parties, as it does not require absolute but only
substantial identity of parties.
6. ID.; ID.; ID.; ID.; IDENTITY OF SUBJECT MATTERS; PRESENT IN CASE AT

BAR. The subject matters of BOE Case No. 82-198 and Civil Case No. Q-89-
3659 are likewise identical since both refer to the savings realized by Meralco
from the reduction of the franchise tax under P.D. No. 551. The subject matter of
an action refers to the thing, wrongful act, contract or property which is directly
involved in the action, concerning which the wrong has been done and with
respect to which the controversy has arisen. In both cases, the controversy is how
the disputed savings shall be disposed of whether they shall be retained by
Meralco or be passed on the consumers.
7. ID.; ID.; ID.; ID.; IDENTITY OF CAUSES OF ACTION; PARTIES WERE

LITIGATING FOR THE SAME THING AND THE SAME CONTENTIONS.
With respect to identity of causes of action, this requisite is likewise present. In
both cases, the act alleged to be in violation of the legal right of private
respondents is Meralco's retention of the savings it realized under P.D. No. 551.
While it is true that BOE Case No. 82-198 is one for specific performance, while
Civil Case No. Q-89-3659 is for declaratory relief in the ultimate both are
directed towards only one relief, i.e., the refund of the disputed savings to the
consumers. To seek a court's declaration on who should benefit from the
disputed savings (whether Meralco or the consumers) will result in the
relitigation of an issue fairly and fully adjudicated in BOE Case No. 82-198.
Clearly, the test of identity of causes of action lies not in the form of an action. The
difference of actions in the aforesaid cases is of no moment. The doctrine of res
judicata still applies considering that the parties were litigating for the same thing
and more importantly, the same contentions. As can be gleaned from the records,
private respondents' arguments in Civil Case No. Q-89-3659 bear extreme
resemblance with those raised in BOE Case No. 82-198.
8. POLITICAL LAW; ADMINISTRATIVE LAW; Presidential Decree No. 551;

MERALCO IS DULY AUTHORIZED TO RETAIN THE SAVINGS IT REALIZED
THEREUNDER AS LONG AS ITS RATE OF RETURN FALLS BELOW THE 12%
ALLOWABLE RATE. Respondent RTC's Decision granting PCFI and Isip's
petition for declaratory relief is in direct derogation of the principle of res
judicata. Twice, it has been settled that Meralco is duly authorized to retain the
savings it realized under P.D. No. 551 as long as its rate of return falls below the
12% allowable rate. The pronouncement of the BOE in BOE Case No. 82-198
finding such fact to be "beyond question" is clear and not susceptible of
equivocation. This pronouncement was sustained by this Court in G.R. No.
63018. In finding no grave abuse of discretion on the part of the BOE, this Court
saw the wisdom of its assailed Decision. Thus, this Court held: "[I]n dismissing
the petition for specific performance, the BOE authorized Meralco, in lieu of
increasing its rates to get a more reasonable return on investments while at the
same time refunding to consumers the benefit of P.D. No. 551, to instead defer
the passing on of benefits but without the planned increases. Instead of giving
back money to consumers and then taking back the same in terms of increased
rates, Meralco was allowed by the BOE to follow the more simplified and
rational procedure."
9. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; DECLARATORY RELIEF; NOT

APPLICABLE AFTER A LAW HAS BEEN ALLEGEDLY VIOLATED; CASE AT
BAR. [L]et it not be overlooked that the purpose of an action for declaratory
relief is to secure an authoritative statement of the rights and obligations of the
parties under a statute, deed, contract, etc. for their guidance in the enforcement
thereof, or compliance therewith, and not to settle issues arising from an alleged
breach thereof. It may be entertained only before the breach or violation of the
statute, deed, contract, etc., to which it refers. The petition gives a practical
remedy in ending controversies which have not reached the stage where other
relief is immediately available. It supplies the need for a form of action that will
set controversies at rest before they lead to repudiation of obligations, invasion of
rights, and the commission of wrongs. Here, private respondents brought the
petition for declaratory relief long after the alleged violation of P.D. No. 551.
DaHSIT
10. ID.; CIVIL PROCEDURE; JURISDICTION; PRINCIPLE OF HIERARCHY OF

COURTS; LOWER COURT CANNOT REVERSE OR SET ASIDE DECISION OR
ORDERS OF A SUPERIOR COURT. A lower court cannot reverse or set aside
decisions or orders of a superior court, especially of this Court, for to do so will
negate the principle of hierarchy of courts and nullify the essence of review. A
final judgment, albeit erroneous, is binding on the whole world. Thus, it is the
duty of the lower courts to obey the Decisions of this Court and render obeisance
to its status as the apex of the hierarchy of courts. "A becoming modesty of
inferior courts demands conscious realization of the position that they occupy in
the interrelation and operation of the integrated judicial system of the nation."
"There is only one Supreme Court from whose decisions all other courts should
take their bearings," as eloquently declared by Justice J.B.L. Reyes.
11. ID.; ID.; JUDGMENT; JUDICIAL ERROR SHOULD BE CORRECTED

THROUGH APPEALS, NOT THROUGH REPEATED SUITS ON THE SAME
CLAIM. Respondent RTC, and for this matter, all lower courts, ought to be
reminded that a final and executory decision or order can no longer be disturbed
or reopened no matter how erroneous it may be. Although judicial
determinations are not infallible, judicial error should be corrected through
appeals, not through repeated suits on the same claim. In setting aside the
Resolution and Entry of Judgment of this Court in G.R. No. 63018, respondent
court grossly violated basic rules of civil procedure. ScEaAD
DECISION
SANDOVAL-GUTIERREZ, J p:
Interest republicae ut sit finis litium 1 it is to the interest of the public that there
should be an end to litigation by the same parties and their privies over a subject
fully and fairly adjudicated. From this overwhelming concern springs the
doctrine of res judicata an obvious rule of reason according stability to
judgments. acCITS
Challenged in this petition for review on certiorari are the a) Decision in Civil
Case No. Q-89-3659 dated January 16, 1991 of the Regional Trial Court, Branch
76, Quezon City; 2 and b) its Order dated September 10, 1991 3 denying the
motion for reconsideration of the said Decision.
The pertinent facts are:
On September 11, 1974, former President Ferdinand E. Marcos, with the objective
of enabling the grantees of electric franchises to reduce their rates "within the
reach of consumers," 4 promulgated Presidential Decree No. 551 5 providing for
the reduction from 5% to 2% of the franchise tax paid by electric companies, thus:
"SECTION 1. Any provision of law or local ordinance to the

contrary notwithstanding, the franchise tax payable by all
grantees of franchises to generate, distribute and sell electric
current for light, heat and power shall be two (2%) of their
gross receipts received from the sale of electric current and
from transactions incident to the generation, distribution
and sale of electric current."
On February 5, 1982, the Philippine Consumers Foundation, Inc., (PCFI) filed

with the Board of Energy (BOE) a "Petition for Specific Performance, Damages
and Violation of P.D. No. 551" 6 against the Manila Electric Company (Meralco),
docketed as BOE Case No. 82-198. PCFI sought for the immediate refund by
Meralco to its customers of all the savings it realized under P.D. No. 551, through
the reduction of its franchise tax from 5% to 2%, with interest at the legal rate;
and for the payment of damages and a fine in the amount of P50,000.00 for
violating P.D. 551. It moored its petition on Section 4 of P.D. No. 551 which
provides:
"Sec. 4. All the savings realized by electric franchise holders

from the reduction of the franchise tax under Section 1 and
tariff reductions and tax credits under Sections 2 and 3, shall
be passed on to the ultimate consumer. The Secretary of Finance
shall promulgate rules and regulations and devise a
reporting systems to carry out the provisions of this Decree."
In its answer to the petition, Meralco alleged that it was duly authorized by the
BOE in its Order dated March 10, 1980 in BOE Case No. 79-692 to retain the
disputed savings; and that the said Order had long become final.
On November 25, 1982, the BOE issued its Decision dismissing PCFI's petition,
declaring that Meralco was indeed authorized by the BOE, in BOE Case No. 79-
692, to retain the disputed savings under P.D. 551, thus:
"It is at once evident from the foregoing controlling facts and

circumstances, particularly the Order of this Board dated March
10, 1980, as confirmed by the reply-letter dated March 3, 1981,
that Meralco has been duly authorized to retain the savings
realized under the provisions of P.D. 551. The authority granted
in the said Order and letter is so clear and unequivocal as to
leave any room for contradictory interpretation. This Board,
therefore, holds as untenable petitioner's claim that
respondent Meralco was never authorized under the said
Order and letter to hold on to the savings realized under the
said decree.
"The Board likewise finds to be devoid of merit petitioner's

contention that pursuant to Opinion No. 140, Series of 1979,
of the Minister of Justice, it is absolutely mandatory on the
part of respondent Meralco to pass on to its customers the
savings under consideration. It must be pointed out that the
Order of March 10, 1980 was issued by this Board on the
basis of the recommendation contained in the Memorandum
dated November 30, 1979 of the Minister of Finance, which
was approved by the President of the Philippines in his
directive to this Board dated December 11, 1979 issued thru
Presidential Executive Assistant Jacobo Clave. This Board
believes and so holds that the approval by the President of
the Philippines of the aforesaid Finance Ministry's
recommendation had the effects of (a) reversing or
modifying the aforementioned Opinion of the Minister of
Justice; and (b) confirming the promulgation by the Ministry
of Finance, conformably with the specific authority granted
it under P.D. No. 551, of an additional rule or regulation for
the implementation of the said decree for the guidance of
this Board. In issuing the Order of March 10, 1980, therefore,
the Board has done no more than follow and be guided by
the said additional rule or regulation.
"It is noteworthy to mention also that the registered oppositors in

BOE Case No. 79-692 (formerly BPW Case No. 72-2146), where
the respondent herein originally filed its motion requesting for
authority to defer the passing on to its customers of the franchise
tax reduction benefits under P.D. No. 551, have done nothing to
seek relief from or to appeal to the appropriate forum, the said
Order of March 10, 1980. As a consequence, the disposition
contained therein have long become final.
xxx xxx xxx

"That Meralco has been authorized to retain the savings resulting
from the reduction of the franchise tax under P.D. No. 551 is,
therefore beyond question." 7 (Italics supplied)
PCFI filed a motion for reconsideration but was denied by the BOE. Hence, PCFI
filed a Petition for Certiorari with this Court, docketed as G.R. No. 63018. In a
Resolution dated October 22, 1985, this Court dismissed the petition for lack of
merit, holding that:
"We see no grave abuse of discretion warranting the setting aside

of the BOE order.
"P.D. No. 551 ordered the Minister of Finance to issue

implementing rules and regulations. The Minister
authorized all grantees of electric franchises, not Meralco
alone, whose rates of return on their rate bases were below
the legal allowable level to either ask for increased rates or to
defer the passing on of benefits under the decree to
consumers until just and reasonable returns could be had.
Lengthy investigations, audits, hearings, and determinations
over practically an eight year period preceded the
questioned decision. The petitioners failed both below and
in this petition to successfully refute the facts ascertained in
the audits and examinations. The BOE approved option
formed the basis of subsequent determinations of Meralco
rates and the adopted formula became the basis of
computations. When this petition was filed on January 27, 1983,
the November 25, 1982 ruling was already final and executory.
Moreover, the March 10, 1980 judgment rendered in BOE Case
No. 79-692, where Meralco had filed a motion for authority to
defer passing on to customers the savings from the reduction of
franchise taxes, was not appealed or questioned by the petitioners.
Instead, they filed BOE Case No. 82-198 on February 5, 1982 or
almost two years later, raising the same issues against the same
parties. BOE's questioned decision in Case No. 82-198 used the
facts in BOE Case No. 79-692 for its conclusions. Not only had the
March 10, 1980 decision confirmed the findings of the Minister of
Finance on Meralco's accounts and finances but in filing the
second case, the petitioners were asking for a readjudication of the
same issues in another challenge to these same findings. . . . ." 8
(Italics supplied)
Four years thereafter, PCFI and a certain Edgardo S. Isip, private respondents
herein, filed with respondent Regional Trial Court, Branch 76, Quezon City, a
petition for declaratory relief, docketed as Civil Case No. Q-89-3659. Private
respondents prayed for a ruling on who should be entitled to the savings
realized by Meralco under P.D. No. 551. Once again, they insisted that pursuant
to Section 4 of P.D. No. 551, the savings belong to the ultimate consumers.
Meralco, in its answer, prayed for the dismissal of the petition on the ground of
res judicata, citing this Court's Resolution in G.R. No. 63018 which affirmed the
BOE's Decision in BOE Case No. 82-198.
On January 16, 1991, respondent RTC rendered the assailed Decision declaring
null and void the Resolution of this Court in G.R. No. 63018 and on the basis of
the Dissenting Opinion of the late Justice Claudio Teehankee, held that the
disputed savings belong to the consumers, thus:
"Respondent Meralco's theory is devoid of merit. As correctly

stated in the dissenting opinion of the late Chief Justice Claudio
Teehankee in the October 22, 1985 resolution of the Supreme
Court in SC G.R. No. 63018, the decision of the Board of Energy is
ultra vires, hence, null and void. . . . .
"It is a well-settled rule in statutory construction that when

the law is clear, it leaves no room for interpretation. The
memorandum issued by the Minister of Finance which was
made the basis of the decision of the Board of Energy has no
legal effect because Sec. 4 of P.D. No. 551 is clear and
unequivocal.
xxx xxx xxx

"Since the law is clear, what is left to be done by the
administrative body or agency concerned is to enforce the
law. There is no room for an administrative interpretation of
the law. In the instant case, the Board interpreted PD 551
and chose not only to enforce it but to amend and modify
the law on the basis of a Memorandum and the authority
issued by the Minister of Finance to all grantees of electric-
franchises, not Meralco alone, whose rates of return on their
rate basis were below the legal allowable level, to either ask
for an increased rates or to defer the passing on of benefits
under the decree to consumers, until just and reasonable
return could be had. This is beyond the authority granted by
PD 551 to the Minister of Finance. PD 551 merely ordered
the Minister of Finance to issue implementing rules and
regulations. He cannot amend or modify the clear mandate
of the law. The act therefore of the Minister of Finance was ultra
vires, hence, null and void. Considering that said act became the
basis of the Board of Energy's decision, it follows that said decision
is likewise null and void and the Supreme Court resolution
affirming said decision is also null and void having proceeded from
a void judgment, hence, cannot be considered as valid judgment
that will be a bar to the present action." 9 (Italics supplied)
Meralco moved for a reconsideration of the above Decision but was denied by
respondent court in its Order of September 10, 1991.
Hence, Meralco's petition for review on certiorari anchored on the following

grounds:
"I
RESPONDENT JUDGES ERRED IN HOLDING THAT

CIVIL CASE NO. 89-3659 IS NOT BARRED BY PRIOR
JUDGMENT.
II
RESPONDENT JUDGES ERRED IN DECLARING NULL

AND VOID A RESOLUTION OF THIS HONORABLE
SUPREME COURT.
III
RESPONDENT JUDGES ERRED IN HOLDING THAT THE

REMEDY OF DECLARATORY RELIEF WAS STILL
AVAILABLE TO PRIVATE RESPONDENTS.
IV
RESPONDENT JUDGES ERRED IN NOT DISMISSING THE

PETITION FOR DECLARATORY RELIEF." 10
Meralco contends that Civil Case No. Q-89-3659 is already barred by prior
judgments, referring to a) this Court's Resolution in G.R. No. 63018 sustaining the
BOE's Decision in BOE Case No. 82-198; and b) the Order dated March 10, 1980 of
the same Board in BOE Case No. 79-692, both holding that Meralco is authorized
to retain its savings realized under P.D. 551. Meralco likewise argues that
respondent RTC cannot annul the Resolution of this Court in G.R. No. 63018
considering that trial courts cannot set aside decisions of a superior court. And
lastly, Meralco maintains that private respondents can no longer avail of the
remedy of an action for declaratory relief in view of the rule that such action
should be filed before a violation of the statute occurred. 11
In their comment, 12 private respondents argue that this Court's Resolution in

G.R. No. 63018 cannot be a bar to Civil Case No. Q-89-3659 for declaratory relief
considering that it did not delve on the essential issue raised in the latter case,
i.e., who is entitled to the savings. Further, they claim that public interest would
be defeated by the application of res judicata.
The petition is meritorious.
The issue whether or not Meralco is duly authorized to retain the savings
resulting from the reduction of the franchise tax under P.D. No. 551 as long as its
rate of return falls below the 12% allowable rate recognized in this jurisdiction
has long been settled. Thus, the relitigation of the same issue in Civil Case No. Q-
89-3659 cannot be sanctioned under the principle of res judicata.
Res judicata means a matter adjudged, a thing judicially acted upon or decided; a
thing or matter settled by judgment. 13 In res judicata, the judgment in the first
action is considered conclusive as to every matter offered and received therein,
as to any other admissible matter which might have been offered for that
purpose, and all other matters that could have been adjudged therein. 14 For a
claim of res judicata to prosper, the following requisites must concur: 1) there
must be a final judgment or order; 2) the court rendering it must have
jurisdiction over the subject matter and the parties; 3) it must be a judgment or
order on the merits; and 4) there must be, between the two cases identity of
parties, subject matter and causes of action. 15
All the above requisites are extant in the records and thus, beyond dispute.
Re: FIRST REQUISITE there must be a final judgment:
It is beyond question that this Court's Resolution dated October 22, 1985 in G.R.
No. 63018, sustaining the BOE's Decision dated November 25, 1982 in BOE Case
No. 82-198 which dismissed PCFI's petition, attained finality on December 4,
1985. As a matter of fact, this Court had long ago issued an Entry of Judgment
stating that the said Resolution "became final and executory and is . . . recorded
in the Book of Entries of Judgments." Prior thereto, or on March 10, 1980, the
BOE's Order in BOE Case No. 79-672 became final when the oppositors therein
did not appeal.
Re: SECOND REQUISITE the court which rendered the final judgment must have
jurisdiction over the subject matter and the parties:
There is no question that the BOE has jurisdiction over the subject matter and the
parties herein. Under P.D. No. 1206, 16 The BOE is the agency authorized to
"regulate and fix the power rates to be charged by electric companies.'' 17 As
such, it has jurisdiction over Meralco, an electric company, and over the savings
it realized under P.D. No. 551. It bears stressing that P.D. No. 551 was passed
precisely to enable the grantees of electric franchises to reduce their rates within
the reach of consumers. Clearly, the matter on how the disputed savings should
be disposed of in order to realize a reduction of rates is within the competence of
the BOE.
Re: THIRD REQUISITE it must be a judgment or order on the merits:
The BOE's Decision in BOE Case No. 82-198 is a judgment on the merits. A
judgment is on the merits when it determines the rights and liabilities of the
parties based on the disclosed facts, irrespective of formal, technical or dilatory
objections. After according both parties the opportunities to be heard, the BOE
disposed of the controversy by resolving the rights of the parties under P.D. No.
551. In its Decision, the BOE declared in clear and unequivocal manner that
Meralco "has been duly authorized to retain the savings realized under the
provisions of P.D. No. 551" and that private respondent PCFI's argument to the
contrary is "untenable." The BOE's Decision was upheld by this Court in G.R. No.
63018.
Re: FOURTH REQUISITE there must be between the two cases identity of parties,
subject matter and causes of action:
There is identity of parties between the two cases. BOE Case No. 82-198 was a
contest between private respondent PCFI, as petitioner, and Meralco, as
respondent. Civil Case No. Q-89-3659 involves the same contenders, except that
respondent Edgardo Isip joined PCFI as a plaintiff. But his inclusion as such
plaintiff is inconsequential. A party by bringing forward, in a second case,
additional parties cannot escape the effects of the principle of res judicata when
the facts remain the same. Res judicata is not defeated by a minor difference of
parties, as it does not require absolute but only substantial identity of parties. 18
The subject matters of BOE Case No. 82-198 and Civil Case No. Q-89-3659 are
likewise identical since both refer to the savings realized by Meralco from the
reduction of the franchise tax under P.D. No. 551. The subject matter of an action
refers to the thing, wrongful act, contract or property which is directly involved
in the action, concerning which the wrong has been done and with respect to
which the controversy has arisen. 19 In both cases, the controversy is how the
disputed savings shall be disposed of whether they shall be retained by
Meralco or be passed on to the consumers.
With respect to identity of causes of action, this requisite is likewise present. In

both cases, the act alleged to be in violation of the legal right of private
respondents is Meralco's retention of the savings it realized under P.D. No. 551.
While it is true that BOE Case No. 82-198 is one for specific performance, while
Civil Case No. Q-89-3659 is for declaratory relief in the ultimate both are
directed towards only one relief, i.e., the refund of the disputed savings to the
consumers. To seek a court's declaration on who should benefit from the
disputed savings (whether Meralco or the consumers) will result in the
relitigation of an issue fairly and fully adjudicated in BOE Case No. 82-198.
Clearly, the test of identity of causes of action lies not in the form of an action. The
difference of actions in the aforesaid cases is of no moment. The doctrine of res
judicata still applies considering that the parties were litigating for the same thing
and more importantly, the same contentions. 20 As can be gleaned from the
records, private respondents' arguments in Civil Case No. Q-89-3659 bear
extreme resemblance with those raised in BOE Case No. 82-198.
Respondent RTC's Decision granting PCFI and Isip's petition for declaratory
relief is in direct derogation of the principle of res judicata. Twice, it has been
settled that Meralco is duly authorized to retain the savings it realized under
P.D. No. 551 as long as its rate of return falls below the 12% allowable rate. The
pronouncement of the BOE in BOE Case No. 82-198 finding such fact to be
"beyond question" is clear and not susceptible of equivocation. This
pronouncement was sustained by this Court in G.R. No. 63018. In finding no
grave abuse of discretion on the part of the BOE, this Court saw the wisdom of
its assailed Decision. Thus, this Court held: "[I]n dismissing the petition for
specific performance, the BOE authorized Meralco, in lieu of increasing its rates
to get a more reasonable return on investments while at the same time refunding
to consumers the benefit of P.D. No. 551, to instead defer the passing on of
benefits but without the planned increases. Instead of giving back money to
consumers and then taking back the same in terms of increased rates, Meralco
was allowed by the BOE to follow the more simplified and rational procedure."
21
Private respondents now argue that G.R. No. 63018 merely decreed the
postponement of the passing of Meralco's savings to the consumers until it could
increase its rate charges. On this point, this Court categorically ruled:
" . . . . And finally, as stated by the Solicitor General, if only to put
the issue to final rest, BOE's decision authorizing Meralco to
retain the savings resulting from the reduction of franchise tax as
long as its rate of return falls below the 12% allowable rate is
supported by P.D. No. 551, the rules and administrative orders of
the Ministry of Finance which had been duly authorized by the
decree itself and by directives of the President to carry out the
provisions of the decree, and most of all by equitable economic
considerations without which the decree would lose its purpose and
viability." 22
Corollarily, let it not be overlooked that the purpose of an action for declaratory
relief is to secure an authoritative statement of the rights and obligations of the
parties under a statute, deed, contract, etc. for their guidance in the enforcement
thereof, or compliance therewith, and not to settle issues arising from an alleged
breach thereof. It may be entertained only before the breach or violation of the
statute, deed, contract, etc., to which it refers. 23 The petition gives a practical
remedy in ending controversies which have not reached the stage where other
relief is immediately available. It supplies the need for a form of action that will
set controversies at rest before they lead to repudiation of obligations, invasion of
rights, and the commission of wrongs. 24 Here, private respondents brought the
petition for declaratory relief long after the alleged violation of P.D. No. 551.
Lastly, we are dismayed by respondent RTC's adherence to the Dissenting

Opinion, instead of the Majority Opinion, of the members of this Court in G.R.
No. 63018, as well as its temerity to declare a Resolution of this Court "null and
void" and "cannot be considered as valid judgment that will be a bar to the present
action."
A lower court cannot reverse or set aside decisions or orders of a superior court,
especially of this Court, for to do so will negate the principle of hierarchy of
courts and nullify the essence of review. A final judgment, albeit erroneous, is
binding on the whole world. Thus, it is the duty of the lower courts to obey the
Decisions of this Court and render obeisance to its status as the apex of the
hierarchy of courts. "A becoming modesty of inferior courts demands conscious
realization of the position that they occupy in the interrelation and operation of
the integrated judicial system of the nation." 25 "There is only one Supreme
Court from whose decisions all other courts should take their bearings," as
eloquently declared by Justice J. B. L. Reyes. 26
Respondent RTC, and for this matter, all lower courts, ought to be reminded that
a final and executory decision or order can no longer be disturbed or reopened
no matter how erroneous it may be. Although judicial determinations are not
infallible, judicial error should be corrected through appeals, not through
repeated suits on the same claim. 27 In setting aside the Resolution and Entry of
Judgment of this Court in G.R. No. 63018, respondent court grossly violated basic
rules of civil procedure.
In fine, we stress that the rights of Meralco under P.D. No. 551, as determined by
the BOE and sustained by this Court, have acquired the character of res judicata
and can no longer be challenged.
WHEREFORE, the petition is hereby GRANTED. The assailed RTC Decision

dated January 16, 1991 and Order dated September 10, 1991 in Civil Case No. Q-
89-3659 are REVERSED and SET ASIDE.
SO ORDERED.
||| (Manila Electric Co. v. Philippine Consumers Foundation, Inc., G.R. No. 101783,
January 23, 2002)
G.R. No. 150806. January 28, 2008.]
EUFEMIA ALMEDA and ROMEL ALMEDA, petitioners, vs.

BATHALA MARKETING INDUSTRIES, INC., respondent.
DECISION
NACHURA, J p:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, of
the Decision 1 of the Court of Appeals (CA), dated September 3, 2001, in CA-G.R.
CV No. 67784, and its Resolution 2 dated November 19, 2001. The assailed
Decision affirmed with modification the Decision 3 of the Regional Trial Court
(RTC), Makati City, Branch 136, dated May 9, 2000 in Civil Case No. 98-411.
Sometime in May 1997, respondent Bathala Marketing Industries, Inc., as lessee,

represented by its president Ramon H. Garcia, renewed its Contract of Lease 4
with Ponciano L. Almeda (Ponciano), as lessor, husband of petitioner Eufemia
and father of petitioner Romel Almeda. Under the said contract, Ponciano agreed
to lease a portion of the Almeda Compound, located at 2208 Pasong Tamo Street,
Makati City, consisting of 7,348.25 square meters, for a monthly rental of
P1,107,348.69, for a term of four (4) years from May 1, 1997 unless sooner
terminated as provided in the contract. 5 The contract of lease contained the
following pertinent provisions which gave rise to the instant case:
SIXTH It is expressly understood by the parties hereto

that the rental rate stipulated is based on the present rate of
assessment on the property, and that in case the assessment
should hereafter be increased or any new tax, charge or
burden be imposed by authorities on the lot and building
where the leased premises are located, LESSEE shall pay,
when the rental herein provided becomes due, the
additional rental or charge corresponding to the portion
hereby leased; provided, however, that in the event that the
present assessment or tax on said property should be
reduced, LESSEE shall be entitled to reduction in the
stipulated rental, likewise in proportion to the portion leased
by him;
SEVENTH In case an extraordinary inflation or

devaluation of Philippine Currency should supervene, the
value of Philippine peso at the time of the establishment of
the obligation shall be the basis of payment; 6
During the effectivity of the contract, Ponciano died. Thereafter, respondent dealt
with petitioners. In a letter 7 dated December 29, 1997, petitioners advised
respondent that the former shall assess and collect Value Added Tax (VAT) on its
monthly rentals. In response, respondent contended that VAT may not be
imposed as the rentals fixed in the contract of lease were supposed to include the
VAT therein, considering that their contract was executed on May 1, 1997 when
the VAT law had long been in effect. 8
On January 26, 1998, respondent received another letter from petitioners

informing the former that its monthly rental should be increased by 73%
pursuant to condition No. 7 of the contract and Article 1250 of the Civil Code.
Respondent opposed petitioners' demand and insisted that there was no
extraordinary inflation to warrant the application of Article 1250 in light of the
pronouncement of this Court in various cases. 9
Respondent refused to pay the VAT and adjusted rentals as demanded by

petitioners but continued to pay the stipulated amount set forth in their contract.
On February 18, 1998, respondent instituted an action for declaratory relief for
purposes of determining the correct interpretation of condition Nos. 6 and 7 of
the lease contract to prevent damage and prejudice. 10 The case was docketed as
Civil Case No. 98-411 before the RTC of Makati.
On March 10, 1998, petitioners in turn filed an action for ejectment, rescission
and damages against respondent for failure of the latter to vacate the premises
after the demand made by the former. 11 Before respondent could file an answer,
petitioners filed a Notice of Dismissal. 12 They subsequently refiled the
complaint before the Metropolitan Trial Court of Makati; the case was raffled to
Branch 139 and was docketed as Civil Case No. 53596.
Petitioners later moved for the dismissal of the declaratory relief case for being
an improper remedy considering that respondent was already in breach of the
obligation and that the case would not end the litigation and settle the rights of
the parties. The trial court, however, was not persuaded, and consequently,
denied the motion.
After trial on the merits, on May 9, 2000, the RTC ruled in favor of respondent
and against petitioners. The pertinent portion of the decision reads:
WHEREFORE, premises considered, this Court renders

judgment on the case as follows:
1) declaring that plaintiff is not liable for the payment of

Value-Added Tax (VAT) of 10% of the rent for [the] use of
the leased premises;
2) declaring that plaintiff is not liable for the payment of any

rental adjustment, there being no [extraordinary] inflation or
devaluation, as provided in the Seventh Condition of the
lease contract, to justify the same;
3) holding defendants liable to plaintiff for the total amount

of P1,119,102.19, said amount representing payments
erroneously made by plaintiff as VAT charges and rental
adjustment for the months of January, February and March,
1999; and
4) holding defendants liable to plaintiff for the amount of

P1,107,348.69, said amount representing the balance of
plaintiff's rental deposit still with defendants.
SO ORDERED. 13
The trial court denied petitioners their right to pass on to respondent the burden
of paying the VAT since it was not a new tax that would call for the application
of the sixth clause of the contract. The court, likewise, denied their right to collect
the demanded increase in rental, there being no extraordinary inflation or
devaluation as provided for in the seventh clause of the contract. Because of the
payment made by respondent of the rental adjustment demanded by petitioners,
the court ordered the restitution by the latter to the former of the amounts paid,
notwithstanding the well-established rule that in an action for declaratory relief,
other than a declaration of rights and obligations, affirmative reliefs are not
sought by or awarded to the parties.
Petitioners elevated the aforesaid case to the Court of Appeals which affirmed
with modification the RTC decision. The fallo reads:
WHEREFORE, premises considered, the present appeal is

DISMISSED and the appealed decision in Civil Case No. 98-
411 is hereby AFFIRMED with MODIFICATION in that the
order for the return of the balance of the rental deposits and
of the amounts representing the 10% VAT and rental
adjustment, is hereby DELETED.
SO ORDERED. 14
The appellate court agreed with the conclusions of law and the application of the
decisional rules on the matter made by the RTC. However, it found that the trial
court exceeded its jurisdiction in granting affirmative relief to the respondent,
particularly the restitution of its excess payment.
Petitioners now come before this Court raising the following issues:
I.
WHETHER OR NOT ARTICLE 1250 OF THE NEW CIVIL

CODE IS APPLICABLE TO THE CASE AT BAR.
II.
WHETHER OR NOT THE DOCTRINE ENUNCIATED IN

FILIPINO PIPE AND FOUNDRY CORP. VS. NAWASA
CASE, 161 SCRA 32 AND COMPANION CASES ARE (sic)
APPLICABLE IN THE CASE AT BAR.
III.
WHETHER OR NOT IN NOT APPLYING THE DOCTRINE

IN THE CASE OF DEL ROSARIO VS. THE SHELL
COMPANY OF THE PHILIPPINES, 164 SCRA 562, THE
HONORABLE COURT OF APPEALS SERIOUSLY ERRED
ON A QUESTION OF LAW.
IV.
WHETHER OR NOT THE FINDING OF THE HONORABLE

COURT OF APPEALS THAT RESPONDENT IS NOT
LIABLE TO PAY THE 10% VALUE ADDED TAX IS IN
ACCORDANCE WITH THE MANDATE OF RA 7716.
V.
WHETHER OR NOT DECLARATORY RELIEF IS PROPER

SINCE PLAINTIFF-APPELLEE WAS IN BREACH WHEN
THE PETITION FOR DECLARATORY RELIEF WAS FILED
BEFORE THE TRIAL COURT.
In fine, the issues for our resolution are as follows: 1) whether the action for
declaratory relief is proper; 2) whether respondent is liable to pay 10% VAT
pursuant to Republic Act (RA) 7716; and 3) whether the amount of rentals due
the petitioners should be adjusted by reason of extraordinary inflation or
devaluation.
Declaratory relief is defined as an action by any person interested in a deed, will,

contract or other written instrument, executive order or resolution, to determine
any question of construction or validity arising from the instrument, executive
order or regulation, or statute, and for a declaration of his rights and duties
thereunder. The only issue that may be raised in such a petition is the question of
construction or validity of provisions in an instrument or statute. Corollary is the
general rule that such an action must be justified, as no other adequate relief or
remedy is available under the circumstances. 15
Decisional law enumerates the requisites of an action for declaratory relief, as

follows: 1) the subject matter of the controversy must be a deed, will, contract or
other written instrument, statute, executive order or regulation, or ordinance; 2)
the terms of said documents and the validity thereof are doubtful and require
judicial construction; 3) there must have been no breach of the documents in
question; 4) there must be an actual justiciable controversy or the "ripening
seeds" of one between persons whose interests are adverse; 5) the issue must be
ripe for judicial determination; and 6) adequate relief is not available through
other means or other forms of action or proceeding. 16
It is beyond cavil that the foregoing requisites are present in the instant case,
except that petitioners insist that respondent was already in breach of the
contract when the petition was filed.
We do not agree.
After petitioners demanded payment of adjusted rentals and in the months that
followed, respondent complied with the terms and conditions set forth in their
contract of lease by paying the rentals stipulated therein. Respondent religiously
fulfilled its obligations to petitioners even during the pendency of the present
suit. There is no showing that respondent committed an act constituting a breach
of the subject contract of lease. Thus, respondent is not barred from instituting
before the trial court the petition for declaratory relief.
Petitioners claim that the instant petition is not proper because a separate action
for rescission, ejectment and damages had been commenced before another
court; thus, the construction of the subject contractual provisions should be
ventilated in the same forum.
We are not convinced.
It is true that in Panganiban v. Pilipinas Shell Petroleum Corporation 17 we held that

the petition for declaratory relief should be dismissed in view of the pendency of
a separate action for unlawful detainer. However, we cannot apply the same
ruling to the instant case. In Panganiban, the unlawful detainer case had already
been resolved by the trial court before the dismissal of the declaratory relief case;
and it was petitioner in that case who insisted that the action for declaratory
relief be preferred over the action for unlawful detainer. Conversely, in the case
at bench, the trial court had not yet resolved the rescission/ejectment case during
the pendency of the declaratory relief petition. In fact, the trial court, where the
rescission case was on appeal, itself initiated the suspension of the proceedings
pending the resolution of the action for declaratory relief.
We are not unmindful of the doctrine enunciated in Teodoro, Jr. v. Mirasol 18

where the declaratory relief action was dismissed because the issue therein could
be threshed out in the unlawful detainer suit. Yet, again, in that case, there was
already a breach of contract at the time of the filing of the declaratory relief
petition. This dissimilar factual milieu proscribes the Court from applying
Teodoro to the instant case.
Given all these attendant circumstances, the Court is disposed to entertain the
instant declaratory relief action instead of dismissing it, notwithstanding the
pendency of the ejectment/rescission case before the trial court. The resolution of
the present petition would write finis to the parties' dispute, as it would settle
once and for all the question of the proper interpretation of the two contractual
stipulations subject of this controversy.
Now, on the substantive law issues.
Petitioners repeatedly made a demand on respondent for the payment of VAT

and for rental adjustment allegedly brought about by extraordinary inflation or
devaluation. Both the trial court and the appellate court found no merit in
petitioners' claim. We see no reason to depart from such findings.
As to the liability of respondent for the payment of VAT, we cite with approval
the ratiocination of the appellate court, viz.:
Clearly, the person primarily liable for the payment of VAT

is the lessor who may choose to pass it on to the lessee or
absorb the same. Beginning January 1, 1996, the lease of real
property in the ordinary course of business, whether for
commercial or residential use, when the gross annual
receipts exceed P500,000.00, is subject to 10% VAT.
Notwithstanding the mandatory payment of the 10% VAT
by the lessor, the actual shifting of the said tax burden upon
the lessee is clearly optional on the part of the lessor, under
the terms of the statute. The word "may" in the statute,
generally speaking, denotes that it is directory in nature. It is
generally permissive only and operates to confer discretion.
In this case, despite the applicability of the rule under Sec. 99
of the NIRC, as amended by R.A. 7716, granting the lessor
the option to pass on to the lessee the 10% VAT, to existing
contracts of lease as of January 1, 1996, the original lessor,
Ponciano L. Almeda did not charge the lessee-appellee the
10% VAT nor provided for its additional imposition when
they renewed the contract of lease in May 1997. More
significantly, said lessor did not actually collect a 10% VAT
on the monthly rental due from the lessee-appellee after the
execution of the May 1997 contract of lease. The inevitable
implication is that the lessor intended not to avail of the
option granted him by law to shift the 10% VAT upon the
lessee-appellee. . . . . 19
In short, petitioners are estopped from shifting to respondent the burden of

paying the VAT.
Petitioners' reliance on the sixth condition of the contract is, likewise, unavailing.
This provision clearly states that respondent can only be held liable for new taxes
imposed after the effectivity of the contract of lease, that is, after May 1997, and
only if they pertain to the lot and the building where the leased premises are
located. Considering that RA 7716 took effect in 1994, the VAT cannot be
considered as a "new tax" in May 1997, as to fall within the coverage of the sixth
stipulation.
Neither can petitioners legitimately demand rental adjustment because of

extraordinary inflation or devaluation.
Petitioners contend that Article 1250 of the Civil Code does not apply to this case
because the contract stipulation speaks of extraordinary inflation or devaluation
while the Code speaks of extraordinary inflation or deflation. They insist that the
doctrine pronounced in Del Rosario v. The Shell Company, Phils. Limited 20 should
apply.
Essential to contract construction is the ascertainment of the intention of the
contracting parties, and such determination must take into account the
contemporaneous and subsequent acts of the parties. This intention, once
ascertained, is deemed an integral part of the contract. 21
While, indeed, condition No. 7 of the contract speaks of "extraordinary inflation

or devaluation" as compared to Article 1250's "extraordinary inflation or
deflation," we find that when the parties used the term "devaluation," they really
did not intend to depart from Article 1250 of the Civil Code. Condition No. 7 of
the contract should, thus, be read in harmony with the Civil Code provision.
That this is the intention of the parties is evident from petitioners' letter 22 dated
January 26, 1998, where, in demanding rental adjustment ostensibly based on
condition No. 7, petitioners made explicit reference to Article 1250 of the Civil
Code, even quoting the law verbatim. Thus, the application of Del Rosario is not
warranted. Rather, jurisprudential rules on the application of Article 1250 should
be considered.
Article 1250 of the Civil Code states:
In case an extraordinary inflation or deflation of the currency

stipulated should supervene, the value of the currency at the
time of the establishment of the obligation shall be the basis
of payment, unless there is an agreement to the contrary.
Inflation has been defined as the sharp increase of money or credit, or both,
without a corresponding increase in business transaction. There is inflation when
there is an increase in the volume of money and credit relative to available
goods, resulting in a substantial and continuing rise in the general price level. 23
In a number of cases, this Court had provided a discourse on what constitutes
extraordinary inflation, thus:
[E]xtraordinary inflation exists when there is a decrease or

increase in the purchasing power of the Philippine currency
which is unusual or beyond the common fluctuation in the
value of said currency, and such increase or decrease could
not have been reasonably foreseen or was manifestly beyond
the contemplation of the parties at the time of the
establishment of the obligation. 24
The factual circumstances obtaining in the present case do not make out a case of
extraordinary inflation or devaluation as would justify the application of Article
1250 of the Civil Code. We would like to stress that the erosion of the value of the
Philippine peso in the past three or four decades, starting in the mid-sixties, is
characteristic of most currencies. And while the Court may take judicial notice of
the decline in the purchasing power of the Philippine currency in that span of
time, such downward trend of the peso cannot be considered as the
extraordinary phenomenon contemplated by Article 1250 of the Civil Code.
Furthermore, absent an official pronouncement or declaration by competent
authorities of the existence of extraordinary inflation during a given period, the
effects of extraordinary inflation are not to be applied. 25
WHEREFORE, premises considered, the petition is DENIED. The Decision of the

Court of Appeals in CA-G.R. CV No. 67784, dated September 3, 2001, and its
Resolution dated November 19, 2001, are AFFIRMED.
SO ORDERED.
||| (Almeda v. Bathala Marketing Industries, Inc., G.R. No. 150806, January 28, 2008)
THIRD DIVISION
[G.R. No. 193494. March 12, 2014.]
LUI ENTERPRISES, INC., petitioner, vs. ZUELLIG

PHARMA CORPORATION and the PHILIPPINE BANK
OF COMMUNICATIONS, respondents.
DECISION
LEONEN, J p:
There should be no inexplicable delay in the filing of a motion to set aside order
of default. Even when a motion is filed within the required period, excusable
negligence must be properly alleged and proven.
This is a petition for review on certiorari of the Court of Appeals' decision 1 dated
May 24, 2010 and resolution 2 dated August 13, 2010 in CA-G.R. CV No. 88023.
The Court of Appeals affirmed in toto the Regional Trial Court of Makati's
decision 3 dated July 4, 2006.
The facts as established from the pleadings of the parties are as follows:
On March 9, 1995, Lui Enterprises, Inc. and Zuellig Pharma Corporation entered
into a 10-year contract of lease 4 over a parcel of land located in Barrio Tigatto,
Buhangin, Davao City. The parcel of land was covered by Transfer Certificate of
Title No. T-166476 and was registered under Eli L. Lui. 5
On January 10, 2003, Zuellig Pharma received a letter 6 from the Philippine Bank
of Communications. Claiming to be the new owner of the leased property, the
bank asked Zuellig Pharma to pay rent directly to it. Attached to the letter was a
copy of Transfer Certificate of Title No. 336962 under the name of the Philippine
Bank of Communications. 7 Transfer Certificate of Title No. 336962 was derived
from Transfer Certificate of Title No. T-166476. 8
Zuellig Pharma promptly informed Lui Enterprises of the Philippine Bank of

Communications' claim. On January 28, 2003, Lui Enterprises wrote to Zuellig
Pharma and insisted on its right to collect the leased property's rent. 9
Due to the conflicting claims of Lui Enterprises and the Philippine Bank of
Communications over the rental payments, Zuellig Pharma filed a complaint 10
for interpleader with the Regional Trial Court of Makati. In its complaint, Zuellig
Pharma alleged that it already consigned in court P604,024.35 as rental
payments. Zuellig Pharma prayed that it be allowed to consign in court its
succeeding monthly rental payments and that Lui Enterprises and the Philippine
Bank of Communications be ordered to litigate their conflicting claims. 11
The Philippine Bank of Communications filed its answer 12 to the complaint. On

the other hand, Lui Enterprises filed a motion to dismiss 13 on the ground that
Zuellig Pharma's alleged representative did not have authority to file the
complaint for interpleader on behalf of the corporation. Under the secretary's
certificate 14 dated May 6, 2003 attached to the complaint, Atty. Ana L.A. Peralta
was only authorized to "initiate and represent [Zuellig Pharma] in the civil
proceedings for consignation of rental payments to be filed against Lui
Enterprises, Inc. and/or [the Philippine Bank of Communications]." 15
According to Lui Enterprises, an earlier filed nullification of deed of dation in

payment case pending with the Regional Trial Court of Davao barred the filing
of the interpleader case. 16 Lui Enterprises filed this nullification case against the
Philippine Bank of Communications with respect to several properties it
dationed to the bank in payment of its obligations. The property leased by
Zuellig Pharma was among those allegedly dationed to the Philippine Bank of
Communications. 17 EHASaD
In the nullification of deed of dation in payment case, Lui Enterprises raised the
issue of which corporation had the better right over the rental payments. 18 Lui
Enterprises argued that the same issue was involved in the interpleader case. To
avoid possible conflicting decisions of the Davao trial court and the Makati trial
court on the same issue, Lui Enterprises argued that the subsequently filed
interpleader case be dismissed.
To support its argument, Lui Enterprises cited a writ of preliminary injunction 19
dated July 2, 2003 issued by the Regional Trial Court of Davao, ordering Lui
Enterprises and the Philippine Bank of Communications "[to maintain] status
quo" 20 with respect to the rent. By virtue of the writ of preliminary injunction,
Lui Enterprises argued that it should continue collecting the rental payments
from its lessees until the nullification of deed of dation in payment case was
resolved. The writ of preliminary injunction dated July 2, 2003 reads:
WHEREAS, on June 30, 2003, the Court issued an Order, a

portion of which is quoted:
WHEREFORE, PREMISES CONSIDERED, let a

Writ of Preliminary Injunction issue, restraining
and enjoining [the Philippine Bank of
Communications], its agents or [representative], the
Office of the Clerk of Court-Sheriff and all persons
acting on their behalf, from conducting auction sale
on the properties of [Lui Enterprises] in EJF-REM
Case No. 6272-03 scheduled on July 3, 2003 at 10:00
a.m. at the Hall of Justice, Ecoland, Davao City,
until the final termination of the case, upon plaintiff
[sic] filing of a bond in the amount of P1,000,000.00
to answer for damages that the enjoined parties
may sustain by reason of the injunction if the Court
should finally decide that applicant is not entitled
thereto.
WHEREAS, that plaintiff posted a bond of P1,000,000.00

duly approved by this Court.
IT IS HEREBY ORDERED by the undersigned Judge that,

until further orders, [the Philippine Bank of
Communications] and all [its] attorneys, representatives,
agents and any other persons assisting [the bank], are
directed to restrain from conducting auction sale on the
Properties of [Lui Enterprises] in EJF-REM Case No. 6272-03
scheduled on July 3, 2003 at 10:00 a.m. at the Hall of Justice,
Ecoland, Davao City, until the final termination of the case.
21
Zuellig Pharma filed its opposition 22 to the motion to dismiss. It argued that the
motion to dismiss should be denied for having been filed late. Under Rule 16,
Section 1 of the 1997 Rules of Civil Procedure, a motion to dismiss should be filed
within the required time given to file an answer to the complaint, which is 15
days from service of summons on the defendant. 23 Summons was served on Lui
Enterprises on July 4, 2003. It had until July 19, 2003 to file a motion to dismiss,
but Lui Enterprises filed the motion only on July 23, 2003. 24
As to Lui Enterprises' claim that the interpleader case was filed without
authority, Zuellig Pharma argued that an action interpleader "is a necessary
consequence of the action for consignation." 25 Zuellig Pharma consigned its
rental payments because of "the clearly conflicting claims of [Lui Enterprises]
and [the Philippine Bank of Communications]." 26 Since Atty. Ana L.A. Peralta
was authorized to file a consignation case, this authority necessarily included an
authority to file the interpleader case.
Nevertheless, Zuellig Pharma filed in court the secretary's certificate dated

August 28, 2003, 27 which expressly stated that Atty. Ana L.A. Peralta was
authorized to file a consignation and interpleader case on behalf of Zuellig
Pharma. 28
With respect to the nullification of deed of dation in payment case, Zuellig

Pharma argued that its pendency did not bar the filing of the interpleader case. It
was not a party to the nullification case. 29
As to the writ of preliminary injunction issued by the Regional Trial Court of

Davao, Zuellig Pharma argued that the writ only pertained to properties owned
by Lui Enterprises. Under the writ of preliminary injunction, the Regional Trial
Court of Davao enjoined the July 3, 2003 auction sale of Lui Enterprises'
properties, the proceeds of which were supposed to satisfy its obligations to the
Philippine Bank of Communications. As early as April 21, 2001, however, the
Philippine Bank of Communications already owned the leased property as
evidenced by Transfer Certificate of Title No. 336962. Thus, the writ of
preliminary injunction did not apply to the leased property. 30
Considering that Lui Enterprises filed its motion to dismiss beyond the 15-day
period to file an answer, Zuellig Pharma moved that Lui Enterprises be declared
in default. 31
In its compliance 32 dated September 15, 2003, the Philippine Bank

of Communications "[joined Zuellig Pharma] in moving to declare [Lui
Enterprises] in default, and in [moving for] the denial of [Lui Enterprises']
motion to dismiss." 33
The Regional Trial Court of Makati found that Lui Enterprises failed to file its
motion to dismiss within the reglementary period. Thus, in its order 34 dated
October 6, 2003, the trial court denied Lui Enterprises' motion to dismiss and
declared it in default. 35
Lui Enterprises did not move for the reconsideration of the order dated October
6, 2003. Thus, the Makati trial court heard the interpleader case without Lui
Enterprises' participation. DTESIA
Despite having been declared in default, Lui Enterprises filed the manifestation
with prayer 36 dated April 15, 2004. It manifested that the Regional Trial Court of
Davao allegedly issued the order 37 dated April 1, 2004, ordering all of Lui
Enterprises' lessees to "observe status quo with regard to the rental payments" 38
and continue remitting their rental payments to Lui Enterprises while the
nullification of deed of dation in payment case was being resolved. The order
dated April 1, 2004 of the Regional Trial Court of Davao reads:
ORDER
Posed for Resolution is the Motion for Amendment of Order

filed by [Lui Enterprises] on September 23, 2003 seeking for
the preservation of status quo on the payment/remittance of
rentals to [it] and the disposal/construction of the properties
subject matter of this case.
xxx xxx xxx
As elsewhere stated, [the Philippine Bank of

Communications] did not oppose the instant motion up to
the present. In fact, during the hearing held on March 15,
2004, [the bank's] counsel manifested in open court that
except for the rentals due from [Zuellig Pharma] which are
the subject of a consignation suit before a Makati Court, the
other rental payments are continuously received by [Lui
Enterprises].
There being no objection from [the Philippine Bank of

Communications], and in order to protect the right of [Lui
Enterprises] respecting the subject of the action during the
pendency of this case, this Court, in the exercise of its
discretion hereby grants the motion.
Accordingly, consistent with the order of this Court dated

June 30, 2003, the parties are hereby directed to further
observe status quo with regard to the rental payments owing
or due from the lessees of the properties subject of the first
set of deeds of dacion and that the defendants are enjoined
from disposing of the properties located at Green Heights
Village, Davao City until the case is finally resolved.
With the order dated April 1, 2004 issued by the Regional Trial Court of Davao as
basis, Lui Enterprises argued that Zuellig Pharma must remit its rental payments
to it and prayed that the interpleader case be dismissed.
The Regional Trial Court of Makati only noted the manifestation with prayer
dated April 15, 2004. 39
It was only on October 21, 2004, or one year after the issuance of the order of
default, that Lui Enterprises filed a motion to set aside order of default 40 in the
Makati trial court on the ground of excusable negligence. Lui Enterprises argued
that its failure to file a motion to dismiss on time "was caused by the negligence
of [Lui Enterprises'] former counsel." 41 This negligence was allegedly excusable
because "[Lui Enterprises] was prejudiced and prevented from fairly presenting
[its] case." 42 TSAHIa
For its allegedly meritorious defense, Lui Enterprises argued that the earlier filed
interpleader case. The two actions allegedly involved the same parties and the
same issue of which corporation had the better right over the rental payments.
To prevent "the possibility of two courts . . . rendering conflicting rulings [on the
same issue]," 43 Lui Enterprises argued that the subsequently filed interpleader
case be dismissed.
Zuellig Pharma filed its opposition 44 to the motion to set aside order of default.
It argued that a counsel's failure to file a timely answer was inexcusable
negligence which bound his client.
Further, Zuellig Pharma argued that the pending case for nullification of deed of
dation in payment "[did] not preclude [Zuellig Pharma] from seeking the relief
prayed for in the [interpleader case]." 45
While the motion to set aside order of default was still pending for resolution,
Lui Enterprises filed the manifestation and motion to dismiss 46 dated April 21,
2005 in the Makati trial court. It manifested that the Davao trial court issued
another order 47 dated April 18, 2005 in the nullification of deed of dation in
payment case. In this order, the Davao trial court directed the Philippine Bank of
Communications to inform Zuellig Pharma to pay rent to Lui Enterprises while
the Davao trial court's order dated April 1, 2004 was subsisting. The order dated
April 1, 2005 of the Davao trial court reads:
ORDER
Plaintiffs move for execution or implementation of the Order

dated September 14, 2004. In substance, [Lui Enterprises]
seek[s] to compel the remittance in their favor of the rentals
from [Zuellig Pharma], one of the lessees alluded to in the
September 14, 2004 Order whose rental payments "must be
remitted to and collected by [Lui Enterprises]." [The
Philippine Bank of Communications] did not submit any
opposition.
It appears from the records that sometime in February 2003,

after being threatened with a lawsuit coming from [the
Philippine Bank of Communications], [Zuellig Pharma]
stopped remitting its rentals to [Lui Enterprises] and instead,
has reportedly deposited the monthly rentals before a
Makati court for consignation. SEHDIC
As aptly raised by the plaintiffs, a possible impasse may

insist should the Makati Court's ruling be contrary to or in
conflict with the status quo order issued by this Court. To
preclude this spectacle, Zuellig Pharma should accordingly
be advised with the import of the Order dated September 14,
2004, the salient portion of which is quoted:
. . . prior to the institution of the instant case and by

agreement of the parties, plaintiffs were given as
they did exercise the right to collect, receive and
enjoy rental payments . . . .
Since the April 1, 2004 status quo order was a

necessary implement of the writ of preliminary
injunction issued on June 30, 2003, it follows that
plaintiff's right to collect and receive rental
payments which he enjoyed prior to the filing of
this case, must be respected and protected and
maintained until the case is resolved. As such, all
rentals due from the above-enumerated lessees
must be remitted to and collected by the Plaintiffs.
Status quo simply means the last actual peaceable

uncontested status that preceded the actual
controversy. (Searth Commodities Corp. v. Court of
Appeals, 207 SCRA 622).
As such, the [Philippine Bank of Communications] [is]

hereby directed to forthwith inform [Zuellig Pharma] of the
April 1, 2004 status quo order and the succeeding September
14, 2004 Order, and consequently, for the said lessee to remit
all rentals due from February 23, 2003 and onwards to [Lui
Enterprises] in the meanwhile that the status quo order is
subsisting.
In its manifestation and motion to dismiss, Lui Enterprises reiterated its prayer
for the dismissal of the interpleader case to prevent "the possibility of [the
Regional Trial Court, Branch 143, Makati City] and [the Regional Trial Court,
Branch 16, Davao City] rendering conflicting rulings [on the same issue of which
corporation has the better right to the rental payments]." 48
Without resolving the motion to set aside order of default, the Makati trial court
denied the manifestation with motion to dismiss dated April 21, 2005 on the
ground that Lui Enterprises already lost its standing in court. 49
Lui Enterprises did not file any motion for reconsideration of the denial of the
manifestation and motion to dismiss dated April 21, 2005.
In its decision 50 dated July 4, 2006, the Regional Trial Court of Makati ruled that
Lui Enterprises "[was] barred from any claim in respect of the [rental payments]"
51 since it was declared in default. Thus, according to the trial court, there was
no issue as to which corporation had the better right over the rental payments. 52
The trial court awarded the total consigned amount of P6,681,327.30 to the
Philippine Bank of Communications and ordered Lui Enterprises to pay Zuellig
Pharma P50,000.00 in attorney's fees. 53
Lui Enterprises appealed to the Court of Appeals. 54
The Court of Appeals found Lui Enterprises' appellant's brief insufficient. Under
Rule 44, Section 13 of the 1997 Rules of Civil Procedure, an appellant's brief must
contain a subject index, page references to the record, table of cases, textbooks
and statutes cited, and the statement of issues, among others. However, Lui
Enterprises' appellant's brief did not contain these requirements. 55
As to the denial of Lui Enterprises' motion to dismiss, the Court of Appeals

sustained the trial court. The Court of Appeals found that Lui Enterprises filed
its motion to dismiss four days late. 56
With respect to Lui Enterprises' motion to set aside order of default, the Court of
Appeals found that Lui Enterprises failed to show the excusable negligence that
prevented it from filing its motion to dismiss on time. On its allegedly
meritorious defense, the Court of Appeals ruled that the nullification of deed of
dation in payment case did not bar the filing of the interpleader case, with
Zuellig Pharma not being a party to the nullification case. 57
On the award of attorney's fees, the Court of Appeals sustained the trial court
since "Zuellig Pharma . . . was constrained to file the action for interpleader with
consignation in order to protect its interests . . . ." 58
Thus, in its decision 59 promulgated on May 24, 2010, the Court of Appeals
dismissed Lui Enterprises' appeal and affirmed in toto the Regional Trial Court of
Makati's decision.
Lui Enterprises filed a motion for reconsideration. 60
The Court of Appeals denied Lui Enterprises' motion for reconsideration in its
resolution promulgated on August 13, 2010. 61 Hence, this petition.
In this petition for review on certiorari, 62 Lui Enterprises argued that the Court
of Appeals applied "the rules of procedure strictly" 63 and dismissed its appeal
on technicalities. According to Lui Enterprises, the Court of Appeals should have
taken a liberal stance and allowed its appeal despite the lack of subject index,
page references to the record, table of cases, textbooks and statutes cited, and the
statement of issues in its appellant's brief. 64 IDcAHT
Lui Enterprises also claimed that the trial court should have set aside the order of
default since its failure to file a motion to dismiss on time was due to excusable
negligence. 65
For its allegedly meritorious defense, Lui Enterprises argued that the pending
interpleader case. The nullification of deed of dation in payment case and the
interpleader case allegedly involved the same issue of which corporation had the
better right to the rent. To avoid conflicting rulings on the same issue, Lui
Enterprises argued that the subsequently filed interpleader case be dismissed. 66
No attorney's fees should have been awarded to Zuellig Pharma as argued by

Lui Enterprises. Zuellig Pharma filed the interpleader case despite its knowledge
of the nullification of deed of dation in payment case filed in the Davao trial
court where the same issue of which corporation had the better right over the
rental payments was being litigated. Thus, Zuellig Pharma filed the interpleader
case in bad faith for which it was not entitled to attorney's fees. 67
The Philippine Bank of Communications filed its comment 68 on the petition for
review on certiorari. It argued that Lui Enterprises failed to raise any error of law
and prayed that we affirm in toto the Court of Appeals' decision.
For Zuellig Pharma, it manifested that it was adopting the Philippine Bank of
Communications' arguments in its comment. 69
The issues for our resolution are:
I.Whether the Court of Appeals erred in dismissing Lui

Enterprises' appeal for lack of subject index, page
references to the record, table of cases, textbooks
and statutes cited, and the statement of issues in
Lui Enterprises' appellant's brief;
II.Whether the Regional Trial Court of Makati erred in

denying Lui Enterprises' motion to set aside order
of default;
III.Whether the annulment of deed of dation in payment

pending in the Regional Trial Court of Davao
barred the subsequent filing of the interpleader case
in the Regional Trial Court of Makati; and
IV.Whether Zuellig Pharma was entitled to attorney's fees.
Lui Enterprises' petition for review on certiorari is without merit. However, we

delete the award of attorney's fees.
I
Lui Enterprises did not comply with the rules on the contents of the
appellant's brief
Under Rule 50, Section 1, paragraph (f) of the 1997 Rules of Civil Procedure, the
Court of Appeals may, on its own motion or that of the appellee, dismiss an
appeal should the appellant's brief lack specific requirements under Rule 44,
Section 13, paragraphs (a), (c), (d), and (f):
Section 1.Grounds for dismissal of appeal. An appeal may be

xxx xxx xxx
(f)Absence of specific assignment of errors in the appellant's

brief, or of page references to the record as required in
Section 13, paragraphs (a), (c), (d), and (f) of Rule 44.
These requirements are the subject index of the matter in brief, page references to
the record, and a table of cases alphabetically arranged and with textbooks and
statutes cited:
Section 13.Contents of the appellant's brief. The appellant's

brief shall contain, in the order herein indicated, the
following:
(a)A subject index of the matter in brief with a digest of the

arguments and page references, and a table of cases
alphabetically arranged, textbooks and statutes cited with
references to the pages where they are cited;
xxx xxx xxx

(c)Under the heading "Statement of the Case," a clear and
concise statement of the nature of the action, a summary of
the proceedings, the appealed rulings and orders of the
court, the nature of the controversy, with page references to
the record;
(d)Under the heading "Statement of Facts,'' a clear and

concise statement in a narrative form of the facts admitted
by both parties and of those in controversy, together with
the substance of the proof relating thereto in sufficient detail
to make it clearly intelligible, with page references to the
record; AIDTSE
xxx xxx xxx
(f)Under the heading "Argument," the appellant's arguments

on each assignment of error with page references to the
record. The authorities relied upon shall be cited by the page
of the report at which the case begins and the page of the
report on which the citation is found;
xxx xxx xxx
record, and table of cases, textbooks and statutes cited. Under Rule 50, Section 1
of the 1997 Rules of Civil Procedure, the Court of Appeals correctly dismissed
Lui Enterprises' appeal.
Except for cases provided in the Constitution, 70 appeal is a "purely statutory

right." 71 The right to appeal "must be exercised in the manner prescribed by
law" 72 and requires strict compliance with the Rules of Court on appeals. 73
Otherwise, the appeal shall be dismissed, and its dismissal shall not be a
deprivation of due process of law.
In Mendoza v. United Coconut Planters Bank, Inc., 74 this court sustained the Court
of Appeals' dismissal of Mendoza's appeal. Mendoza's appellant's brief lacked a
subject index, assignment of errors, and page references to the record. In De Liano
v. Court of Appeals, 75 this court also sustained the dismissal of De Liano's appeal.
De Liano's appellant's brief lacked a subject index, a table of cases and
authorities, and page references to the record.
There are exceptions to this rule. In Philippine Coconut Authority v. Corona

International, Inc., 76 the Philippine Coconut Authority's appellant's brief lacked a
clear and concise statement of the nature of the action, a summary of the
proceedings, the nature of the judgment, and page references to the record.
However, this court found that the Philippine Coconut Authority substantially
complied with the Rules. Its appellant's brief "apprise[d] [the Court of Appeals]
of the essential facts and nature of the case as well as the issues raised and the
laws necessary [to dispose of the case]." 77 This court "[deviated] from a rigid
enforcement of the rules" 78 and ordered the Court of Appeals to resolve the
Philippine Coconut Authority's appeal.
In Go v. Chaves, 79 Go's 17-page appellant's brief lacked a subject index.

However, Go subsequently filed a subject index. This court excused Go's
procedural lapse since the appellant's brief "[consisted] only of 17 pages which
[the Court of Appeals] may easily peruse to apprise it of [the case] and of the
relief sought." 80 This court ordered the Court of Appeals to resolve Go's appeal
"in the interest of justice." 81
In Philippine Coconut Authority and Go, the appellants substantially complied with
the rules on the contents of the appellant's brief. Thus, this court excused the
appellants' procedural lapses.
In this case, Lui Enterprises did not substantially comply with the rules on the
contents of the appellant's brief. It admitted that its appellant's brief lacked the
required subject index, page references to the record, and table of cases,
textbooks, and statutes cited. However, it did not even correct its admitted
"technical omissions" 82 by filing an amended appellant's brief with the required
contents. 83 Thus, this case does not allow a relaxation of the rules. The Court of
Appeals did not err in dismissing Lui Enterprises' appeal.
Rules on appeal "are designed for the proper and prompt disposition of cases
before the Court of Appeals." 84 With respect to the appellant's brief, its required
contents are designed "to minimize the [Court of Appeals'] labor in [examining]
the record upon which the appeal is heard and determined." 85
The subject index serves as the brief's table of contents. 86 Instead of "[thumbing]
through the [appellant's brief]" 87 every time the Court of Appeals Justice
encounters an argument or citation, the Justice deciding the case only has to refer
to the subject index for the argument or citation he or she needs. 88 This saves
the Court of Appeals time in reviewing the appealed case. Efficiency allows the
justices of the appellate court to substantially attend to this case as well as other
cases.
Page references to the record guarantee that the facts stated in the appellant's
brief are supported by the record. 89 A statement of fact without a page reference
to the record creates the presumption that it is unsupported by the record and,
thus, "may be stricken or disregarded altogether." 90
As for the table of cases, textbooks, and statutes cited, this is required so that the
Court of Appeals can easily verify the authorities cited "for accuracy and
aptness." 91
record, and a table of cases, textbooks, and statutes cited. These requirements
"were designed to assist the appellate court in the accomplishment of its tasks,
and, overall, to enhance the orderly administration of justice." 92 This court will
not disregard rules on appeal "in the guise of liberal construction." 93 For this
court to liberally construe the Rules, the party must substantially comply with
the Rules and correct its procedural lapses. 94 Lui Enterprises failed to remedy
these errors. cSIACD
All told, the Court of Appeals did not err in dismissing Lui Enterprises' appeal. It
failed to comply with Rule 44, Section 13, paragraphs (a), (c), (d), and (f) of the
1997 Rules of Civil Procedure on the required contents of the appellant's brief.
II
Lui Enterprises failed to show that its failure to answer the complaint
within the required period was due to excusable negligence
When a defendant is served with summons and a copy of the complaint, he or
she is required to answer within 15 days from the day he or she was served with
summons. 95 The defendant may also move to dismiss the complaint "[w]ithin
the time for but before filing the answer." 96
Fifteen days is sufficient time for a defendant to answer with good defenses
against the plaintiff's allegations in the complaint. Thus, a defendant who fails to
answer within 15 days from service of summons either presents no defenses
against the plaintiff's allegations in the complaint or was prevented from filing
his or her answer within the required period due to fraud, accident, mistake or
excusable negligence. 97
In either case, the court may declare the defendant in default on plaintiff's
motion and notice to defendant. 98 The court shall then try the case until
judgment without defendant's participation 99 and grant the plaintiff such relief
as his or her complaint may warrant. 100
A defendant declared in default loses his or her standing in court. 101 He or she
is "deprived of the right to take part in the trial and forfeits his [or her] rights as a
party litigant," 102 has no right "to present evidence [supporting his or her]
allegations," 103 and has no right to "control the proceedings [or] cross-examine
witnesses." 104 Moreover, he or she "has no right to expect that [the court] would
[act] upon [his or her pleadings]" 105 or that he or she "may [oppose] motions
filed against him [or her]." 106
However, the defendant declared in default "does not [waive] all of [his or her]
rights." 107 He or she still has the right to "receive notice of subsequent
proceedings." 108 Also, the plaintiff must still present evidence supporting his or
her allegations "despite the default of [the defendant]." 109
Default, therefore, is not meant to punish the defendant but to enforce the
prompt filing of the answer to the complaint. For a defendant without good
defenses, default saves him or her "the embarrassment of openly appearing to
defend the indefensible." 110 As this court explained in Gochangco v. The Court of
First Instance of Negros Occidental, Branch IV: 111
It does make sense for a defendant without defenses, and

who accepts the correctness of the specific relief prayed for
in the complaint, to forego the filing of the answer or any
sort of intervention in the action at all. For even if he did
intervene, the result would be the same: since he would be
unable to establish any good defense, having none in fact,
judgment would inevitably go against him. And this
would be an acceptable result, if not being in his power to
alter or prevent it, provided that the judgment did not go
beyond or differ from the specific relief stated in the
complaint. . . . . 112 (Emphasis in the original)
On the other hand, for a defendant with good defenses, "it would be unnatural
for him [or her] not to set . . . up [his or her defenses] properly and timely." 113
Thus, "it must be presumed that some insuperable cause prevented him [or her]
from [answering the complaint]." 114 In which case, his or her proper remedy
depends on when he or she discovered the default and whether the default
judgment was already rendered by the trial court.
After notice of the declaration of default but before the court renders the default
judgment, the defendant may file, under oath, a motion to set aside order of
default. The defendant must properly show that his or her failure to answer was
due to fraud, accident, 115 mistake 116 or excusable negligence. 117 The
defendant must also have a meritorious defense. Rule 9, Section 3, paragraph (b)
of the 1997 Rules of Civil Procedure provides:
Section 3.Default; declaration of. . . .
(b)Relief from order of default. A party declared in default

may at any time after notice thereof and before judgment file
a motion under oath to set aside the order of default upon
proper showing that his failure to answer was due to fraud,
accident, mistake or excusable negligence and that he has a
meritorious defense. In such case, the order of default may
be set aside on such terms and conditions as the judge may
impose in the interest of justice.
If the defendant discovers his or her default after judgment but prior to the
judgment becoming final and executory, he or she may file a motion for new trial
under Rule 37, Section 1, paragraph (a) of the 1997 Rules of Civil Procedure. 118
If he or she discovers his or her default after the judgment has become final and
executory, a petition for relief from judgment under Rule 38, Section 1 of the 1997
Rules of Civil Procedure may be filed. 119
Appeal is also available to the defendant declared in default. He or she may

appeal the judgment for being contrary to the evidence or to the law under Rule
41, Section 2 of the 1997 Rules of Civil Procedure. 120 He or she may do so even
if he or she did not file a petition to set aside order of default. 121
A petition for certiorari may also be filed if the trial court declared the defendant
in default with grave abuse of discretion. 122
The remedies of the motion to set aside order of default, motion for new trial,
and petition for relief from judgment are mutually exclusive, not alternative or
cumulative. This is to compel defendants to remedy their default at the earliest
possible opportunity. Depending on when the default was discovered and
whether a default judgment was already rendered, a defendant declared in
default may avail of only one of the three remedies.
Thus, if a defendant discovers his or her default before the trial court renders
judgment, he or she shall file a motion to set aside order of default. If this motion
to set aside order of default is denied, the defendant declared in default cannot
await the rendition of judgment, and he or she cannot file a motion for new trial
before the judgment becomes final and executory, or a petition for relief from
judgment after the judgment becomes final and executory.
Also, the remedies against default become narrower and narrower as the trial
nears judgment. The defendant enjoys the most liberality from this court with a
motion to set aside order of default, as he or she has no default judgment to
contend with, and he or she has the whole period before judgment to remedy his
or her default. TcDIaA
With a motion for new trial, the defendant must file the motion within the period
for taking an appeal 123 or within 15 days from notice of the default judgment.
Although a default judgment has already been rendered, the filing of the motion
for new trial tolls the reglementary period of appeal, and the default judgment
cannot be executed against the defendant.
A petition for relief from judgment is filed after the default judgment has become
final and executory. Thus, the filing of the petition for relief from judgment does
not stay the execution of the default judgment unless a writ of preliminary
injunction is issued pending the petition's resolution. 124
Upon the grant of a motion to set aside order of default, motion for new trial, or a
petition for relief from judgment, the defendant is given the chance to present his
or her evidence against that of plaintiff's. With an appeal, however, the
defendant has no right to present evidence on his or her behalf and can only
appeal the judgment for being contrary to plaintiff's evidence or the law.
Similar to an appeal, a petition for certiorari does not allow the defendant to
present evidence on his or her behalf. The defendant can only argue that the trial
court committed grave abuse of discretion in declaring him or her in default.
Thus, should a defendant prefer to present evidence on his or her behalf, he or

she must file either a motion to set aside order of default, motion for new trial, or
a petition for relief from judgment.
In this case, Lui Enterprises had discovered its default before the Regional Trial
Court of Makati rendered judgment. Thus, it timely filed a motion to set aside
order of default, raising the ground of excusable negligence.
Excusable negligence is "one which ordinary diligence and prudence could not
have guarded against." 125 The circumstances should be properly alleged and
proved. In this case, we find that Lui Enterprises' failure to answer within the
required period is inexcusable.
Lui Enterprises' counsel filed its motion to dismiss four days late. It did not
immediately take steps to remedy its default and took one year from discovery of
default to file a motion to set aside order of default. In its motion to set aside
order of default, Lui Enterprises only "conveniently blamed its . . . counsel [for
the late filing of the answer]" 126 without offering any excuse for the late filing.
This is not excusable negligence under Rule 9, Section 3, paragraph (b) 127 of the
1997 Rules of Civil Procedure. Thus, the Regional Trial Court of Makati did not
err in refusing to set aside the order of default.
Lui Enterprises argued that the Regional Trial Court of Makati should have been
liberal in setting aside its order of default. After it had been declared in default,
Lui Enterprises filed several manifestations informing the Makati trial court of
the earlier filed nullification of deed of dation in payment case which barred the
filing of the interpleader case. Lui Enterprises' president, Eli L. Lui, and counsel
even flew in from Davao to Makati to "formally [manifest that] a [similar] action
between [Lui Enterprises] and [the Philippine Bank of Communications]" 128
was already pending in the Regional Trial Court of Davao. However, the trial
court did not recognize Lui Enterprises' standing in court.
The general rule is that courts should proceed with deciding cases on the merits
and set aside orders of default as default judgments are "frowned upon." 129 As
much as possible, cases should be decided with both parties "given every chance
to fight their case fairly and in the open, without resort to technicality." 130
However, the basic requirements of Rule 9, Section 3, paragraph (b) of the 1997
Rules of Civil Procedure must first be complied with. 131 The defendant's motion
to set aside order of default must satisfy three conditions. First is the time
element. The defendant must challenge the default order before judgment.
Second, the defendant must have been prevented from filing his answer due to
fraud, accident, mistake or excusable negligence. Third, he must have a
meritorious defense. As this court held in SSS v. Hon. Chaves: 132
Procedural rules are not to be disregarded or dismissed

simply because their non-observance may have resulted in
prejudice to a party's substantive rights. Like all rules[,] they
are to be followed, except only when for the most persuasive
of reasons they may be relaxed to relieve a litigant of an
injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure
prescribed. . . . . 133
As discussed, Lui Enterprises never explained why its counsel failed to file the
motion to dismiss on time. It just argued that courts should be liberal in setting
aside orders of default. Even assuming that it had a meritorious defense and that
its representative and counsel had to fly in from Davao to Makati to personally
appear and manifest in court its meritorious defense, Lui Enterprises must first
show that its failure to answer was due to fraud, accident, mistake or excusable
negligence. This Lui Enterprises did not do.
Lui Enterprises argued that Zuellig Pharma filed the interpleader case to compel
Lui Enterprises and the Philippine Bank of Communications to litigate their
claims. Thus, "[d]eclaring the other claimant in default would ironically defeat
the very purpose of the suit." 134 The Regional Trial Court of Makati should not
have declared Lui Enterprises in default.
Under Rule 62, Section 1 of the 1997 Rules of Civil Procedure, a person may file a
special civil action for interpleader if conflicting claims are made against him or
her over a subject matter in which he or she has no interest. The action is brought
against the claimants to compel them to litigate their conflicting claims among
themselves. Rule 62, Section 1 of the 1997 Rules of Civil Procedure provides:
Section 1.When interpleader proper. Whenever conflicting

An interpleader complaint may be filed by a lessee against those who have

conflicting claims over the rent due for the property leased. 135 This remedy is
for the lessee to protect him or her from "double vexation in respect of one
liability." 136 He or she may file the interpleader case to extinguish his or her
obligation to pay rent, remove him or her from the adverse claimants' dispute,
and compel the parties with conflicting claims to litigate among themselves.
cDSAEI
In this case, Zuellig Pharma filed the interpleader case to extinguish its obligation
to pay rent. Its purpose in filing the interpleader case "was not defeated" 137
when the Makati trial court declared Lui Enterprises in default.
At any rate, an adverse claimant in an interpleader case may be declared in

default. Under Rule 62, Section 5 of the 1997 Rules of Civil Procedure, a claimant
who fails to answer within the required period may, on motion, be declared in
default. The consequence of the default is that the court may "render judgment
barring [the defaulted claimant] from any claim in respect to the subject matter."
138 The Rules would not have allowed claimants in interpleader cases to be
declared in default if it would "ironically defeat the very purpose of the suit." 139
The Regional Trial Court of Makati declared Lui Enterprises in default when it
failed to answer the complaint within the required period. Lui Enterprises filed a
motion to set aside order of default without an acceptable excuse why its counsel
failed to answer the complaint. It failed to prove the excusable negligence. Thus,
the Makati trial court did not err in refusing to set aside the order of default.
III
The nullification of deed in dation in payment case did not bar the filing of
the interpleader case. Litis pendentia is not present in this case.
Lui Enterprises allegedly filed for nullification of deed of dation in payment with
the Regional Trial Court of Davao. It sought to nullify the deed of dation in
payment through which the Philippine Bank of Communications acquired title
over the leased property. Lui Enterprises argued that this pending nullification
case barred the Regional Trial Court of Makati from hearing the interpleader
case. Since the interpleader case was filed subsequently to the nullification case,
the interpleader case should be dismissed.
Under Rule 16, Section 1, paragraph (e) of the 1997 Rules of Civil Procedure, a
motion to dismiss may be filed on the ground of litis pendentia:
Section 1.Grounds. Within the time for but before filing the
answer to the complaint or pleading asserting a claim, a
motion to dismiss may be made on any of the following
grounds:
xxx xxx xxx
(e)That there is another action pending between the

same parties for the same cause;
xxx xxx xxx
Litis pendentia is Latin for "a pending suit." 140 It exists when "another action is
pending between the same parties for the same cause of action . . . ." 141 The
subsequent action is "unnecessary and vexatious" 142 and is instituted to "harass
the respondent [in the subsequent action]." 143 ESTDIA
The requisites of litis pendentia are:
(1)Identity of parties or at least such as represent the same

interest in both actions;
(2)Identity of rights asserted and reliefs prayed for, the

reliefs being founded on the same facts; and
(3)The identity in the two cases should be such that the

judgment that may be rendered in one would,
regardless of which party is successful, amount to
res judicata in the other. 144
All of the requisites must be present. 145 Absent one requisite, there is no litis
pendentia. 146
In this case, there is no litis pendentia since there is no identity of parties in the
nullification of deed of dation in payment case and the interpleader case. Zuellig
Pharma is not a party to the nullification case filed in the Davao trial court.
There is also no identity of rights asserted and reliefs prayed for. Lui Enterprises
filed the first case to nullify the deed of dation in payment it executed in favor of
the Philippine Bank of Communications. Zuellig Pharma subsequently filed the
interpleader case to consign in court the rental payments and extinguish its
obligation as lessee. The interpleader case was necessary and was not instituted
to harass either Lui Enterprises or the Philippine Bank of Communications.
Thus, the pending nullification case did not bar the filing of the interpleader case.
Lui Enterprises cited Progressive Development Corporation, Inc. v. Court of Appeals

147 as authority to set aside the subsequently filed interpleader case. In this cited
case, petitioner Progressive Development Corporation, Inc. entered into a lease
contract with Westin Seafood Market, Inc. The latter failed to pay rent. Thus,
Progressive Development Corporation, Inc. repossessed the leased premises,
inventoried the movable properties inside the leased premises, and scheduled
the public sale of the inventoried properties as they agreed upon in their lease
contract.
Westin Seafood Market, Inc. filed for forcible entry with damages against
Progressive Development Corporation, Inc. It subsequently filed an action for
damages against Progressive Development Corporation for its "forcible takeover
of the leased premises." 148
This court ordered the subsequently filed action for damages dismissed as the
pending forcible entry with damages case barred the subsequently filed damages
case.
Progressive Development Corporation, Inc. does not apply in this case. The action for
forcible entry with damages and the subsequent action for damages were filed by
the same plaintiff against the same defendant. There is identity of parties in both
cases.
In this case, the nullification of deed of dation in payment case was filed by Lui
Enterprises against the Philippine Bank of Communications. The interpleader
case was filed by Zuellig Pharma against Lui Enterprises and the Philippine Bank
of Communications. A different plaintiff filed the interpleader case against Lui
Enterprises and the Philippine Bank of Communications. Thus, there is no
identity of parties, and the first requisite of litis pendentia is absent.
As discussed, Lui Enterprises filed the nullification of deed of dation in payment

to recover ownership of the leased premises. Zuellig Pharma filed the
interpleader case to extinguish its obligation to pay rent. There is no identity of
reliefs prayed for, and the second requisite of litis pendentia is absent.
Since two requisites of litis pendentia are absent, the nullification of deed of dation
in payment case did not bar the filing of the interpleader case.
Lui Enterprises alleged that the Regional Trial Court of Davao issued a writ of
preliminary injunction against the Regional Trial Court of Makati. The Regional
Trial Court of Davao allegedly enjoined the Regional Trial Court of Makati from
taking cognizance of the interpleader case. Lui Enterprises argued that the
Regional Trial Court of Makati "should have respected the orders issued by the
Regional Trial Court of Davao." 149 Lui Enterprises cited Compania General de
Tabacos de Filipinas v. Court of Appeals 150 where this court allegedly held:
. . . [T]he issuance of the said writ by the RTC of Agoo, La

Union not only seeks to enjoin Branch 9 of the RTC of
Manila from proceeding with the foreclosure case but also
has the effect of pre-empting the latter's orders. . . . . 151
Compania General de Tabacos de Filipinas is not an authority for the claim that a
court can issue a writ of preliminary injunction against a co-equal court. The
cited sentence was taken out of context. In Compania General de Tabacos de
Filipinas, this court held that the Regional Trial Court of Agoo had no power to
issue a writ of preliminary injunction against the Regional Trial Court of Manila.
152 A court cannot enjoin the proceedings of a co-equal court.
Thus, when this court said that the Regional Trial Court of Agoo's writ of
preliminary injunction "not only seeks to enjoin . . . [the Regional Trial Court of
Manila] from proceeding with the foreclosure case but also has the effect of pre-
empting the latter's orders," 153 this court followed with "[t]his we cannot
countenance." 154
At any rate, the Regional Trial Court of Davao's order dated April 18, 2005 was
not a writ of preliminary injunction. It was a mere order directing the Philippine
Bank of Communications to inform Zuellig Pharma to pay rent to Lui Enterprises
while the status quo order between Lui Enterprises and the Philippine Bank of
Communications was subsisting. The Regional Trial Court of Davao did not
enjoin the proceedings before the Regional Trial Court of Makati. The order
dated April 18, 2005 provides:
As such, [the Philippine Bank of Communications] [is]

hereby directed to forthwith inform Zuellig Pharma Corp.,
of the April 1, 2004 status quo order and the succeeding
September 14, 2004 Order, and consequently, for the said
lessee to remit all rentals due from February 23, 2003 and
onwards to plaintiff Lui Enterprises, Inc., in the meanwhile
that the status quo order is subsisting. 155
Thus, the Regional Trial Court of Davao did not enjoin the Regional Trial Court
of Makati from hearing the interpleader case.
All told, the trial court did not err in proceeding with the interpleader case. The
nullification of deed of dation in payment case pending with the Regional Trial
Court of Davao did not bar the filing of the interpleader case with the Regional
Trial Court of Makati.
The Court of Appeals erred in awarding attorney's fees

In its ordinary sense, attorney's fees "represent the reasonable compensation [a
client pays his or her lawyer] [for legal service rendered]." 156 In its
extraordinary sense, attorney's fees "[are] awarded . . . as indemnity for damages
[the losing party pays the prevailing party]." 157
The award of attorney's fees is the exception rather than the rule. 158 It is not
awarded to the prevailing party "as a matter of course." 159 Under Article 2208 of
the Civil Code, attorney's fees cannot be recovered in the absence of stipulation,
except under specific circumstances:
(1)When exemplary damages are awarded;
(2)When the defendant's act or omission has compelled the

plaintiff to litigate with third persons or to incur
expenses to protect his interest; TIADCc
(3)In criminal cases of malicious prosecution against the

plaintiff;
(4)In case of a clearly unfounded civil action or proceeding

against the plaintiff;
(5)Where the defendant acted in gross and evident bad faith

in refusing to satisfy the plaintiff's plainly valid,
just and demandable claim;
(6)In actions for legal support;
(7)In actions for the recovery of wages of household helpers,

laborers and skilled workers;
(8)In actions for indemnity under workmen's compensation

and employer's liability laws;
(9)In a separate civil action to recover civil liability arising

from a crime;
(10)When at least double judicial costs are awarded;
(11)In any other case where the court deems it just and
equitable that attorney's fees and expenses of
litigation should be recovered. 160
Even if a party is "compelled to litigate with third persons or to incur expenses to

protect his [or her] rights," 161 attorney's fees will not be awarded if no bad faith
"could be reflected in a party's persistence in a case." 162
To award attorney's fees, the court must have "factual, legal, [and] equitable
justification." 163 The court must state the award's basis in its decision. 164 These
rules are based on the policy that "no premium should be placed on the right to
litigate." 165
In this case, the Court of Appeals awarded attorney's fees as "[Zuellig Pharma]
was compelled to litigate with third persons or to incur expenses to protect [its]
interest[s]." 166 This is not a compelling reason to award attorney's fees. That
Zuellig Pharma had to file an interpleader case to consign its rental payments did
not mean that Lui Enterprises was in bad faith in insisting that rental payments
be paid to it. Thus, the Court of Appeals erred in awarding attorney's fees to
Zuellig Pharma.
All told, the Court of Appeals' award of P50,000.00 as attorney's fees must be
deleted.
WHEREFORE, in view of the foregoing, the petition for review on certiorari is

DENIED. The Court of Appeals' decision and resolution in CA-G.R. CV No.
88023 are AFFIRMED with MODIFICATION. The award of P50,000.00
attorney's fees to Zuellig Pharma Corporation is DELETED.
SO ORDERED.
Velasco, Jr., Peralta, Abad and Mendoza, JJ., concur
||| (Lui Enterprises, Inc. v. Zuellig Pharma Corp., G.R. No. 193494, March 12, 2014)
EN BANC
[UDK-14858. April 2, 2013.]
ERNESTO D. BALITE, petitioner, vs. COMMISSION ON

ELECTIONS, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court en banc issued a Resolution dated APRIL 2, 2013,
which reads as follows:
"UDK-14858 (Ernesto D. Balite vs. Commission on Elections). In accordance with

Rule 64 and other related provisions of the 1997 Rules of Civil Procedure, as
amended, governing review of judgments and final orders or resolutions of the
Commission on Elections, only petitions which are accompanied by or which
comply strictly with the requirements specified therein shall be entertained. On
the basis thereof, the Court Resolved to DISMISS the instant petition for
certiorari for non-compliance therewith, particularly for
(a)failure to completely state the material dates to show that
the petition was filed on time pursuant to Section 5,
Rule 64 in relation to Section 3 (2nd par.), Rule 46;
(b)non-submission of proof of service (e.g., a written

admission of the party served/an affidavit of the
party serving/registry receipts) of the petition on
the Commission on Elections as required by Section
5, Rule 64 and Section 13, Rule 13;
(c)failure to pay docket and other fees in violation of Section

5 (4th par.), Rule 64 and Section 3, Rule 46 in
relation to Section 2, Rule 56; and
(d)insufficiency of the petition in form as it lacks verification

and certification against forum-shopping as
required by Section 5, Rule 64 in relation to Sections
4 and 5, Rule 7.
In any event, the petition would still be dismissed for failure to sufficiently show
that any grave abuse of discretion was committed by the Commission on
Elections in rendering the challenged resolution which, on the contrary, appears
to be in accord with the facts and applicable law and jurisprudence." Perlas-
Bernabe, J., on official leave. (adv30)
||| (Balite v. COMELEC, UDK-14858, April 02, 2013)
EN BANC
[G.R. No. 205296. February 19, 2013.]
ARNOLD ADRANEDA AND DR. PRISCILLA AMPUAN,

petitioners, vs. COMMISSION ON ELECTIONS AND
ATING GURO, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court en banc issued a Resolution dated FEBRUARY 19,
2013, which reads as follows:
"G.R. No. 205296 (Arnold Adraneda and Dr. Priscilla Ampuan vs. Commission on
Elections and Ating Guro). In accordance with Rule 64 and other related
provisions of the 1997 Rules of Civil Procedure, as amended, governing review
of judgments and final orders or resolutions of the Commission on Elections,
only petitions which are accompanied by or which comply strictly with the
requirements specified therein shall be entertained. On the basis thereof, the
Court Resolved to DISMISS the instant petition for certiorari for non-compliance
therewith, particularly for
(a) failure to accompany the petition with a clearly legible

duplicate original or certified true copy of the
assailed resolution in violation of Section 5, Rule 64;
and
(b) failure to state material dates showing when notice of

resolution subject of the petition was received,
when a motion for reconsideration, if any, was
filed, and when notice of the denial thereof was
received, to show that the petition was filed on time
pursuant to Section 5, Rule 64 in relation to Section
3 (2nd par.), Rule 46." (adv2) TDcAaH
Very
||| (Adraneda v. COMELEC, G.R. No. 205296, February 19, 2013)
EN BANC
[G.R. No. 200704. March 20, 2012.]
IAM ALASTAIRE PAINAGAN PALGAN, petitioner, vs.

COMMISSION ON ELECTIONS AND KRISTINE JEANE
BUDIONGAN, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court en banc issued a Resolution dated MARCH 20, 2012,
"G.R. No. 200704 (Iam Alastaire Painagan Palgan vs. Commission on Elections and
Kristine Jeane Budiongan). The Court Resolved to:
(a)GRANT the Motion dated February 24, 2012 filed by

counsel for petitioner for an extension of thirty (30)
days from February 24, 2012, or until March 25,
2012, within which to file a petition for certiorari
under Rules 64 and 65 of the Rules of Court (not a
petition for review on certiorari); and
(b)REQUIRE the petitioner to COMPLY with the following

procedural requirements within five (5) days from
notice hereof:
(i)requirement to state material dates showing

when notice of judgment, final order or
resolution subject of the petition was
received, when a motion for
reconsideration, if any, was filed, and
when notice of the denial thereof was
received, to show that the motion for
extension was filed on time pursuant to
Section 5 (3rd par.), Rule 64 in relation to
Section 3 (2nd par.), Rule 46, Rules of
Court;
(ii)requirement to pay deposit for sheriff's fee and

legal research fee pursuant to Sections 4
and 5 (4th par.), Rule 64, Rules of Court;
and
(iii)requirement to file pleadings and motions in

eighteen (18) legible copies pursuant to
Section 5 (1st par.), Rule 64 and Section 2,
Rule 56, Rules of Court." Del Castillo, J., on
leave. (adv61) aITECA
Very
||| (Palgan v. COMELEC, G.R. No. 200704, March 20, 2012)
EN BANC
[G.R. No. 205736. March 5, 2013.]

ALLIANCE FOR REFORM TOWARDS EFFECTIVE
MANAGEMENT AND SUSTAINABLE DEVELOPMENT,
INC. [ARMD], petitioner, vs. COMMISSION ON
ELECTIONS, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court en banc issued a Resolution dated MARCH 5, 2013,
"G.R. No. 205736 (Alliance for Reform Towards Effective Management and Sustainable
Development, Inc. [ARMD] vs. Commission on Elections). In accordance with
Rule 64 and other related provisions of the 1997 Rules of Civil Procedure, as
amended, governing review of judgments and final orders or resolutions of the
Commission on Elections, only petitions which are accompanied by or which
comply strictly with the requirements specified therein shall be entertained. On
the basis thereof, the Court Resolved to DISMISS the instant petition for
certiorari for non-compliance therewith, particularly for
(a)failure to accompany the petition with a clearly legible

duplicate original or certified true copy of the
assailed judgment in violation of Section 5, Rule 64;
and
(b)insufficiency of the petition in form as the verification is

defective because of lack of proof of authority to
sign the same for and in behalf of the petitioner."
(adv90) SDEITC
||| (Alliance for Reform Towards Effective Management and Sustainable Development,
Inc. v. COMELEC, G.R. No. 205736, March 05, 2013)
EN BANC
[G.R. No. 209593. November 19, 2013.]
CASIMIRO A. YNARES III, petitioner, vs. COMMISSION

ON ELECTIONS AND DANILO O. LEYBLE, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court en banc issued a Resolution dated NOVEMBER 19,
"G.R. No. 209593 (Casimiro A. Ynares III vs. Commission on Elections and Danilo O.
Leyble). In accordance with Rule 64 and other related provisions of the 1997
Rules of Civil Procedure, as amended, as well as circulars, directives or orders of
the Supreme Court, governing review of judgments and final orders or
resolutions of the Commission on Elections, only petitions which are
accompanied by or which comply strictly with the requirements specified therein
shall be entertained. On the basis thereof, the Court Resolved to DISMISS the
instant petition for certiorari for non-compliance therewith, particularly for
(a)failure to state all the material dates to show that the

petition was filed on time pursuant to Section 5,
Rule 64 in relation to Section 3 (2nd par.), Rule 46,
1997 Rules of Civil Procedure, as amended;
(b)insufficient or defective verification and certification on

non-forum shopping, as the affiant thereof was not
personally known to the notary public or identified
by the notary public through competent evidence of
identity as required by the 2004 Rules on Notarial
Practice; and
(c)failure to attach a verified declaration that the pleading

and annexes submitted electronically are complete
and true copies of the printed document and
annexes filed with the Supreme Court, as required
in the Guidelines on Submission and Processing of
Soft Copies of Supreme Court-bound Papers
Pursuant to the Efficient Use of Paper Rule. cDAISC
In any event, the petition would still be dismissed for being the wrong remedy
and for failure to sufficiently show that any grave abuse of discretion was
committed by the Commission on Elections in rendering the challenged orders
which, on the contrary, appear to be in accord with the facts and applicable law
and jurisprudence.
The Court Resolved to NOTE the Manifestation dated October 29, 2013 filed by
counsel for petitioner, stating that he was constrained to file the petition by
registered mail on October 25, 2013." (adv66)
||| (CASIMIRO A. YNARES III, petitioner, vs. COMMISSION ON ELECTIONS

AND DANILO O. LEYBLE, respondents., G.R. No. 209593, November 19, 2013)
EN BANC
[G.R. No. 184915. June 30, 2009.]
NILO T. PATES, petitioner, vs. COMMISSION ON

ELECTIONS and EMELITA B. ALMIRANTE, respondents.
RESOLUTION
BRION, J p:
Our Resolution of November 11, 2008 dismissed the petition in caption pursuant
to Section 3, Rule 64 of the Rules of Court which provides:
SEC. 3. Time to file petition. The petition shall be filed

within thirty (30) days from notice of the judgment or final
order or resolution sought to be reviewed. The filing of a
motion for new trial or reconsideration of said judgment or
final order or resolution, if allowed under the procedural
rules of the Commission concerned, shall interrupt the
period herein fixed. If the motion is denied, the aggrieved
party may file the petition within the remaining period, but
which shall not be less than five (5) days in any event,
reckoned from notice of denial.
taking into account the following material antecedents:

a. February 1, 2008 The COMELEC First Division issued
its Resolution (assailed in the petition);
b. February 4, 2008 The counsel for petitioner Nilo T.

Pates (petitioner) received a copy of the February 1,
2008 Resolution; TAEcSC
c. February 8, 2008 The petitioner filed his motion for

reconsideration (MR) of the February 1, 2008
Resolution (4 days from receipt of the February 1,
2008 Resolution)
d. September 18, 2008 The COMELEC en banc issued a

Resolution denying the petitioner's MR (also
assailed in the petition).
e. September 22, 2008 The petitioner received the

COMELEC en banc Resolution of September 18,
2008 AaITCH
Under this chronology, the last day for the filing of a petition for certiorari, i.e., 30
days from notice of the final COMELEC Resolution, fell on a Saturday (October
18, 2008), as the petitioner only had the remaining period of 26 days to file his
petition, after using up 4 days in preparing and filing his Motion for
Reconsideration. Effectively, the last day for filing was October 20, 2008 the
following Monday or the first working day after October 18, 2008. The petitioner
filed his petition with us on October 22, 2008 or two days late; hence, our
Resolution of dismissal of November 11, 2008.
The Motion for Reconsideration

The petitioner asks us in his "Urgent Motion for Reconsideration with Reiteration
for the Issuance of a Temporary Restraining Order" to reverse the dismissal of his
petition, arguing that the petition was seasonably filed under the fresh period rule
enunciated by the Supreme Court in a number of cases decided beginning the year 2005.
The "fresh period" refers to the original period provided under the Rules of
Court counted from notice of the ruling on the motion for reconsideration by the
tribunal below, without deducting the period for the preparation and filing of the
motion for reconsideration. SIDTCa
He claims that, historically, the fresh period rule was the prevailing rule in filing
petitions for certiorari. This Court, he continues, changed this rule when it
promulgated the 1997 Rules of Civil Procedure and Circular No. 39-98, which
both provided for the filing of petitions within the remainder of the original
period, the "remainder" being the original period less the days used up in
preparing and filing a motion for reconsideration. He then points out that on
September 1, 2000 or only three years after, this Court promulgated A.M. No. 00-
02-03-SC bringing back the fresh period rule. According to the petitioner, the
reason for the change, which we supposedly articulated in Narzoles v. National
Labor Relations Commission, 1 was the tremendous confusion generated by
Circular No. 39-98.
The fresh period rule, the petitioner further asserts, was subsequently applied by
this Court in the following cases:
(1) Neypes v. Court of Appeals 2 which thenceforth applied the
fresh eriod rule to ordinary appeals of decisions of
the Regional Trial Court to the Court of Appeals;
SDAcaT
(2) Spouses de los Santos v. Vda. de Mangubat 3 reiterating

Neypes;
(3) Active Realty and Development Corporation v. Fernandez 4

which, followingNeypes, applied the fresh period
rule to ordinary appeals from the decisions of the
Municipal Trial Court to the Regional Trial Court;
and
(4) Romero v. Court of Appeals 5 which emphasized that A.M.

No. 00-02-03-SC is a curative statute that may be
applied retroactively.
A reading of the ruling in these cases, the petitioner argues, shows that this
Court has consistently held that the order or resolution denying the motion for
reconsideration or new trial is considered as the final order finally disposing of
the case, and the date of its receipt by a party is the correct reckoning point for
counting the period for appellate review. CADSHI
The Respondent's Comment

We asked the respondents to comment on the petitioner's motion for
reconsideration. The Office of the Solicitor General (OSG), citing Section 5, Rule
65 of the Rules of Court and its related cases, asked via a "Manifestation and
Motion" that it be excused from filing a separate comment. We granted the OSG's
manifestation and motion.
For her part, respondent Emelita B. Almirante (respondent Almirante) filed a

comment stating that: (1) we are absolutely correct in concluding that the petition
was filed out of time; and (2) the petitioner's reliance on Section 4, Rule 65 of the
Rules of Court (as amended by A.M. No. 00-02-03-SC) is totally misplaced, as
Rule 64, not Rule 65, is the vehicle for review of judgments and final orders or
resolutions of the COMELEC. Respondent Almirante points out that Rule 64 and
Rule 65 are different; Rule 65 provides for a 60-day period for filing petitions for
certiorari, while Rule 64 provides for 30 days.
OUR RULING
We do not find the motion for reconsideration meritorious.
A. As a Matter of Law
Section 7, Article IX-A of the Constitution provides that unless otherwise
provided by the Constitution or by law, any decision, order, or ruling of each
Commission may be brought to the Court on certiorari by the aggrieved party
within 30 days from receipt of a copy thereof. For this reason, the Rules of Court
provide for a separate rule (Rule 64) specifically applicable only to decisions of
the COMELEC and the Commission on Audit. This Rule expressly refers to the
application of Rule 65 in the filing of a petition for certiorari, subject to the
exception clause "except as hereinafter provided". 6 SaIACT
Even a superficial reading of the motion for reconsideration shows that the
petitioner has not challenged our conclusion that his petition was filed outside
the period required by Section 3, Rule 64; he merely insists that the fresh period
rule applicable to a petition for certiorari under Rule 65 should likewise apply to
petitions for certiorari of COMELEC rulings filed under Rule 64.
Rule 64, however, cannot simply be equated to Rule 65 even if it expressly refers
to the latter rule. They exist as separate rules for substantive reasons as discussed
below. Procedurally, the most patent difference between the two i.e., the
exception that Section 2, Rule 64 refers to is Section 3 which provides for a
special period for the filing of petitions for certiorari from decisions or rulings of
the COMELEC en banc. The period is 30 days from notice of the decision or
ruling (instead of the 60 days that Rule 65 provides), with the intervening period
used for the filing of any motion for reconsideration deductible from the
originally-granted 30 days (instead of the fresh period of 60 days that Rule 65
provides). HICATc
Thus, as a matter of law, our ruling of November 11, 2008 to dismiss the petition
for late filing cannot but be correct. This ruling is not without its precedent; we
have previously ordered a similar dismissal in the earlier case of Domingo v.
Commission on Elections. 7 The Court, too, has countless times in the past stressed
that the Rules of Court must be followed. Thus, we had this to say in Fortich v.
Corona: 8
Procedural rules, we must stress, should be treated with

utmost respect and due regard since they are designed to
facilitate the adjudication of cases to remedy the worsening
problem of delay in the resolution of rival claims and in the
administration of justice. The requirement is in pursuance to
the bill of rights inscribed in the Constitution which
guarantees that "all persons shall have a right to the speedy
disposition of their before all judicial, quasi-judicial and
administrative bodies," the adjudicatory bodies and the
parties to a case are thus enjoined to abide strictly by the
rules. While it is true that a litigation is not a game of
technicalities, it is equally true that every case must be prosecuted
in accordance with the prescribed procedure to ensure an orderly
and speedy administration of justice. There have been some
instances wherein this Court allowed a relaxation in the
application of the rules, but this flexibility was "never
intended to forge a bastion for erring litigants to violate
the rules with impunity." A liberal interpretation and
application of the rules of procedure can be resorted to
only in proper cases and under justifiable causes and
circumstances. (Emphasis supplied) ISCDEA
As emphasized above, exceptional circumstances or compelling reasons may

have existed in the past when we either suspended the operation of the Rules or
exempted a particular case from their application. 9 But, these instances were
the exceptions rather than the rule, and we invariably took this course of action
only upon a meritorious plea for the liberal construction of the Rules of Court
based on attendant exceptional circumstances. These uncommon exceptions
allowed us to maintain the stability of our rulings, while allowing for the
unusual cases when the dictates of justice demand a correspondingly different
treatment.
Under this unique nature of the exceptions, a party asking for the suspension of
the Rules of Court comes to us with the heavy burden of proving that he
deserves to be accorded exceptional treatment. Every plea for a liberal
construction of the Rules must at least be accompanied by an explanation of why
the party-litigant failed to comply with the rules and by a justification for the
requested liberal construction. 10
Significantly, the petitioner presented no exceptional circumstance or any

compelling reason to warrant the non-application of Section 3, Rule 64 to his
petition. He failed to explain why his filing was late. Other than his appeal to
history, uniformity, and convenience, he did not explain why we should adopt and
apply the fresh period rule to an election case. EHSADc
To us, the petitioner's omissions are fatal, as his motion does not provide us any
reason specific to his case why we should act as he advocates.
B. As a Matter of Policy
In harking back to the history of the fresh period rule, what the petitioner
apparently wants for reasons of uniformity and convenience is the
simultaneous amendment of Section 3, Rule 64 and the application of his
proposed new rule to his case. To state the obvious, any amendment of this
provision is an exercise in the power of this Court to promulgate rules on
practice and procedure as provided by Section 5 (5), Article VIII of the
Constitution. Our rulemaking, as every lawyer should know, is different from
our adjudicatory function. Rulemaking is an act of legislation, directly assigned
to us by the Constitution, that requires the formulation of policies rather than the
determination of the legal rights and obligations of litigants before us. As a rule,
rulemaking requires that we consult with our own constituencies, not necessarily
with the parties directly affected in their individual cases, in order to ensure that
the rule and the policy that it enunciates are the most reasonable that we can
promulgate under the circumstances, taking into account the interests of
everyone not the least of which are the constitutional parameters and
guidelines for our actions. We point these out as our adjudicatory powers should
not be confused with our rulemaking prerogative.
We acknowledge that the avoidance of confusion through the use of uniform

standards is not without its merits. We are not unmindful, too, that no less than
the Constitution requires that "motions for reconsideration of [division] decisions
shall be decided by the Commission en banc." 11 Thus, the ruling of the
Commission en banc on reconsideration is effectively a new ruling rendered
separately and independently from that made by a division. SEcITC
Counterbalanced against these reasons, however, are other considerations no less

weighty, the most significant of which is the importance the Constitution and
this Court, in obedience to the Constitution, accord to elections and the prompt
determination of their results. Section 3, Article IX-C of the Constitution
expressly requires that the COMELEC's rules of procedure should expedite the
disposition of election cases. This Court labors under the same command, as our
proceedings are in fact the constitutional extension of cases that start with the
COMELEC.
Based on these considerations, we do not find convenience and uniformity to be

reasons sufficiently compelling to modify the required period for the filing of
petitions for certiorari under Rule 64. While the petitioner is correct in his
historical data about the Court's treatment of the periods for the filing of the
different modes of review, he misses out on the reason why the period under
Section 3, Rule 64 has been retained. The reason, as made clear above, is
constitutionally-based and is no less than the importance our Constitution
accords to the prompt determination of election results. This reason far
outweighs convenience and uniformity. We significantly note that the present
petition itself, through its plea for the grant of a restraining order, recognizes the need for
haste in deciding election cases.
C. Our Liberal Approach
Largely for the same reason and as discussed below, we are not inclined to
suspend the rules to come to the rescue of a litigant whose counsel has blundered
by reading the wrong applicable provision. The Rules of Court are with us for
the prompt and orderly administration of justice; litigants cannot, after resorting
to a wrong remedy, simply cry for the liberal construction of these rules. 12 Our
ruling in Lapid v. Laurea 13 succinctly emphasized this point when we said:
cIECaS
Members of the bar are reminded that their first duty is to

comply with the rules of procedure, rather than seek
exceptions as loopholes. Technical rules of procedure are not
designed to frustrate the ends of justice. These are provided
to effect the prompt, proper and orderly disposition of cases
and, thus, effectively prevent the clogging of court dockets.
Utter disregard of these rules cannot justly be rationalized
by harking on the policy of liberal construction. [Emphasis
supplied.]
We add that even for this Court, liberality does not signify an unbridled exercise
of discretion. It has its limits; to serve its purpose and to preserve its true worth,
it must be exercised only in the most appropriate cases. 14
WHEREFORE, premises considered, we DENY the motion for reconsideration

for lack of merit. Our Resolution of November 11, 2008 is hereby declared
FINAL. Let entry of judgment be made in due course. EcTIDA
SO ORDERED.
||| (Pates v. COMELEC, G.R. No. 184915, June 30, 2009)
EN BANC
[G.R. No. 193808. June 26, 2012.]
LUIS K. LOKIN, JR. and TERESITA F. PLANAS,

petitioners, vs. COMMISSION ON ELECTIONS
(COMELEC), CITIZENS' BATTLE AGAINST
CORRUPTION PARTY LIST represented by VIRGINIA S.
JOSE, SHERWIN N. TUGNA, and CINCHONA CRUZ-
GONZALES, respondents.
DECISION
SERENO, J p:
The present petition having been filed beyond the reglementary period, Rule 64
of the Rules of Court compels a dismissal on this basis alone. Despite petitioner's
inexplicable disregard of basic concepts, this Court deems it appropriate to
reiterate the specific procedure for the review of judgments made by the
Commission on Elections (COMELEC) as laid down in Rule 64, and how it is
differentiated from the more general remedy afforded by Rule 65.
On 5 July 2010, the COMELEC First Division issued a Resolution 1 expunging

the Certificate of Nomination which included herein petitioners as
representatives of the party-list group known as Citizens' Battle Against
Corruption (CIBAC). The COMELEC en banc affirmed the said Resolution,
prompting Luis Lokin, Jr. and Teresita F. Planas to file the present Petition for
Certiorari. Petitioners allege grave abuse of discretion on the part of the
COMELEC in issuing both Resolutions, praying that they be recognized as the
legitimate nominees of CIBAC party-list, and that petitioner Lokin, Jr. be
proclaimed as the CIBAC party-list representative to the House of
Representatives. SHcDAI
Respondent CIBAC party-list is a multi-sectoral party registered 2 under

Republic Act No. (R.A.) 7941, otherwise known as the Party-List System Act. As
stated in its constitution and bylaws, the platform of CIBAC is to fight graft and
corruption and to promote ethical conduct in the country's public service. 3
Under the leadership of the National Council, its highest policymaking and
governing body, the party participated in the 2001, 2004, and 2007 elections. 4 On
20 November 2009, two different entities, both purporting to represent CIBAC,
submitted to the COMELEC a "Manifestation of Intent to Participate in the Party-
List System of Representation in the May 10, 2010 Elections." The first
Manifestation 5 was signed by a certain Pia B. Derla, who claimed to be the
party's acting secretary-general. At 1:30 p.m. of the same day, another
Manifestation 6 was submitted by herein respondents Cinchona Cruz-Gonzales
and Virginia Jose as the party's vice-president and secretary-general,
respectively.
On 15 January 2010, the COMELEC issued Resolution No. 8744 7 giving due
course to CIBAC's Manifestation, "WITHOUT PREJUDICE . . . TO the
determination which of the two factions of the registered party-
list/coalitions/sectoral organizations which filed two (2) manifestations of
intent to participate is the official representative of said party-
list/coalitions/sectoral organizations . . . ." 8
On 19 January 2010, respondents, led by President and Chairperson Emmanuel

Joel J. Villanueva, submitted the Certificate of Nomination 9 of CIBAC to the
COMELEC Law Department. The nomination was certified by Villanueva and
Virginia S. Jose. On 26 March 2010, Pia Derla submitted a second Certificate of
Nomination, 10 which included petitioners Luis Lokin, Jr. and Teresita Planas as
party-list nominees. Derla affixed to the certification her signature as "acting
secretary-general" of CIBAC.
Claiming that the nomination of petitioners Lokin, Jr. and Planas was
unauthorized, respondents filed with the COMELEC a "Petition to Expunge from
the Records and/or for Disqualification," seeking to nullity the Certificate filed
by Derla. Respondents contended that Derla had misrepresented herself as
"acting secretary-general," when she was not even a member of CIBAC; that the
Certificate of Nomination and other documents she submitted were
unauthorized by the party and therefore invalid; and that it was Villanueva who
was duly authorized to file the Certificate of Nomination on its behalf. 11
In the Resolution dated 5 July 2010, the COMELEC First Division granted the
Petition, ordered the Certificate filed by Derla to be expunged from the records,
and declared respondents' faction as the true nominees of CIBAC. 12 Upon
Motion for Reconsideration separately filed by the adverse parties, the
COMELEC en banc affirmed the Division's findings. In a per curiam Resolution
dated 31 August 2010, 13 the Commission reiterated that Pia Derla was unable to
prove her authority to file the said Certificate, whereas respondents presented
overwhelming evidence that Villanueva deputized CIBAC Secretary General
Virginia Jose to submit the Certificate of Nomination pursuant to CIBAC's
Constitution and bylaws. SHacCD
Petitioners now seek recourse with this Court in accordance with Rules 64 and 65
of the Rules of Court, raising these issues: I) Whether the authority of Secretary
General Virginia Jose to file the party's Certificate of Nomination is an intra-
corporate matter, exclusively cognizable by special commercial courts, and over
which the COMELEC has no jurisdiction; and II) Whether the COMELEC erred
in granting the Petition for Disqualification and recognizing respondents as the
properly authorized nominees of CIBAC party-list.
As earlier stated, this Court denies the petition for being filed outside the
requisite period. The review by this Court of judgments and final orders of the
COMELEC is governed specifically by Rule 64 of the Rules of Court, which
states:
Sec. 1.Scope. This rule shall govern the review of

judgments and final orders or resolutions of the Commission
on Elections and the Commission on Audit.
Sec. 2.Mode of review. A judgment or final order or

resolution of the Commission on Elections and the
Commission on Audit may be brought by the aggrieved
party to the Supreme Court on certiorari under Rule 65,
except as hereinafter provided.
The exception referred to in Section 2 of this Rule refers precisely to the

immediately succeeding provision, Section 3 thereof, 14 which provides for the
allowable period within which to file petitions for certiorari from judgments of
both the COMELEC and the Commission on Audit. Thus, while Rule 64 refers to
the same remedy of certiorari as the general rule in Rule 65, they cannot be
equated, as they provide for different reglementary periods. 15 Rule 65 provides
for a period of 60 days from notice of judgment sought to be assailed in the
Supreme Court, while Section 3 expressly provides for only 30 days, viz.:
SEC. 3.Time to file petition. The petition shall be filed

party may file the petition within the remaining period,
but which shall not be less than five (5) days in any event,
reckoned from notice of denial.
Petitioner received a copy of the first assailed Resolution on 12 July 2010. Upon
the Motion for Reconsideration filed by petitioners on 15 July 2010, the
COMELEC en banc issued the second assailed Resolution on 31 August 2010. This
per curiam Resolution was received by petitioners on 1 September 2010. 16 Thus,
pursuant to Section 3 above, deducting the three days it took petitioners to file
the Motion for Reconsideration, they had a remaining period of 27 days or until
28 September 2010 within which to file the Petition for Certiorari with this Court.
AECcTS
However, petitioners filed the present Petition only on 1 October 2010, clearly
outside the required period. In Pates v. Commission on Elections and Domingo v.
Commission on Elections, 17 we have established that the fresh-period rule used in
Rule 65 does not similarly apply to the timeliness of petitions under Rule 64. In
Pates, this Court dismissed the Petition for Certiorari on the sole ground that it
was belatedly filed, reasoning thus:
. . . . While it is true that a litigation is not a game of

technicalities, it is equally true that every case must be
prosecuted in accordance with the prescribed procedure to
ensure an orderly and speedy administration of justice.
There have been some instances wherein this Court allowed
a relaxation in the application of the rules, but this flexibility
was "never intended to forge a bastion for erring litigants to
violate the rules with impunity."
xxx xxx xxx
Under this unique nature of the exceptions, a party asking

for the suspension of the Rules of Court comes to us with
the heavy burden of proving that he deserves to be
accorded exceptional treatment. Every plea for a liberal
construction of the Rules must at least be accompanied by
an explanation of why the party-litigant failed to comply
with the rules and by a justification for the requested
liberal construction.
xxx xxx xxx
. . . . Section 3, Article IX-C of the Constitution expressly

requires that the COMELEC's rules of procedure should
expedite the disposition of election cases. This Court labors
under the same command, as our proceedings are in fact the
constitutional extension of cases that start with the
COMELEC.
Based on these considerations, we do not find convenience

and uniformity to be reasons sufficiently compelling to
modify the required period for the filing of petitions for
certiorari under Rule 64. While the petitioner is correct in
his historical data about the Court's treatment of the
periods for the filing of the different modes of review, he
misses out on the reason why the period under Section 3,
Rule 64 has been retained. The reason, as made clear
above, is constitutionally-based and is no less than the
importance our Constitution accords to the prompt
determination of election results. 18 . . . . (Emphasis
supplied, footnotes omitted.)
In this case, petitioners do not even attempt to explain why the Petition was filed
out of time. Clearly, they are aware of the applicable period for filing, as they
themselves invoke the remedy under Rule 64 in conjunction with Rule 65. Hence,
there is no acceptable reason for their failure to comply with the proper
procedure. But even if this Court were to apply liberality and take cognizance of
the late Petition, the arguments therein are flawed. The COMELEC has
jurisdiction over cases pertaining to party leadership and the nomination of
party-list representatives.
Petitioners contend that the COMELEC never should have taken cognizance of
respondents' Petition to Expunge and/or for Disqualification. They have reached
this conclusion by characterizing the present matter as an intra-corporate dispute
and, thus, cognizable only by special commercial courts, particularly the
designated commercial court in this case, the Regional Trial Court in Pasig City.
19 Pia Derla purportedly filed the Certificate of Nomination pursuant to the
authority granted by the Board of Trustees of the "CIBAC Foundation, Inc.,'' the
non-stock entity that is registered with the Securities and Exchange Commission
(SEC). 20
Thus, petitioners insist that the group that participated in the party-list system in
the 2004 and 2007 elections was the SEC-registered entity, and not the National
Council, which had allegedly become defunct since 2003. That was the year
when CIBAC Foundation, Inc. was established and registered with the SEC. 21
On the other hand, respondents counter that the foundation was established
solely for the purpose of acting as CIBAC's legal and financial arm, as provided
by the party's Constitution and bylaws. It was never intended to substitute for, or
oust CIBAC, the party-list itself. 22 ACTIcS
Even as petitioners insisted on the purely intra-corporate nature of the conflict

between "CIBAC Foundation" and the CIBAC Sectoral Party, they submitted
their Certificate of Nomination and Manifestation of Intent to participate in the
party-list elections. Precisely, petitioners were seeking the COMELEC's approval
of their eligibility to participate in the upcoming party-list elections. In effect,
they invoke its authority under the Party-List System Act. 23 Contrary to their
stance that the present dispute stemmed from an intra-corporate matter, their
submissions even recognize the COMELEC's constitutional power to enforce and
administer all laws relative to the conduct of an election, plebiscite, initiative,
referendum, and recall. 24 More specifically, as one of its constitutional
functions, the COMELEC is also tasked to "register, after sufficient publication,
political parties, organizations, or coalitions which, in addition to other
requirements, must present their platform or program of government." 25
In any case, the COMELEC's jurisdiction to settle the struggle for leadership
within the party is well established. This singular power to rule upon questions
of party identity and leadership is exercised by the COMELEC as an incident to
its enforcement powers. In Laban ng Demokratikong Pilipino v. Commission on
Elections, 26 the Court held:
. . . . Corollary to the right of a political party "to identify the

people who constitute the association and to select a
standard bearer who best represents the party's ideologies
and preference'' is the right to exclude persons in its
association and to not lend its name and prestige to those
which it deems undeserving to represent its ideals. A
certificate of candidacy makes known to the COMELEC that
the person therein mentioned has been nominated by a duly
authorized political group empowered to act and that it
reflects accurately the sentiment of the nominating body. A
candidate's political party affiliation is also printed followed
by his or her name in the certified list of candidates. A
candidate misrepresenting himself or herself to be a
party's candidate, therefore, not only misappropriates the
party's name and prestige but foists a deception upon the
electorate, who may unwittingly cast its ballot for him or
her on the mistaken belief that he or she stands for the
party's principles. To prevent this occurrence, the
COMELEC has the power and the duty to step in and
enforce the law not only to protect the party but, more
importantly, the electorate, in line with the Commission's
broad constitutional mandate to ensure orderly elections.
27 (Emphasis supplied.) THCASc
Similar to the present case, Laban delved into the issue of leadership for the
purpose of determining which officer or member was the duly authorized
representative tasked with filing the Certificate of Nomination, pursuant to its
Constitution and bylaws, to wit:
The only issue in this case, as defined by the COMELEC

itself, is who as between the Party Chairman and the
Secretary General has the authority to sign certificates of
candidacy of the official candidates of the party. Indeed, the
petitioners' Manifestation and Petition before the COMELEC
merely asked the Commission to recognize only those
certificates of candidacy signed by petitioner Sen. Angara or
his authorized representative, and no other. 28
In the 2010 case Atienza v. Commission on Elections, 29 it was expressly settled that
the COMELEC possessed the authority to resolve intra-party disputes as a
necessary tributary of its constitutionally mandated power to enforce election
laws and register political parties. The Court therein cited Kalaw v. Commission on
Elections and Palmares v. Commission on Elections, which uniformity upheld the
COMELEC's jurisdiction over intra-party disputes:
The COMELEC's jurisdiction over intra-party leadership

disputes has already been settled by the Court. The Court
ruled in Kalaw v. Commission on Elections that the
COMELEC's powers and functions under Section 2, Article
IX-C of the Constitution, "include the ascertainment of the
identity of the political party and its legitimate officers
responsible for its acts." The Court also declared in another
case that the COMELEC's power to register political parties
necessarily involved the determination of the persons who
must act on its behalf. Thus, the COMELEC may resolve an
intra-party leadership dispute, in a proper case brought
before it, as an incident of its power to register political
parties. 30
Furthermore, matters regarding the nomination of party-list representatives, as

well as their individual qualifications, are outlined in the Party-List System Law.
Sections 8 and 9 thereof state:
Sec. 8.Nomination of Party-List Representatives. Each

registered party, organization or coalition shall submit to the
COMELEC not later than forty-five (45) days before the
election a list of names, not less than five (5), from which
party-list representatives shall be chosen in case it obtains
the required number of votes.
A person may be nominated in one (1) list only. Only

persons who have given their consent in writing may be
named in the list. The list shall not include any candidate for
any elective office or a person who has lost his bid for an
elective office in the immediately preceding election. No
change of names or alteration of the order of nominees shall
be allowed after the same shall have been submitted to the
COMELEC except in cases where the nominee dies, or
withdraws in writing his nomination, becomes incapacitated
in which case the name of the substitute nominee shall be
placed last in the list. Incumbent sectoral representatives in
the House of Representatives who are nominated in the
party-list system shall not be considered resigned.
See. 9.Qualifications of Party-List Nominees. No person shall

be nominated as party-list representative unless he is a
natural-born citizen of the Philippines, a registered voter, a
resident of the Philippines for a period of not less than one
(1) year immediately preceding the day of the election, able
to read and write, a bona fide member of the party or
organization which he seeks to represent for at least ninety
(90) days preceding the day of the election, and is at least
twenty-five (25) years of age on the day of the election.
By virtue of the aforesaid mandate of the Party-List Law vesting the COMELEC
with jurisdiction over the nomination of party-list representatives and
prescribing the qualifications of each nominee, the COMELEC promulgated its
"Rules on Disqualification Cases Against Nominees of Party-List
Groups/Organizations Participating in the 10 May 2010 Automated National
and Local Elections." 31 Adopting the same qualifications of party-list nominees
listed above, Section 6 of these Rules also required that:
The party-list group and the nominees must submit

documentary evidence in consonance with the Constitution,
R.A. 7941 and other laws to duly prove that the nominees
truly belong to the marginalized and underrepresented
sector/s, the sectoral party, organization, political party or
coalition they seek to represent, which may include but not
limited to the following: cSaCDT
a.Track record of the party-list group/organization showing

active participation of the nominee/s in the undertakings of
the party-list group/organization for the advancement of the
marginalized and underrepresented sector/s, the sectoral
party, organization, political party or coalition they seek to
represent;
b.Proofs that the nominee/s truly adheres to the advocacies

of the party-list group/organizations (prior declarations,
speeches, written articles, and such other positive actions on
the part of the nominee/s showing his/her adherence to the
advocacies of the party-list group/organizations);
c.Certification that the nominee/s is/are a bona fide member

of the party-list group/organization for at least ninety (90)
days prior to the election; and
d.In case of a party-list group/organization seeking

representation of the marginalized and underrepresented
sector/s, proof that the nominee/s is not only an advocate of
the party-list/organization but is/are also a bona fide
member/s of said marginalized and underrepresented
sector.
The Law Department shall require party-list group and

nominees to submit the foregoing documentary evidence if
not complied with prior to the effectivity of this resolution
not later than three (3) days from the last day of filing of the
list of nominees.
Contrary to petitioners' stance, no grave abuse of discretion is attributable to the
COMELEC First Division and the COMELEC en banc. The tribunal correctly
found that Pia Derla's alleged authority as "acting secretary-general" was an
unsubstantiated allegation devoid of any supporting evidence. Petitioners did
not submit any documentary evidence that Derla was a member of CIBAC, let
alone the representative authorized by the party to submit its Certificate of
Nomination. 32 The COMELEC ruled:
A careful perusal of the records readily shows that Pia B.

Derla, who has signed and submitted, as the purported
Acting Secretary General of CIBAC, the Certificates of
Nomination of Respondents, has no authority to do so.
Despite Respondents' repeated claim that Ms. Derla is a
member and officer of CIBAC, they have not presented any
proof in support of the same. We are at a loss as to the
manner by which Ms. Derla has assumed the post, and We
see nothing but Respondents' claims and
writings/certifications by Ms. Derla herself that point to that
alleged fact. Surely, We cannot rely on these submissions, as
they are the very definition of self-serving declarations.
On the other hand . . . We cannot help but be convinced that

it was Emmanuel Joel J. Villanueva, as the Party President
and Chairman, who had been given the sole authority, at
least for the 10 May 2010 Elections, to submit the list of
nominees for the Party. The records would show that, in
accordance with the Party's Constitution and by-laws, its
National Council, the highest policymaking and governing
body of the Party, met on 12 November 2009 and there being
a quorum, then proceeded to elect its new set of officers,
which included Mr. Villanueva as both Party President and
Party Chairman, and Virginia S. Jose as Party Secretary
General. During the same meeting, the Party's New Electoral
Congress, which as per the CIBAC's Constitution and By-
Laws, was also composed of the National Council Members
and had the task of choosing the nominees for the Party in
the Party-List Elections, unanimously ruled to delegate to
the Party President such latter function. This set of facts,
which had not been belied by concrete contrary evidence,
weighed heavily against Respondents and favorably for
Petitioner. 33
Pia Derla, who is not even a member of CIBAC, is thus a virtual stranger to the
party-list, and clearly not qualified to attest to petitioners as CIBAC nominees, or
certify their nomination to the COMELEC. Petitioners cannot use their
registration with the SEC as a substitute for the evidentiary requirement to show
that the nominees, including Derla, are bona fide members of the party.
Petitioners Planas and Lokin, Jr. have not even presented evidence proving the
affiliation of the so-called Board of Trustees to the CIBAC Sectoral Party that is
registered with COMELEC.
Petitioners cannot draw authority from the Board of Trustees of the SEC-
registered entity, because the Constitution of CIBAC expressly mandates that it is
the National Council, as the governing body of CIBAC, that has the power to
formulate the policies, plans, and programs of the Party, and to issue decisions
and resolutions binding on party members and officers. 34 Contrary to
petitioners' allegations, the National Council of CIBAC has not become defunct,
and has certainly not been replaced by the Board of Trustees of the SEC-
registered entity. The COMELEC carefully perused the documents of the
organization and outlined the process followed by the National Council before it
complied with its task of choosing the party's nominees. This was based on the
"Minutes of Meeting of CIBAC Party-List National Council" held on 12
November 2009, which respondents attached to their Memorandum. 35
For its part, the COMELEC en banc also enumerated the documentary evidence
that further bolstered respondents' claim that it is Chairman Villanueva and
Secretary General Virginia Jose who were duly authorized to submit the
Certificate of Nomination to the COMELEC. 36 These include:
a.The Joint Affidavit of Resolutions of the CIBAC National

Council and the National Electoral Congress of
CIBAC dated 12 November 2009; acCITS
b.Certificate of Deputization and Delegation of Authority

issued to CIBAC Secretary-General Virginia S. Jose
by the CIBAC President;
c.Constitution and By-Laws of CIBAC as annexed to its

Petition for Registration as Sectoral Organization
Under the Party-List System filed by CIBAC on 13
November 2000; and
d.Manifestation dated 8 January 2010 by CIBAC's Secretary

General Virginia S. Jose providing the official list of
officers of CIBAC. 37
WHEREFORE, finding no grave abuse of discretion on the part of the

COMELEC in issuing the assailed Resolutions, the instant Petition is
DISMISSED. This Court AFFIRMS the judgment of the COMELEC expunging
from its records the Certificate of Nomination filed on 26 March 2010 by Pia B.
Derla. The nominees, as listed in the Certificate of Nomination filed on 19
January 2010 by Emmanuel Joel J. Villanueva, President and Chairman of
Citizens' Battle Against Corruption (CIBAC) Party List, are recognized as the
legitimate nominees of the said party.
SO ORDERED.
||| (Lokin, Jr. v. COMELEC, G.R. No. 193808, June 26, 2012)
EN BANC
[G.R. No. 188818. May 31, 2011.]
TOMAS R. OSMEA, in his personal capacity and in his

capacity as City Mayor of Cebu City, petitioner, vs. THE
COMMISSION ON AUDIT, respondent.
DECISION
BRION, J p:
Before the Court is the Petition for Certiorari 1 filed by Tomas R. Osmea, former
mayor of the City of Cebu, under Rule 64 of the Rules of Court. The petition
seeks the reversal of the May 6, 2008 Decision 2 and the June 8, 2009 Resolution 3
of the respondent Commission on Audit (COA), which disallowed the damages,
attorney's fees and litigation expenses awarded in favor of two construction
companies in the collection cases filed against the City of Cebu, and made these
charges the personal liability of Osmea for his failure to comply with the legal
requirements for the disbursement of public funds. HDacIT
BACKGROUND FACTS
The City of Cebu was to play host to the 1994 Palarong Pambansa (Palaro). In
preparation for the games, the City engaged the services of WT Construction,
Inc. (WTCI) and Dakay Construction and Development Company (DCDC) to
construct and renovate the Cebu City Sports Complex. Osmea, then city mayor,
was authorized by the Sangguniang Panlungsod (Sanggunian) of Cebu to represent
the City and to execute the construction contracts.
While the construction was being undertaken, Osmea issued a total of 20

Change/Extra Work Orders to WTCI, amounting to P35,418,142.42 (about 83% of
the original contract price), and to DCDC, amounting to P15,744,525.24 (about
31% of the original contract price). These Change/Extra Work Orders were not
covered by any Supplemental Agreement, nor was there a prior authorization
from the Sanggunian. Nevertheless, the work proceeded on account of the
"extreme urgency and need to have a suitable venue for the Palaro." 4 The Palaro
was successfully held at the Cebu City Sports Complex during the first six
months of 1994.
Thereafter, WTCI and DCDC demanded payment for the extra work they
performed in the construction and renovation of the sports complex. A
Sanggunian member, Councilor Augustus Young, sponsored a resolution
authorizing Osmea to execute the supplemental agreements with WTCI and
DCDC to cover the extra work performed, but the other Sanggunian members
refused to pass the resolution. Thus, the extra work completed by WTCI and
DCDC was not covered by the necessary appropriation to effect payment,
prompting them to file two separate collection cases before the Regional Trial
Court (RTC) of Cebu City (Civil Case Nos. CEB-17004 5 and CEB-17155). 6 The
RTC found the claims meritorious, and ordered the City to pay for the extra
work performed. The RTC likewise awarded damages, litigation expenses and
attorney's fees in the amount of P2,514,255.40 to WTCI 7 and P102,015.00 to
DCDC. 8 The decisions in favor of WTCI and DCDC were affirmed on appeal,
subject to certain modifications as to the amounts due, and have become final. To
satisfy the judgment debts, the Sanggunian finally passed the required
appropriation ordinances.
During post-audit, the City Auditor issued two notices disallowing the payment
of litigation expenses, damages, and attorney's fees to WTCI and DCDC. 9 The
City Auditor held Osmea, the members of the Sanggunian, and the City
Administrator liable for the P2,514,255.40 and P102,015.00 awarded to WTCI and
DCDC, respectively, as damages, attorney's fees, and interest charges. These
amounts, the City Auditor concluded, were unnecessary expenses for which the
public officers should be held liable in their personal capacities pursuant to the
law.
Osmea and the members of the Sanggunian sought reconsideration of the

disallowance with the COA Regional Office, which, through a 2nd Indorsement
dated April 30, 2003, 10 modified the City Auditor's Decision by absolving the
members of the sanggunian from any liability. It declared that the payment of the
amounts awarded as damages and attorney's fees should solely be Osmea's
liability, as it was him who ordered the change or extra work orders without
the supplemental agreement required by law, or the prior authorization from
the Sanggunian. The Sanggunian members cannot be held liable for refusing to
enact the necessary ordinance appropriating funds for the judgment award
because they are supposed to exercise their own judgment and discretion in the
performance of their functions; they cannot be mere "rubber stamps" of the city
mayor.
The COA Regional Office's Decision was sustained by the COA's National
Director for Legal and Adjudication (Local Sector) in a Decision dated January
16, 2004. 11 Osmea filed an appeal against this Decision.
On May 6, 2008, the COA issued the assailed Decision which affirmed the
notices of disallowance. 12 Osmea received a copy of the Decision on May 23,
2008. Eighteen days after or on June 10, 2008, Osmea filed a motion for
reconsideration of the May 6, 2008 COA Decision.
The COA denied Osmea's motion via a Resolution dated June 8, 2009. 13 The
Office of the Mayor of Cebu City received the June 8, 2009 Resolution of the COA
on June 29, 2009. A day before, however, Osmea left for the United States of
America for his check-up after his cancer surgery in April 2009 and returned to
his office only on July 15, 2009. Thus, it was only on July 27, 2009 that Osmea
filed the present petition for certiorari under Rule 64 to assail the COA's Decision
of May 6, 2008 and Resolution of June 8, 2009. cSCTID
THE PETITION
Rule 64 of the Rules of Court governs the procedure for the review of judgments
and final orders or resolutions of the Commission on Elections and the COA.
Section 3 of the same Rule provides for a 30-day period, counted from the notice
of the judgment or final order or resolution sought to be reviewed, to file the
petition for certiorari. The Rule further states that the filing of a motion for
reconsideration of the said judgment or final order or resolution interrupts the
30-day period.
Osmea filed his motion for reconsideration, of the COA's May 6, 2008 Decision,
18 days from his receipt thereof, leaving him with 12 days to file a Rule 64
petition against the COA ruling. He argues that the remaining period should be
counted not from the receipt of the COA's June 8, 2009 Resolution by the Office
of the Mayor of Cebu City on June 29, 2009, but from the time he officially
reported back to his office on July 15, 2009, after his trip abroad. Since he is being
made liable in his personal capacity, he reasons that the remaining period should
be counted from his actual knowledge of the denial of his motion for
reconsideration. Corollary, he needed time to hire a private counsel who would
review his case and prepare the petition.
Osmea pleads that his petition be given due course for the resolution of the
important issues he raised. The damages and interest charges were awarded on
account of the delay in the payment of the extra work done by WTCI and DCDC,
which delay Osmea attributes to the refusal of the Sanggunian to appropriate
the necessary amounts. Although Osmea acknowledges the legal necessity for a
supplemental agreement for any extra work exceeding 25% of the original
contract price, he justifies the immediate execution of the extra work he ordered
(notwithstanding the lack of the supplemental agreement) on the basis of the
extreme urgency to have the construction and repairs on the sports complex
completed in time for the holding of the Palaro. He claims that the contractors
themselves did not want to embarrass the City and, thus, proceeded to perform
the extra work even without the supplemental agreement.
Osmea also points out that the City was already adjudged liable for the
principal sum due for the extra work orders and had already benefitted from the
extra work orders by accepting and using the sports complex for the Palaro. For
these reasons, he claims that all consequences of the liability imposed, including
the payment of damages and interest charges, should also be shouldered by the
City and not by him.
THE COURT'S RULING

Relaxation of procedural rules to
give effect to a party's right to appeal
Section 3, Rule 64 of the Rules of Court states:
SEC. 3.Time to file petition. The petition shall be filed

party may file the petition within the remaining period, but
which shall not be less than five (5) days in any event,
reckoned from notice of denial. [Emphasis ours.]
Several times in the past, we emphasized that procedural rules should be treated
with utmost respect and due regard, since they are designed to facilitate the
adjudication of cases to remedy the worsening problem of delay in the resolution
of rival claims and in the administration of justice. From time to time, however,
we have recognized exceptions to the Rules but only for the most compelling reasons
where stubborn obedience to the Rules would defeat rather than serve the ends
of justice. Every plea for a liberal construction of the Rules must at least be
accompanied by an explanation of why the party-litigant failed to comply with
the Rules and by a justification for the requested liberal construction. 14 Where
strong considerations of substantive justice are manifest in the petition, this
Court may relax the strict application of the rules of procedure in the exercise of
its legal jurisdiction. 15
Osmea cites the mandatory medical check-ups he had to undergo in Houston,
Texas after his cancer surgery in April 2009 as reason for the delay in filing his
petition for certiorari. Due to his weakened state of health, he claims that he could
not very well be expected to be bothered by the affairs of his office and had to
focus only on his medical treatment. He could not require his office to attend to
the case as he was being charged in his personal capacity. DSEaHT
We find Osmea's reasons sufficient to justify a relaxation of the Rules. Although

the service of the June 8, 2009 Resolution of the COA was validly made on June
29, 2009 through the notice sent to the Office of the Mayor of Cebu City, 16 we
consider July 15, 2009 the date he reported back to office as the effective
date when he was actually notified of the resolution, and the reckoning date of
the period to appeal. If we were to rule otherwise, we would be denying Osmea
of his right to appeal the Decision of the COA, despite the merits of his case.
Moreover, a certiorari petition filed under Rule 64 of the Rules of Court must be
verified, and a verification requires the petitioner to state under oath before an
authorized officer that he has read the petition and that the allegations therein
are true and correct of his personal knowledge. Given that Osmea was out of
the country to attend to his medical needs, he could not comply with the
requirements to perfect his appeal of the Decision of the COA.
While the Court has accepted verifications executed by a petitioner's counsel

who personally knows the truth of the facts alleged in the pleading, this was an
alternative not available to Osmea, as he had yet to secure his own counsel.
Osmea could not avail of the services of the City Attorney, as the latter is
authorized to represent city officials only in their official capacity. 17 The COA
pins liability for the amount of damages paid to WTCI and DCDC on Osmea in
his personal capacity, pursuant to Section 103 of Presidential Decree No. 1445
(PD 1445). 18
Thus, the reckoning date to count the remaining 12 days to file his Rule 64
petition should be counted from July 15, 2009, the date Osmea had actual
knowledge of the denial of his motion for reconsideration of the Decision of the
COA and given the opportunity to competently file an appeal thereto before the
Court. The present petition, filed on July 27, 2009, was filed within the
reglementary period.
Personal liability for expenditures of

government fund when made in violation of law
The Court's decision to adopt a liberal application of the rules stems not only
from humanitarian considerations discussed earlier, but also on our finding of
merit in the petition.
Section 103 of PD 1445 declares that "[e]xpenditures of government funds or uses
of government property in violation of law or regulations shall be a personal
liability of the official or employee found to be directly responsible therefor."
Notably, the public official's personal liability arises only if the expenditure of
government funds was made in violation of law. In this case, the damages were
paid to WTCI and DCDC pursuant to final judgments rendered against the City
for its unreasonable delay in paying its obligations. The COA, however, declared
that the judgments, in the first place, would not be rendered against the City had
it not been for the change and extra work orders that Osmea made which (a) it
considered as unnecessary, (b) were without the Sanggunian's approval, and (c)
were not covered by a supplemental agreement.
The term "unnecessary," when used in reference to expenditure of funds or uses

of property, is relative. In Dr. Teresita L. Salva, etc. v. Guillermo N. Carague, etc., et
al., 19 we ruled that "[c]ircumstances of time and place, behavioural and
ecological factors, as well as political, social and economic conditions, would
influence any such determination. . . . [T]ransactions under audit are to be judged
on the basis of not only the standards of legality but also those of regularity,
necessity, reasonableness and moderation." The 10-page letter of City
Administrator Juan Saul F. Montecillo to the Sanggunian explained in detail the
reasons for each change and extra work order; most of which were made to
address security and safety concerns that may arise not only during the holding
of the Palaro, but also in other events and activities that may later be held in the
sports complex. Comparing this with the COA's general and unsubstantiated
declarations that the expenses were "not essential" 20 and not "dictated by the
demands of good government," 21 we find that the expenses incurred for change
and extra work orders were necessary and justified.
The COA considers the change and extra work orders illegal, as these failed to
comply with Section III, C1 of the Implementing Rules and Regulations of
Presidential Decree No. 1594, 22 which states that:
5.Change Orders or Extra Work Orders may be issued on a

contract upon the approval of competent
authorities provided that the cumulative amount of
such Change Orders or Extra Work Orders does not
exceed the limits of the former's authority to
approve original contracts. HECaTD
6.A separate Supplemental Agreement may be entered into

for all Change Orders and Extra Work Orders if
the aggregate amount exceeds 25% of the
escalated original contract price. All change
orders/extra work orders beyond 100% of the
escalated original contract cost shall be subject to
public bidding except where the works involved
are inseparable from the original scope of the
project in which case negotiation with the
incumbent contractor may be allowed, subject to
approval by the appropriate authorities. [Emphases
ours.]
Reviewing the facts of the case, we find that the prevailing circumstances at
the time the change and extra work orders were executed and completed
indicate that the City of Cebu tacitly approved these orders, rendering a
supplemental agreement or authorization from the Sanggunian unnecessary.
The Pre-Qualification, Bids and Awards Committee (PBAC), upon the
recommendation of the Technical Committee and after a careful deliberation,
approved the change and extra work orders. It bears pointing out that two
members of the PBAC were members of the Sanggunian as well Rodolfo
Cabrera (Chairman, Committee on Finance) and Ronald Cuenco (Minority Floor
Leader). A COA representative was also present during the deliberations of the
PBAC. None of these officials voiced any objection to the lack of a prior
authorization from the Sanggunian or a supplemental agreement. The RTC
Decision in fact mentioned that the Project Post Completion Report and
Acceptance was approved by an authorized representative of the City of Cebu on
September 21, 1994. 23 "[a]s the projects had been completed, accepted and used
by the [City of Cebu]," the RTC ruled that there is "no necessity of [executing] a
supplemental agreement." 24 Indeed, as we declared in Mario R. Melchor v. COA,
25 a supplemental agreement to cover change or extra work orders is not always
mandatory, since the law adopts the permissive word "may." Despite its initial
refusal, the Sanggunian was eventually compelled to enact the appropriation
ordinance in order to satisfy the RTC judgments. Belated as it may be, the
enactment of the appropriation ordinance, nonetheless, constitutes as sufficient
compliance with the requirements of the law. It serves as a confirmatory act
signifying the Sanggunian's ratification of all the change and extra work orders
issued by Osmea. In National Power Corporation (NPC) v. Hon. Rose Marie Alonzo-
Legasto, etc., et al., 26 the Court considered the compromise agreement between
the NPC and the construction company as a ratification of the extra work
performed, without prior approval from the NPC's Board of Directors.
As in Melchor, 27 we find it "unjust to order the petitioner to shoulder the

expenditure when the government had already received and accepted benefits
from the utilization of the [sports complex]," especially considering that the City
incurred no substantial loss in paying for the additional work and the damages
awarded. Apparently, the City placed in a time deposit the entire funds allotted
for the construction and renovation of the sports complex. The interest that the
deposits earned amounted to P12,835,683.15, more than enough to cover the
damages awarded to WTCI (P2,514,255.40) and the DCDC (P102,015.00). There
was "no showing that [the] petitioner was ill-motivated, or that [the petitioner]
had personally profited or sought to profit from the transactions, or that the
disbursements have been made for personal or selfish ends." 28 All in all, the
circumstances showed that Osmea issued the change and extra work orders for
the City's successful hosting of the Palaro, and not for any other "nefarious
endeavour." 29
WHEREFORE, in light of the foregoing, we hereby GRANT the petitioner's

Petition for Certiorari filed under Rule 64 of the Rules of Court. The respondent's
Decision of May 6, 2008 and Resolution of June 8, 2009 are SET ASIDE. ScEaAD
SO ORDERED.
||| (Osmea v. COA, G.R. No. 188818, May 31, 2011)
EN BANC
[G.R. No. 168296. January 31, 2007.]
FELOMINO V. VILLAGRACIA, petitioner, vs.

COMMISSION ON ELECTIONS and RENATO V. DE LA
PUNTA, respondents.
DECISION
PUNO, C.J p:
At bar is a Petition for Certiorari under Rule 64 of the Rules of Court with Urgent
Prayer for Issuance of Temporary Restraining Order. Petitioner was proclaimed
as winning candidate for the position of Punong Barangay in Barangay
Caawigan, Talisay, Camarines Norte, in the July 15, 2002 barangay elections by a
margin of six (6) votes.
Private respondent filed an election protest with the Municipal Trial Court of
Talisay, Camarines Norte, under Election Case No. 001-2002. After the revision of
ballots, the trial court invalidated thirty-four (34) of the ballots for being marked.
All 34 marked ballots were deducted from the votes of petitioner.
On December 3, 2003, the trial court adjudged private respondent as the true
winner and nullified the proclamation of petitioner, viz.:
WHEREFORE, the Court finds the Protestant Renato dela

Punta as the duly elected Punong Barangay of Caawigan,
Talisay, Camarines Norte with the total valid vote[s] of 187
or a winning margin of 26 votes.
The earlier proclamation made by the Barangay Board of

Canvassers of Precinct No. 15-A and 15-A-2 and 15-A-1 of
Barangay Caawigan, Talisay, Camarines Norte is declared
null and void. 1
Petitioner appealed the decision with the First Division of the Commission on
Elections (COMELEC) raising for the first time on appeal the issue that the trial
court lacked jurisdiction over the election protest for failure of private
respondent to pay the correct filing fees. HIEASa
The First Division, through its Resolution 2 dated September 9, 2004, set aside the
decision of the trial court and dismissed the election protest of private
respondent for lack of jurisdiction, viz.:
The payment credited to the general fund which could be

considered as filing fee is incomplete considering that
Section 6 of Rule 37 of the [COMELEC] Rules on Procedure
requires that it should be One Hundred (P100.00) Pesos.
Hence, the trial court could not have acquired jurisdiction
over the [private respondent's] case. 3
Private respondent moved for reconsideration. In an Order 4 dated October 7,

2004, the First Division elevated the motion for reconsideration to the COMELEC
En Banc.
On June 1, 2005, the COMELEC En Banc promulgated its questioned Resolution

granting the motion for reconsideration and reinstating the decision of the trial
court. It issued a writ of execution 5 on July 22, 2005 ordering petitioner to vacate
his post as Punong Barangay of Barangay Caawigan, Talisay, Camarines Norte,
in favor of private respondent.
Hence, this petition raising the following issues:
WHETHER THE COMMISSION ON ELECTIONS

(COMELEC, FOR SHORT) GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK OF JURISDICTION
IN NOT APPLYING THE SOLLER DOCTRINE IN THE
INSTANT CASE[.]
II
WHETHER THE COMELEC ERRED IN CONCLUDING

THAT THE USE OF THE WORDS "JOKER", "QUEEN",
"ALAS", AND "KAMATIS", IN MORE THAN ONE BALLOT
WOULD CONSTITUTE MARKED BALLOTS. 6
Petitioner contends that had public respondent followed the doctrine in Soller v.
COMELEC, 7 it would have sustained the ruling of the First Division that the
trial court lacked jurisdiction to hear the election protest due to private
respondent's failure to pay the correct filing fees.
We disagree. The Soller case is not on all fours with the case at bar. In Soller,
petitioner therein filed with the trial court a motion to dismiss private
respondent's protest on the ground of, among others, lack of jurisdiction. In the
case at bar, petitioner actively participated in the proceedings and voluntarily
submitted to the jurisdiction of the trial court. It was only after the trial court
issued its decision adverse to petitioner that he raised the issue of jurisdiction for
the first time on appeal with the COMELEC's First Division. 8
While it is true that a court acquires jurisdiction over a case upon complete
payment of the prescribed filing fee, the rule admits of exceptions, as when a
party never raised the issue of jurisdiction in the trial court. As we stated in
Tijam v. Sibonghanoy, et al., viz.: 9
. . . [I]t is too late for the loser to question the jurisdiction or

power of the court. . . . [I]t is not right for a party who has
affirmed and invoked the jurisdiction of a court in a
particular matter to secure an affirmative relief, to
afterwards deny that same jurisdiction to escape a penalty.
HAcaCS
It was therefore error on the part of the COMELEC's First Division to

indiscriminately apply Soller to the case at bar. As correctly pointed out by
public respondent in its questioned Resolution, viz.:
. . . . Villagracia never assailed the proceedings of the trial

court for lack of jurisdiction during the proceedings therein.
Instead, he filed an Answer to the Protest on 2 August 2002
and then actively participated during the hearings and
revision of ballots and subsequently filed his Formal Offer of
Exhibits. The issue on the filing fees was never raised until
the Decision adverse to his interest was promulgated by the
trial court and only on [a]ppeal to the COMELEC.
Necessarily, we apply the case of Alday vs. FGU Insurance
Corporation where the Supreme Court instructed that
"although the lack of jurisdiction of a court may be raised at
any stage of the action, a party may be estopped from raising
such questions if he has actively taken part in the very
proceedings which he questions, belatedly objecting to the
court's jurisdiction in the event that the judgment or order
subsequently rendered is adverse to him." Villagracia is
therefore estopped from questioning the jurisdiction of the
trial court only on [a]ppeal. 10
As to the second issue, petitioner contends that in order to invalidate a ballot for
being marked, it must appear that the voter has placed the mark to identify the
ballot. 11 Petitioner argues that the appearance of the words "Joker," "Alas,"
"Queen" and "Kamatis" in more than one ballot cannot identify the ballot of a
voter so as to violate the secrecy of votes. Thus, the votes should be counted in
his favor. 12
There are 34 marked ballots in the case at bar. Fourteen (14) ballots are marked
with the word "Joker"; six (6) ballots with the word "Alas"; seven (7) ballots with
the word "Queen"; and, seven (7) ballots with the word "Kamatis." These ballots
were all deducted by the trial court from the votes of petitioner. While each of
these words appears in more than one ballot and may not identify a particular
voter, it is not necessary that the marks in a ballot should be able to specifically
identify a particular voter. 13 We have ruled that the distinction should always
be between marks that were apparently carelessly or innocently made, which do
not invalidate the ballot, and marks purposely placed thereon by the voter with a
view to possible future identification, which invalidates it. The marks which shall
be considered sufficient to invalidate the ballot are those which the voter himself
deliberately placed on his ballot for the purpose of identifying it thereafter. 14
In the case at bar, the marks indicate no other intention than to identify the
ballots. The observation of public respondent on the appearance of the marks on
the questioned ballots is apropos, viz.:
. . . . We take notice of the fact that these marks were all

written in the number 7 slot of the list of Kagawad for
Sangguniang Barangay. We further take notice that all these
marks appear only in ballots wherein the Punong Barangay
voted thereon is Jun Villagracia, the proclaimed winning
candidate and herein [petitioner]. It is therefore indubitable
that these ballots are indeed marked ballots. 15
Finally, the present action is one of certiorari under Rule 64 of the Rules of Court
where questions of fact cannot be raised. The familiar rule is that findings of fact
of the [COMELEC] supported by substantial evidence shall be final and non-
reviewable. 16 There is no reason to depart from this rule.
IN VIEW WHEREOF, the petition is DISMISSED. The prayer for a Temporary

Restraining Order is DENIED for being moot. The questioned Resolution of the
COMELEC En Banc dated June 1, 2005 in EAC No. 1-2004 is AFFIRMED.
Costs against petitioner.
||| (Villagracia v. COMELEC, G.R. No. 168296, January 31, 2007)
THIRD DIVISION
[G.R. No. 135507. November 29, 2005.]
PHILIPPINE RABBIT BUS LINES, INC., petitioner, vs.

NELSON GOIMCO, SR., SPOUSES ISABELO and
REMEGIA LADIA, respondents.
Ponce Enrile Cayetano Reyes & Manalastas for petitioner.
Reynaldo D. Hernandez, Romeo Sadarnas and Ruben Platon for

respondents.
SYLLABUS
1.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; PETITION FOR CERTIORARI

UNDER RULE 65; CORRECTS ONLY ERRORS OF JURISDICTION OR GRAVE
ABUSE OF DISCRETION, AMOUNTING TO LACK OR EXCESS OF
JURISDICTION; CASE AT BAR. What petitioner should have filed is a
petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, not a petition for certiorari under Rule 65 of the same
Rules. We have consistently held that certiorari is not a substitute for a lost
appeal. The extraordinary writ of certiorari issues only for the correction of
errors of jurisdiction or grave abuse of discretion amounting to lack or excess of
jurisdiction. Grave abuse of discretion is such capricious and whimsical exercise
of judgment which is equivalent to an excess or lack of jurisdiction, meaning that
the abuse of discretion must be so patent and so gross as to amount to an evasion
of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act
at all in contemplation of law, as where the power is exercised in an arbitrary
and despotic manner by reason of passion or hostility.
2.ID.; APPEAL; RIGHT TO APPEAL IS A PROCEDURAL REMEDY WHICH

MAY BE EXERCISED ONLY IN THE MANNER PRESCRIBED BY LAW. The
right to appeal is not a natural right or a part of due process. It is merely a
procedural remedy of statutory origin and may be exercised only in the manner
prescribed by the provisions of law authorizing its exercise. Hence, its
requirements must be strictly complied with.
3.LEGAL AND JUDICIAL ETHICS; ATTORNEYS; ADMINISTRATIVE

COMPLAINT AGAINST AN ATTORNEY; INEXCUSABLE NEGLIGENCE;
FAILURE TO FILE BRIEF FOR CLIENT, A CASE OF. We note that petitioner's
previous counsel is a large law firm with several lawyers in its roster. Yet it took
said counsel four (4) months, from the expiration of the reglementary period,
within which to file the appellant's brief. It is settled that failure to file brief for a
client constitutes inexcusable negligence.
4.ID.; ID.; ID.; ID.; MISTAKES, NEGLIGENCE AND OMISSIONS OF COUNSEL

ARE BINDING UPON HIS CLIENT; CASE AT BAR. It is settled that the
mistakes, negligence, and omissions of counsel are binding upon his client. So
should it be in the instant cases. On petitioner's insistence that it was denied due
process, suffice it to say that there is no denial of due process where the adverse
ruling was attributable to its counsel's negligence.
RESOLUTION
Before us is a petition for certiorari seeking to set aside the Resolutions 1 of the
Court of Appeals dated February 3, 1998 in CA-G.R. CV No. 56176 dismissing
the appeal filed by the Philippine Rabbit Bus Liner, Inc., herein petitioner, for its
failure to file the required appellant's brief within the reglementary period.
Petitioner is a corporation organized and existing under the Philippine laws and
is engaged in business as a common carrier.
On October 17, 1983, petitioner's bus No. 309 collided with a ten-wheeler truck in
Dolores, Mabalacat, Pampanga. As a result, several passengers were injured.
Nelson Goimco, Sr., herein respondent and one of the passengers, filed with the
Regional Trial Court (RTC), Branch 65, Tarlac City, a complaint for breach of
contract of carriage against petitioner, docketed as Civil Case No. 6977. Spouses
Isabelo and Remegia Ladia (also impleaded herein as respondents), parents of
Isabelo Ladia, Jr. who died, likewise instituted a similar complaint with the same
court, docketed as Civil Case No. 7054. The two cases were consolidated and
jointly heard by the trial court.
After trial, the RTC rendered a Joint Decision, the dispositive portion of which
reads:
"WHEREFORE, judgment is rendered in favor of the

plaintiffs and against the defendant as follows:
(1)Defendant is ordered to pay to plaintiff Nelson

Goimco, Sr., the amount of P248,157.38 as
and by way of actual damages; the
amount of P100,000.00 as and by way of
moral damages; the amount of P100,000.00
as and by way of exemplary damages; and
the amount of P50,000.00 as and by way of
attorney's fees;
(2)Defendant is ordered to pay to the heirs of

Isabelo Ladia, Jr., the amount of P50,000.00
for the death of Isabelo Ladia, Jr., the
amount of P75,000.00 as and by way of
actual damages, and amount of P15,000.00
as and by way of attorney's fees.
(3)Third-party defendant First Integrated Bonding

and Insurance Company is ordered to pay
to the defendant the amount of P50,000.00
by way of reimbursement of liabilities
incurred by the defendant as a result of
the accident.
SO ORDERED." 2
Both parties filed their respective motions for reconsideration of the Decision.
Petitioner sought to be exonerated from all civil liabilities, while respondents
asked for an award corresponding to the loss of income of respondent Nelson
Goimco and the late Isabelo Ladia, Jr.
In an Order dated September 7, 1995, the trial court denied petitioner's motion
but granted those of respondents Goimco and spouses Ladia, thus:
"WHEREFORE, the decision of this court is hereby amended

awarding the amount of P679,629,60 to Nelson Goimco and
P100,980.00 to the heirs of Isabelo Ladia, Jr., for loss of
income.
SO ORDERED." 3
Petitioner then, through the law office of Escudero, Marasigan, Sta. Ana & E.H.
Villareal, interposed an appeal to the Court of Appeals.
On October 2, 1997, petitioner received a copy of the Order of the Appellate

Court directing it to file its appellant's brief within fifteen (15) days or until
October 17, 1997. However, despite notice, petitioner did not file the required
appellant's brief. Hence, on February 3, 1998, the Court of Appeals dismissed
petitioner's appeal pursuant to Section 1 (3), Rule 50 of the 1997 Rules of Civil
Procedure, as amended. ECcTaS
Petitioner filed a motion for reconsideration alleging that "the expiration of the
reglementary period fell during more or less at the time that the office log book
(of its counsel), containing the schedules of hearings and deadlines for pleadings,
motions and other documents, inadvertently got lost." 4 Hence, its failure to file
the appellant's brief was due to "its (counsel's) mistake or excusable negligence."
On July 29, 1998, the Court of Appeals denied petitioner's motion for
reconsideration, holding that its "counsel could have, with ordinary prudence,
updated the schedule of hearings and deadlines for the filing of pleadings, briefs
and other court papers within a lesser period of 4 months." 5
Hence, the instant petition for certiorari.
This petition lacks merit.
What petitioner should have filed is a petition for review on certiorari under Rule
45 of the 1997 Rules of Civil Procedure, as amended, not a petition for certiorari
under Rule 65 of the same Rules. We have consistently held that certiorari is not a
substitute for a lost appeal. 6
The extraordinary writ of certiorari issues only for the correction of errors of
jurisdiction or grave abuse of discretion amounting to lack or excess of
jurisdiction. 7 Grave abuse of discretion is such capricious and whimsical
exercise of judgment which is equivalent to an excess or lack of jurisdiction,
meaning that the abuse of discretion must be so patent and so gross as to amount
to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by
law, or to act at all in contemplation of law, as where the power is exercised in an
arbitrary and despotic manner by reason of passion or hostility. 8
We find that in dismissing petitioner's appeal, the Court of Appeals did not
gravely abuse its discretion.
Moreover, the right to appeal is not a natural right or a part of due process. It is
merely a procedural remedy of statutory origin and may be exercised only in the
manner prescribed by the provisions of law authorizing its exercise. 9 Hence, its
requirements must be strictly complied with. 10 Section 7, Rule 44 of the same
Rules provides:
"SEC. 7.Appellant's brief. It shall be the duty of the

appellant to file with the court within forty-five (45) days
from receipt of the notice of the clerk that all evidence, oral
and documentary, are attached to record, seven (7) copies of
his legibly typewritten, mimeographed or printed brief, with
proof of service of two (2) copies thereof upon the appellee."
Section 1 (e), Rule 50 likewise states:
"SEC. 1.Grounds for dismissal of appeal. An appeal may be

xxx xxx xxx
(e)Failure of the appellant to serve and file the required

number of copies of his brief or memorandum within the
time prescribed by these Rules;"
In Casim v. Floredeliza, 11 we stressed that the above Rules are designed for the
proper and prompt disposition of cases before the Appellate Court, for they
provide for a system under which litigants may be heard in the correct form and
manner at the prescribed time in an orderly confrontation before a court whose
authority is unquestioned.
We note that petitioner's previous counsel is a large law firm with several
lawyers in its roster. Yet it took said counsel four (4) months, from the
expiration of the reglementary period, within which to file the appellant's brief.
It is settled that failure to file brief for a client constitutes inexcusable negligence.
12 Petitioner's flimsy excuse that it's counsel's logbook containing the schedules
for the filing of pleadings and hearings was lost is, to say the least, most
unpersuasive. Said counsel should have examined consistently the records of its
cases to find out what appropriate actions have to be taken thereon. The notice to
file the appellant's brief was in the records of the instant cases all along. Had
counsel been efficient in the handling of its cases, the required appellant's brief
could have been filed on time. Its failure to do so is an inexcusable negligence.
It is settled that the mistakes, negligence, and omissions of counsel are binding
upon his client. 13 So should it be in the instant cases.
On petitioner's insistence that it was denied due process, suffice it to say that
there is no denial of due process where the adverse ruling was attributable to its
counsel's negligence. 14
WHEREFORE, the petition is DISMISSED. Costs against petitioner.
SO ORDERED.
||| (Philippine Rabbit Bus Lines Inc. v. Goimco Sr., G.R. No. 135507, November 29,
2005)
SECOND DIVISION
[G.R. No. 153762. August 12, 2005.]
SUSAN HONORIDEZ, JOSEFINA H. LOPEZ and

CONSTANTINA H. SANCHEZ, petitioners, vs. MAKILITO
B. MAHINAY, JOCELYN "JOY" B. SORENSEN and
husband name unknown, ARTHUR CABIGON, and
FELIMON SUAREZ, respondents.
Pedro A. Rosito for petitioners.
Jesus Isidoro C. Atoc for F. Suarez.
Makilito Mahinay and Mario Mayol for respondents.
SYLLABUS
1.REMEDIAL LAW; CIVIL PROCEDURE; APPEALS; PETITION FOR REVIEW;

PROPER REMEDY TO QUESTION FINAL ORDERS OR JUDGMENTS AND
NOT INTERLOCUTORY ORDERS. Petitioners clearly erred in their choice of
remedy. The instant petition, as described by petitioners' counsel, "is a petition
for review on appeal by certiorari." A petition for review under Rule 45 is the
proper remedy to question final orders or judgments and not interlocutory
orders. It is limited only to questions of law. The 22 March 2002 Order of the RTC
does not constitute a final order or judgment, but is an interlocutory order, for it
did not rule on nor dismiss Civil Case No. CEB-23653. In denying petitioners'
three (3) motions, the RTC merely resolved incidental matters and did not touch
on the merits of the case nor put an end to the proceedings.
2.ID.; ID.; ID.; ID.; WILL FAIL WHERE PARTIES DID NOT RAISE
SUBSTANTIAL QUESTION OF LAW; SUPREME COURT IS NOT THE PROPER
VENUE TO CONSIDER A FACTUAL ISSUE AS IT IS NOT A TRIER OF FACTS.
Likewise, even if we treat this matter as a proper petition for certiorari under
Rule 45, the petition must still fail. Petitioners raise no substantial question of
law. Petitioners want the Court to reverse the Order of the RTC on the sole
ground that the transaction between them and Suarez was one of real estate
mortgage, and that they were able to redeem the subject lot. In other words,
petitioners would have the Court reopen Civil Case No. CEB-16335, and make a
re-evaluation of the facts pertaining to the true nature of petitioners' transaction
with Suarez, a question which has long been ruled upon by the RTC by its
holding that it is a sale and not a mortgage. Moreover, petitioners would like the
Court to accept their claim that a redemption of the subject property had been
made, a matter which should have been brought before the trial court which
heard Civil Case No. CEB-16335. It is not the function of this Court to re-examine
the evidence submitted by the parties or analyze or weigh the evidence all over
again. This Court is definitely not the proper venue to consider a factual issue as
it is not a trier of facts.
3.ID.; SPECIAL CIVIL ACTIONS; PETITION FOR CERTIORARI; PROPER

REMEDY TO QUESTION AN ALLEGEDLY IMPROVIDENT ORDER OR
DECISION; PETITION WILL NOT PROSPER ABSENT IMPUTATION OF
COMMISSION OF GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION ON THE PART OF THE LOWER COURT.
Moreover, it is well-settled that a petition for certiorari under Rule 65, not Rule
45, is the proper remedy to question an allegedly improvident order or decision,
such as the one in the instant case. However, even if petitioners filed a petition
under Rule 65, the same will not prosper, since the same should have been filed
with the Court of Appeals, following the doctrine of hierarchy of courts, which
serves as a general determinant of the proper forum for the availment of the
extraordinary remedy of certiorari. Considering that a special civil action of
certiorari under Rule 65 is within the concurrent original jurisdiction of the
Supreme Court and the Court of Appeals, the petition should have been initially
filed in the Court of Appeals in strict observance of the doctrine on the hierarchy
of courts. Moreover, the petition does not impute the commission of a grave
abuse of discretion amounting to lack or excess of jurisdiction to the lower court,
which is the essential centerpiece of a Rule 65 petition.
4.ID.; CIVIL PROCEDURE; TRIAL; CONSOLIDATION; ONLY PENDING

ACTIONS INVOLVING A COMMON QUESTION OF LAW OR FACT MAY BE
CONSOLIDATED. Petitioners attempt to revive the issues in Civil Case No.
CEB-16335 by moving for the consolidation of the same with Civil Case No. CEB-
23653. Under Section 1, Rule 31 of the Rules of Court, only pending actions
involving a common question of law or fact may be consolidated. Obviously,
petitioners cannot make out a case for consolidation in this case since Civil Case
No. CEB-16335, the case which petitioners seek to consolidate with the case a
quo, has long become final and executory; as such it cannot be re-litigated in the
instant proceedings without virtually impeaching the correctness of the decision
in the other case. Public policy abhors such eventuality.
5.ID.; JUDGMENTS; FINAL AND EXECUTORY; DOCTRINE OF FINALITY OF

JUDGMENT; ONCE A JUDGMENT HAS ATTAINED FINALITY IT BECOMES
IMMUTABLE AND UNALTERABLE. Litigation must end and terminate
sometime and somewhere, and it is essential to an effective administration of
justice that once a judgment has become final the issue or cause involved therein
should be laid to rest. This doctrine of finality of judgment is grounded on
fundamental considerations of public policy and sound practice. In fact, nothing
is more settled in law than that once a judgment attains finality it thereby
becomes immutable and unalterable. It may no longer be modified in any
respect, even if the modification is meant to correct what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether the modification
is attempted to be made by the court rendering it or by the highest court of the
land. The decision in Civil Case No. CEB-16335 has long become final and
executory. This Court finds no reason to disturb the same.
DECISION
TINGA, J p:
This petition for review under Rule 45 filed by Susan Honoridez, Josefina H.
Lopez and Constantina H. Sanchez assails the 22 March 2002 Order of the
Regional Trial Court (RTC), 7th Judicial Region, Branch 58, Cebu City in Civil
Case No. CEB-23653 which denied petitioners' three (3) motions. 1
On 14 April 1992, petitioners filed a Complaint 2 with the RTC of Cebu City for
declaration of nullity of a mortgage deed and for damages, with an application
for a temporary restraining order and/or injunction to prevent the foreclosure
sale of the subject parcel of land. Petitioners alleged that on 27 October 1994, they
mortgaged said parcel of land to Jocelyn "Joy" Sorensen (Sorensen), and that the
mortgage deed imposed an exorbitant, unconscionable interest of five percent
(5%) per month or sixty percent (60%) per annum. 3 Thereafter, petitioners filed
an Amended Complaint, 4 alleging that the same parcel of land was earlier
mortgaged to Felimon Suarez (Suarez) on 9 November 1993, but they were
required to execute a deed of sale instead. They claimed that when the secured
obligation had matured, Sorensen offered to help redeem the property and did
pay the sum for such purpose, as well as the taxes involved. It was after such
payment that petitioners executed the mortgage in favor of Sorensen. CTHDcE
During the course of the proceedings, Atty. Makilito Mahinay (Mahinay) filed a
Motion to Intervene, 5 claiming that in an earlier case, Civil Case No. CEB-11086,
he and petitioners entered into a compromise agreement wherein he was given
the preferential right to buy the lot in issue in the event that petitioners decide to
dispose of it. Later on, he discovered that petitioners executed a deed of sale over
the same lot in favor of Suarez, thereby prompting him to file an action for
specific performance against petitioners and Suarez. The subsequent action,
docketed as Civil Case No. CEB-16335, was decided in Mahinay's favor, with the
RTC finding that the contract between Suarez and petitioners was a sale and not
an equitable mortgage, ruling that Mahinay is entitled to redeem the lot from
Suarez, and ordering Suarez to execute a deed of conveyance and to transfer the
lot to Mahinay for the same consideration as in the deed of sale between Suarez
and petitioners. This decision was affirmed by the Court of Appeals and became
final and executory on 8 February 2001. 6
Petitioners and Sorensen opposed the motion for intervention, claiming that
Suarez could not have sold the lot to Mahinay because Suarez had not purchased
it and become its owner in the first place. Thereafter, Mahinay filed a motion for
judgment on the pleadings, alleging that the answers failed to tender an issue. 7
Petitioners then filed three motions, to wit: (1) Motion to Defer Motion for Judgment
on the Pleadings, (2) Motion for Consolidation, and (3) Motion for Leave to File Third
Party Complaint and Admit Third Party Complaint. 8 In the first motion, they
claimed that they were able to redeem the lot from Suarez long before the
decision in Civil Case No. CEB-16335 had come out, thus rendering the
aforementioned decision moot and academic. According to petitioners, such
redemption is a supervening event which rendered the decision unenforceable.
In the second motion, they argued that the determination of whether such
redemption is a supervening event is a common issue in the case a quo and in
Civil Case No. CEB-16335. In the third motion, petitioners claimed that there is a
necessity to implead Suarez in order to preserve and protect their ownership
over the lot. 9
In the assailed 22 March 2002 Order, 10 the RTC found that the parties are bound
by the finality of the decision in Civil Case No. CEB-16335, and that their posture
that their transaction with Suarez is not a sale but a mortgage is an attempt to
reopen an issue which has already been decided with finality. Anent the claim
that the redemption of the lot in issue is a supervening event which rendered the
decision moot and academic, the RTC held that it should have been raised in
Civil Case No. CEB-16335 to precipitate the presentation of evidence on the
matter, especially since the redemption allegedly occurred while the case was
still pending. Based on these findings, the RTC denied the three motions. The
dispositive portion of the Order reads:
Based on the foregoing findings, the Court finds no valid

ground to grant the Motion for Judgment on the Pleadings,
Motion to Defer Action on the Motion for Judgment on the
Pleadings, Motion for Consolidation and Motion for Leave
to File Third Party Complaint, etc, as they are hereby denied.
SO ORDERED. 11
Petitioners filed a Motion for Reconsideration 12 but the same was denied by the
RTC for lack of merit.
Petitioners went straight to this Court, through a petition under Rule 45 of the
Rules of Court, presenting the following assignment of errors, to wit:
I.The trial court erred in not allowing petitioners to file the

third-party complaint against Felimon Suarez.
II.The trial court erred in not consolidating Civil Case No.

CEB-23653 [with Civil Case No. CEB 16335].
III.The trial court erred in not granting petitioners' motion

for reconsideration. 13
The Order insofar as it denied Mahinay's motion for judgment on the pleadings is
not challenged in this petition.
Petitioners maintain that the deed of sale between them and Suarez was a real
estate mortgage founded on a loan, 14 and that assuming arguendo that they sold
the lot to Suarez, ownership over the lot was eventually restored to them
nevertheless since they were able to redeem the same in 1994. 15 They thus claim
that the redemption of the lot was a fait accompli and that the RTC decision in
Civil Case No. CEB-16335 has become functus oficio. 16 As Suarez has never
become the owner of the lot, he is not entitled to withdraw the amount deposited
by Mahinay in accordance with the decision in Civil Case No. CEB-16335. 17
In his Comment, Mahinay capitalizes on the holding of the trial court. He claims
that petitioners' third-party complaint does not relate in any way to the subject
matter in the complaint-in-intervention, and that petitioners merely want the
reversal of the decision in Civil Case No. CEB-16335. In addition, he argues that
the case a quo cannot be consolidated with Civil Case No. CEB-16335 since the
latter case has long been terminated. 18
For his part, Suarez admits that he executed a deed of conveyance in favor of
Mahinay and had moved for the release of the cash bond posted by the latter.
However, he abandoned the motion for release of the money when petitioners
made him "recall" 19 that they have already redeemed the property from him
and that he had already returned to them the Original Owner's Certificate of
Title covering the property. He likewise admits that he received money from
Sorensen for the redemption of the subject lot. 20
Sorensen, on the other hand, claims that the instant petition in essence seeks to
annul the decision in Civil Case No. CEB-16335, a decision which had already
been affirmed by the Court of Appeals and for which an entry of judgment had
already been issued. She adds that although she has claims against Suarez, it is
doubtful whether it is still procedurally feasible to reopen Civil Case No. CEB-
16335 considering that there is an entry of judgment. 21
In their consolidated reply, petitioners assert that with Suarez's admission that
they redeemed the subject lot, it follows that he had no more legal right over the
said property when the decision in Civil Case No. CEB-16335 was rendered.
Thus, said decision has no legal leg to stand on. 22 They insist that there is a
common issue between the case a quo and in Civil Case No. CEB-16335, that is,
whether the subject lot was repurchased by petitioners from Suarez. 23
The petition must be denied.
Petitioners clearly erred in their choice of remedy. The instant petition, as

described by petitioners' counsel, "is a petition for review on appeal by certiorari."
24 A petition for review under Rule 45 is the proper remedy to question final
orders or judgments and not interlocutory orders. It is limited only to questions
of law. 25 The 22 March 2002 Order of the RTC does not constitute a final order or
judgment, but is an interlocutory order, for it did not rule on nor dismiss Civil
Case No. CEB-23653. In denying petitioners' three (3) motions, the RTC merely
resolved incidental matters and did not touch on the merits of the case nor put an
end to the proceedings. 26
Moreover, it is well-settled that a petition for certiorari under Rule 65, not Rule 45,
is the proper remedy to question an allegedly improvident order or decision,
such as the one in the instant case. 27
However, even if petitioners filed a petition under Rule 65, the same will not
prosper, since the same should have been filed with the Court of Appeals,
following the doctrine of hierarchy of courts, which serves as a general
determinant of the proper forum for the availment of the extraordinary remedy
of certiorari. Considering that a special civil action of certiorari under Rule 65 is
within the concurrent original jurisdiction of the Supreme Court and the Court of
Appeals, the petition should have been initially filed in the Court of Appeals in
strict observance of the doctrine on the hierarchy of courts. 28 Moreover, the
petition does not impute the commission of a grave abuse of discretion
amounting to lack or excess of jurisdiction to the lower court, which is the
essential centerpiece of a Rule 65 petition. EACTSH
Likewise, even if we treat this matter as a proper petition for certiorari under Rule
45, the petition must still fail. Petitioners raise no substantial question of law.
Petitioners want the Court to reverse the Order of the RTC on the sole ground
that the transaction between them and Suarez was one of real estate mortgage,
and that they were able to redeem the subject lot. In other words, petitioners
would have the Court reopen Civil Case No. CEB-16335, and make a re-
evaluation of the facts pertaining to the true nature of petitioners' transaction
with Suarez, a question which has long been ruled upon by the RTC by its
holding that it is a sale and not a mortgage. Moreover, petitioners would like the
Court to accept their claim that a redemption of the subject property had been
made, a matter which should have been brought before the trial court which
heard Civil Case No. CEB-16335.
It is not the function of this Court to re-examine the evidence submitted by the
parties or analyze or weigh the evidence all over again. This Court is definitely
not the proper venue to consider a factual issue as it is not a trier of facts. 29
Petitioners attempt to revive the issues in Civil Case No. CEB-16335 by moving
for the consolidation of the same with Civil Case No. CEB-23653. Under Section
1, Rule 31 of the Rules of Court, only pending actions involving a common
question of law or fact may be consolidated. Obviously, petitioners cannot make
out a case for consolidation in this case since Civil Case No. CEB-16335, the case
which petitioners seek to consolidate with the case a quo, has long become final
and executory; as such it cannot be re-litigated in the instant proceedings without
virtually impeaching the correctness of the decision in the other case. Public
policy abhors such eventuality. HASDcC
Litigation must end and terminate sometime and somewhere, and it is essential
to an effective administration of justice that once a judgment has become final the
issue or cause involved therein should be laid to rest. 30 This doctrine of finality
of judgment is grounded on fundamental considerations of public policy and
sound practice. 31 In fact, nothing is more settled in law than that once a
judgment attains finality it thereby becomes immutable and unalterable. It may
no longer be modified in any respect, even if the modification is meant to correct
what is perceived to be an erroneous conclusion of fact or law, and regardless of
whether the modification is attempted to be made by the court rendering it or by
the highest court of the land. 32 The decision in Civil Case No. CEB-16335 has
long become final and executory. This Court finds no reason to disturb the same.
WHEREFORE, premises considered, the instant petition is hereby DENIED for

lack of merit. Costs against petitioners.
SO ORDERED.
||| (Honoridez v. Mahinay, G.R. No. 153762, August 12, 2005)
SECOND DIVISION
[G.R. No. 140102. February 9, 2006.]
UNION INDUSTRIES, INC., petitioner, vs. GASPAR

VALES and PRUDENCIO CERDENIA, 1 respondents.
SYLLABUS
1.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; FAILURE TO

ATTACH PERTINENT PLEADINGS AND DOCUMENTS IS A VIOLATION OF
THE RULES WHICH ARE REQUIRED TO BE FOLLOWED EXCEPT ONLY FOR
THE MOST PERSUASIVE REASONS; RATIONALE. Petitioner's failure to
attach copies of pertinent pleadings and documents was a violation of Rule 65,
Section 1, paragraph 2 of the Rules of Court. It is true that a litigation is not a
game of technicalities and that the rules of procedure should not be strictly
enforced at the cost of substantial justice. However, it does not mean that the
Rules of Court may be ignored at will and at random to the prejudice of the
orderly presentation and assessment of the issues and their just resolution. It
must be emphasized that procedural rules should not be belittled or dismissed
simply because their non-observance may have resulted in prejudice to a party's
substantial rights. Like all rules, they are required to be followed except only for
the most persuasive of reasons.
2.ID.; EVIDENCE; FACTUAL FINDINGS OF THE LABOR ARBITER WHEN

AFFIRMED BY THE NATIONAL LABOR RELATIONS COMMISSION (NLRC)
AND THE COURT OF APPEALS ARE BINDING UPON THE SUPREME
COURT; JUSTIFIED. As a rule, factual findings of the labor arbiter, when
affirmed by the NLRC and the Court of Appeals, are binding on this Court. It is
not our function to analyze or weigh all over again the evidence already
considered in the proceedings below. Our jurisdiction in a petition for review
under Rule 45 of the Rules of Court is limited to reviewing only errors of law.
RESOLUTION
CORONA, J p:
In this petition for review under Rule 45 of the Rules of Court, petitioner would
have us annul and set aside the May 21, 1999 decision 2 of the Court of Appeals
finding no grave abuse of discretion on the part of the National Labor Relations
Commission 3 (NLRC) in holding petitioner liable to pay respondents, Gaspar
Vales and Prudencio Cerdenia, separation benefits in the amounts of P27,885 and
P21,450, respectively.
The facts are not disputed.
Respondents Vales and Cerdenia were agency workers of Gotamco & Sons, Inc.
They were assigned to work for petitioner Union Industries, Inc. as carpenters
since 1983 and 1986, respectively.
In 1995, grievance meetings were held for the regularization of several

contractual employees, including respondents. This resulted in a compromise
agreement, 4 the pertinent portion of which read:
1.)On the remaining issues, the parties agreed on the

following:
xxx xxx xxx
(b)The following years of service of the remaining 8

complainants under Gotamco shall be tacked in
into their length of service as regular employees of
UII for purposes only of retirement or separation
pay, to wit:
xxx xxx xxx

2.GASPAR VALES- 6 years
3.PRUDENCIO CERDENIA- 5 years

2.)The complainants agree that this agreement embodies all
their claims and that they waive any other claims against UII
which [they] could have made or have made during the
negotiations, but which are not embodied in this agreement.
HDTcEI
3.)The parties agree to sign the formal memorandum of

agreement at a later date to be agreed upon by them." 5
In 1995, respondents joined petitioner's mainstream of regular employees. They

underwent medical examination and were both diagnosed to be positive for
pulmonary tuberculosis (PTB). They were, however, allowed to continue
working for another year subject to medical re-examination. If still found
suffering from PTB, they were to take a leave to recuperate before reporting back
to work.
On June 14, 1996, respondents were again found positive for PTB. They were
required to go on sick leave. Instead, respondents filed a complaint for illegal
dismissal against petitioner before the arbitration branch of the NLRC.
The labor arbiter 6 dismissed the complaint for illegal dismissal but ordered the
payment of separation benefits based on the following:
After a thorough analysis of the evidence adduced to the

records of the case at bench, this Arbitration Branch finds
that complainants 7 were not illegally dismissed from
employment much less dismissed at all. They were both
[merely asked] to go on sick leave for further medical
treatment of pulmonary tuberculosis (PTB).
xxx xxx xxx
Considering that complainants [were] suffering from

controlled PTB minimal since the [latter] part of 1995 and
their continued employment would be prejudicial to their
health and that of their co-workers and despite medication
and treatment for over a year, their medical condition
showed that they are still suffering from PTB minimal, the
relief of separation pay of 1/2 month salary for every year of
credited and actual service is in order. . . .
The basis in the computation of their separation benefits

should be reckoned from the date that they were first
hired/assigned at Union Industries, Inc. by Gotamco & Sons,
Inc. and not from the agreement forged between labor and
management as a result of the grievance hearing for the
regularization of the affected service contractual workers
(including complainants herein). This is based on the
principle of equity since the record of employment is
reckoned not from the date of his appointment as such, but
from the very first time that he worked with the respondent
establishment.
xxx xxx xxx
WHEREFORE, judgment is hereby rendered ordering

Respondent, Union Industries, Inc. 8 to pay complainants,
Gaspar Vales and Prudencio Cerdenia separation benefits in
the amounts of P27,885.00 and P21,450.00 respectively.
DHACES
The complaint for illegal dismissal and other monetary

claims are hereby disallowed for lack of merit. 9
On appeal, the NLRC affirmed the decision of the labor arbiter, reasoning that,
because of respondents' regularization, the number of years they actually
worked for petitioner should be considered in the computation of separation
benefits. Petitioner's motion for reconsideration was denied.
On June 9, 1998, petitioner filed a petition for certiorari with this Court. It was,
however, referred to the Court of Appeals in line with our ruling in St. Martin
Funeral Homes v. NLRC, et al. 10
On May 21, 1999, the Court of Appeals dismissed the petition on two grounds:
(1) petitioner failed to attach pertinent documents and pleadings and (2) there
was no grave abuse of discretion on the part of the NLRC. According to the
Court of Appeals, the decision of the labor arbiter, which the NLRC affirmed,
was in consonance with the principle that labor laws constitute social legislation
under which doubts are resolved in favor of labor. 11 The motion for
reconsideration was denied. Hence, this recourse.
The Court of Appeals was correct in dismissing the petition for certiorari.
Petitioner's failure to attach copies of pertinent pleadings and documents was a
violation of Rule 65, Section 1, paragraph 2 of the Rules of Court.
It is true that a litigation is not a game of technicalities and

that the rules of procedure should not be strictly enforced at
the cost of substantial justice. However, it does not mean
that the Rules of Court may be ignored at will and at
random to the prejudice of the orderly presentation and
assessment of the issues and their just resolution. It must be
emphasized that procedural rules should not be belittled or
dismissed simply because their non-observance may have
resulted in prejudice to a party's substantial rights. Like all
rules, they are required to be followed except only for the
most persuasive of reasons. 12
Petitioner furthermore wants us to set aside the award of separation benefits to
respondents Vales and Cerdenia in the amounts of P27,885 and P21,450,
respectively a factual finding of the labor arbiter which was affirmed by the
NLRC and upheld by the Court of Appeals.
We deny the prayer. As a rule, factual findings of the labor arbiter, when
affirmed by the NLRC and the Court of Appeals, are binding on this Court. It is
not our function to analyze or weigh all over again the evidence already
considered in the proceedings below. 13 Our jurisdiction in a petition for review
under Rule 45 of the Rules of Court is limited to reviewing only errors of law. 14
WHEREFORE, there being no reversible error on the part of the Court of Appeals
in rendering its May 21, 1999 decision, the instant petition is hereby DENIED.
ESHAIC
SO ORDERED.
||| (Union Industries, Inc. v. Vales, G.R. No. 140102, February 09, 2006)
FIRST DIVISION
[G.R. Nos. 162814-17. August 25, 2005.]
JOSE F. MANACOP, HARISH C. RAMNANI, CHANDRU

P. PESSUMAL and MAUREEN M. RAMNANI, petitioners,
vs. EQUITABLE PCIBANK, LAVINE LOUNGEWEAR
MANUFACTURING INC., PHILIPPINE FIRE AND
MARINE INSURANCE CORPORATION and FIRST
LEPANTO-TAISHO INSURANCE CORPORATION,
respondents.
Arturo S. Santos for petitioners.
R.A. Quiroz Law Offices for First Lepanto-Taisho Insurance

Corporation.
Picazo Buyco Tan Fider & Santos for Rizal Surety and Insurance
Company.
M.A. Aguinaldo & Associates and Fondevilla Jasarino Young Rondario &
Librojo Law Offices for Lavine Loungewear Manufacturing, Inc.
Villaraza & Angangco Law Offices for Equitable PCI Bank.

SYLLABUS
1.REMEDIAL LAW; CIVIL PROCEDURE; SIMULTANEOUS FILING OF A

PETITION FOR CERTIORARI UNDER RULE 65 AND AN ORDINARY APPEAL
UNDER RULE 45 OF THE REVISED RULES OF CIVIL PROCEDURE CANNOT
BE ALLOWED; RATIONALE. Simultaneous filing of a petition for certiorari
under Rule 65 and an ordinary appeal under Rule 41 of the Revised Rules of
Civil Procedure cannot be allowed since one remedy would necessarily cancel
out the other. The existence and availability of the right of appeal proscribes
resort to certiorari because one of the requirements for availment of the latter is
precisely that there should be no appeal. It is elementary that for certiorari to
prosper, it is not enough that the trial court committed grave abuse of discretion
amounting to lack or excess of jurisdiction; the requirement that there is no
appeal, nor any plain, speedy and adequate remedy in the ordinary course of law
must likewise be satisfied. It is well-settled that the remedy to obtain reversal or
modification of the judgment on the merits is appeal. This is true even if the
error, or one of the errors, ascribed to the trial court rendering the judgment is its
lack of jurisdiction over the subject matter, or the exercise of power in excess
thereof, or grave abuse of discretion in the findings of fact or of law set out in the
decision. Thus, while it may be true that a final order or judgment was rendered
under circumstances that would otherwise justify resort to a special civil action
under Rule 65, the latter would nonetheless be unavailing if there is an appeal or
any other plain, speedy and adequate remedy in the ordinary course of law.
2.ID.; ID.; WHEN RESORT TO SPECIAL CIVIL ACTION FOR CERTIORARI

WAS JUSTIFIED EVEN AS THE REGLEMENTARY PERIOD FOR THE PROPER
REMEDY OF APPEAL HAD ALREADY LAPSED; NOT APPLICABLE IN CASE
AT BAR. Equitable Bank's reliance on Estate of Salud Jimenez v. Philippine
Export Processing Zone is misplaced. In that case, resort by the respondent to a
special civil action was justified, even as the reglementary period for the proper
remedy of appeal had already lapsed, because the assailed order of the trial court
set aside an expropriation order that had long become final and executory. The
Court declared therein that the trial court clearly acted beyond its jurisdiction for
it cannot modify a final and executory order. The questioned order of the trial
court in that case was a patent nullity. In contrast, Equitable Bank has not shown
any valid or extraordinary circumstance that would justify immediate resort to
certiorari. It simply alleged grave abuse of discretion on the part of the trial judge
as purportedly shown by a pattern of questionable rulings in favor of petitioners.
However, these rulings may not be corrected by certiorari no matter how
irregular or erroneous they might be. If the court has jurisdiction over the subject
matter and of the person, its rulings upon all questions involved are within its
jurisdiction and may be corrected only by an appeal from the final decision.
3.ID.; ID.; FORUM-SHOPPING; PRESENT UPON INSTITUTION OF TWO OR

MORE ACTIONS OR PROCEEDINGS GROUNDED ON THE SAME CAUSE OF
ACTION ON THE SUPPOSITION THAT ONE OR THE OTHER WOULD
MAKE A FAVORABLE DISPOSITION; PRESENT IN CASE AT BAR. Another
compelling reason for dismissing CA-G.R. Nos. 70292 and 70298 is that Equitable
Bank and Lavine actually engaged in forum-shopping. As pointed out by
petitioners, there is indeed parallelism between the instant case and Chemphil
Export & Import Corp. v. CA. In Chemphil, PCIBank filed a special civil action
for certiorari against final orders of the trial court, even as its co-parties likewise
brought an ordinary appeal from the same final orders. Although PCIBank did
not join its co-parties in the latter's appeal and instead separately filed its own
petition under Rule 65, the Court nonetheless found PCIBank's acts as
constituting forum-shopping: We view with skepticism PCIB's contention that it
did not join the consortium because it 'honestly believed that certiorari was the
more efficacious and speedy relief available under the circumstances.' Rule 65 of
the Revised Rules of Court is not difficult to understand. Certiorari is available
only if there is no appeal or other plain, speedy and adequate remedy in the
ordinary course of law. Hence, in instituting a separate petition for certiorari,
PCIB has deliberately resorted to forum-shopping. . . . It alarms us to realize that
we have to constantly repeat our warning against forum-shopping. We cannot
over-emphasize its ill-effects, one of which is aptly demonstrated in the case at
bench where we are confronted with two divisions of the Court of Appeals
issuing contradictory decisions . . . Forum-shopping or the act of a party against
whom an adverse judgment has been rendered in one forum, of seeking another
(and possibly favorable) opinion in another forum (other than by appeal or the
special civil action of certiorari), or the institution of two (2) or more actions or
proceedings grounded on the same cause on the supposition that one or the
other court would make a favorable disposition has been characterized as an act
of malpractice that is prohibited and condemned as trifling with the Courts and
abusing their processes. It constitutes improper conduct which tends to degrade
the administration of justice. It has also been aptly described as deplorable
because it adds to the congestion of the already heavily burdened dockets of the
courts. Thus, if we allow the instant petitions of Equitable Bank and Lavine to
prosper, this Court would be confronted with the spectacle of two (2) appellate
court decisions (one on the special civil actions brought by Equitable Bank and
Lavine, and another on the ordinary appeals taken by Rizal Surety, Equitable
Bank and the other respondents) dealing with the same subject matter, issues,
and parties. Needless to say, this is exactly the pernicious effect that the rules
against forum-shopping seek to avoid.
4.ID.; ID.; CERTIORARI; WHEN CONSIDERED AS PROPER REMEDY

AGAINST AN ORDER GRANTING EXECUTION PENDING APPEAL.
Certiorari lies against an order granting execution pending appeal where the
same is not founded upon good reasons. The fact that the losing party had also
appealed from the judgment does not bar the certiorari proceedings, as the
appeal could not be an adequate remedy from such premature execution.
Additionally, there is no forum-shopping where in one petition a party questions
the order granting the motion for execution pending appeal and at the same time
questions the decision on the merits in a regular appeal before the appellate
court. After all, the merits of the main case are not to be determined in a petition
questioning execution pending appeal and vice versa.
5.ID.; ID.; EXECUTION PENDING APPEAL; WHEN ALLOWED. The general

rule is that only judgments which have become final and executory may be
executed. However, discretionary execution of appealed judgments may be
allowed under Section 2 (a) of Rule 39 of the Revised Rules of Civil Procedure
upon concurrence of the following requisites: (a) there must be a motion by the
prevailing party with notice to the adverse party; (b) there must be a good reason
for execution pending appeal; and (c) the good reason must be stated in a special
order. The yardstick remains the presence or the absence of good reasons
consisting of exceptional circumstances of such urgency as to outweigh the injury
or damage that the losing party may suffer, should the appealed judgment be
reversed later. Since the execution of a judgment pending appeal is an exception
to the general rule, the existence of good reasons is essential.
6.ID.; ID.; ID.; NOT PROPER IN CASE AT BAR. The fact that the insurance
companies admit their liabilities is not a compelling or superior circumstance
that would warrant execution pending appeal. On the contrary, admission of
their liabilities and willingness to deliver the proceeds to the proper party
militate against execution pending appeal since there is little or no danger that
the judgment will become illusory. There is likewise no merit in petitioners'
contention that the appeals are merely dilatory because, while the insurance
companies admitted their liabilities, the matter of how much is owing from each
of them and who is entitled to the same remain unsettled. It should be noted that
respondent insurance companies are questioning the amounts awarded by the
trial court for being over and above the amount ascertained by the Office of the
Insurance Commission. There are also three parties claiming the insurance
proceeds, namely: petitioners, Equitable Bank, and Lavine as represented by the
group of Chandru. Besides, that the appeal is merely dilatory is not a good
reason for granting execution pending appeal. As held in BF Corporation v. Edsa
Shangri-la Hotel: . . . it is not for the trial judge to determine the merit of a
decision he rendered as this is the role of the appellate court. Hence, it is not
within competence of the trial court, in resolving a motion for execution pending
appeal, to rule that the appeal is patently dilatory and rely on the same as basis
for finding good reasons to grant the motion. Only an appellate court can
appreciate the dilatory intent of an appeal as an additional good reason in
upholding an order for execution pending appeal. . .
DECISION
Respondent Lavine Loungewear Manufacturing, Inc. ("Lavine") insured its

buildings and supplies against fire with Philippine Fire and Marine Insurance
Corporation ("PhilFire"), Rizal Surety and Insurance Company ("Rizal Surety"),
Tabacalera Insurance Company ("TICO"), First Lepanto-Taisho Insurance
Corporation ("First Lepanto"), Equitable Insurance Corporation ("Equitable
Insurance"), and Reliance Insurance Corporation ("Reliance Insurance"). Except
for Policy No. 13798 issued by First Lepanto, all the policies provide that:
Loss, if any, under this policy is payable to Equitable

Banking Corporation-Greenhills Branch, as their interest
may appear subject to the terms, conditions, clauses and
warranties under this policy. (Underscoring supplied)
On August 1, 1998, a fire gutted Lavine's buildings and their contents thus claims
were made against the policies. As found by the Office of the Insurance
Commission, the insurance proceeds payable to Lavine is P112,245,324.34. 1
Lavine was then represented by Harish C. Ramnani ("Harish") but his authority
was withdrawn on March 17, 2000 by the Board of Directors due to his alleged
failure to account for the insurance proceeds. Chandru C. Ramnani ("Chandru")
was appointed in his stead and was designated, together with Atty. Mario A.
Aguinaldo, as Lavine's representatives in negotiating with the insurance
companies.
Prior to the release of the proceeds, the insurance companies required Lavine to
sign a Sworn Statement in Proof of Loss and Subrogation Agreement 2 whereby the
former would be absolved from their liabilities upon payment of the proceeds to
Equitable Bank. Only Harish signed the document while the rest of Lavine's
directors refused to sign.
Notwithstanding Chandru's request that payments be made first to Lavine who

shall thereafter pay Equitable Bank as the latter's interest may appear, certain
insurance companies released the proceeds directly to Equitable Bank thus
Chandru filed, in behalf of Lavine, a Petition for the Issuance of a Writ of
Preliminary Injunction with Prayer for a Temporary Restraining Order 3 before
the Regional Trial Court (RTC) of Pasig City, against PhilFire, Rizal Surety,
TICO, First Lepanto and Equitable Bank. The case was docketed as Civil Case
No. 68287 and raffled to Branch 71 presided by Judge Celso D. Lavia. SIcEHD
Harish, Jose F. Manacop, Chandru P. Pessumal, Maureen M. Ramnani and

Salvador Cortez, moved to intervene 4 claiming they were Lavine's incumbent
directors and that Harish was Lavine's authorized representative. 5 They
disclaimed Chandru's designation as president of Lavine as well as his and Atty.
Aguinaldo's authority to file the action. They also denied having refused to sign
the Sworn Statement in Proof of Loss and Subrogation Agreement. 6
On February 14, 2001, the trial court granted the motion for intervention 7 and
thereafter denied Lavine's motion for reconsideration. 8
In their respective Answer with Compulsory Counterclaim, Rizal Surety stated

its willingness to pay the insurance proceeds but only to the rightful claimant, 9
while Equitable Bank alleged it had sufficiently established the amount of its
claim and as beneficiary of the insurance policies, it was entitled to collect the
proceeds. 10
The intervenors in their Amended Answer-in-Intervention 11 with cross-claim

against the insurance companies alleged that as of August 1, 1998, Lavine's
obligations to Equitable Bank amounted to P71,000,000.00 and since Equitable
Insurance and Reliance Insurance have already paid the bank more than this
amount, respondent insurance companies should be ordered to immediately
deliver to Lavine the remaining insurance proceeds through the intervenors and
to pay interests thereon from the time of submission of proof of loss.
In its Answer 12 dated May 22, 2001 to Lavine's complaint and the intervenors'
cross-claim, First Lepanto alleged that its share in the combined proceeds was
P16,145,760.11, of which P6,000,000.00 had already been paid to Equitable Bank.
It withheld payment of the balance since it could not determine to whom it
should be made. It further alleged that the intervenors had no personality to
intervene and prayed for the outright dismissal of their cross-claim against the
insurance companies.
This was refuted by the intervenors who alleged that since Lavine and
petitioners were already litigating, it was too late for First Lepanto to file an
action for interpleader. They stressed that the latter must now deliver the balance
of the insurance proceeds to either Equitable Bank or Lavine, through the
intervenors. 13
On June 18, 2001, PhilFire filed its Answer 14 admitting liability in the amount of
P12,916,608.09, of which P4,288,329.52 had been paid to Equitable Bank but
withheld paying the balance until the rightful claimant has been determined.
TICO did not file an answer to Lavine's complaint and was declared in default.
15
After pre-trial, the intervenors filed a Second Amended Answer-in-Intervention

16 alleging that Lavine's liabilities to Equitable Bank were extinguished since it
received proceeds exceeding the amount of Lavine's obligations. Thus, the real
estate mortgages given as security therefor be released and the excess amount
returned to Lavine. ESCTIA
Equitable Bank denied that Lavine's obligations were fully paid, and averred that
the loans were secured not only by the insurance policies and the real estate
mortgages but also by several surety agreements executed by Harish and
Maureen Ramnani. The bank prayed that: (a) the insurance companies be
ordered to deliver to it the proceeds of the policies and/or for Lavine to be
directed to pay the outstanding loans; (b) the spouses Harish and Maureen
Ramnani be held solidarily liable for the payment of the outstanding obligations
of Lavine; and (c) the mortgaged properties be foreclosed in case of failure of
Lavine, the insurers and sureties to fully satisfy the loan obligations. 17
In a Reply, 18 the intervenors denied that Lavine acquired further loans from the
bank for the years 1998 and 1999. The promissory notes allegedly pertaining to
these loans were obtained prior to 1998 and the surety agreements signed by
Harish and Maureen Ramnani were consolidated in a Surety Agreement dated
January 27, 1997 19 and that the loan covered by PN No. TL-GH-97-0292 had
been fully paid.
In the meantime, Equitable Bank and First Lepanto manifested in open court that
another pre-trial should be conducted on the intervenors' cross-claim under the
Second Amended Answer-in-Intervention but the trial court denied the same
and proceeded with the hearing of the case. 20
On April 2, 2002, the trial court rendered a decision, the dispositive part of which
reads:
WHEREFORE, judgment is hereby rendered:
1.DISMISSING the Complaint dated January 22, 2001, for

lack of merit, with costs against Chandru C. Ramnani.
2.ORDERING the defendant Bank to refund to plaintiff

through the Intervenors the amount of P65,819,936.05
representing the overpayment as actual or compensatory
damages, with legal rate of interest at six (6%) per cent per
annum from the date of this decision until full payment.
3.ORDERING:
a.Defendant Philippine Fire and Marine Insurance
Corporation to pay plaintiff through Intervenors
the total amount of P15,111,670.48 representing
unpaid insurance proceeds as actual or
compensatory damages, with twenty-nine (29%)
per cent interest per annum from October 1, 1998
until full payment.
b.Defendant Rizal Surety and Insurance Company

to pay plaintiff through Intervenors the amount of
P17,100,000.00 representing unpaid insurance
proceeds as actual or compensatory damages, with
twenty-nine (29%) per cent interest per annum
from October 1, 1998 until full payment.
c.Defendant First Lepanto-Taisho Insurance

Corporation to pay plaintiff through Intervenors
the total amount of P18,250,000.00 representing
unpaid insurance proceeds as actual or
compensatory damages, with twenty-nine (29%)
per cent interest per annum from October 1, 1998
until full payment.
d.Defendant Tabacalera Insurance Company to pay

plaintiff through Intervenors the amount of
P25,690,000.00 representing unpaid insurance
proceeds as actual or compensatory damages, with
twenty-nine (29%) per cent interest per annum
from October 1, 1998 until full payment. DTAHSI
4.ORDERING all defendants to pay, jointly and severally,

plaintiff through Intervenors the amount equivalent to ten
(10%) per cent of the actual damages due and demandable as
and by way of attorney's fees.
5.CANCELLING the loan mortgage annotations and

RETURNING to plaintiff through Intervenors TCT No.
23906, CCT Nos. PT-17871, PT-17872 and PT-17873.
6.Costs of suit.
Counterclaims filed by plaintiff against intervenors and

cross-claims filed by all defendants against intervenors and
counterclaims are hereby DISMISSED for lack of merit.
SO ORDERED. 21
On April 3, 2002, the intervenors filed a Motion for Execution Pending Appeal 22
on the following grounds: (a) TICO was on the brink of insolvency; (b) Lavine
was in imminent danger of extinction; and (c) any appeal from the trial court's
judgment would be merely dilatory.
Meanwhile, Rizal Surety, First Lepanto, Equitable Bank and Lavine separately
filed a Notice of Appeal. 23 PhilFire likewise filed a Notice of Appeal, 24 a
Motion for Reconsideration (Ad Cautelam), 25 and a Motion to Dismiss. 26
PhilFire's Motion for Reconsideration and Motion to Dismiss were denied by the
trial court on May 14, 2002. 27
Without filing a motion for reconsideration from the decision of the trial court
and even before the latter could rule on the motion for execution pending appeal,
Equitable Bank filed on April 24, 2002 a Petition for Certiorari, Prohibition and
Mandamus (with Prayer for Temporary Restraining Order and Preliminary
Injunction) 28 before the Court of Appeals docketed as CA-G.R. SP No. 70298.
Lavine also filed a Petition for Certiorari with Prayer for Temporary Restraining
Order (TRO) and Writ of Preliminary Injunction 29 docketed as CA-G.R. SP No.
70292, after it withdrew its Notice of Appeal. Both claimed that appeal was not a
plain, speedy and adequate remedy under the circumstances.
Judge Lavia granted intervenors' motion for execution pending appeal 30 and
issued a writ of execution on May 20, 2002 31 which was implemented the
following day. Personal properties of PhilFire and First Lepanto were seized; the
latter's bank deposits garnished while real properties belonging to Equitable
Bank were levied upon. The writ was not enforced against Rizal Surety because
its corporate name and operations were transferred to QBE Insurance (Phils.)
Incorporation ("QBE Insurance"). 32
First Lepanto assailed the trial court's order granting execution pending appeal
and the writ of execution in a Petition for Certiorari 33 before the Court of
Appeals docketed as CA-G.R. SP No. 70844. It allegedly did not file a motion for
reconsideration of the trial court's order due to extreme urgency, as the ongoing
execution of the appealed judgment was threatening to paralyze its operations.
Before long, PhilFire also filed a Petition for Certiorari With Prayer for Temporary
Restraining Order and Writ of Preliminary Injunction docketed as CA-G.R. SP
No. 70799, against the same order and writ of execution. 34
Rizal Surety, for its part, did not file a petition under Rule 65 of the Revised
Rules of Civil Procedure but maintained its ordinary appeal from the April 2,
2002 decision of the trial court. However, acting on the report that Rizal Surety
was now re-organized as QBE Insurance (Phils.) Inc., Judge Lavia issued an
Order dated May 27, 2002 directing the implementation of the Writ of Execution
against QBE Insurance. 35
Subsequently, the certiorari petitions were consolidated before the Tenth Division
of the Court of Appeals, which thereupon granted Lavine's prayer for the
issuance of a writ of preliminary injunction upon posting a P50M bond. 36
In view of the issuance of the writ of execution by the trial court, Equitable Bank
filed an Amended and/or Supplemental Petition for Certiorari, Prohibition and
Mandamus 37 in CA-G.R. SP No. 70298 on June 11, 2002, assailing the trial court's
order granting execution pending appeal as well as the issuance of the writ of
execution. In due course, the Court of Appeals promulgated a consolidated
decision, the dispositive part of which reads:

rendered:
(1)SETTING ASIDE the decision dated April 2, 2001;
(2)declaring NULL and VOID the Special Order dated May

17, 2002 and the Writ of Execution dated May 20, 2002;
(3)remanding the case to the lower court for the conduct of

pre-trial conference on the Second Amended Answer-in-
Intervention and the subsequent pleadings filed in relation
thereto; and
(4)in the event that the lower court decides that Lavine is the
one entitled to the proceeds of the insurance policies,
payment thereof should be withheld, subject to the outcome
of the decision on the issue on the rightful members of the
Board of Directors of Lavine which is pending before the
intra-corporate court. DTCSHA
SO ORDERED. 38
On March 17, 2004, the appellate court issued a resolution amending its earlier
decision as follows:
WHEREFORE, premises considered, this Court hereby

resolves to:
1.CORRECT paragraph 1 of the dispositive portion of the

Consolidated Decision dated May 29, 2003 to reflect the
correct date of the questioned decision of the court a quo
which is April 2, 2002 and not April 2, 2001;
2.CLARIFY paragraph 3 of the Consolidated Decision in the

sense that the case is remanded to the lower court to enable
to (sic) the parties to amend their respective pleadings and
issues, as may be necessary and conduct pre-trial anew and
other proceedings to the exclusion of the intervenors in view
of the ruling that the latter should not have been allowed to
intervene in the case;
3.a) LIFT the order of levy and garnishment on the real and
personal properties and bank deposits of Equitable PCIBank;
b) LIFT the garnishment on the bank accounts of Philippine
Fire and Marine Insurance Corporation which were made
pursuant to the Special Order dated May 17, 2002 and the
Writ of Execution dated May 20, 2002 which were declared
null and void in this Court's Consolidated Decision; and
5.DENY Equitable PCIBank's motion to disqualify

respondent Judge Celso Lavia from hearing the case upon
its remand to the lower court. IEHTaA
SO ORDERED. 39
Upon proper motion, the Court of Appeals also subsequently ordered the lifting
of the order of levy and notice of garnishment on the real properties and bank
deposits of First Lepanto in a resolution dated April 20, 2004.
Equitable Bank then filed a petition for review before this Court docketed as G.R.
Nos. 162842-45 assailing the appellate court's resolution insofar as it denied the
bank's motion to disqualify Judge Lavia. However, the Third Division of this
Court denied the petition 40 and its subsequent motion for reconsideration. 41
On the other hand, the intervenors now petitioners took this recourse
under Rule 45 alleging that:
I.THE COURT OF APPEALS ERRED IN GIVING DUE

COURSE TO THE PETITION FOR CERTIORARI
OF EQUITABLE PCIBANK IN CA-G.R. SP NO.
70298 AND THE PETITION FOR CERTIORARI OF
LAVINE IN CA-G.R. SP NO. 70292
NOTWITHSTANDING THAT THE ORDINARY
MODE OF APPEAL UNDER SECTION 2, RULE 41
OF THE REVISED RULES OF COURT HAD
ALREADY BEEN AVAILED OF BY THEM.
II.THE COURT OF APPEALS COMMITTED AN ERROR IN

VOIDING THE DECISION OF THE TRIAL COURT
DATED APRIL 2, 2002 FOR LACK OF PRE-TRIAL
ON THE PETITIONERS AMENDED ANSWER-IN-
INTERVENTION NOTWITHSTANDING THAT A
PRE-TRIAL WAS ALREADY CONCLUDED AND
THE PARTIES HAVE ALREADY ADDUCED
THEIR RESPECTIVE EVIDENCES IN THE TRIAL.
III.THE COURT OF APPEALS GRAVELY ERRED IN

HOLDING THAT PETITIONERS WHO ARE THE
RIGHTFUL MEMBERS OF THE BOARD OF
DIRECTORS CANNOT INTERVENE TO
PROSECUTE THE ACTION FILED BY LAVINE
THROUGH A MINORITY STOCKHOLDER WHO
HAS NO AUTHORITY THEREFOR.
IV.THE COURT OF APPEALS ERRED IN SETTING ASIDE

THE DECISION OF THE TRIAL COURT AND
FRUSTRATE THE FINDINGS THAT EQUITABLE
PCIBANK IS NOT ENTITLED TO CLAIM THE
INSURANCE PROCEEDS SINCE THE LOAN OF
LAVINE TO IT HAD ALREADY BEEN FULLY
PAID AS IN FACT THERE WAS AN
OVERPAYMENT WHICH MUST BE RETURNED
TO LAVINE.
V.THE COURT OF APPEALS COMMITTED AN ERROR IN

VOIDING THE WRIT OF EXECUTION PENDING
APPEAL NOTWITHSTANDING THAT THE
JUDGMENT LIABILITY IS ADMITTED BUT ITS
SATISFACTION IS WITHHELD BY VIRTUE OF
THE FLIMSY APPEAL. 42
The petition is partly meritorious.
On the first assigned error, we agree that the Court of Appeals should have
dismissed CA-G.R. SP Nos. 70292 and 70298. A perusal of these petitions show
that Equitable Bank and Lavine inappropriately filed the petitions for certiorari
when appeal was clearly a plain, speedy and adequate remedy from the decision
of the trial court. In fact, both filed their respective notices of appeal from the
trial court's decision, although Lavine later withdrew its notice of appeal. They
therefore cannot be allowed to question the same decision on the merits and also
invoke the extraordinary remedy of certiorari.
Simultaneous filing of a petition for certiorari under Rule 65 and an ordinary

appeal under Rule 41 of the Revised Rules of Civil Procedure cannot be allowed
since one remedy would necessarily cancel out the other. The existence and
availability of the right of appeal proscribes resort to certiorari because one of the
requirements for availment of the latter is precisely that there should be no
appeal. 43 It is elementary that for certiorari to prosper, it is not enough that the
trial court committed grave abuse of discretion amounting to lack or excess of
jurisdiction; the requirement that there is no appeal, nor any plain, speedy and
adequate remedy in the ordinary course of law must likewise be satisfied. 44
In the instant case, Equitable Bank and Lavine assailed the trial court's decision
through certiorari by alleging that Judge Lavia was biased. According to
Equitable Bank, Judge Lavia's partiality was evident in his refusal to issue and
serve summons on Jethmal Inc. and in conducting pre-trial on petitioners' Second
Amended Answer-in-Intervention. On the other hand, Lavine alleged that Judge
Lavia disregarded mandatory provisions of the Rules of Court when he allowed
petitioners to intervene; that he also resolved the issue of corporate
representation between the two groups of directors of Lavine when he had no
jurisdiction over the subject matter.
Clearly, the foregoing allegations are proper under Rule 41. It should be pointed
out that when Equitable Bank and Lavine filed their respective petitions before
the Court of Appeals on April 24, 2002, the trial court had already rendered on
April 2, 2002 a judgment on the merits. Both had notice of said final judgment as
they even filed notices of appeal with the trial court. This only goes to show that
Equitable Bank and Lavine unwittingly recognized ordinary appeal as the proper
remedy in seeking reversal of the assailed decision.
It is well-settled that the remedy to obtain reversal or modification of the

judgment on the merits is appeal. This is true even if the error, or one of the
errors, ascribed to the trial court rendering the judgment is its lack of jurisdiction
over the subject matter, or the exercise of power in excess thereof, or grave abuse
of discretion in the findings of fact or of law set out in the decision. 45 Thus,
while it may be true that a final order or judgment was rendered under
circumstances that would otherwise justify resort to a special civil action under
Rule 65, the latter would nonetheless be unavailing if there is an appeal or any
other plain, speedy and adequate remedy in the ordinary course of law.
Equitable Bank, however, posits that in certain exceptional cases, certiorari may
be allowed even with the availability of an appeal, such as where valid and
compelling considerations would warrant the same or where rigid application of
the rules would result in a manifest failure or miscarriage of justice, as in this
case.
Equitable Bank's reliance on Estate of Salud Jimenez v. Philippine Export Processing

Zone 46 is misplaced. In that case, resort by the respondent to a special civil
action was justified, even as the reglementary period for the proper remedy of
appeal had already lapsed, because the assailed order of the trial court set aside
an expropriation order that had long become final and executory. The Court
declared therein that the trial court clearly acted beyond its jurisdiction for it
cannot modify a final and executory order. The questioned order of the trial
court in that case was a patent nullity. DAEcIS
In contrast, Equitable Bank has not shown any valid or extraordinary

circumstance that would justify immediate resort to certiorari. It simply alleged
grave abuse of discretion on the part of the trial judge as purportedly shown by a
pattern of questionable rulings in favor of petitioners. However, these rulings
may not be corrected by certiorari no matter how irregular or erroneous they
might be. If the court has jurisdiction over the subject matter and of the person,
its rulings upon all questions involved are within its jurisdiction and may be
corrected only by an appeal from the final decision. 47
Another compelling reason for dismissing CA-G.R. Nos. 70292 and 70298 is that
Equitable Bank and Lavine actually engaged in forum-shopping. As pointed out
by petitioners, there is indeed parallelism between the instant case and Chemphil
Export & Import Corp. v. CA. 48
In Chemphil, PCIBank filed a special civil action for certiorari against final orders
of the trial court, even as its co-parties likewise brought an ordinary appeal from
the same final orders. Although PCIBank did not join its co-parties in the latter's
appeal and instead separately filed its own petition under Rule 65, the Court
nonetheless found PCIBank's acts as constituting forum-shopping:
We view with skepticism PCIB's contention that it did not

join the consortium because it 'honestly believed that
certiorari was the more efficacious and speedy relief available
under the circumstances.' Rule 65 of the Revised Rules of
Court is not difficult to understand. Certiorari is available
only if there is no appeal or other plain, speedy and
adequate remedy in the ordinary course of law. Hence, in
instituting a separate petition for certiorari, PCIB has
deliberately resorted to forum-shopping.
xxx xxx xxx
It alarms us to realize that we have to constantly repeat our

warning against forum-shopping. We cannot over-
emphasize its ill-effects, one of which is aptly demonstrated
in the case at bench where we are confronted with two
divisions of the Court of Appeals issuing contradictory
decisions . . .
Forum-shopping or the act of a party against whom an
adverse judgment has been rendered in one forum, of
seeking another (and possibly favorable) opinion in another
forum (other than by appeal or the special civil action of
certiorari), or the institution of two (2) or more actions or
proceedings grounded on the same cause on the supposition
that one or the other court would make a favorable
disposition has been characterized as an act of malpractice
that is prohibited and condemned as trifling with the Courts
and abusing their processes. It constitutes improper conduct
which tends to degrade the administration of justice. It has
also been aptly described as deplorable because it adds to
the congestion of the already heavily burdened dockets of
the courts. (Underscoring supplied) 49
Thus, if we allow the instant petitions of Equitable Bank and Lavine to prosper,
this Court would be confronted with the spectacle of two (2) appellate court
decisions (one on the special civil actions brought by Equitable Bank and Lavine,
and another on the ordinary appeals taken by Rizal Surety, Equitable Bank and
the other respondents) dealing with the same subject matter, issues, and parties.
Needless to say, this is exactly the pernicious effect that the rules against forum-
shopping seek to avoid. Consequently, the certiorari petitions of Equitable Bank
and Lavine must be struck down for being anathema to the orderly
administration of justice. cDAEIH
In view of the preceding discussion, we find it no longer necessary to discuss

petitioners' second to fourth assigned errors. The propriety of the intervention,
the lack of pre-trial and the extent of Equitable Bank's interests in the insurance
proceeds, among others, are issues that must properly be resolved in the
ordinary appeals. Except for Lavine which apparently withdrew its notice of
appeal, all the other respondents appealed the decision of the trial court under
Rule 41. These appeals must consequently be allowed to proceed.
Anent petitioners' fifth assigned error, we find that the Court of Appeals did not
err in giving due course and in granting the petitions in CA-G.R. SP Nos. 70799
and 70844. These certiorari petitions initiated by PhilFire and First Lepanto were
directed against the trial court's orders granting execution pending appeal and
the concomitant issuance of a writ of execution. The proper recourse to be taken
from these orders is a special civil action for certiorari under Rule 65, pursuant to
Section 1, Rule 41 of the Revised Rules of Civil Procedure. 50
Certiorari lies against an order granting execution pending appeal where the
same is not founded upon good reasons. The fact that the losing party had also
appealed from the judgment does not bar the certiorari proceedings, as the appeal
could not be an adequate remedy from such premature execution. Additionally,
there is no forum-shopping where in one petition a party questions the order
granting the motion for execution pending appeal and at the same time questions
the decision on the merits in a regular appeal before the appellate court. After all,
the merits of the main case are not to be determined in a petition questioning
execution pending appeal and vice versa. 51
The general rule is that only judgments which have become final and executory
may be executed. 52 However, discretionary execution of appealed judgments
may be allowed under Section 2 (a) of Rule 39 of the Revised Rules of Civil
Procedure upon concurrence of the following requisites: (a) there must be a
motion by the prevailing party with notice to the adverse party; (b) there must be
a good reason for execution pending appeal; and (c) the good reason must be
stated in a special order. 53 The yardstick remains the presence or the absence of
good reasons consisting of exceptional circumstances of such urgency as to
outweigh the injury or damage that the losing party may suffer, should the
appealed judgment be reversed later. 54 Since the execution of a judgment
pending appeal is an exception to the general rule, the existence of good reasons
is essential. 55
In the case at bar, petitioners insist that execution pending appeal is justified
because respondent insurance companies admitted their liabilities under the
insurance contracts and thus have no reason to withhold payment.
We are not persuaded. The fact that the insurance companies admit their
liabilities is not a compelling or superior circumstance that would warrant
execution pending appeal. On the contrary, admission of their liabilities and
willingness to deliver the proceeds to the proper party militate against execution
pending appeal since there is little or no danger that the judgment will become
illusory.
There is likewise no merit in petitioners' contention that the appeals are merely
dilatory because, while the insurance companies admitted their liabilities, the
matter of how much is owing from each of them and who is entitled to the same
remain unsettled. It should be noted that respondent insurance companies are
questioning the amounts awarded by the trial court for being over and above the
amount ascertained by the Office of the Insurance Commission. There are also
three parties claiming the insurance proceeds, namely: petitioners, Equitable
Bank, and Lavine as represented by the group of Chandru.
Besides, that the appeal is merely dilatory is not a good reason for granting
execution pending appeal. As held in BF Corporation v. Edsa Shangri-la Hotel: 56
. . . it is not for the trial judge to determine the merit of a

decision he rendered as this is the role of the appellate court.
Hence, it is not within competence of the trial court, in
resolving a motion for execution pending appeal, to rule that
the appeal is patently dilatory and rely on the same as basis
for finding good reasons to grant the motion. Only an
appellate court can appreciate the dilatory intent of an
appeal as an additional good reason in upholding an order
for execution pending appeal. . . 57
Lastly, petitioners assert that Lavine's financial distress is sufficient reason to

order execution pending appeal. Citing Borja v. Court of Appeals, 58 they claim
that execution pending appeal may be granted if the prevailing party is already
of advanced age and in danger of extinction. ADTCaI
Borja is not applicable to the case at bar because its factual milieu is different. In
Borja, the prevailing party was a natural person who, at 76 years of age, "may no
longer enjoy the fruit of the judgment before he finally passes away." 59 Lavine,
on the other hand, is a juridical entity whose existence cannot be likened to a
natural person. Its precarious financial condition is not by itself a compelling
circumstance warranting immediate execution and does not outweigh the long
standing general policy of enforcing only final and executory judgments. 60
WHEREFORE, the petition is PARTIALLY GRANTED. CA-G.R. SP Nos. 70292

and 70298 are DISMISSED. The assailed decision of the Court of Appeals dated
May 29, 2003 is AFFIRMED insofar as it declared null and void the Special Order
dated May 17, 2002 and the Writ of Execution dated May 20, 2002 of the Regional
Trial Court-Pasig City, Branch 71, in Civil Case No. 68287.
SO ORDERED.
||| (Manacop v. Equitable PCIBank, G.R. Nos. 162814-17, August 25, 2005)
THIRD DIVISION
[G.R. No. 159296. February 10, 2006.]
ALLGEMEINE-BAU-CHEMIE PHILS., INC., petitioner, vs.

METROPOLITAN BANK & TRUST CO., HONORABLE
N. C. PERELLO, Presiding Judge of the REGIONAL
TRIAL COURT-MUNTINLUPA, BRANCH 276 and
SHERIFF FELIX FALCOTELLO, respondents.
The Law Firm of Chan Robles & Associates for petitioner.

Santiago Corpuz & Ejercito Law Offices for private respondent.
SYLLABUS
1.REMEDIAL LAW; PROVISIONAL REMEDIES; PRELIMINARY INJUNCTION;

DEFINED; APPLICATION IN CASE AT BAR. It is axiomatic that what
determines the nature of an action and hence, the jurisdiction of a court, are the
allegations of the complaint and the character of the relief sought. Petitioner's
only prayer in CA-G.R. No. 71217 is "for the preservation of the status quo, that is,
petitioner, having in possession over the subject properties for several years,
shall retain such possession until the controversy [Civil Case No. 00-196] before
the said trial court [Branch 276, RTC of Muntinlupa City] has been finally
resolved and respondents be prevented from taking over such possession."
Clearly, what petitioner filed with the appellate court was an original action for
preliminary injunction which is a provisional and extra-ordinary remedy
calculated to preserve or maintain the status quo of things and is availed of to
prevent actual or threatened acts, until the merits of the case can be heard.
2.ID.; ID.; ID.; JURISDICTION OF THE COURT OF APPEALS, EXPLAINED.

An original action for injunction is outside the jurisdiction of the Court of
Appeals, however. Under B.P. 129, the appellate court has original jurisdiction
only over actions for annulment of judgments of the RTCs and has original
jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus and
quo warranto, and auxiliary writs or processes whether or not they are in aid of its
appellate jurisdiction. The appellate court's jurisdiction to grant a writ of
preliminary injunction is limited to actions or proceedings pending before it, as
Section 2 of Rule 58 of the Rules clearly provides: SECTION 2. Who may grant
preliminary injunction. A preliminary injunction may be granted by the court
where the action or proceeding is pending. . . . or in a petition for certiorari,
prohibition or mandamus under Section 7 of Rule 65, thus: SECTION 7.
Expediting proceedings; injunctive relief. The court in which the petition is filed
may issue orders expediting the proceedings, and it may also grant a temporary
restraining order or a writ of preliminary injunction for the preservation of the
rights of the parties pending such proceedings. The 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 the public respondent from
further proceeding in the case.
DECISION
The appellate court's denial of petitioner Allgemeine-Bau-Chemie Phils., Inc.'s

petition to enjoin the implementation of a writ of possession issued by Branch
276, Regional Trial Court (RTC) of Muntinlupa City in favor of private
respondent Metropolitan Bank and Trust Co. (Metrobank) is the subject of the
present petition for review.
Under a loan agreement 1 dated November 19, 1996, Asian Appraisal Holdings,
Inc. (AAHI) obtained a loan amounting to P442,500,000 from Solidbank
Corporation (Solidbank) for the construction of Asian Star Building, a 20 storey
commercial condominium built on lots covered by TCT Nos. 205967 and 205969
2 located at the Filinvest Corporate City, Alabang, Muntinlupa City.
As security for the loan, AAHI executed a security agreement 3 or real estate
mortgage dated November 19, 1996 over its property consisting of the lots
covered by TCT Nos. 205967 and 205969 and the condominium built thereon
including all units, parking slots, common areas and other improvements,
machineries and equipment. The real estate mortgage was registered with the
Register of Deeds on November 19, 1996 and duly annotated on the individual
Condominium Certificates of Title (CTC) on even date.
On November 17, 1999, AAHI entered into a contract to sell 4 with petitioner for
the purchase of Units 1004 and 1005 covered by CTC No. 54666 5 and CTC No.
54667 6 , respectively, and the right to the exclusive use of parking slots P515,
P516, P517, and P514 covered by CTC No. 54986, 7 CTC No. 54987, 8 CTC No.
54988, 9 CTC No. 54985 10 (the subject properties), respectively, for a total
purchase price of P23,571,280.
On December 22, 1999, the parties executed an addendum 11 to the contract to

sell whereby AAHI assigned to petitioner the right to the exclusive use of
parking slot P504 covered by CTC No. 54975 for a consideration of P600,000,
which petitioner paid on even date. TEDHaA
By separate letters 12 dated March 23, 2000, AAHI and Solidbank informed
petitioner of the real estate mortgage forged by them and was advised to remit
its monthly amortizations for the units and parking slots it purchased to
Solidbank. Petitioner was also requested to inform Solidbank of the total
installments it had paid for these units and parking slots and the balance still due
thereon. 13
Petitioner which occupied the condominium units as its place of business had, by
October 2001, fully settled its obligation to AAHI in the total amount of
P26,588,409.30. 14
On October 21, 2000, as AAHI defaulted on its loan obligation, Metropolitan
Bank and Trust Company (Metrobank), to which the banking operations of
Solidbank were integrated, filed before the Muntinlupa RTC a Petition for Extra-
Judicial Foreclosure of the Real Estate Mortgage. 15
AAHI not long after filed on October 30, 2000 also before the Muntinlupa RTC a
complaint 16 against Solidbank, for Specific Performance with Preliminary
Injunction to enjoin the foreclosure of the real estate mortgage, docketed as Civil
Case No. 00-196, and raffled to Branch 256 of the RTC.
On October 31, 2000, the mortgaged properties were sold at public auction to the
highest bidder, Metrobank, to which a Certificate of Sale was issued. 17 The
Certificate of Sale was registered with the Register of Deeds of Muntinlupa City
and annotated on the individual CTCs on April 4, 2001. 18
On January 24, 2002, Metrobank filed an Ex-Parte petition for the Issuance of a
Writ of Possession 19 of the properties subject of the foreclosed mortgage. The
petition was docketed as LRC Case No. 02-007 and raffled to Branch 276, RTC of
Muntinlupa. The petition was granted and a writ of possession was issued on
April 9, 2002. 20
Also on April 9, 2002, petitioner filed before Branch 256 of the RTC in Civil Case
No. 00-196 (AAHI's complaint against Solidbank for Specific Performance with
Preliminary Injunction) a motion for intervention, 21 to which it attached a
complaint-in-intervention 22 with prayer for the annulment of the extra-judicial
foreclosure sale, delivery of title, and damages and for the issuance of a
temporary restraining order and/or writ of preliminary injunction enjoining
Metrobank to consolidate its title and to take possession of its properties.
The court Sheriff on April 15, 2002 issued a notice to vacate 23 which was served
on May 16, 2002 upon all building occupants who were advised to make the
necessary arrangements with Metrobank regarding their occupancy. 24
In the meantime, the Motion for Reconsideration of the April 9, 2002 Order of
Branch 276 filed by AAHI was denied by Order 25 dated May 13, 2002,
prompting it to file before the appellate court a petition for a writ of preliminary
injunction.
Petitioner filed on June 18, 2002 a separate petition for the issuance of a
temporary restraining order and a writ of preliminary injunction with the
appellate court, 26 docketed as CA-G.R. SP No. 71217, also to enjoin the
implementation of the writ of possession issued by Branch 276 of the Muntinlupa
RTC. In its petition, petitioner alleged that its complaint-in-intervention in Civil
Case No. 00-196 pending in Branch 256 is its principal action but as the said court
could not enjoin Branch 276 from implementing the writ of possession, both
courts being of equal jurisdiction, it had no choice but to file the petition with the
appellate court. 27
On August 22, 2002, the Tenth Division of the Court of Appeals granted
petitioners prayer for, and issued a temporary restraining order 28 in CA-G.R.
SP No. 71217. By Decision 29 of January 22, 2003, the Seventh Division of the
Court of Appeals denied, however, petitioners prayer for the issuance of a writ
of preliminary injunction for failure to establish a clear and unmistakable right to
the subject properties. 30
The motion for reconsideration of the above-said Resolution of January 22, 2003
having been denied by the appellate court by Resolution 31 dated July 23, 2003,
petitioner now comes before this Court on a petition for review, alleging that the
appellate court committed grave and palpable error in denying its prayer for a
writ of preliminary injunction in flagrant violation of laws and jurisprudence. 32
The petition fails. SDEHCc
It is axiomatic that what determines the nature of an action and hence, the
jurisdiction of a court, are the allegations of the complaint and the character of
the relief sought. 33 Petitioner's only prayer in CA-G.R. No. 71217 is "for the
preservation of the status quo, that is, petitioner, having in possession over the
subject properties for several years, shall retain such possession until the
controversy [Civil Case No. 00-196] before the said trial court [Branch 276, RTC
of Muntinlupa City] has been finally resolved and respondents be prevented
from taking over such possession." 34
Clearly, what petitioner filed with the appellate court was an original action for
preliminary injunction which is a provisional and extra-ordinary remedy
calculated to preserve or maintain the status quo of things and is availed of to
prevent actual or threatened acts, until the merits of the case can be heard.
An original action for injunction is outside the jurisdiction of the Court of

Appeals, however. Under B.P. 129, the appellate court has original jurisdiction
only over actions for annulment of judgments of the RTCs and has original
jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus and
quo warranto, and auxiliary writs or processes whether or not they are in aid of its
appellate jurisdiction. 35
The appellate court's jurisdiction to grant a writ of preliminary injunction is

limited to actions or proceedings pending before it, as Section 2 of Rule 58 of the
Rules clearly provides:
SECTION 2.Who may grant preliminary injunction. A

preliminary injunction may be granted by the court where
the action or proceeding is pending. . . . (Emphasis
supplied),
or in a petition for certiorari, prohibition or mandamus under Section 7 of Rule

65, thus:
SECTION 7.Expediting proceedings; injunctive relief. The
court in which the petition is filed may issue orders
expediting the proceedings, and it may also grant a
temporary restraining order or a writ of preliminary
injunction for the preservation of the rights of the parties
pending such proceedings. The 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 the public respondent from further
proceeding in the case. (Emphasis supplied)
In the case at bar, petitioner's complaint-in-intervention in Civil Case No. 00-196

was pending before Branch 256 of the Muntinlupa RTC, not with the appellate
court. Petitioner's petition before the appellate court does not show, nay allege,
that in issuing the writ of possession, the Muntinlupa RTC acted without or in
excess of its jurisdiction or with grave abuse of discretion for it to be treated as
either one for certiorari 36 or prohibition. 37
Thus, for want of jurisdiction, the petition before the appellate court should have
been dismissed outright. aTADcH
At all events, it is well-settled that an order granting or denying a preliminary

injunction is not appealable. 38
WHEREFORE, the petition is, in light of the foregoing discussions, DENIED.
||| (Allgemeine-Bau-Chemie Phils., Inc. v. Metropolitan Bank & Trust Co., G.R. No.
159296, February 10, 2006)
THIRD DIVISION
[G.R. No. 148361. November 29, 2005.]
RAFAEL BAUTISTA and LIGAYA ROSEL, petitioners, vs.

MAYA-MAYA COTTAGES, INC., respondent.
Abello Concepcion Regala & Cruz for petitioners.
Romulo Mabanta Buenaventura Sayoc & Delos Angeles and Roxas De los
Reyes Laurel & Rosario Law Offices for respondent.
SYLLABUS
REMEDIAL LAW; 1997 RULES OF CIVIL PROCEDURE; SEC. 2 RULE 10

THEREOF; WHEN AN AMENDMENT OF PLEADING, AS A MATTER OF
RIGHT, MAY BE MADE; CASE AT BAR. [The above provision] Section 2,
Rule 10 of the 1997 Rules of Civil Procedure clearly shows that before the filing of
any responsive pleading, a party has the absolute right to amend his pleading,
regardless of whether a new cause of action or change in theory is introduced. It
is settled that a motion to dismiss is not the responsive pleading contemplated by
the Rule. Records show that petitioners had not yet filed a responsive pleading to
the original complaint in Civil Case No. 371. What they filed was a motion to
dismiss. It follows that respondent, as a plaintiff, may file an amended complaint
even after the original complaint was ordered dismissed, provided that the order
of dismissal is not yet final, as in this case. Verily, the Court of Appeals correctly
held that in issuing the assailed Order admitting the amended complaint, the
trial court did not gravely abuse its discretion. Hence, neither certiorari nor
prohibition would lie.
RESOLUTION
SANDOVAL GUTIERREZ, J p:
For our resolution is the instant petition for review on certiorari assailing the
Decision 1 and Resolution of the Court of Appeals, dated November 24, 2000 and
May 30, 2001, respectively, in CA-G.R. SP No. 43574.
The facts are:
Spouses Rafael and Ligaya Bautista, petitioners herein, are the registered owners
of a 3,856-square meter lot located at Natipuan, Nasugbu, Batangas, as evidenced
by Original Certificate of Title (OCT) No. P-1436 issued in their names on
January 15, 1989 by the Register of Deeds, same province.
On May 13, 1996, Maya-Maya Cottages, Inc. (MMCI), respondent, filed with the
Regional Trial Court (RTC) of Nasugbu, Batangas a complaint for cancellation of
petitioners' title and damages, with application for a preliminary injunction,
docketed as Civil Case No. 371. Respondent alleged inter alia that "without any
color of right and through dubious means," petitioners were able to obtain OCT
No. P-1436 in their names.
On May 29, 1996, petitioners filed a motion to dismiss the complaint on the
ground that it does not state a cause of action. They averred that respondent is a
private corporation, hence, disqualified under the Constitution 2 from acquiring
public alienable lands except by lease. Respondent cannot thus be considered a
real party in interest.
In its Order dated August 30, 1996, the trial court granted the motion to dismiss,
holding that since the property is an alienable public land, respondent is not
qualified to acquire it except by lease. Thus, it has no cause of action.
Respondent then filed a motion for reconsideration with motion for leave to file
an amended complaint for quieting of title. Respondent alleged that the technical
description in petitioners' title does not cover the disputed lot.
Thereupon, petitioners filed their opposition, contending that the amended

complaint does not also state a cause of action and if admitted, respondent's
theory of the case is substantially modified.
On November 18, 1996, the trial court issued an Order denying petitioners'
motion to dismiss, thus, reversing its Order of August 30, 1996 dismissing the
complaint in Civil Case No. 371. SIcEHC
Petitioners then filed with the Court of Appeals a special civil action for certiorari
and prohibition, docketed as CA-G.R. SP No. 43574. They alleged that the
amended complaint does not cure the defect in the original complaint which
does not state a cause of action. Clearly, in admitting respondent's amended
complaint, the trial court committed grave abuse of discretion amounting to lack
or excess of jurisdiction.
On November 24, 2000, the Court of Appeals rendered a Decision dismissing the
petition for certiorari and prohibition.
Petitioners filed a motion for reconsideration but was denied by the Appellate
Court in its Resolution of May 30, 2001.
Hence, the instant petitioner for review on certiorari.
The sole issue for our resolution is whether the Court of Appeals erred in
holding that the trial court did not commit grave abuse of discretion amounting
to lack or excess of jurisdiction in admitting respondent's amended complaint.
Section 2, Rule 10 of the 1997 Rules of Civil Procedure, as amended, provides:
"SEC. 2.Amendments as a matter of right. A party may

amend his pleading once as a matter of right at any time
before a responsive pleading is served or, in the case of a
reply, at any time within ten (10) days after it is served."
The above provision clearly shows that before the filing of any responsive
pleading, a party has the absolute right to amend his pleading, regardless of
whether a new cause of action or change in theory is introduced. It is settled that
a motion to dismiss is not the responsive pleading contemplated by the Rule. 3
Records show that petitioners had not yet filed a responsive pleading to the
original complaint in Civil Case No. 371. What they filed was a motion to
dismiss. It follows that respondent, as a plaintiff, may file an amended complaint
even after the original complaint was ordered dismissed, provided that the order
of dismissal is not yet final, 4 as in this case.
Verily, the Court of Appeals correctly held that in issuing the assailed Order
admitting the amended complaint, the trial court did not gravely abuse its
discretion. Hence, neither certiorari nor prohibition would lie.
As to petitioners' contention that respondent corporation is barred from

acquiring the subject lot, suffice it to say that this is a matter of defense which can
only be properly determined during the full-blown trial of the instant case.
WHEREFORE, the petition is DENIED. The challenged Decision and Resolution

of the Court of Appeals in CA-G.R. SP No. 43574 are AFFIRMED IN TOTO. Costs
against petitioners.
SO ORDERED.
||| (Bautista v. Maya-Maya Cottages Inc., G.R. No. 148361, November 29, 2005)
FIRST DIVISION
[G.R. No. 156142. March 23, 2011.]
SPOUSES ALVIN GUERRERO AND MERCURY M.

GUERRERO, petitioners, vs. HON. LORNA NAVARRO
DOMINGO, IN HER CAPACITY AS PRESIDING JUDGE,
BRANCH 201, REGIONAL TRIAL COURT, LAS PIAS
CITY & PILAR DEVELOPMENT CORPORATION,
respondents.
DECISION
LEONARDO-DE CASTRO, J p:
This is a Petition for Review on Certiorari assailing the Order 1 of the Regional
Trial Court (RTC), Branch 201 of Las Pias City dated November 18, 2002 in Civil
Case No. SCA-02-0007. Said Order denied the Petition for Prohibition against the
proceedings in Civil Case No. 6293, an unlawful detainer case, which was filed in
the Metropolitan Trial Court (MeTC) of Las Pias City.
The factual and procedural antecedents of this case are as follows:
On June 2, 1997, private respondent Pilar Development Corporation (PDC) and

petitioners spouses Alvin and Mercury Guerrero (spouses Guerrero) entered into
a Contract to Sell 2 whereby PDC agreed to sell to the spouses Guerrero the
property covered by Transfer Certificate of Title (TCT) No. T-51529 and the
house standing thereon. The total consideration for the sale is P2,374,000.00 with
a downpayment of P594,000.00 and a balance of P1,780,000.00 payable in 120
months commencing on May 30, 1997.
On February 5, 2002, PDC filed a Complaint 3 for Unlawful Detainer against the
spouses Guerrero. The Complaint alleged that the spouses Guerrero made no
further payment beyond June 1, 2000 despite repeated demands, prompting PDC
to cancel the Contract to Sell on November 19, 2001 by sending a Notice of
Cancellation to the spouses Guerrero dated November 23, 2001. The Complaint
was docketed as Civil Case No. 6293 filed with the MeTC of Las Pias City. The
spouses Guerrero responded with a pleading captioned Answer with
Reservation 4 alleging that it is impermissible to blend "causes of action such as
'cancellation, extinguishment or rescission of contract' (which are beyond
pecuniary estimation) and 'ejectment (unlawful detainer).'"
On April 10, 2002, the spouses Guerrero filed a Petition for Prohibition 5 with the
RTC of Las Pias City praying that the Complaint in Civil Case No. 6293 be
quashed, 6 and raising the following lone issue: DcHSEa
AN ACTION WITH TWO (2) JOINED CONTROVERSIES,

ONE BEYOND PECUNIARY ESTIMATION SUCH AS
"EXTINGUISHMENT OF CONTRACT" (COGNIZABLE BY
THE RTC), AND THE OTHER, FOR EJECTMENT
(UNLAWFUL DETAINER), IS BEYOND THE
ADJUDICATORY POWERS OF AN INFERIOR COURT. 7
The Petition was docketed as Civil Case No. SCA-02-0007 and was raffled to
the RTC-Branch 201, then presided by Judge Lorna Navarro Domingo.
In the meantime, proceedings in Civil Case No. 6293 continued. Except for the
Answer they had earlier filed, the spouses Guerrero did not participate in the
proceedings of Civil Case No. 6293 until the MeTC rendered its Decision 8 on
September 30, 2002. Ruling in favor of PDC, the MeTC brushed aside the spouses
Guerrero's insistence that it had no jurisdiction by holding that the allegations in
the complaint and the reliefs prayed for therein indicate that the suit is indeed an
unlawful detainer case cognizable by it. 9
On November 4, 2002, the spouses Guerrero appealed the MeTC Decision in

Civil Case No. 6293 to the RTC of Las Pias City. The appeal was docketed as
Civil Case No. LP-02-0292 and was raffled to Branch 197 then presided by Judge
Manuel N. Duque.
On November 18, 2002, the RTC-Branch 201 issued the herein assailed Order in
Civil Case No. SCA-02-0007, denying the Petition for Prohibition for lack of
merit.
Hence, this Petition wherein the spouses, Guerrero reiterated their argument
before the RTC-Branch 201 that the joinder of an action beyond pecuniary
estimation such as "extinguishment of contract" with an action for unlawful
detainer is beyond the adjudicatory powers of the MeTC. The spouses Guerrero
claim that the cancellation of the contract to sell is a matter prejudicial to the
action for unlawful detainer. 10
Meanwhile, on June 20, 2003, the RTC-Branch 197 dismissed the appeal of the
spouses Guerrero in Civil Case No. LP-02-0292 on account of their failure to file
their Memorandum of Appeal and for failure to comply with another Court
Order dated December 16, 2002. 11 On August 28, 2003, the RTC-Branch 197,
noting that there was no appeal or Motion for Reconsideration filed assailing the
June 20, 2003 Decision, ordered the return of the records of the case to the MeTC.
12
Prohibition does not lie to restrain an act that is already a fait accompli
In denying the Petition for Prohibition of the spouses Guerrero, the RTC-Branch
201 held that the remedy was inappropriate, applying the rule that Prohibition
does not lie to restrain an act that is already a fait accompli:
A perusal of the complaint filed before the Metropolitan

Trial Court, Las Pias under Civil Case No. 6293 alleged that
the Contract to Sell was cancelled on November 19, 2001,
from then on Petitioner's right to occupy the property
ceased, and that Defendants/Petitioners refused to
surrender and vacate the house and lot. The prayer is for the
Defendants to vacate the premises to the Plaintiff and pay
rentals. TASCEc
xxx xxx xxx
"The function of the Writ of Prohibition is to prevent the

doing of some act which is about to be done. It is not
intended to provide a remedy for acts already
accomplished["] (Cabanero vs. Torres, 61 Phil. 522 [1935];
Agustin, et al. vs. De la Fuente, 84 Phil. 525 [1949]; Navarro vs.
Lardizabal, G.R. No. L-25361, September 28, 1968, 25 SCRA
370; Heirs of Eugenia V. Roxas, Inc. vs. Intermediate Appellate
Court, G.R. No. 67195, May 29, 1989, 173 SCRA 581).
In this case the Contract to Sell has already been cancelled

before the filing of the complaint for Unlawful Detainer,
hence the Prohibition will no longer lie.
The rest of the allegations are within the jurisdiction of the

Metropolitan Trial Court as the case filed is for Unlawful
Detainer. 13
Indeed, prohibition is a preventive remedy seeking a judgment ordering the

defendant to desist from continuing with the commission of an act perceived to
be illegal. 14 However, we disagree with the pronouncement of the RTC-Branch
201 that the act sought to be prevented in the filing of the Petition for Prohibition
is the cancellation of the contract to sell. Petitions for Prohibition may be filed
only against tribunals, corporations, boards, officers or persons exercising
judicial, quasi-judicial or ministerial functions. 15 Though couched in imprecise
terms, the Petition for Prohibition in the case at bar apparently seeks to prevent
the MeTC from hearing and disposing Civil Case No. 6293:
PRAYER
WHEREFORE, considering the nature of this petition, that is,

Civil Case No. 6293 being under the operation of the
Summary Rules of Procedure, petitioners very fervently
pray, that:
1.Upon the filing of this petition, it be given

preferential disposition or hearing at the
earliest time possible be conducted for
purposes of issuance of preliminary writ
of prohibition;
2.Thereafter, the COMPLAINT (Annex "B" hereof),

be QUASHED as it contains two (2)
combined but severable cases, one
cognizable before this Honorable Court,
and the other, before the public
respondent.
For other reliefs just and equitable. 16
Nevertheless, the same result occurs: Civil Case No. 6293 had already been
disposed by the MeTC, as there was no preliminary injunction issued against
said proceeding. The appeal of the spouses Guerrero in Civil Case No. 6293 had
likewise been denied by the RTC-Branch 197 in a Decision dated June 20, 2003.
The records of the case were returned to the MeTC in view of petitioners' failure
to file a Motion for Reconsideration or an appeal of the same. 17 Since the act
sought to be enjoined in the Petition for Prohibition had already been
accomplished, the same should be dismissed. AHEDaI
To avail of the extraordinary writ of prohibition, petitioners

should have no appeal, nor any plain, speedy and adequate remedy in
the ordinary course of law
Ever since the Petition for Prohibition was filed with the RTC-Branch 201, PDC
opposed its propriety on the ground that the spouses Guerrero had an available
remedy against the allegedly improper exercise of jurisdiction by the MeTC a
Motion to Dismiss. 18
Certainly, the spouses Guerrero could have filed a Motion to Dismiss to prevent
the exercise of jurisdiction by the MeTC if the same had been warranted. Section
13, Rule 70 of the 1997 Rules of Civil Procedure clearly provides that Motions to
Dismiss on the ground of lack of jurisdiction over the subject matter are
exceptions to the pleadings that are prohibited in forcible entry and unlawful
detainer cases:
Sec. 13.Prohibited pleadings and motions. The following

petitions, motions, or pleadings shall not be allowed:
1.Motion to dismiss the complaint except on the

ground of lack of jurisdiction over the subject
matter, or failure to comply with section 12.
Further, under Section 6, Rule 16 19 of the same Rules, any ground for dismissal
may, in lieu of a Motion to Dismiss, be raised in the Answer as an affirmative
defense. This was, in fact, what petitioners did in the present case.
Before resorting to the remedy of prohibition, there should be "no appeal or any
other plain, speedy, and adequate remedy in the ordinary course of law." 20 We
are convinced that in the case at bar, a Motion to Dismiss or an Answer is a plain,
speedy, and adequate remedy in opposing the jurisdiction of the MeTC. Being in
possession of the subject property, the step of filing a Motion to Dismiss or an
Answer instead of resorting to an extraordinary writ under Rule 65 would have
even favored the spouses Guerrero, as there is no threat of dispossession until
the MeTC renders its judgment on the action.
The spouses Guerrero could have, and in fact actually did, present their
allegations in the Petition for Prohibition as defenses in Civil Case No. 6293. As
stated above, however, the spouses Guerrero did not participate in the
proceedings of Civil Case No. 6293 with the exception of filing an Answer with
Reservation. The appeal thereof, Civil Case No. LP-02-0292 in the RTC-Branch
197, was likewise dismissed on account of the spouses Guerrero's failure to file
their Memorandum of Appeal and failure to comply with another Court Order.
Just as certiorari cannot be made a substitute for an appeal where the latter
remedy is available but was lost through the fault or negligence of petitioner, 21
prohibition should not lie when petitioner could have resorted to other remedies
that are now lost due to its own neglect. The irresponsible act of ignoring the
proceedings and orders in Civil Case No. 6293 and in the appeal thereof deserve
no affirmation from this Court.
The spouses Guerrero's insistence that there was a violation of Presidential

Decree No. 975 or an invalid rescission of the contract by PDC could have been
asserted in a separate civil action. The latter would not constitute forum
shopping since the only issue in ejectment suits is physical possession, and any
finding thereon on ownership is only for the purpose of determining right to
possession. 22
WHEREFORE, the instant Petition for Review on Certiorari is DENIED. The

Decision of the Regional Trial Court, Branch 201 of Las Pias City in Civil Case
No. SCA-02-0007 is AFFIRMED.
Costs against petitioners Alvin and Mercury Guerrero.
SO
||| (Spouses Guerrero v. Domingo, G.R. No. 156142, March 23, 2011)
THIRD DIVISION
[G.R. No. 191424. August 7, 2013.]
ALFEO D. VIVAS, on his behalf and on behalf of the

Shareholders of EUROCREDIT COMMUNITY BANK,
petitioner, vs. THE MONETARY BOARD OF THE
BANGKO SENTRAL NG PILIPINAS and the PHILIPPINE
DEPOSIT INSURANCE CORPORATION, respondents.
DECISION
MENDOZA, J p:
This is a petition for prohibition with prayer for the issuance of a status quo ante
order or writ of preliminary injunction ordering the respondents to desist from
closing EuroCredit Community Bank, Incorporated (ECBI) and from pursuing
the receivership thereof. The petition likewise prays that the management and
operation of ECBI be restored to its Board of Directors (BOD) and its officers.
The Facts
The Rural Bank of Faire, Incorporated (RBFI) was a duly registered rural banking
institution with principal office in Centro Sur, Sto. Nio, Cagayan. Record shows
that the corporate life of RBFI expired on May 31, 2005. 1 Notwithstanding,
petitioner Alfeo D. Vivas (Vivas) and his principals acquired the controlling
interest in RBFI sometime in January 2006. At the initiative of Vivas and the new
management team, an internal audit was conducted on RBFI and results thereof
highlighted the dismal operation of the rural bank. In view of those findings,
certain measures calculated to revitalize the bank were allegedly introduced. 2
On December 8, 2006, the Bangko Sentral ng Pilipinas (BSP) issued the Certificate
of Authority extending the corporate life of RBFI for another fifty (50) years. The
BSP also approved the change of its corporate name to EuroCredit Community
Bank, Incorporated, as well as the increase in the number of the members of its
BOD, from five (5) to eleven (11). 3 SaIACT
Pursuant to Section 28 of Republic Act (R.A.) No. 7653, otherwise known as The
New Central Bank Act, the Integrated Supervision Department II (ISD II) of the
BSP conducted a general examination on ECBI with the cut-off date of December
31, 2007. Shortly after the completion of the general examination, an exit
conference was held on March 27, 2008 at the BSP during which the BSP officials
and examiners apprised Vivas, the Chairman and President of ECBI, as well as
the other bank officers and members of its BOD, of the advance findings noted
during the said examination. The ECBI submitted its comments on BSP's
consolidated findings and risk asset classification through a letter, dated April 8,
2008. 4
Sometime in April 2008, the examiners from the Department of Loans and Credit
of the BSP arrived at the ECBI and cancelled the rediscounting line of the bank.
Vivas appealed the cancellation to BSP. 5 Thereafter, the Monetary Board (MB)
issued Resolution No. 1255, dated September 25, 2008, placing ECBI under
Prompt Corrective Action (PCA) framework because of the following serious
findings and supervisory concerns noted during the general examination: 1]
negative capital of P14.674 million and capital adequacy ratio of negative 18.42%;
2] CAMEL (Capital Asset Management Earnings Liquidity) composite rating of
"2" with a Management component rating of "1"; and 3] serious supervisory
concerns particularly on activities deemed unsafe or unsound. 6 Vivas claimed
that the BSP took the above courses of action due to the joint influence exerted by
a certain hostile shareholder and a former BSP examiner. 7
Through its letter, dated September 30, 2008, the BSP furnished ECBI with a copy
of the Report of Examination (ROE) as of December 31, 2007. In addition, the BSP
directed the bank's BOD and senior management to: 1] infuse fresh capital of
P22.643 million; 2] book the amount of P28.563 million representing unbooked
valuation reserves on classified loans and other risks assets on or before October
31, 2008; and 3] take appropriate action necessary to address the
violations/exceptions noted in the examination. 8 cAEaSC
Vivas moved for a reconsideration of Resolution No. 1255 on the grounds of non-
observance of due process and arbitrariness. The ISD II, on several instances, had
invited the BOD of ECBI to discuss matters pertaining to the placement of the
bank under PCA framework and other supervisory concerns before making the
appropriate recommendations to the MB. The proposed meeting, however, did
not materialize due to postponements sought by Vivas. 9
In its letter, dated February 20, 2009, the BSP directed ECBI to explain why it
transferred the majority shares of RBFI without securing the prior approval of
the MB in apparent violation of Subsection X126.2 of the Manual of Regulation
for Banks (MORB). 10 Still in another letter, 11 dated March 31, 2009, the ISD II
required ECBI to explain why it did not obtain the prior approval of the BSP
anent the establishment and operation of the bank's sub-offices.
Also, the scheduled March 31, 2009 general examination of the books, records
and general condition of ECBI with the cut-off date of December 31, 2008, did not
push through. According to Vivas, ECBI asked for the deferment of the
examination pending resolution of its appeal before the MB. Vivas believed that
he was being treated unfairly because the letter of authority to examine allegedly
contained a clause which pertained to the Anti-Money Laundering Law and the
Bank Secrecy Act. 12
The MB, on the other hand, posited that ECBI unjustly refused to allow the BSP
examiners from examining and inspecting its books and records, in violation of
Sections 25 and 34 of R.A. No. 7653. In its letter, 13 dated May 8, 2009, the BSP
informed ECBI that it was already due for another annual examination and that
the pendency of its appeal before the MB would not prevent the BSP from
conducting another one as mandated by Section 28 of R.A. No. 7653. DTEScI
In view of ECBI's refusal to comply with the required examination, the MB

issued Resolution No. 726, 14 dated May 14, 2009, imposing monetary
penalty/fine on ECBI, and referred the matter to the Office of the Special
Investigation (OSI) for the filing of appropriate legal action. The BSP also wrote a
letter, 15 dated May 26, 2009, advising ECBI to comply with MB Resolution No.
771, which essentially required the bank to follow its directives. On May 28, 2009,
the ISD II reiterated its demand upon the ECBI BOD to allow the BSP examiners
to conduct a general examination on June 3, 2009. 16
In its June 2, 2009 Letter-Reply, 17 ECBI asked for another deferment of the
examination due to the pendency of certain unresolved issues subject of its
appeal before the MB, and because Vivas was then out of the country. The ISD II
denied ECBI's request and ordered the general examination to proceed as
previously scheduled. 18
Thereafter, the MB issued Resolution No. 823, 19 dated June 4, 2009, approving
the issuance of a cease and desist order against ECBI, which enjoined it from
pursuing certain acts and transactions that were considered unsafe or unsound
banking practices, and from doing such other acts or transactions constituting
fraud or might result in the dissipation of its assets. TCHcAE
On June 10, 2009, the OSI filed with the Department of Justice (DOJ) a complaint
for Estafa Through Falsification of Commercial Documents against certain
officials and employees of ECBI. Meanwhile, the MB issued Resolution No. 1164,
20 dated August 13, 2009, denying the appeal of ECBI from Resolution No. 1255
which placed it under PCA framework. On November 18, 2009, the general
examination of the books and records of ECBI with the cut-off date of September
30, 2009, was commenced and ended in December 2009. Later, the BSP officials
and examiners met with the representatives of ECBI, including Vivas, and
discussed their findings. 21 On December 7, 2009, the ISD II reminded ECBI of
the non-submission of its financial audit reports for the years 2007 and 2008 with
a warning that failure to submit those reports and the written explanation for
such omission shall result in the imposition of a monetary penalty. 22 In a letter,
dated February 1, 2010, the ISD II informed ECBI of MB Resolution No. 1548
which denied its request for reconsideration of Resolution No. 726.
On March 4, 2010, the MB issued Resolution No. 276 23 placing ECBI under
receivership in accordance with the recommendation of the ISD II which reads:
On the basis of the examination findings as of 30 September

2009 as reported by the Integrated Supervision Department
(ISD) II, in its memorandum dated 17 February 2010, which
findings showed that the Eurocredit Community Bank, Inc.
a Rural Bank (Eurocredit Bank) (a) is unable to pay its
liabilities as they become due in the ordinary course of
business; (b) has insufficient realizable assets to meet
liabilities; (c) cannot continue in business without involving
probable losses to its depositors and creditors; and (d) has
willfully violated a cease and desist order of the Monetary
Board for acts or transactions which are considered unsafe
and unsound banking practices and other acts or
transactions constituting fraud or dissipation of the assets of
the institution, and considering the failure of the Board of
Directors/management of Eurocredit Bank to restore the
bank's financial health and viability despite considerable
time given to address the bank's financial problems, and that
the bank had been accorded due process, the Board, in
accordance with Section 30 of Republic Act No. 7653 (The
New Central Bank Act), approved the recommendation of
ISD II as follows: cSDHEC
1.To prohibit the Eurocredit Bank from doing

business in the Philippines and to place its
assets and affairs under receivership; and
2.To designate the Philippine Deposit Insurance

Corporation as Receiver of the bank.
Assailing MB Resolution No. 276, Vivas filed this petition for prohibition before
this Court, ascribing grave abuse of discretion to the MB for prohibiting ECBI
from continuing its banking business and for placing it under receivership. The
petitioner presents the following
ARGUMENTS:
(a)It is grave abuse of discretion amounting to loss of
jurisdiction to apply the general law embodied in
Section 30 of the New Central Bank Act as
opposed to the specific law embodied in Sections
11 and 14 of the Rural Banks Act of 1992.
(b)Even if it assumed that Section 30 of the New Central

Bank Act is applicable, it is still the gravest abuse
of discretion amounting to lack or excess of
jurisdiction to execute the law with manifest
arbitrariness, abuse of discretion, and bad faith,
violation of constitutional rights and to further
execute a mandate well in excess of its parameters.
IcTEAD
(c)The power delegated in favor of the Bangko Sentral ng

Pilipinas to place rural banks under receiverships
is unconstitutional for being a diminution or
invasion of the powers of the Supreme Court, in
violation of Section 2, Article VIII of the
Philippine Constitution. 24
Vivas submits that the respondents committed grave abuse of discretion when
they erroneously applied Section 30 of R.A. No. 7653, instead of Sections 11 and
14 of the Rural Bank Act of 1992 or R.A. No. 7353. He argues that despite the
deficiencies, inadequacies and oversights in the conduct of the affairs of ECBI, it
has not committed any financial fraud and, hence, its placement under
receivership was unwarranted and improper. He posits that, instead, the BSP
should have taken over the management of ECBI and extended loans to the
financially distrained bank pursuant to Sections 11 and 14 of R.A. No. 7353
because the BSP's power is limited only to supervision and management take-
over of banks.
He contends that the implementation of the questioned resolution was tainted

with arbitrariness and bad faith, stressing that ECBI was placed under
receivership without due and prior hearing in violation of his and the bank's
right to due process. He adds that respondent PDIC actually closed ECBI even in
the absence of any directive to this effect. Lastly, Vivas assails the
constitutionality of Section 30 of R.A. No. 7653 claiming that said provision
vested upon the BSP the unbridled power to close and place under receivership a
hapless rural bank instead of aiding its financial needs. He is of the view that
such power goes way beyond its constitutional limitation and has transformed
the BSP to a sovereign in its own "kingdom of banks." 25 ISCHET
The Court's Ruling

The petition must fail.
Vivas Availed of the Wrong Remedy

To begin with, Vivas availed of the wrong remedy. The MB issued Resolution
No. 276, dated March 4, 2010, in the exercise of its power under R.A. No. 7653.
Under Section 30 thereof, any act of the MB placing a bank under
conservatorship, receivership or liquidation may not be restrained or set aside
except on a petition for certiorari. Pertinent portions of R.A. 7653 read:
Section 30.
xxx xxx xxx.

The actions of the Monetary Board taken under this section
or under Section 29 of this Act shall be final and executory,
and may not be restrained or set aside by the court except on
petition for certiorari on the ground that the action taken
was in excess of jurisdiction or with such grave abuse of
discretion as to amount to lack or excess of jurisdiction. The
petition for certiorari may only be filed by the stockholders of
record representing the majority of the capital stock within
ten (10) days from receipt by the board of directors of the
institution of the order directing receivership, liquidation or
conservatorship.
xxx xxx xxx. [Emphases supplied]
Prohibition is already unavailing

Granting that a petition for prohibition is allowed, it is already an ineffective
remedy under the circumstances obtaining. Prohibition or a "writ of prohibition"
is that process by which a superior court prevents inferior courts, tribunals,
officers, or persons from usurping or exercising a jurisdiction with which they
have not been vested by law, and confines them to the exercise of those powers
legally conferred. Its office is to restrain subordinate courts, tribunals or persons
from exercising jurisdiction over matters not within its cognizance or exceeding
its jurisdiction in matters of which it has cognizance. 26 In our jurisdiction, the
rule on prohibition is enshrined in Section 2, Rule 65 of the Rules on Civil
Procedure, to wit: TIAEac
Sec. 2.Petition for prohibition. When the proceedings of

any tribunal, corporation, board, officer or person,
whether exercising judicial, quasi-judicial or ministerial
functions, are without or in excess of its or his jurisdiction,
or with grave abuse of discretion amounting to lack or
excess of jurisdiction, and there is no appeal or any other
plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with
certainty and praying that the judgment be rendered
commanding the respondent to desist from further
proceedings in the action or matter specified therein, or
otherwise granting such incidental reliefs as the law and
justice require.
xxx xxx xxx.
Indeed, prohibition is a preventive remedy seeking that a judgment be rendered

which would direct the defendant to desist from continuing with the commission
of an act perceived to be illegal. 27 As a rule, the proper function of a writ of
prohibition is to prevent the doing of an act which is about to be done. It is not
intended to provide a remedy for acts already accomplished. 28
Though couched in imprecise terms, this petition for prohibition apparently

seeks to prevent the acts of closing of ECBI and placing it under receivership.
Resolution No. 276, however, had already been issued by the MB and the closure
of ECBI and its placement under receivership by the PDIC were already
accomplished. Apparently, the remedy of prohibition is no longer appropriate.
Settled is the rule that prohibition does not lie to restrain an act that is already a
fait accompli. 29 caADIC
The Petition Should Have Been Filed in the CA

Even if treated as a petition for certiorari, the petition should have been filed
with the CA. Section 4 of Rule 65 reads:
Section 4.When and where petition filed. The petition shall

be filed not later than sixty (60) days from notice of the
judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such
motion is required or not, the sixty (60) day period shall be
counted from notice of the denial of said motion.
The petition shall be filed in the Supreme Court or, if it

relates to the acts or omissions of a lower court or of a
corporation, board, officer or person, in the Regional Trial
Court exercising jurisdiction over the territorial area as
defined by the Supreme Court. It may also be filed in the
Court of Appeals whether or not the same is in aid of its
appellate jurisdiction, or in the Sandiganbayan if it is in aid
of its appellate jurisdiction. If it involves the acts or
omissions of a quasi-judicial agency, unless otherwise
provided by law or these Rules, the petition shall be filed in
and cognizable only by the Court of Appeals. [Emphases
supplied]
That the MB is a quasi-judicial agency was already settled and reiterated in the
case of Bank of Commerce v. Planters Development Bank and Bangko Sentral Ng
Pilipinas. 30 SIcEHC
Doctrine of Hierarchy of Courts

Even in the absence of such provision, the petition is also dismissible because it
simply ignored the doctrine of hierarchy of courts. True, the Court, the CA and
the RTC have original concurrent jurisdiction to issue writs of certiorari,
prohibition and mandamus. The concurrence of jurisdiction, however, does not
grant the party seeking any of the extraordinary writs the absolute freedom to
file a petition in any court of his choice. The petitioner has not advanced any
special or important reason which would allow a direct resort to this Court.
Under the Rules of Court, a party may directly appeal to this Court only on pure
questions of law. 31 In the case at bench, there are certainly factual issues as Vivas
is questioning the findings of the investigating team.
Strict observance of the policy of judicial hierarchy demands that where the
issuance of the extraordinary writs is also within the competence of the CA or the
RTC, the special action for the obtainment of such writ must be presented to
either court. As a rule, the Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate lower courts; or where
exceptional and compelling circumstances, such as cases of national interest and
with serious implications, justify the availment of the extraordinary remedy of
writ of certiorari, prohibition, or mandamus calling for the exercise of its primary
jurisdiction. 32 The judicial policy must be observed to prevent an imposition on
the precious time and attention of the Court.
The MB Committed No Grave Abuse of Discretion

In any event, no grave abuse of discretion can be attributed to the MB for the
issuance of the assailed Resolution No. 276. DcAEIS
Vivas insists that the circumstances of the case warrant the application of Section
11 of R.A. No. 7353, which provides:
Sec. 11.The power to supervise the operation of any rural

bank by the Monetary Board as herein indicated shall consist
in placing limits to the maximum credit allowed to any
individual borrower; in prescribing the interest rate, in
determining the loan period and loan procedures, in
indicating the manner in which technical assistance shall be
extended to rural banks, in imposing a uniform accounting
system and manner of keeping the accounts and records of
rural banks; in instituting periodic surveys of loan and
lending procedures, audits, test-check of cash and other
transactions of the rural banks; in conducting training
courses for personnel of rural banks; and, in general, in
supervising the business operations of the rural banks.
The Central Bank shall have the power to enforce the laws,
orders, instructions, rules and regulations promulgated by
the Monetary Board, applicable to rural banks; to require
rural banks, their directors, officers and agents to conduct
and manage the affairs of the rural banks in a lawful and
orderly manner; and, upon proof that the rural bank or its
Board of Directors, or officers are conducting and managing
the affairs of the bank in a manner contrary to laws, orders,
instructions, rules and regulations promulgated by the
Monetary Board or in a manner substantially prejudicial to
the interest of the Government, depositors or creditors, to
take over the management of such bank when specifically
authorized to do so by the Monetary Board after due hearing
process until a new board of directors and officers are
elected and qualified without prejudice to the prosecution of
the persons responsible for such violations under the
provisions of Sections 32, 33 and 34 of Republic Act No. 265,
as amended. aEDCAH
xxx xxx xxx.
The thrust of Vivas' argument is that ECBI did not commit any financial fraud
and, hence, its placement under receivership was unwarranted and improper. He
asserts that, instead, the BSP should have taken over the management of ECBI
and extended loans to the financially distrained bank pursuant to Sections 11 and
14 of R.A. No. 7353 because the BSP's power is limited only to supervision and
management take-over of banks, and not receivership. acIHDA
Vivas argues that implementation of the questioned resolution was tainted with
arbitrariness and bad faith, stressing that ECBI was placed under receivership
without due and prior hearing, invoking Section 11 of R.A. No. 7353 which states
that the BSP may take over the management of a rural bank after due hearing. 33
He adds that because R.A. No. 7353 is a special law, the same should prevail over
R.A. No. 7653 which is a general law.
The Court has taken this into account, but it appears from all over the records
that ECBI was given every opportunity to be heard and improve on its financial
standing. The records disclose that BSP officials and examiners met with the
representatives of ECBI, including Vivas, and discussed their findings. 34 There
were also reminders that ECBI submit its financial audit reports for the years
2007 and 2008 with a warning that failure to submit them and a written
explanation of such omission shall result in the imposition of a monetary
penalty. 35 More importantly, ECBI was heard on its motion for reconsideration.
For failure of ECBI to comply, the MB came out with Resolution No. 1548
denying its request for reconsideration of Resolution No. 726. Having been heard
on its motion for reconsideration, ECBI cannot claim that it was deprived of its
right under the Rural Bank Act.
Close Now, Hear Later
At any rate, if circumstances warrant it, the MB may forbid a bank from doing
business and place it under receivership without prior notice and hearing. Section
30 of R.A. No. 7653 provides, viz.:
Sec. 30.Proceedings in Receivership and Liquidation.

Whenever, upon report of the head of the supervising or
examining department, the Monetary Board finds that a
bank or quasi-bank:
(a)is unable to pay its liabilities as they become due in the

ordinary course of business: Provided, That this
shall not include inability to pay caused by
extraordinary demands induced by financial panic
in the banking community; ETAICc
(b)has insufficient realizable assets, as determined by the

Bangko Sentral, to meet its liabilities; or
(c)cannot continue in business without involving probable

losses to its depositors or creditors; or
(d)has wilfully violated a cease and desist order under

Section 37 that has become final, involving acts or
transactions which amount to fraud or a dissipation
of the assets of the institution; in which cases, the
Monetary Board may summarily and without need
for prior hearing forbid the institution from doing
business in the Philippines and designate the
Philippine Deposit Insurance Corporation as
receiver of the banking institution. [Emphases
supplied.]
xxx xxx xxx.

Accordingly, there is no conflict which would call for the application of the
doctrine that a special law should prevail over a general law. It must be
emphasized that R.A. No. 7653 is a later law and under said act, the power of the
MB over banks, including rural banks, was increased and expanded. The Court,
in several cases, upheld the power of the MB to take over banks without need for
prior hearing. It is not necessary inasmuch as the law entrusts to the MB the
appreciation and determination of whether any or all of the statutory grounds
for the closure and receivership of the erring bank are present. The MB, under
R.A. No. 7653, has been invested with more power of closure and placement of a
bank under receivership for insolvency or illiquidity, or because the bank's
continuance in business would probably result in the loss to depositors or
creditors. In the case of Bangko Sentral Ng Pilipinas Monetary Board v. Hon.
Antonio-Valenzuela, 36 the Court reiterated the doctrine of "close now, hear later,"
stating that it was justified as a measure for the protection of the public interest.
Thus: DAcSIC
The "close now, hear later" doctrine has already been

justified as a measure for the protection of the public
interest. Swift action is called for on the part of the BSP when
it finds that a bank is in dire straits. Unless adequate and
determined efforts are taken by the government against
distressed and mismanaged banks, public faith in the
banking system is certain to deteriorate to the prejudice of
the national economy itself, not to mention the losses
suffered by the bank depositors, creditors, and stockholders,
who all deserve the protection of the government. 37
[Emphasis supplied]
In Rural Bank of Buhi, Inc. v. Court of Appeals, 38 the Court also wrote that
. . . due process does not necessarily require a prior

hearing; a hearing or an opportunity to be heard may be
subsequent to the closure. One can just imagine the dire
consequences of a prior hearing: bank runs would be the
order of the day, resulting in panic and hysteria. In the
process, fortunes may be wiped out and disillusionment will
run the gamut of the entire banking community. 39
The doctrine is founded on practical and legal considerations to obviate

unwarranted dissipation of the bank's assets and as a valid exercise of police
power to protect the depositors, creditors, stockholders, and the general public.
40 Swift, adequate and determined actions must be taken against financially
distressed and mismanaged banks by government agencies lest the public faith
in the banking system deteriorate to the prejudice of the national economy.
CcAITa
Accordingly, the MB can immediately implement its resolution prohibiting a

banking institution to do business in the Philippines and, thereafter, appoint the
PDIC as receiver. The procedure for the involuntary closure of a bank is
summary and expeditious in nature. Such action of the MB shall be final and
executory, but may be later subjected to a judicial scrutiny via a petition for
certiorari to be filed by the stockholders of record of the bank representing a
majority of the capital stock. Obviously, this procedure is designed to protect the
interest of all concerned, that is, the depositors, creditors and stockholders, the
bank itself and the general public. The protection afforded public interest
warrants the exercise of a summary closure.
In the case at bench, the ISD II submitted its memorandum, dated February 17,
2010, containing the findings noted during the general examination conducted
on ECBI with the cut-off date of September 30, 2009. The memorandum
underscored the inability of ECBI to pay its liabilities as they would fall due in
the usual course of its business, its liabilities being in excess of the assets held.
Also, it was noted that ECBI's continued banking operation would most
probably result in the incurrence of additional losses to the prejudice of its
depositors and creditors. On top of these, it was found that ECBI had willfully
violated the cease-and-desist order of the MB issued in its June 24, 2009
Resolution, and had disregarded the BSP rules and directives. For said reasons,
the MB was forced to issue the assailed Resolution No. 276 placing ECBI under
receivership. In addition, the MB stressed that it accorded ECBI ample time and
opportunity to address its monetary problem and to restore and improve its
financial health and viability but it failed to do so. AEcTaS
In light of the circumstances obtaining in this case, the application of the

corrective measures enunciated in Section 30 of R.A. No. 7653 was proper and
justified. Management take-over under Section 11 of R.A. No. 7353 was no longer
feasible considering the financial quagmire that engulfed ECBI showing serious
conditions of insolvency and illiquidity. Besides, placing ECBI under
receivership would effectively put a stop to the further draining of its assets.
No Undue Delegation of Legislative Power

Lastly, the petitioner challenges the constitutionality of Section 30 of R.A. No.
7653, as the legislature granted the MB a broad and unrestrained power to close
and place a financially troubled bank under receivership. He claims that the said
provision was an undue delegation of legislative power. The contention deserves
scant consideration. DITEAc
Preliminarily, Vivas' attempt to assail the constitutionality of Section 30 of R.A.

No. 7653 constitutes collateral attack on the said provision of law. Nothing is
more settled than the rule that the constitutionality of a statute cannot be
collaterally attacked as constitutionality issues must be pleaded directly and not
collaterally. 41 A collateral attack on a presumably valid law is not permissible.
Unless a law or rule is annulled in a direct proceeding, the legal presumption of
its validity stands. 42
Be that as it may, there is no violation of the non-delegation of legislative power.

The rationale for the constitutional proscription is that "legislative discretion as
to the substantive contents of the law cannot be delegated. What can be
delegated is the discretion to determine how the law may be enforced, not what
the law shall be. The ascertainment of the latter subject is a prerogative of the
legislature. This prerogative cannot be abdicated or surrendered by the
legislature to the delegate." 43
"There are two accepted tests to determine whether or not there is a valid
delegation of legislative power, viz., the completeness test and the sufficient
standard test. Under the first test, the law must be complete in all its terms and
conditions when it leaves the legislature such that when it reaches the delegate
the only thing he will have to do is enforce it. Under the sufficient standard test,
there must be adequate guidelines or stations in the law to map out the
boundaries of the delegate's authority and prevent the delegation from running
riot. Both tests are intended to prevent a total transference of legislative authority
to the delegate, who is not allowed to step into the shoes of the legislature and
exercise a power essentially legislative." 44 CcAHEI
In this case, under the two tests, there was no undue delegation of legislative
authority in the issuance of R.A. No. 7653. To address the growing concerns in
the banking industry, the legislature has sufficiently empowered the MB to
effectively monitor and supervise banks and financial institutions and, if
circumstances warrant, to forbid them to do business, to take over their
management or to place them under receivership. The legislature has clearly
spelled out the reasonable parameters of the power entrusted to the MB and
assigned to it only the manner of enforcing said power. In other words, the MB
was given a wide discretion and latitude only as to how the law should be
implemented in order to attain its objective of protecting the interest of the
public, the banking industry and the economy.
WHEREFORE, the petition for prohibition is DENIED.
||| (Vivas v. Monetary Board of the BSP, G.R. No. 191424, August 07, 2013)
SECOND DIVISION
[G.R. No. 202556. September 12, 2012.]
DANILO A. LIHAYLIHAY, petitioner, vs. BUREAU OF

INTERNAL REVENUE, REPRESENTED BY
COMMISSIONER KIM S. JACINTO-HENARES, ET AL.,
respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Second Division, issued a Resolution dated 12
September 2012 which reads as follows:
G.R. No. 202556 (Danilo A. Lihaylihay v. Bureau of Internal Revenue,

represented by Commissioner Kim S. Jacinto-Henares, et al.).
After a judicious perusal of the records, the Court resolves to DISMISS the
instant petition for failure to sufficiently show, based on the recital of facts
therein, that mandamus lies in this case to compel respondent Bureau of Internal
Revenue (BIR) to collect the alleged delinquent taxes of Fortune Tobacco
Corporation (FTC) or to deliver to petitioner Danilo Lihaylihay his informer's
reward.
Mandamus is a remedy available to compel the performance of ministerial duties.

1 However, the assessment and imposition of tax liabilities is within BIR's
discretionary power, which cannot be ordered by mandamus. 2 Records show that
the BIR found no legal justification to warrant the filing and collection of taxes
against FTC. Thus, in the absence of arbitrariness, which petitioner failed to
establish in this case, the BIR's exercise of its discretionary power is not subject to
the contrary judgment. 3 Consequently, there being no delinquent taxes assessed,
no collection can be made nor any informer's reward became due 4 in favor of
petitioner. (Carpio, J., no part due to prior inhibition in related cases; Mendoza, J.,
designated Acting Member per Raffle dated September 10, 2012.)
SO ORDERED.
||| (Lihaylihay v. BIR, G.R. No. 202556, September 12, 2012)
THIRD DIVISION
[G.R. No. 176831. January 15, 2010.]
UY KIAO ENG, petitioner, vs. NIXON LEE, respondent.
DECISION
NACHURA, J p:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of
Court, assailing the August 23, 2006 Amended Decision 1 of the Court of
Appeals (CA) in CA-G.R. SP No. 91725 and the February 23, 2007 Resolution, 2
denying the motion for reconsideration thereof.
The relevant facts and proceedings follow.
Alleging that his father passed away on June 22, 1992 in Manila and left a
holographic will, which is now in the custody of petitioner Uy Kiao Eng, his
mother, respondent Nixon Lee filed, on May 28, 2001, a petition for mandamus
with damages, docketed as Civil Case No. 01100939, before the Regional Trial
Court (RTC) of Manila, to compel petitioner to produce the will so that probate
proceedings for the allowance thereof could be instituted. Allegedly, respondent
had already requested his mother to settle and liquidate the patriarch's estate
and to deliver to the legal heirs their respective inheritance, but petitioner
refused to do so without any justifiable reason. 3
In her answer with counterclaim, petitioner traversed the allegations in the

complaint and posited that the same be dismissed for failure to state a cause of
action, for lack of cause of action, and for non-compliance with a condition
precedent for the filing thereof. Petitioner denied that she was in custody of the
original holographic will and that she knew of its whereabouts. She, moreover,
asserted that photocopies of the will were given to respondent and to his
siblings. As a matter of fact, respondent was able to introduce, as an exhibit, a
copy of the will in Civil Case No. 224-V-00 before the RTC of Valenzuela City.
Petitioner further contended that respondent should have first exerted earnest
efforts to amicably settle the controversy with her before he filed the suit. 4
DcHSEa
The RTC heard the case. After the presentation and formal offer of respondent's
evidence, petitioner demurred, contending that her son failed to prove that she
had in her custody the original holographic will. Importantly, she asserted that
the pieces of documentary evidence presented, aside from being hearsay, were
all immaterial and irrelevant to the issue involved in the petition they did not
prove or disprove that she unlawfully neglected the performance of an act which
the law specifically enjoined as a duty resulting from an office, trust or station,
for the court to issue the writ of mandamus. 5
The RTC, at first, denied the demurrer to evidence. 6 In its February 4, 2005
Order, 7 however, it granted the same on petitioner's motion for reconsideration.
Respondent's motion for reconsideration of this latter order was denied on
September 20, 2005. 8 Hence, the petition was dismissed.
Aggrieved, respondent sought review from the appellate court. On April 26,
2006, the CA initially denied the appeal for lack of merit. It ruled that the writ of
mandamus would issue only in instances when no other remedy would be
available and sufficient to afford redress. Under Rule 76, in an action for the
settlement of the estate of his deceased father, respondent could ask for the
presentation or production and for the approval or probate of the holographic
will. The CA further ruled that respondent, in the proceedings before the trial
court, failed to present sufficient evidence to prove that his mother had in her
custody the original copy of the will. 9
Respondent moved for reconsideration. The appellate court, in the assailed

August 23, 2006 Amended Decision, 10 granted the motion, set aside its earlier
ruling, issued the writ, and ordered the production of the will and the payment
of attorney's fees. It ruled this time that respondent was able to show by
testimonial evidence that his mother had in her possession the holographic will.
Dissatisfied with this turn of events, petitioner filed a motion for reconsideration.
The appellate court denied this motion in the further assailed February 23, 2007
Resolution. 11
Left with no other recourse, petitioner brought the matter before this Court,
contending in the main that the petition for mandamus is not the proper remedy
and that the testimonial evidence used by the appellate court as basis for its
ruling is inadmissible. 12
The Court cannot sustain the CA's issuance of the writ.
The first paragraph of Section 3 of Rule 65 of the Rules of Court pertinently

provides that SAEHaC
SEC. 3. Petition for mandamus. When any tribunal,

corporation, board, officer or person unlawfully neglects the
performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station, or unlawfully excludes
another from the use and enjoyment of a right or office to which
such other is entitled, and there is no other plain, speedy and
adequate remedy in the ordinary course of law, the person
aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that
judgment be rendered commanding the respondent,
immediately or at some other time to be specified by the
court, to do the act required to be done to protect the rights
of the petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the respondent.
13
Mandamus is a command issuing from a court of law of competent jurisdiction, in

the name of the state or the sovereign, directed to some inferior court, tribunal, or
board, or to some corporation or person requiring the performance of a
particular duty therein specified, which duty results from the official station of
the party to whom the writ is directed or from operation of law. 14 This
definition recognizes the public character of the remedy, and clearly excludes the
idea that it may be resorted to for the purpose of enforcing the performance of
duties in which the public has no interest. 15 The writ is a proper recourse for
citizens who seek to enforce a public right and to compel the performance of a
public duty, most especially when the public right involved is mandated by the
Constitution. 16 As the quoted provision instructs, mandamus will lie if the
tribunal, corporation, board, officer, or person unlawfully neglects the
performance of an act which the law enjoins as a duty resulting from an office,
trust or station. 17
The writ of mandamus, however, will not issue to compel an official to do

anything which is not his duty to do or which it is his duty not to do, or to give
to the applicant anything to which he is not entitled by law. 18 Nor will
mandamus issue to enforce a right which is in substantial dispute or as to which a
substantial doubt exists, although objection raising a mere technical question will
be disregarded if the right is clear and the case is meritorious. 19 As a rule,
mandamus will not lie in the absence of any of the following grounds: [a] that the
court, officer, board, or person against whom the action is taken unlawfully
neglected the performance of an act which the law specifically enjoins as a duty
resulting from office, trust, or station; or [b] that such court, officer, board, or
person has unlawfully excluded petitioner/relator from the use and enjoyment
of a right or office to which he is entitled. 20 On the part of the relator, it is
essential to the issuance of a writ of mandamus that he should have a clear legal
right to the thing demanded and it must be the imperative duty of respondent to
perform the act required. 21
Recognized further in this jurisdiction is the principle that mandamus cannot be

used to enforce contractual obligations. 22 Generally, mandamus will not lie to
enforce purely private contract rights, and will not lie against an individual
unless some obligation in the nature of a public or quasi-public duty is imposed.
23 The writ is not appropriate to enforce a private right against an individual. 24
The writ of mandamus lies to enforce the execution of an act, when, otherwise,
justice would be obstructed; and, regularly, issues only in cases relating to the
public and to the government; hence, it is called a prerogative writ. 25 To
preserve its prerogative character, mandamus is not used for the redress of private
wrongs, but only in matters relating to the public. 26 TEIHDa
Moreover, an important principle followed in the issuance of the writ is that

there should be no plain, speedy and adequate remedy in the ordinary course of
law other than the remedy of mandamus being invoked. 27 In other
words,mandamus can be issued only in cases where the usual modes of procedure
and forms of remedy are powerless to afford relief. 28 Although classified as a
legal remedy, mandamus is equitable in its nature and its issuance is generally
controlled by equitable principles. 29 Indeed, the grant of the writ of mandamus
lies in the sound discretion of the court.
In the instant case, the Court, without unnecessarily ascertaining whether the
obligation involved here the production of the original holographic will is
in the nature of a public or a private duty, rules that the remedy of mandamus
cannot be availed of by respondent Lee because there lies another plain, speedy
and adequate remedy in the ordinary course of law. Let it be noted that
respondent has a photocopy of the will and that he seeks the production of the
original for purposes of probate. The Rules of Court, however, does not prevent
him from instituting probate proceedings for the allowance of the will whether
the same is in his possession or not. Rule 76, Section 1 relevantly provides:
Section 1. Who may petition for the allowance of will. Any

executor, devisee, or legatee named in a will, or any other
person interested in the estate, may, at any time, after the
death of the testator, petition the court having jurisdiction to
have the will allowed, whether the same be in his possession
or not, or is lost or destroyed.
An adequate remedy is further provided by Rule 75, Sections 2 to 5, for the

production of the original holographic will. Thus
SEC. 2. Custodian of will to deliver. The person who has
custody of a will shall, within twenty (20) days after he
knows of the death of the testator, deliver the will to the
court having jurisdiction, or to the executor named in the
will.
SEC. 3. Executor to present will and accept or refuse trust. A

person named as executor in a will shall within twenty (20)
days after he knows of the death of the testator, or within
twenty (20) days after he knows that he is named executor if
he obtained such knowledge after the death of the testator,
present such will to the court having jurisdiction, unless the
will has reached the court in any other manner, and shall,
within such period, signify to the court in writing his
acceptance of the trust or his refusal to accept it. ADcHES
SEC. 4. Custodian and executor subject to fine for neglect. A

person who neglects any of the duties required in the two
last preceding sections without excuse satisfactory to the
court shall be fined not exceeding two thousand pesos.
SEC. 5. Person retaining will may be committed. A person
having custody of a will after the death of the testator who
neglects without reasonable cause to deliver the same, when
ordered so to do, to the court having jurisdiction, may be
committed to prison and there kept until he delivers the will.
30
There being a plain, speedy and adequate remedy in the ordinary course of law
for the production of the subject will, the remedy of mandamus cannot be availed
of. Suffice it to state that respondent Lee lacks a cause of action in his petition.
Thus, the Court grants the demurrer.
WHEREFORE, premises considered, the petition for review on certiorari is

GRANTED. The August 23, 2006 Amended Decision and the February 23, 2007
Resolution of the Court of Appeals in CA-G.R. SP No. 91725 are REVERSED and
SET ASIDE. Civil Case No. 01100939 before the Regional Trial Court of Manila is
DISMISSED.
SO ORDERED.
||| (Uy Kiao Eng v. Lee, G.R. No. 176831, January 15, 2010)
EN BANC
[G.R. No. 206323. April 11, 2013.]
LOUIS "BAROK" C. BIRAOGO, ON HIS BEHALF AND

ON BEHALF OF OTHER CITIZENS OF THE REPUBLIC
OF THE PHILIPPINES SIMILARLY SITUATED, petitioner,
vs. HON. ALBERTO F. DEL ROSARIO, SECRETARY OF
FOREIGN AFFAIRS, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court en banc issued a Resolution dated APRIL 11, 2013,
"G.R. No. 206323 (Louis "Barok" C. Biraogo, on his behalf and on behalf of
other citizens of the Republic of the Philippines similarly situated, petitioner, v.
Hon. Alberto F. Del Rosario, Secretary of Foreign Affairs, respondent.)
RESOLUTION
This is a petition for Mandamus under Rule 65 of the Rules of Court, seeking to
compel herein respondent Alberto F. Del Rosario, as Secretary of Foreign Affairs,
to press the Philippine claim to North Borneo (Sabah) before the International
Court of Justice (ICJ) or such other fora authorized under international law.
We dismiss the petition for lack of merit.
1.Section 3, Rule 65 of the Rules of Court provides:
Sec. 3.When any tribunal, corporation, board, officer or

person unlawfully neglects the performance of an act which
the law specifically enjoins as a duty resulting from an office,
trust, or station . . . and there is no other plain, speedy and
adequate remedy in the ordinary course of law, the person
aggrieved may file a verified petition in the proper court,
alleging the facts with certainty and praying that judgment
be rendered commanding the respondent, immediately or at
some other time to be specified by the court, to do the act
required to be done to protect the rights of the petitioner,
and to pay the damages sustained by the petitioner by
reason of the wrongful acts of the respondent.
Mandamus is a command issuing from a court of law of competent jurisdiction in

the name of the state or the sovereign, directed to some inferior court, tribunal, or
board, or to some corporation or person requiring the performance of a
particular duty therein specified, which duty results from the official station of
the party to whom the writ is directed or from operation of law. The writ of
mandamus, however, will not issue to compel an official to do anything which is
not his duty to do or which it is his duty not to do. Nor will mandamus issue to
enforce a right which is in substantial dispute. 1 aDECHI
Before mandamus is issued, the following requisites should be satisfied: (1)

petitioner must show a clear legal right to the act demanded; (2) respondent
must have the duty to perform the act because the same is mandated by law; (3)
respondent unlawfully neglects the performance of the duty enjoined by law; (4)
the act to be performed is ministerial, not discretionary; and (5) there is no other
plain, speedy, and adequate remedy in the ordinary course of law. These
requisites applied, mandamus will not lie in the case at bar.
First, petitioner has not shown a clear legal right to the act demanded. Second,
the act which petitioner seeks to be performed by the Secretary of Foreign Affairs
is clearly not merely ministerial. What is here involved is a discretionary act on
the part of the Executive Department, which act involves the delicate balance of
national and international concerns. Third, there is no showing that there is no
other remedy in the course of law.
2.The submission to the ICJ of the Philippine claim over Sabah involves the
conduct of our foreign relations. This is primarily an executive prerogative, and
the courts may not inquire into the wisdom or lack of it in the exercise thereof.
This is a principle laid down by the courts since time immemorial. 2
WHEREFORE, premises considered, the Court Resolves to DISMISS the present

petition for lack of merit." (adv115)
||| (Biraogo v. Del Rosario, G.R. No. 206323, April 11, 2013)
THIRD DIVISION
[G.R. No. 146531. March 18, 2005.]
DOMINGO R. MANALO, petitioner, vs. PAIC SAVINGS

BANK and THERESE V. VARGAS, respondents.
DECISION
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, assailing the Decision 1 dated December 21, 2000 of
the Court of Appeals in CA-G.R. SP No. 60966, "Domingo R. Manalo vs. PAIC
Savings Bank, represented by the Liquidator/Receiver, PDIC, and Therese Villanueva
Vargas."
The factual antecedents as borne by the records are:
On July 19, 1983, S. Villanueva Enterprises, Inc., represented by its president,

Therese Villanueva Vargas, impleaded as a respondent, obtained a P3,000,000.00
loan from PAIC Savings and Mortgage Bank, also a respondent. As security for
the loan, respondents mortgaged two (2) lots situated in Pasay City covered by
Transfer Certificate of Title (TCT) No. 6076 of the Registry of Deeds, same city.
However, respondent Vargas failed to pay the loan. Consequently, the mortgage
was foreclosed and the lots were sold at public auction to respondent bank, being
the highest bidder.
On December 4, 1984, a Certificate of Sale 2 was issued to respondent bank and

eventually registered with the Registry of Deeds of Pasay City.
On October 14, 1991 or seven years later, respondent Vargas filed with the
Regional Trial Court (RTC), Branch 116, Pasay City, a complaint for annulment
of mortgage and extrajudicial foreclosure against respondent bank, docketed as
Civil Case No. R-8477. In due course, the RTC rendered a Decision dated July 22,
1993 dismissing the complaint for lack of merit. On appeal, the Court of Appeals,
in a Decision dated October 28, 1996, affirmed the RTC Decision, sustaining the
legality of the mortgage and the foreclosure proceedings. The Decision of the
Appellate Court then became final and executory.
Meantime or on June 22, 1992, respondent bank filed with the RTC, Branch 112,
Pasay City, a petition for issuance of a writ of possession, docketed as Civil Case
No. 9011-P. After hearing, or on April 2, 1998, the court granted the petition and
issued a writ of possession.
Earlier or on December 23, 1992, respondent Vargas sold to Armando Angsico

the lots for P18,000,500.00. Then on August 24, 1994, respondent Vargas leased to
Domingo R. Manalo, petitioner, a portion of the same lots consisting of 450
square meters for a period of ten (10) years with a monthly rental of P22,500.00.
Later, or on June 29, 1997, Angsico assigned and transferred to petitioner all his
rights to the property as shown by a Deed of Assignment and Transfer of Rights.
TcHDIA
On May 7, 1998, petitioner filed with the RTC, Branch 231, Pasay City, a
complaint for specific performance and damages, docketed as Civil Case No. 98-
0868. Impleaded as defendants are respondent bank, its liquidator and/or
receiver PDIC, and respondent Vargas. In his complaint, petitioner alleged that
he has legal interest in the subject lots, having initially leased a portion of the
same from respondent Vargas and then purchased the whole area from Angsico.
He prayed that the trial court issue a writ of mandamus compelling respondent
bank (1) to allow him to redeem and/or repurchase the subject lots for
P18,000,000.00; and (2) to release to him TCT No. 6076.
Instead of filing an answer, respondent bank filed a motion to dismiss the

complaint on the following grounds: (1) the trial court has no jurisdiction over
the subject property; and (2) the complaint fails to state a sufficient cause of
action. Respondent bank averred that petitioner has no legal interest in the
subject lots since as early as December 4, 1985, the title thereto was consolidated
in its name when respondent Vargas, petitioner's predecessor-in-interest, failed
to exercise her right of redemption.
On September 29, 1998, the RTC issued an Order denying respondent bank's
motion to dismiss the complaint. Thus, respondent bank, on October 7, 1998,
filed its answer alleging as affirmative defenses that the complaint failed to state
a cause of action and that the trial court has no jurisdiction over the case.
On September 4, 2000, the RTC rendered a Decision dismissing the complaint for
"lack of an enforceable cause of action," thus:
"WHEREFORE, in the light of the aforementioned reasons,

for lack of an enforceable cause of action, the case is hereby
DISMISSED with costs against the plaintiff.
SO ORDERED."
On appeal, the Court of Appeals rendered the assailed Decision dated December
21, 2000 affirming the RTC Decision and holding that petitioner's complaint
failed to state a cause of action, thus:
"To begin with, the present petition for Mandamus on appeal

should have been outrightly dismissed considering that such
extraordinary remedy under Rule 65 is not available under
the facts obtaining. Mandamus is a writ issued in order to
compel the performance, when refused, of a ministerial
duty, this being its main objective. It does not lie to require
anyone to fulfill a contractual obligation or to compel a
course of conduct, nor to control or review the exercise of
discretion. Petitioner must show a clear legal right to the
thing demanded with the corresponding imperative duty of
the respondent to perform the act required. It never issues in
doubtful cases. The writ will not issue to compel anything to
which the petitioner is not entitled by law. Mandamus does
not confer power nor impose duties. It simply commands to
exercise a power already possessed and to perform a duty
already imposed (Tangonan vs. Pano, 137 SCRA 245 [1985];
University of San Agustin vs. Court of Appeals, 230 SCRA 761
[1994]).
"At bar, we cannot see any legal justification to compel PAIC

Bank to accept the proposed P18,000,000.00 redemption money
and to release the subject title. This is not the idea of a ministerial
duty under the law.
"Essentially, the case at hand could be one for specific

performance, as what the court a quo said in the first
paragraph of the challenged decision.
xxx xxx xxx
"In the case at bar, what succinctly appears on records is the

indubitable fact that appellant has no cause of action against
PAIC Bank. It may be true that earlier the motion to dismiss
of PAIC Bank on this point was denied by the court a quo.
Yet, such resolution did not preclude the trial court to later
on declare, after trial, that indeed there was no cause of
action, especially so when the defense of lack of cause of
action is averred in the answer as one of the affirmative
defenses. ADcHES
"Under the Rules of Court, a cause of action is defined as an

act of omission of one party in violation of the legal right of
the other which causes the latter injury (Rebodillo vs. Court of
Appeals, 170 SCRA 800 [1989]). It is composed of: (1) the
plaintiff's primary right and defendant's corresponding
primary duty, whatever may be the subject to which they
relate to his person, character, property or contract; and (2)
the delict or wrongful act or omission of the defendant, by
which the primary right and duty have been violated. The
cause of action is determined not by the prayer of the
complaint but by the facts alleged (Nicanor de Guzman, Jr. vs.
Court of Appeals, 192 SCRA 507 [1990]).
"Here, the absence of cause of action of the appellant becomes more

apparent when we consider the following:
(a) Logic and common sense dictate that one can only sell
what he owns and the buyer acquires only what the
seller can offer. On June 29, 1997, when Angsico sold
the lot to Manalo, Angsico was not the owner of the
subject property simply because at the time he (Angsico)
purchased the same property from Vargas and/or S.
Villanueva on December 23, 1992, said sellers were no
longer the lawful owners of the property. As correctly
pointed out by the appellees, after the expiration of the
one (1) year redemption period and no redemption was
made on December 5, 1985, PAIC Bank ipso facto
became the legal owner in fee simple of the subject lot
and its improvements, being the highest bidder in the
auction sale and the vendee in the Sheriff's Certificate of
Sale duly registered a year before and which entitles it to
the issuance of a new certificate of title in his name
(People's Financing Corp. vs. Court of Appeals, 192
SCRA 34 [1990]; Sumerariz vs. Development Bank of
the Philippines, 21 SCRA 1374 [1967]).
xxx xxx xxx
"One last word, after failing to avail of the right of

redemption, the mortgaged property became an acquired
asset of the mortgagee PAIC Bank. Like any ordinary
property owner, PAIC Bank has the right to enjoy all the
attributes of ownership, among others, to sell the property
for whatever price it may deem reasonable and in favor of
whomsoever it chooses to sell it. This prerogative to enter
into lawful contract constitutes one of the liberties of the
people of the State. If that right be struck down or arbitrarily
interfered with, there is a substantial inferment of the liberty
of the people under the Constitution. To enter into a contract
freely and without restraint is one of the liberties guaranteed
to the citizens of the country and should not be lightly
interfered with. On that very same reason, courts cannot
force party litigants to enter into a contract, without
violating the fundamental law.
"IN VIEW OF THE FOREGOING, this appeal is ordered

DISMISSED.
SO ORDERED."
Thus, the instant petition for review on certiorari. Basically, petitioner ascribes to
the Court of Appeals the following error:
"IN HOLDING THAT THE PETITIONER FAILED TO

ESTABLISH A CAUSE OF ACTION AND THAT
MANDAMUS IS NOT THE CORRECT REMEDY."
In its comment, respondent bank contends that both the courts below did not err
in dismissing petitioner's action because mandamus does not lie to enforce
contractual obligations.
We hold that mandamus is not the proper recourse to enforce petitioner's alleged
right of redemption. To begin with, mandamus applies as a remedy only where
petitioner's right is founded clearly in law and not when it is doubtful. 3 In varying
language, the principle echoed and reechoed is that legal rights may be enforced
by mandamus only if those rights are well-defined, clear and certain. 4
On December 4, 1985 or when respondent Vargas failed to exercise her right of
redemption within the one (1) year redemption period, respondent bank ipso facto
became the absolute owner of the lots. Surprisingly, however, on December 23, 1992,
she sold the property for P18,000,500.00 to Angsico, who eventually transferred
his rights to petitioner. Not only that, on August 24, 1994, respondent Vargas still
leased to petitioner a portion of the subject lots.
Verily, when respondent bank became the owner of the lots on December 4, 1985,
respondent Vargas could no longer legally transfer, cede and convey the
property to petitioner. EIcTAD
Moreover, mandamus cannot be availed of as a remedy to enforce the

performance of contractual obligations. In Commission on Elections vs. Quijano-
Padilla, 5 we held:
"No rule of law is better settled than that mandamus does not lie to
enforce the performance of contractual obligations. As early as
1924, Justice Street, in Quiogue vs. Romualdez, already set
forth the justification of this rule, thus:
'Upon the facts above stated we are of the opinion

that the writ of mandamus is not the appropriate, or
even an admissible remedy. It is manifest that
whatever rights the petitioner may have, upon the
facts stated, are derived from her contract with the
city; and no rule of law is better settled than that
mandamus never lies to enforce the performance of
private contracts. . . . The petitioner's remedy, if any
she has, is by an original action in the Court of First
Instance to compel the city to pay the agreed price
or to pay damages for the breach of contract.'
xxx xxx xxx

'It was not intended to aid a plaintiff in the enforcement
of a mere contract right, or to take the place of the other
remedies provided by law for the adjudication of disputed
claims. Looking at the case from the standpoint of
appellant, it involves nothing more than an
ordinary breach of contract. If, as contended, the
appellant had a valid contract with the school
board, it also had an adequate remedy at law to
recover damages for its breach; and to permit the
writ of mandamus to be used for the purpose of enforcing
a mere contract right would be a wide departure from the
settled practice in respect to the character of cases in
which relief by mandamus may be obtained.
xxx xxx xxx."

WHEREFORE, the petition is DENIED. The assailed Decision dated December
21, 2000 of the Court of Appeals in CA-G.R. SP No. 60966 is hereby AFFIRMED.
||| (Manalo v. PAIC Savings Bank, G.R. No. 146531, March 18, 2005)
THIRD DIVISION
[G.R. No. 168053. September 21, 2011.]
REBECCA T. ARQUERO, petitioner, vs. COURT OF

APPEALS (Former Thirteenth Division); EDILBERTO C.
DE JESUS, in his capacity as Secretary of the Department
of Education; DR. PARALUMAN GIRON, Director,
Regional Office IV-MIMAROPA, Department of
Education; DR. EDUARDO LOPEZ, Schools Division
Superintendent, Puerto Princesa City; and NORMA
BRILLANTES, respondents.
DECISION
PERALTA, J p:
This is a petition for review on certiorari under Rule 45 of the Rules of Court filed
by petitioner Rebecca T. Arquero against public respondents Edilberto C. De
Jesus (De Jesus), in his capacity as Secretary of Education, Dr. Paraluman Giron
(Dr. Giron), Department of Education (DepEd) Director, Regional Office IV-
MIMAROPA, Dr. Eduardo Lopez (Lopez), Schools Division Superintendent,
Puerto Princesa City, and private respondent Norma Brillantes. Petitioner assails
the Court of Appeals (CA) Decision 1 dated December 15, 2004 and Resolution 2
dated May 3, 2005 in CA-G.R. SP No. 85899. The assailed decision reversed and
set aside the Judgment by Default 3 of the Regional Trial Court (RTC), Branch 95,
Puerto Princesa City, while the assailed resolution denied petitioner's motion for
reconsideration.

On October 13, 1989, Congress approved Republic Act (RA) No. 6765, or "An Act
Integrating Certain High Schools in the City of Puerto Princesa and in the Province of
Palawan with the Palawan National School and Appropriating Funds Therefor." Under
the law, the following schools were converted into national schools and
integrated with the Palawan National School (PNS) in the City of Puerto
Princesa, Province of Palawan, as branches thereof: (1) Puerto Princesa School of
Philippine Craftsmen; (2) San Jose Barangay High School; (3) Inagawan Barangay
High School; (4) Puerto Princesa Rural High School; all in the City of Puerto
Princesa and (5) Plaridel Barangay High School in the Municipality of Aborlan;
(6) Narra Barangay High School in the Municipality of Narra; (7) Quezon
Municipal High School in the Municipality of Quezon; (8) Pulot Barangay High
School in the Municipality of Brooke's Point; (9) Bataraza Barangay High School
in the Municipality Bataraza; and (10) Balabac Barangay High School in the
Municipality of Balabac; all in the Province of Palawan. 4
Section 2 of the law provides that the PNS shall, in addition to general secondary
education program, offer post-secondary technical-vocational and other relevant
courses to carry out its objectives. The PNS shall thus be considered the "mother
unit" and the integrated schools should benefit from a centralized curriculum
planning to eliminate duplication of functions and efforts relative to human
resource development for the province. 5 The law also provides that the Palawan
Integrated National Schools (PINS) shall be headed by a Vocational School
Superintendent (VSS) who shall be chosen and appointed by the Secretary of the
Department of Education, Culture, and Sports (now the DepEd). 6 Except for
Puerto Princesa School of Philippine Craftsmen, which shall be headed by the
Home Industries Training Supervisor, the PNS and each of its units or branches
shall be headed either by a Principal or Secondary School Head Teacher to be
chosen in accordance with the DepEd Rules and Regulations. 7 aIHCSA
However, no VSS was appointed. Instead, then DECS Region IV Office

designated then PNS Principal Eugenio J. dela Cuesta in a concurrent capacity as
Officer-in-Charge (OIC) of the PINS. After the retirement of Dela Cuesta,
petitioner took over as Secondary School Principal of the PNS. 8 On March 18,
1993, then DECS-Region IV Director IV Desideria Rex (Director Rex) designated
petitioner as OIC of the PINS. 9
On December 1, 1994, Director Rex's successor, Pedro B. Trinidad placed all

satellite schools of the PINS under the direct supervision of the Schools Division
Superintendent for Palawan effective January 1, 1995. 10 This directive was later
approved by the DepEd in September 1996. Petitioner was instructed to turn
over the administration and supervision of the PINS branches or units. 11 In
another memorandum, Schools Division Superintendent Portia Gesilva was
designated as OIC of the PINS. These events prompted different parties to
institute various actions restraining the enforcement of the DepEd orders.
Pursuant to RA 8204, separate City Schools Division Offices were established for
the City of Puerto Princesa and the Province of Palawan. 12
On March 14, 2000, Regional Director Belen H. Magsino issued an Order

addressed to the Schools Division Superintendent of Palawan and Puerto
Princesa City, and petitioner stating that the PINS satellite schools shall be under
the supervision of the division schools superintendents concerned, while
petitioner should concentrate on the supervision and administration of the PNS.
13 Again, this prompted the filing of various court actions.
On May 14, 2002, then DECS Undersecretary Jaime D. Jacob issued an Order 14
addressed to Dr. Giron, OIC, DepEd Regional Office No. 4, stating that there
being no more legal impediment to the integration, he ordered that the
secondary schools integrated with the PNS be under the direct administrative
management and supervision of the schools division superintendents of the
divisions of Palawan and Puerto Princesa City, as the case may be, according to
their geographical and political boundaries. Consequently, Dr. Giron instructed
the secondary schools' principals concerned of the assumption of jurisdiction by
the superintendent of the schools division offices of the city and province, and
that their fiscal and financial transaction as turned over will be effected on July 1,
2002. However, then DepEd Undersecretary Ramon C. Bacani (Bacani) ordered
that the status quo be maintained and that no turn over of schools be made. 15 In
the meantime, petitioner remained as the OIC of the PINS.
On September 19, 2002, Dr. Giron withdrew the designation of petitioner as OIC
of the PINS, enjoining her from submitting to the Regional Office all
appointments and personnel movement involving the PNS and the satellite
schools. On November 7, 2002, petitioner appealed to the Civil Service
Commission assailing the withdrawal of her designation as OIC of the PINS. 16
On March 28, 2003, then DepEd Secretary Edilberto C. De Jesus designated

Assistant Schools Division Superintendent Norma B. Brillantes (hereafter
referred to as private respondent) in concurrent capacity as OIC of the PINS
entitled to representation and transportation allowance, except the salary of the
position. 17 Petitioner filed a Motion for Reconsideration and/or Clarification 18
before the Office of the DepEd Secretary as to the designation of private
respondent. aDcHIS
On September 18, 2003, Dr. Giron filed a formal charge 19 against petitioner who
continued to defy the orders issued by the Regional Office relative to the exercise
of her functions as OIC of the PINS despite the designation of private respondent
as such. The administrative complaint charged petitioner with grave misconduct,
gross insubordination and conduct prejudicial to the best interest of the service.
Petitioner was also preventively suspended for ninety (90) days. 20
On October 2, 2003, petitioner filed the Petition for Quo Warranto with Prayer for
Issuance of Temporary Restraining Order and/or Injunctive Writ 21 before the
RTC of Palawan 22 against public and private respondents. The case was
docketed as Civil Case No. 3854. Petitioner argued that the designation of private
respondent deprived her of her right to exercise her function and perform her
duties in violation of her right to security of tenure. Considering that petitioner
was appointed in a permanent capacity, she insisted that private respondent's
designation as OIC of the PNS is null and void there being no vacancy to the
position. Petitioner thus prayed that the RTC issue an order granting the writ of
quo warranto enjoining private respondent from assuming the position of OIC of
the PNS, declaring the questioned designation null and void and without
operative effect, and declaring petitioner to be entitled to the office of the
principal of the PNS. 23
On October 6, 2003, the Executive Judge issued a 72-Hour TRO 24 enjoining and
restraining private respondent from assuming the position of OIC and
performing the functions of the Office of the Principal of the PNS; and
restraining public respondents from giving due course or recognizing the
assailed designation of private respondent. The RTC later issued the writ of
preliminary injunction. 25
Respondents failed to file their Answer. Hence, on motion 26 of petitioner, the

Court declared respondents in default in an Order 27 dated December 15, 2003.
In the same order, petitioner was allowed to present her evidence ex parte.
On June 14, 2004, the RTC rendered a Judgment by Default, 28 the dispositive
portion of which reads:
WHEREFORE, premises considered and by preponderance

of evidence, judgment is hereby rendered:
1. Declaring petitioner Rebecca T. Arquero as the

lawful Principal and Head of the Palawan
Integrated National High School who is
lawfully entitled to manage the operation
and finances of the school subject to
existing laws;
2. Declaring the formal charge against petitioner,

the preventive suspension, the
investigating committee, the proceedings
therein and any orders, rulings, judgments
and decisions that would arise therefrom
as null, void and of no effect;
3. Ordering respondent Norma Brillantes, or any
person acting in her behalf, to cease and
desist from assuming and exercising the
functions of the Office of the Principal of
Palawan Integrated National High School,
and respondents Edilberto C. De Jesus,
Paraluman R. Giron and Eduardo V.
Lopez, or any person acting in their behalf,
from giving due course or recognizing the
same; and HCaIDS
4. Making the writ of preliminary injunction issued

in this case permanent.
IT IS SO ORDERED. 29
The RTC held that considering that the integrated school failed to offer post-
secondary technical-vocational courses, the VSS position became functus officio.
The PNS, therefore, remains to be a general secondary school under the
jurisdiction of the DepEd. 30 Consequently, supervision of the integrated school
was automatically vested with the principal of the PNS without the necessity of
appointment or designation. As to the administrative case filed against
petitioner, the RTC opined that the formal charge and preventive suspension are
illegal for lack of due process. 31
On appeal, the CA reversed and set aside the RTC decision, the dispositive

hereby GRANTED. The appealed decision of the court a quo
in Civil Case No. 3854 is hereby REVERSED and SET ASIDE.
A new judgment is hereby entered DISMISSING the petition
for quo warranto filed by appellee Rebecca T. Arquero.
SO ORDERED. 32
Applying the rules on statutory construction, the appellate court emphasized the
need to harmonize the laws. The CA held that the PINS and its satellite schools
remain under the complete administrative jurisdiction of the DepEd and not
transferred to the Technical Education and Skills Development Authority
(TESDA). It also explained that by providing for a distinct position of VSS with a
higher qualification, specifically chosen and appointed by the DepEd Secretary
that is separate from the school head of the PNS offering general secondary
education program, RA 6765 intended that the functions of a VSS and School
Principal of PNS be discharged by two separate persons. 33 The CA added that if
we follow the RTC conclusion, petitioner would assume the responsibilities and
exercise the functions of a division schools superintendent without appointment
and compliance with the qualifications required by law. 34 The appellate court
likewise held that petitioner failed to establish her clear legal right to the position
of OIC of the PINS as she was not appointed but merely designated to the
position in addition to her functions as incumbent school principal of the PNS. 35
Clearly, there was no violation of her right to due process and security of tenure
when private respondent replaced her. As to the validity of filing the
administrative charge against her and the subsequent imposition of preventive
suspension, the CA refused to rule on the matter due to the pendency of the
administrative case which is within the jurisdiction of the DepEd.
Hence, this petition raising the following issues: cIHCST
A. THE COURT OF APPEALS' DECISION DATED THE

15TH DECEMBER 2004, AND THE RESOLUTION
OF 3RD MAY 2005, HAVE DECIDED A
QUESTION OF SUBSTANCE, NOT
THERETOFORE DETERMINED BY THE
SUPREME COURT, OR THE APPELLATE COURT
HAS DECIDED IT IN A WAY PROBABLY NOT IN
ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THE HIGHEST
COURT; OR THE RESPONDENT COURT OF
APPEALS HAS SO FAR DEPARTED FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS AS TO CALL FOR AN EXERCISE
OF THE POWER OF SUPERVISION.
B. THE CHALLENGED DECISION WAS RENDERED ON

THE BASIS OF MERE UNSUBSTANTIATED
"ARGUMENTATIONS" OF THE INDIVIDUAL
RESPONDENTS.
NO IOTA OF EVIDENCE, TESTIMONIAL OR

DOCUMENTARY, WERE PRESENTED AND
OFFERED FOR A SPECIFIC PURPOSE BY THE
RESPONDENTS (WHO WERE DECLARED IN
DEFAULT).
THEREFORE, THE CONCLUSION OF THE IMPUGNED

DECISION IS NOT SUPPORTED BY RECORDED
EVIDENCE. 36
The petition is without merit.
Petitioner insists that respondents could not have appealed the RTC decision
having been declared in default. She explains that the only issue that could have
been raised is a purely legal question, therefore, the appeal should have been
filed with the Court and not with the CA.
In Martinez v. Republic, 37 the Court has clearly discussed the remedies of a party
declared in default in light of the 1964 and 1997 Rules of Court and a number of
jurisprudence applying and interpreting said rules. Citing Lina v. Court of
Appeals, 38 the Court enumerated the above-mentioned remedies, to wit:
a) The defendant in default may, at any time after discovery

thereof and before judgment, file a motion, under
oath, to set aside the order of default on the ground
that his failure to answer was due to fraud,
accident, mistake or excusable neglect, and that he
has meritorious defenses; (Sec. 3, Rule 18)
b) If the judgment has already been rendered when the

defendant discovered the default, but before the
same has become final and executory, he may file a
motion for new trial under Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment

has become final and executory, he may file a
petition for relief under Section 2 of Rule 38; and
d) He may also appeal from the judgment rendered against

him as contrary to the evidence or to the law, even
if no petition to set aside the order of default has
been presented by him. (Sec. 2, Rule 41) 39
cDEHIC
The Court explained in Martinez that the fourth remedy, that of appeal, is
anchored on Section 2, Rule 41 of the 1964 Rules. Even after the deletion of that
provision under the 1997 Rules, the Court did not hesitate to expressly rely on
the Lina doctrine, including the pronouncement that a defaulted defendant may
appeal from the judgment rendered against him. Moreover, in Rural Bank of Sta.
Catalina v. Land Bank of the Philippines, 40 the Court provided a comprehensive
restatement of the remedies of the defending party declared in default:
It bears stressing that a defending party declared in default

loses his standing in court and his right to adduce evidence
and to present his defense. He, however, has the right to
appeal from the judgment by default and assail said
judgment on the ground, inter alia, that the amount of the
judgment is excessive or is different in kind from that
prayed for, or that the plaintiff failed to prove the material
allegations of his complaint, or that the decision is contrary
to law. Such party declared in default is proscribed from
seeking a modification or reversal of the assailed decision on
the basis of the evidence submitted by him in the Court of
Appeals, for if it were otherwise, he would thereby be
allowed to regain his right to adduce evidence, a right which
he lost in the trial court when he was declared in default,
and which he failed to have vacated. In this case, the
petitioner sought the modification of the decision of the trial
court based on the evidence submitted by it only in the
Court of Appeals. 41
Undoubtedly, a defendant declared in default retains the right to appeal

from the judgment by default on the ground that the plaintiff failed to prove
the material allegations of the complaint, or that the decision is contrary to
law, even without need of the prior filing of a motion to set aside the order
of default except that he does not regain his right to adduce evidence. 42 The
appellate court, in turn, can review the assailed decision and is not
precluded from reversing the same based solely on the evidence submitted
by the plaintiff.
The next question to be resolved is whether petitioner has the right to the
contested public office and to oust private respondent from its enjoyment. We
answer in the negative.
A quo warranto proceeding is the proper legal remedy to determine the right or
title to the contested public office and to oust the holder from its enjoyment. 43 It
is brought against the person who is alleged to have usurped, intruded into, or
unlawfully held or exercised the public office. 44 It may be brought by the
Republic of the Philippines or by the person claiming to be entitled to such office.
45
In quo warranto, the petitioner who files the action in his name must prove that he
is entitled to the subject public office. In other words, the private person suing
must show a clear right to the contested position. 46 Otherwise, the person who
holds the same has a right to undisturbed possession and the action for quo
warranto may be dismissed. 47 It is not even necessary to pass upon the right of
the defendant who, by virtue of his appointment, continues in the undisturbed
possession of his office. 48 IECcAT
On the basis of the evidence presented solely by petitioner and without

considering the arguments and attachments made by respondents to rebut
petitioner's claims, we find that petitioner failed to prove that she is entitled to
the contested position.
It is undisputed that petitioner was appointed as the principal of the PNS. In

addition, she was designated as the OIC of the PINS. Said designation was,
however, withdrawn. Private respondent was, thereafter, designated as the new
OIC. This prompted petitioner to file the quo warranto petition before the court a
quo.
The contested position was created by RA 6765. Section 3 of the law provides:
Section 3. The school shall be headed by a Vocational School

Superintendent. He shall be chosen and appointed by the
Secretary of Education, Culture and Sports [now Secretary of
Education].
Moreover, Section 4 thereof states:

Section 4. The Home Industries Training Supervisor of the
Puerto Princesa School of Philippine Craftsmen shall
continue to serve as such. The main school and each of its
units or branches shall be headed either by a Principal or
Secondary School Head Teacher to be chosen in accordance
with the rules and regulations of the Department of
Education, Culture and Sports [now the Department of
Education].
As aptly observed by the CA, the law created two positions the VSS and the
principal or secondary school head teacher of each of the units or branches of the
integrated school. The legislators clearly intended that the integrated schools
shall be headed by a superintendent. Admittedly, petitioner did not possess the
qualifications to hold the position and she was merely designated by the DepEd
as the OIC of the PINS. At that time, she held in a concurrent capacity, the
permanent position of principal of the PNS. Having been appointed as OIC
without the necessary qualifications, petitioner held the position only in a
temporary capacity. The purpose of an acting or temporary appointment is to
prevent a hiatus in the discharge of official functions by authorizing a person to
discharge those functions pending the selection of a permanent or another
appointee. An acting appointee accepts the position on the condition that he shall
surrender the office once he is called to do so by the appointing authority.
Therefore, his term of office is not fixed, but endures at the pleasure of the
appointing authority. 49 The essence of an acting appointment is its
temporariness and its consequent revocability at any time by the appointing
authority. 50
Thus, under RA 6765, petitioner can only insist on her security of tenure as
principal of the PNS but not as OIC of the integrated school. Upon the
withdrawal of her designation, her right to the contested position ceased to exist.
Petitioner also bases her right to the contested position on the enactment of RA
7796, or "An Act Creating the Technical Education and Skills Development Authority,
Providing for its Powers, Structure and for Other Purposes," and RA 9155, or "An Act
Instituting a Framework of Governance for Basic Education, Establishing Authority and
Accountability, Renaming the Department of Education Culture and Sports as the
Department of Education, and for Other Purposes." She contends that under RA
7796, the position of VSS could no longer be filled up by the DepEd having been
absorbed by TESDA. As such, the right to manage the operation and finances of
the integrated schools is automatically vested with petitioner being the principal
of the PNS without further appointment or designation.
Again, we do not agree. HDICSa
As found by the RTC and affirmed by the CA, the PINS failed to implement its
technical-vocational education program. Consequently, the PNS and the other
satellite schools never came under the jurisdiction of the Bureau of Technical and
Vocational Education of the DepEd nor the technical-vocational education in
DepEd's regional offices. Thus, except for the Puerto Princesa School of
Philippine Craftsmen, which is now within the jurisdiction of the TESDA, the
PNS and the other units remained under the complete administrative jurisdiction
of the DepEd. Although the technical-vocational education program was not
implemented, it does not alter the law's intent that the main school, which is the
PNS and the other units integrated with it, shall be headed either by a principal
or secondary school head teacher; while the PINS or the integrated school shall
be headed by another. We cannot subscribe to petitioner's insistence that the
principal automatically heads the PINS without appointment or designation. As
clearly explained by the CA, "by providing for a distinct position with a higher
qualification (that of a superintendent), specifically chosen and appointed by the
DepEd Secretary, separate from the school head of the PNS offering general
secondary education program, the law clearly intended the functions of a VSS
and school principal of the PNS to be discharged and performed by two different
individuals." 51
Neither can petitioner rely on the enactment of RA 9155. The law, in fact,
weakens petitioner's claim. RA 9155 provides the framework for the governance
of basic education. It also emphasizes the principle of shared governance which
recognizes that every unit (which includes the national, regional, division, school
district, and school levels) in the education bureaucracy has a particular role, task
and responsibility. The school shall be headed by a [principal] or school head; a
school district by a schools district supervisor; a division by a schools division
superintendent; a region by a director; and the national level by the Secretary of
Education. It must be recalled that the integration under RA 6765 involved
certain high schools in different municipalities of the Province of Palawan and
the City of Puerto Princesa. We also note that RA 6765 intended that the
integrated school shall be headed by a superintendent. Nowhere in the above
laws can we find justification for petitioner's insistence that she, and not private
respondent, has a better right to hold the contested position.
Clearly, petitioner failed to establish her right to the contested position.

Therefore, the dismissal of her quo warranto petition is in order. It must be
emphasized, however, that this declaration only involves the position of
petitioner as OIC of the PINS. It does not in any way affect her position as
principal of the PNS which she holds in a permanent capacity.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.

The Court of Appeals Decision dated December 15, 2004 and Resolution dated
May 3, 2005 in CA-G.R. SP No. 85899, are AFFIRMED.
SO ORDERED. STcEaI
Velasco, Jr., Abad, Mendoza and Perlas-Bernabe, JJ., concur.
||| (Arquero v. Court of Appeals, G.R. No. 168053, September 21, 2011)
SECOND DIVISION
[G.R. No. 184980. March 30, 2011.]
DANILO MORO, petitioner, vs. GENEROSO REYES DEL

CASTILLO, JR., respondent.
DECISION
ABAD, J p:
This case is about the right of the petitioner in an action for quo warranto to be
reinstated meantime that he has appealed from the Ombudsman's decision
dismissing him from the service for, among other grounds, misconduct in office.
cEAHSC
The Facts and the Case

On December 7, 2005 the Ombudsman charged respondent Generoso Reyes del
Castillo, Jr. (Del Castillo), then Chief Accountant of the General Headquarters
(GHQ) Accounting Center of the Armed Forces of the Philippines (AFP), with
dishonesty, grave misconduct and conduct prejudicial to the best interest of the
service in OMB-P-A-06-0031-A. The Ombudsman alleged that Del Castillo made
false statements in his Statement of Assets and Liabilities from 1996 to 2004 and
that he acquired properties manifestly out of proportion to his reported salary.
On April 1, 2006 the GHQ reassigned Del Castillo to the Philippine Air Force
(PAF) Accounting Center by virtue of GHQ AFP Special Order 91 (SO 91). 1
Through the same order, petitioner Danilo Moro (Moro), then Chief Accountant
of the Philippine Navy, took over the position of Chief Accountant of the GHQ
Accounting Center.
Meantime, on August 30, 2006 the Ombudsman placed Del Castillo under
preventive suspension for six months and eventually ordered his dismissal from
the service on February 5, 2007. 2 The penalty imposed on him included
cancellation of eligibility, forfeiture of retirement benefits, and perpetual
disqualification from reemployment in the government. Del Castillo filed a
motion for reconsideration, which is pending to this date.
Following the lapse of his six-month suspension or on March 12, 2007 Del
Castillo attempted to reassume his former post of GHQ Chief Accountant. But,
he was unable to do so since Moro declined to yield the position. Consequently,
on April 4, 2007 Del Castillo filed a petition for quo warranto 3 against Moro with
the Regional Trial Court 4 (RTC) of Paraaque City in Civil Case 07-0111.
Del Castillo claimed that Moro was merely detailed as GHQ Chief Accountant
when the Ombudsman placed Del Castillo under preventive suspension. Since
the latter's period of suspension already lapsed, he was entitled to resume his
former post and Moro was but a usurper. 5
For his part, Moro pointed out in his Answer 6 that his appointment under SO 91
as GHQ Chief Accountant was a permanent appointment. Indeed, the GHQ had
already reassigned Del Castillo to the PAF Accounting Center even before the
Ombudsman placed him under preventive suspension. Del Castillo was,
therefore, not automatically entitled to return to his former GHQ post despite the
lapse of his suspension.
During the pendency of the quo warranto case before the RTC, Del Castillo
refused to report at the PAF Accounting Center despite a memorandum from the
AFP Acting Deputy Chief of Staff for Personnel that carried the note and
approval of the AFP Chief of Staff. 7 Del Castillo insisted that he could not be
placed under the PAF since he was the GHQ Chief Accountant. 8 cAISTC
On October 10, 2007 the RTC dismissed Del Castillo's petition, 9 holding that
Moro held the position of GHQ Chief Accountant pursuant to orders of the AFP
Chief of Staff. Moreover, the RTC found Del Castillo's reassignment to the PAF
Accounting Center valid. Under the Civil Service Commission (CSC) Rules, a
reassignment may be made for a maximum of one year. Since Del Castillo's
preventive suspension kept him away for only six months, he had to return to
the PAF to complete his maximum detail at that posting. Besides, said the trial
court, the Ombudsman's February 5, 2007 Order, which directed Del Castillo's
dismissal from the service for grave misconduct, among others, rendered the
petition moot and academic. The RTC denied Del Castillo's motion for
reconsideration.
Instead of appealing from the order of dismissal of his action, Del Castillo filed a
petition for certiorari with the Court of Appeals (CA) in CA-G.R. SP 103470. On
October 13, 2008 the CA reversed the RTC Decision. 10 Notwithstanding the
procedural error, the CA gave due course to the petition on grounds of
substantial justice and fair play. It held that Del Castillo's reassignment exceeded
the maximum of one year allowed by law and that SO 91 was void since it did
not indicate a definite duration for such reassignment. Further, the CA held as
non-executory the Ombudsman's dismissal of Del Castillo in view of his appeal
from that dismissal. With the denial of his motion for reconsideration, Moro filed
this petition via Rule 45 of the Rules of Court.
The Issue Presented

The key issue in this case is whether or not respondent Del Castillo is entitled to
be restored to the position of Chief Accountant of the GHQ Accounting Center
that he once held.
The Court's Ruling

An action for quo warranto under Rule 66 of the Rules of Court may be filed
against one who usurps, intrudes into, or unlawfully holds or exercises a public
office. 11 It may be brought by the Republic of the Philippines or by the person
claiming to be entitled to such office. 12 In this case, it was Del Castillo who filed
the action, claiming that he was entitled as a matter of right to reassume the
position of GHQ Chief Accountant after his preventive suspension ended on
March 11, 2007. He argues that, assuming his reassignment to the PAF
Accounting Center was valid, the same could not exceed one year. Since his
detail at the PAF took effect under SO 91 on April 1, 2006, it could last not later
than March 31, 2007. By then, Moro should have allowed him to return to his
previous posting as GHQ Chief Accountant.
But, as Moro points out, he had been authorized under SO 91 to serve as GHQ
Chief Accountant. Del Castillo, on the other hand, had been ordered dismissed
from the service by the Ombudsman in OMB-P-A-06-0031-A. Consequently, he
cannot reassume the contested position.
Del Castillo of course insists, citing Lapid v. Court of Appeals, 13 that only
decisions of the Ombudsman that impose the penalties of public censure,
reprimand, or suspension of not more than a month or a fine of one month salary
are final, executory, and unappealable. Consequently, when the penalty is
dismissal as in his case, he can avail himself of the remedy of appeal and the
execution of the decision against him would, in the meantime, be held in
abeyance.
But, the Lapid case has already been superseded by In the Matter to Declare in
Contempt of Court Hon. Simeon A. Datumanong, Secretary of DPWH. 14 The Court
held in Datumanong that Section 7, Rule III of Administrative Order 7, as
amended by Administrative Order 17, 15 clearly provides that an appeal shall
not stop a decision of the Ombudsman from being executory. The Court later
reiterated this ruling in Office of the Ombudsman v. Court of Appeals. 16 AaDSTH
is entitled to the subject public office. Otherwise, the person who holds the same
has a right to undisturbed possession and the action for quo warranto may be
dismissed. 17
Here, Del Castillo brought the action for quo warranto in his name on April 4,
2007, months after the Ombudsman ordered his dismissal from service on
February 5, 2007. As explained above, that dismissal order was immediately
executory even pending appeal. Consequently, he has no right to pursue the
action for quo warranto or reassume the position of Chief Accountant of the GHQ
Accounting Center.
WHEREFORE, the Court GRANTS the petition, REVERSES and SETS ASIDE
the decision dated October 13, 2008 of the Court of Appeals in CA-G.R. SP
103470, and REINSTATES the October 10, 2007 decision of the Regional Trial
Court in Civil Case 07-0111, which dismissed the complaint for quo warranto.
||| (Moro v. Del Castillo, Jr., G.R. No. 184980, March 30, 2011)
EN BANC
[G.R. Nos. 192147 & 192149. August 23, 2011.]
RENALD F. VILANDO, petitioner, vs. HOUSE OF

REPRESENTATIVES ELECTORAL TRIBUNAL,
JOCELYN SY LIMKAICHONG AND HON. SPEAKER
PROSPERO NOGRALES, respondents.
DECISION
MENDOZA, J p:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court
assailing the March 24, 2010 Decision 1 of the House of Representatives Electoral
Tribunal (HRET) dismissing the petitions for quo warranto and declaring private
respondent Jocelyn Sy Limkaichong (Limkaichong) not disqualified as Member of
the House of Representatives representing the First District of Negros Oriental
and its Resolution 2 dated May 17, 2010, denying the motion for reconsideration.
In the May 14, 2007 elections, Limkaichong filed her certificate of candidacy for
the position of Representative of the First District of Negros Oriental. She won
over the other contender, Olivia Paras.
On May 25, 2007, she was proclaimed as Representative by the Provincial Board
of Canvassers on the basis of Comelec Resolution No. 8062 3 issued on May 18,
2007.
On July 23, 2007, she assumed office as Member of the House of Representatives.
Meanwhile, petitions involving either the disqualification or the proclamation of

Limkaichong were filed before the Commission on Elections (COMELEC) which
reached the Court. EDIaSH
The petitions, which questioned her citizenship, were filed against Limkaichong
by her detractors: Louis Biraogo (G.R. No. 179120); 4 Olivia Paras (G.R. Nos.
179132-33); 5 and Renald F. Vilando (G.R. Nos. 179240-41). 6 These three (3)
petitions were consolidated with the petition for certiorari filed by Limkaichong
(G.R. Nos. 178831-32) assailing the Joint Resolution issued by the COMELEC
which resolved the disqualification cases against her.
On April 1, 2009, the Court granted the aforesaid petition of Limkaichong,

reversed the Joint Resolution of the Comelec, dismissed the three (3) other
petitions, and directed the petitioners to seek relief before the HRET by way of a
petition for Quo Warranto.
On April 21, 2009 and May 27, 2009, petitioner Renald F. Vilando (Vilando), as
taxpayer; and Jacinto Paras, as registered voter of the congressional district
concerned, filed separate petitions for Quo Warranto against Limkaichong before
the HRET. These petitions were consolidated by the HRET as they both
challenged the eligibility of one and the same respondent. Petitioners asserted
that Limkaichong was a Chinese citizen and ineligible for the office she was
elected and proclaimed. They alleged that she was born to a father (Julio Sy),
whose naturalization had not attained finality, and to a mother who acquired the
Chinese citizenship of Julio Sy from the time of her marriage to the latter. Also,
they invoked the jurisdiction of the HRET for a determination of Limkaichong's
citizenship, which necessarily included an inquiry into the validity of the
naturalization certificate of Julio Sy.
For her defense, Limkaichong maintained that she is a natural-born Filipino

citizen. She averred that the acquisition of Philippine citizenship by her father
was regular and in order and had already attained the status of res judicata.
Further, she claimed that the validity of such citizenship could not be assailed
through a collateral attack. DcTSHa
On March 24, 2010, the HRET dismissed both petitions and declared
Limkaichong not disqualified as Member of the House of Representatives.
Pertinent portions of the HRET decision reads:
By and large, petitioners failed to satisfy the quantum of

proof to sustain their theory that respondent is not a natural-
born Filipino citizen and therefore not qualified as
Representative of the First District, Negros Oriental. This
being so, their petitions must fail.
WHEREFORE, the Tribunal DISMISSES the instant petition

for lack of merit and declares that respondent Jocelyn Sy
Limkaichong is not disqualified as Member of the House of
Representatives representing the First District, Negros
Oriental.
As soon as the Decision becomes final and executory, notice

of copies thereof shall be sent to the President of the
Philippines, the House of Representatives through the
Speaker, the Commission on Audit through the Chairman,
pursuant to Rule 96 of the 2004 Rules of the House of
Representatives Electoral Tribunal. Let a copy of this
Decision be furnished the Chairman, Commission on
Elections, for his information and appropriate action.
SO ORDERED. 7
The petitioners sought reconsideration of the aforesaid decision, but it was

denied by the HRET in its Resolution dated May 17, 2010. IDTcHa
Hence, this petition for certiorari filed by Vilando anchored on the following:
GROUNDS:
THE ONE-SIDED RESOLUTION OF THE SUBJECT
PETITION FOR QUO WARRANTO AND THE UTTER
FAILURE OF THE HRET TO DISQUALIFY
LIMKAICHONG AS MEMBER OF THE HOUSE OF
REPRESENTATIVES DESPITE MANIFEST EVIDENCE
THAT SHE IS NOT A NATURAL-BORN FILIPINO
CITIZEN IS WHIMSICAL, CAPRICIOUS AND
ARBITRARY BECAUSE:
1. THE PETITION FOR QUO WARRANTO DOES NOT

OPERATE AS A COLLATERAL ATTACK ON
THE CITIZENSHIP OF LIMKAICHONG'S
FATHER FOR THE REASON THAT HER
FATHER'S CERTIFICATE OF
NATURALIZATION IS OF NO FORCE AND
EFFECT FROM THE VERY BEGINNING,
HENCE, THERE IS ACTUALLY NOTHING
BEING ATTACKED OR ASSAILED BY THE
SAME.
2. LIMKAICHONG CANNOT DERIVE PHILIPPINE

CITIZENSHIP FROM HER MOTHER GIVEN
THAT AT THE TIME OF HER BIRTH, HER
MOTHER IS NOT ALREADY A FILIPINO
CITIZEN AS A RESULT OF HER MARRIAGE
TO HER FATHER AS PROVIDED FOR UNDER
SECTION 1 (7) OF COMMONWEALTH ACT
NO. 63 IN RELATION TO ARTICLE 2 (1)
CHAPTER II OF THE CHINESE REVISED
NATIONALITY LAW OF FEBRUARY 5, 1959.
3. HAVING THE PLENARY, ABSOLUTE AND

EXCLUSIVE JURISDICTION TO DETERMINE,
AMONG OTHERS, THE QUALIFICATIONS OF
MEMBERS OF THE HOUSE OF
REPRESENTATIVES, THE HRET CAN LOOK
INTO THE ELIGIBILITY OF LIMKAICHONG
EVEN IF, AS AN INCIDENT THERETO, IT
WOULD MEAN LOOKING INTO THE
VALIDITY OF THE CERTIFICATE OF
NATURALIZATION. 8
It should be noted that Limkaichong's term of office as Representative of the First

District of Negros Oriental from June 30, 2007 to June 30, 2010 already expired.
As such, the issue questioning her eligibility to hold office has been rendered
moot and academic by the expiration of her term. Whatever judgment is reached,
the same can no longer have any practical legal effect or, in the nature of things,
can no longer be enforced. 9 Thus, the petition may be dismissed for being moot
and academic. aCASEH
Moreover, there was the conduct of the 2010 elections, a supervening event, in a
sense, has also rendered this case moot and academic. A moot and academic case
is one that ceases to present a justiciable controversy by virtue of supervening
events, so that a declaration thereon would be of no practical value. As a rule,
courts decline jurisdiction over such case, or dismiss it on ground of mootness.
10
Citizenship, being a continuing requirement for Members of the House of

Representatives, however, may be questioned at anytime. 11 For this reason, the
Court deems it appropriate to resolve the petition on the merits. This position
finds support in the rule that courts will decide a question, otherwise moot and
academic, if it is "capable of repetition, yet evading review." 12 The question on
Limkaichong's citizenship is likely to recur if she would run again, as she did
run, for public office, hence, capable of repetition.
In any case, the Court is of the view that the HRET committed no grave abuse of
discretion in finding that Limkaichong is not disqualified to sit as Member of the
House of Representatives.
Vilando's argument, that the quo warranto petition does not operate as a collateral
attack on the citizenship of Limkaichong's father as the certificate of
naturalization is null and void from the beginning, is devoid of merit.
In this petition, Vilando seeks to disqualify Limkaichong on the ground that she
is a Chinese citizen. To prove his point, he makes reference to the alleged nullity
of the grant of naturalization of Limkaichong's father which, however, is not
allowed as it would constitute a collateral attack on the citizenship of the father.
In our jurisdiction, an attack on a person's citizenship may only be done through
a direct action for its nullity. 13
The proper proceeding to assail the citizenship of Limkaichong's father should be

in accordance with Section 18 of Commonwealth Act No. 473. As held in
Limkaichong v. Comelec, 14 thus:
As early as the case of Queto v. Catolico, 15 where the Court

of First Instance judge motu propio and not in the proper
denaturalization proceedings called to court various
grantees of certificates of naturalization (who had already
taken their oaths of allegiance) and cancelled their
certificates of naturalization due to procedural infirmities,
the Court held that:
. . . It may be true that, as alleged by said

respondents, that the proceedings for naturalization
were tainted with certain infirmities, fatal or
otherwise, but that is beside the point in this case.
The jurisdiction of the court to inquire into and rule
upon such infirmities must be properly invoked in
accordance with the procedure laid down by law.
Such procedure is the cancellation of the
naturalization certificate. [Section 1(5),
COMMONWEALTH ACT NO. 63], in the manner
fixed in Section 18 of Commonwealth Act No. 473,
hereinbefore quoted, namely, "upon motion made
in the proper proceedings by the Solicitor General
or his representatives, or by the proper provincial
fiscal." In other words, the initiative must come
from these officers, presumably after previous
investigation in each particular case. DHSCEc
Clearly, under law and jurisprudence, it is the State, through

its representatives designated by statute, that may question
the illegally or invalidly procured certificate of
naturalization in the appropriate denaturalization
proceedings. It is plainly not a matter that may be raised by
private persons in an election case involving the naturalized
citizen's descendant.
Vilando asserts that as an incident in determining the eligibility of Limkaichong,

the HRET, having the plenary, absolute and exclusive jurisdiction to determine
her qualifications, can pass upon the efficacy of the certificate of naturalization.
True, the HRET has jurisdiction over quo warranto petitions, specifically over
cases challenging ineligibility on the ground of lack of citizenship. No less than
the 1987 Constitution vests the HRET the authority to be the sole judge of all
contests relating to the election, returns and qualifications of its Members. This
constitutional power is likewise echoed in the 2004 Rules of the HRET. Rule 14
thereof restates this duty, thus:
Rule 14. Jurisdiction. The Tribunal is the sole judge of all

contests relating to the election, returns, and qualifications of
the Members of the House of Representatives. ICHAaT
Time and again, this Court has acknowledged this sole and exclusive jurisdiction
of the HRET. 16 The power granted to HRET by the Constitution is intended to
be as complete and unimpaired as if it had remained originally in the legislature.
17 Such power is regarded as full, clear and complete and excludes the exercise
of any authority on the part of this Court that would in any wise restrict it or
curtail it or even affect the same. 18
Such power of the HRET, no matter how complete and exclusive, does not carry
with it the authority to delve into the legality of the judgment of naturalization in
the pursuit of disqualifying Limkaichong. To rule otherwise would operate as a
collateral attack on the citizenship of the father which, as already stated, is not
permissible. The HRET properly resolved the issue with the following
ratiocination:
. . . We note that Jocelyn C. Limkaichong, not the father

Julio Ong Sy, is the respondent in the present case. The
Tribunal may not dwell on deliberating on the validity of
naturalization of the father if only to pursue the end of
declaring the daughter as disqualified to hold office.
Unfortunately, much as the Tribunal wants to resolve said

issue, it cannot do so because its jurisdiction is limited to the
qualification of the proclaimed respondent Limkaichong,
being a sitting Member of the Congress.
Evidently, there is no basis to oblige the Tribunal to reopen

the naturalization proceedings for a determination of the
citizenship of the ascendant of respondent. A petition for quo
warranto is not a means to achieve that purpose. To rule on
this issue in this quo warranto proceeding will not only be a
clear grave abuse of discretion amounting to a lack or excess
of jurisdiction, but also a blatant violation of due process on
the part of the persons who will be affected or who are not
parties in this case. 19
Thus, the Office of the Solicitor General (OSG) wrote that "a collateral attack
against a judgment is generally not allowed, unless the judgment is void upon its
face or its nullity is apparent by virtue of its own recitals." 20 Under the present
situation, there is no evidence to show that the judgment is void on its face:
As to the Order of the CFI, Negros Oriental dated July 9,

1957 and September 21, 1959 that were offered in evidence,
far from proving an invalid oath of allegiance and certificate
of naturalization, being public records, they do in fact
constitute legitimate source of authority for the conferment
of status of the father of respondent as naturalized Filipino.
Absent any contrary declaration by a competent court, the
Tribunal presumes the validity of the CFI Orders of July 9,
1957 and September 21, 1959, and the resulting
documentations of Julio Sy's acquisition of Filipino
citizenship by naturalization as valid and of legal effect. The
oath of allegiance and certificate of naturalization are
themselves proofs of the actual conferment of naturalization.
21
The HRET, therefore, correctly relied on the presumption of validity of the July 9,
1957 and September 21, 1959 Orders of the Court of First Instance (CFI) Negros
Oriental, which granted the petition and declared Julio Sy a naturalized Filipino
absent any evidence to the contrary. THacES
Records disclose that Limkaichong was born in Dumaguete City on November 9,

1959. The governing law is the citizenship provision of the 1935 Constitution, the
pertinent portion thereof, reads:
Article IV
Section 1. The following are citizens of the Philippines:
xxx xxx xxx
(3) Those whose fathers are citizens of the Philippines.
(4) Those whose mothers are citizens of the Philippines and,

upon reaching the age of majority, elect Philippine
citizenship.
xxx xxx xxx
Indubitably, with Limkaichong's father having been conferred the status as a

naturalized Filipino, it follows that she is a Filipino citizen born to a Filipino
father.
Even on the assumption that the naturalization proceedings and the subsequent
issuance of certificate of naturalization were invalid, Limkaichong can still be
considered a natural-born Filipino citizen having been born to a Filipino mother
and having impliedly elected Filipino citizenship when she reached majority age.
The HRET is, thus, correct in declaring that Limkaichong is a natural-born
Filipino citizen:
Respondent Limkaichong falls under the category of those

persons whose fathers are citizens of the Philippines. (Section
1(3), Article IV, 1935 Constitution) It matters not whether the
father acquired citizenship by birth or by naturalization.
Therefore, following the line of transmission through the
father under the 1935 Constitution, the respondent has
satisfactorily complied with the requirement for candidacy
and for holding office, as she is a natural-born Filipino
citizen.
Likewise, the citizenship of respondent Limkaichong finds

support in paragraph 4, Section 1, Article IV of the 1935
Constitution.
Having failed to prove that Anesia Sy lost her Philippine

citizenship, respondent can be considered a natural born
citizen of the Philippines, having been born to a mother who
was a natural-born Filipina at the time of marriage, and
because respondent was able to elect citizenship informally
when she reached majority age. Respondent participated in
the barangay elections as a young voter in 1976,
accomplished voter's affidavit as of 1984, and ran as a
candidate and was elected as Mayor of La Libertad, Negros
Oriental in 2004. These are positive acts of election of
Philippine citizenship. The case of In re: Florencio Mallare,
elucidates how election of citizenship is manifested in
actions indubitably showing a definite choice. We note that
respondent had informally elected citizenship after January
17, 1973 during which time the 1973 Constitution considered
as citizens of the Philippines all those who elect citizenship
in accordance with the 1935 Constitution. The 1987
Constitution provisions, i.e., Section 1(3), Article [IV] and
Section 2, Article [IV] were enacted to correct the anomalous
situation where one born of a Filipino father and an alien
mother was automatically accorded the status of a natural-
born citizen, while one born of a Filipino mother and an
alien father would still have to elect Philippine citizenship
yet if so elected, was not conferred natural-born status. It
was the intention of the framers of the 1987 Constitution to
treat equally those born before the 1973 Constitution and
who elected Philippine citizenship upon reaching the age of
majority either before or after the effectivity of the 1973
Constitution. Thus, those who would elect Philippine
citizenship under par. 3, Section 1, Article [IV] of the 1987
Constitution are now, under Section 2, Article [IV] thereof
also natural-born Filipinos. The following are the pertinent
provisions of the 1987 Constitution: ADCEaH
Article IV
Section 1. The following are citizens of the
Philippines:
(1) Those who are citizens of the

Philippines at the time of the adoption of
this Constitution;
(2) Those whose fathers or mothers are

citizens of the Philippines;
(3) Those born before January 17, 1973, of

Filipino mothers, who elect Philippine
citizenship upon reaching the age of
majority; and
(4) Those who are naturalized in

accordance with law.
Section 2. Natural-born citizens are those who are

citizens of the Philippines from birth without
having to perform any act to acquire or perfect their
Philippine citizenship. Those who elect Philippine
citizenship in accordance with paragraph (3),
Section 1 hereof shall be deemed natural-born
citizens. 22
Vilando's assertion that Limkaichong cannot derive Philippine citizenship from

her mother because the latter became a Chinese citizen when she married Julio
Sy, as provided for under Section 1 (7) of COMMONWEALTH ACT NO. 63 in
relation to Article 2 (1) Chapter II of the Chinese Revised Nationality Law of
February 5, 1959, must likewise fail.
As aptly pointed out by the HRET, Vilando was not able to offer in evidence a
duly certified true copy of the alleged Chinese Revised Law of Nationality to
prove that Limkaichong's mother indeed lost her Philippine citizenship. Verily,
Vilando failed to establish his case through competent and admissible evidence
to warrant a reversal of the HRET ruling. cAHDES
Also, an application for an alien certificate of registration (ACR) is not an

indubitable proof of forfeiture of Philippine citizenship. It is well to quote the
ruling of the HRET on this matter, to wit:
An alien certificate of registration is issued to an individual

who declares that he is not a Filipino citizen. It is obtained
only when applied for. It is in a form prescribed by the
agency and contains a declaration by the applicant of his or
her personal information, a photograph, and physical details
that identify the applicant. It bears no indication of basis for
foreign citizenship, nor proof of change to foreign
citizenship. It certifies that a person named therein has
applied for registration and fingerprinting and that such
person was issued a certificate of registration under the
Alien Registration Act of 1950 or other special law. It is only
evidence of registration.
Unlike birth certificates registered pursuant to Act 3753 (The

Civil Register Law), and much less like other public records
referred to under Section 23, Rule 132, an alien certificate of
registration is not a public document that would be prima
facie evidence of the truth of facts contained therein. On its
face, it only certifies that the applicant had submitted
himself or herself to registration. Therefore, there is no
presumption of alienage of the declarant. This is especially
so where the declarant has in fact been a natural-born
Filipino all along and never lost his or her status as such. 23
Thus, obtaining an ACR by Limkaichong's mother was not tantamount to a

repudiation of her original citizenship. Neither did it result in an acquisition of
alien citizenship. In a string of decisions, this Court has consistently held that an
application for, and the holding of, an alien certificate of registration is not an act
constituting renunciation of Philippine citizenship. 24 For renunciation to
effectively result in the loss of citizenship, the same must be express. 25 Such
express renunciation is lacking in this case. aIEDAC
Accordingly, Limkaichong's mother, being a Filipino citizen, can transmit her

citizenship to her daughter.
Well-settled is the principle that the judgments of the HRET are beyond judicial
interference. The only instance where this Court may intervene in the exercise of
its so-called extraordinary jurisdiction is upon a determination that the decision
or resolution of the HRET was rendered without or in excess of its jurisdiction, or
with grave abuse of discretion or upon a clear showing of such arbitrary and
improvident use of its power to constitute a denial of due process of law, or upon
a demonstration of a very clear unmitigated error, manifestly constituting such
grave abuse of discretion that there has to be a remedy for such abuse. 26 In this
case, there is no showing of any such arbitrariness or improvidence. The HRET
acted well within the sphere of its power when it dismissed the quo warranto
petition.
In fine, this Court finds sufficient basis to sustain the ruling of the HRET which
resolved the issue of citizenship in favor of Limkaichong.
WHEREFORE, the petition is DENIED. Accordingly, the Court affirms the
March 24, 2010 Decision of the HRET declaring that Limkaichong is not
disqualified as Member of the House of Representatives representing the First
District, Negros Oriental. TEacSA
SO ORDERED.
||| (Vilando v. HRET, G.R. Nos. 192147 & 192149, August 23, 2011)
EN BANC
[G.R. No. 191560. March 29, 2011.]
HON. LUIS MARIO M. GENERAL, Commissioner,

National Police Commission, petitioner, vs. HON.
ALEJANDRO S. URRO, in his capacity as the new
appointee vice herein petitioner HON. LUIS MARIO M.
GENERAL, National Police Commission, respondent.
HON. LUIS MARIO M. GENERAL, Commissioner,

National Police Commission, petitioner, vs. President
GLORIA MACAPAGAL-ARROYO, thru Executive
Secretary LEANDRO MENDOZA, in Her capacity as the
appointing power, HON. RONALDO V. PUNO, in His
capacity as Secretary of the Department of Interior and
Local Government and as Ex-Officio Chairman of the
National Police Commission and HON. EDUARDO U.
ESCUETA, ALEJANDRO S. URRO, and HON.
CONSTANCIA P. DE GUZMAN as the midnight
appointees, respondents.
DECISION
BRION, J p:
Before the Court are the Consolidated Petitions for Quo Warranto, 1 and Certiorari
and/or Prohibition 2 with urgent prayer for the issuance of a temporary
restraining order (TRO) and/or preliminary injunction filed by Atty. Luis Mario
General (petitioner). The petitioner seeks to declare unconstitutional the
appointments of Alejandro S. Urro, Constancia P. de Guzman and Eduardo U.
Escueta (collectively, the respondents) as Commissioners of the National Police
Commission (NAPOLCOM), and to prohibit then Executive Secretary Leandro
Mendoza and Department of Interior and Local Government (DILG) Secretary
Ronaldo V. Puno from enforcing the respondents' oath of office. Particularly, the
petitioner asks that respondent Urro be ousted as NAPOLCOM Commissioner
and he be allowed to continue in office.
THE ANTECEDENTS
On September 20, 2004, then President Gloria Macapagal-Arroyo (PGMA)
appointed Imelda C. Roces (Roces) as acting Commissioner of the NAPOLCOM,
representing the civilian sector. 3 On January 25, 2006, PGMA reappointed Roces
as acting NAPOLCOM Commissioner. 4 When Roces died in September 2007,
PGMA appointed the petitioner on July 21, 2008 5 as acting NAPOLCOM
Commissioner in place of Roces. On the same date, PGMA appointed Eduardo
U. Escueta (Escueta) as acting NAPOLCOM Commissioner and designated him as
NAPOLCOM Vice Chairman. 6
Later, PGMA appointed Alejandro S. Urro (Urro) in place of the petitioner,

Constancia P. de Guzman in place of Celia Leones, and Escueta as permanent
NAPOLCOM Commissioners. Urro's appointment paper is dated March 5, 2010;
while the appointment papers of De Guzman and Escueta are both dated
March 8, 2010. 7 On March 9, 2010, Escueta took his oath of office before Makati
Regional Trial Court Judge Alberico Umali. 8
In a letter dated March 19, 2010, DILG Head Executive Assistant/Chief-of-Staff

Pascual V. Veron Cruz, Jr. issued separate congratulatory letters to the
respondents. The letter uniformly reads.
You have just been appointed COMMISSIONER . . .

National Police Commission. . . . Attached is your
appointment paper duly signed by Her Excellency, President
Macapagal Arroyo. 9
After being furnished a copy of the congratulatory letters on March 22, 2010, 10
the petitioner filed the present petition questioning the validity of the
respondents' appointments mainly on the ground that it violates the
constitutional prohibition against midnight appointments. 11
On March 25, 2010 and April 27, 2010, respondents Urro and de Guzman took
their oath of office as NAPOLCOM Commissioners before DILG Secretary Puno
and Sandiganbayan Associate Justice Jose R. Hernandez, respectively. 12 DTEcSa
On July 30, 2010, the newly elected President of the Republic of the Philippines,
His Excellency Benigno S. Aquino III, issued Executive Order No. 2 (E.O. No. 2)
"Recalling, Withdrawing, and Revoking Appointments Issued by the Previous
Administration in Violation of the Constitutional Ban on Midnight
Appointments." The salient portions of E.O. No. 2 read:
SECTION 1. Midnight Appointments Defined. The following

appointments made by the former President and other
appointing authorities in departments, agencies, offices, and
instrumentalities, including government-owned or
controlled corporations, shall be considered as midnight
appointments:
(a) Those made on or after March 11, 2010, including all

appointments bearing dates prior to March 11, 2010 where
the appointee has accepted, or taken his oath, or assumed
public office on or after March 11, 2010, except temporary
appointments in the executive positions when continued
vacancies will prejudice public service or endanger public
safety as may be determined by the appointing authority.
(b) Those made prior to March 11, 2010, but to take effect
after said date or appointments to office that would be
vacant only after March 11, 2010.
(c) Appointments and promotions made during the period

of 45 days prior to the May 10, 2010 elections in violation of
Section 261 of the Omnibus Election Code.
SECTION 2. Recall, Withdraw, and Revocation of Midnight

Appointments. Midnight appointments, as defined under
Section 1, are hereby recalled, withdrawn, and revoked.
The positions covered or otherwise affected are hereby
declared vacant. (Emphasis supplied.)
THE PETITION
The petitioner claims that Roces was supposed to serve a full term of six years
counted from the date of her appointment in October (should be September)
2004. 13 Since she failed to finish her six-year term, then the petitioner is entitled
to serve this unexpired portion or until October (should be September) 2010. 14
The petitioner invokes Republic Act (R.A.) No. 6975 15 (otherwise known as the
Department of the Interior and Local Government Act of 1990) which requires that
vacancies in the NAPOLCOM "shall be filled up for the unexpired term only." 16
Because of the mandatory word "shall," the petitioner concludes that the
appointment issued to him was really a "regular" appointment, notwithstanding
what appears in his appointment paper. As a regular appointee, the petitioner argues
that he cannot be removed from office except for cause.
The petitioner alternatively submits that even if his appointment were
temporary, a temporary appointment does not give the President the license to
abuse a public official simply because he lacks security of tenure. 17 He asserts
that the validity of his termination from office depends on the validity of the
appointment of the person intended to replace him. He explains that until a
presidential appointment is "officially released," there is no "appointment" to
speak of. Since the appointment paper of respondent Urro, while bearing a date
prior to the effectivity of the constitutional ban on appointments, 18 was
officially released (per the congratulatory letter dated March 19, 2010 issued to
Urro) when the appointment ban was already in effect, then the petitioner's
appointment, though temporary in nature, should remain effective as no new
and valid appointment was effectively made.
The petitioner assails the validity of the appointments of respondents De

Guzman and Escueta, claiming that they were also made in violation of the
constitutional ban on appointments. HDIaST
THE COMMENTS OF THE RESPONDENTS and THE OFFICE OF THE

SOLICITOR GENERAL (OSG)
Prefatorily, the respondents characterize Escueta's inclusion in the present
petition as an error since his appointment, acceptance and assumption of office
all took place before the constitutional ban on appointments started. Thus, there
is no "case or controversy" as to Escueta.
The respondents posit that the petitioner is not a real party-in-interest to file a
petition for quo warranto since he was merely appointed in an acting capacity and
could be validly removed from office at anytime.
The respondents likewise counter that what the ban on midnight appointments
under Section 15, Article VII of the Constitution prohibits is only the making of an
appointment by the President sixty (60) days before the next presidential
elections and until his term expires; it does not prohibit the acceptance by the
appointee of his appointment within the same prohibited period. 19 The
respondents claim that "appointment" which is a presidential act, must be
distinguished from the "acceptance" or "rejection" of the appointment, which is
the act of the appointee. Section 15, Article VII of the Constitution is directed
only against the President and his act of appointment, and is not concerned with
the act/s of the appointee. Since the respondents were appointed (per the date
appearing in their appointment papers) before the constitutional ban took effect,
then their appointments are valid.
The respondents assert that their appointments cannot be considered as

midnight appointments under the Dominador R. Aytona v. Andres V. Castillo, et al.
20 ruling, as restated in In Re: Appointments dated March 30, 1998 of Hon. Mateo A.
Valenzuela, et al. 21 and Arturo M. de Castro v. Judicial and Bar Council, et al., 22
since the petitioner failed to substantiate his claim that their appointments were
made only "for the purpose of influencing the Presidential elections," or for
"partisan reasons." 23
The respondents pray for the issuance of a TRO to stop the implementation of
E.O. No. 2, and for the consolidation of this case with the pending cases of
Tamondong v. Executive Secretary 24 and De Castro v. Office of the President 25
which similarly assail the validity of E.O. No. 2.
On the other hand, while the OSG considers the respondents' appointments
within the scope of "midnight appointments" as defined by E.O. No. 2, the OSG
nonetheless submits that the petitioner is not entitled to the remedy of quo
warranto in view of the nature of his appointment. The OSG claims that since an
appointment in an acting capacity cannot exceed one year, the petitioner's
appointment ipso facto expired on July 21, 2009. 26
PETITIONER'S REPLY
The petitioner argues in reply that he is the legally subsisting commissioner until
another qualified commissioner is validly appointed by the new President to
replace him. 27
The petitioner likewise claims that the respondents appeared to have skirted the
element of issuance of an appointment in considering whether an appointment is
made. The petitioner asserts that to constitute an appointment, the President's act
of affixing his signature must be coupled with the physical issuance of the
appointment to the appointee i.e., the appointment paper is officially issued in
favor of the appointee through the President's proper Cabinet Secretary. The
making of an appointment is different from its issuance since prior to the official
issuance of an appointment, the appointing authority enjoys the prerogative to
change his mind. In the present case, the respondents' appointment papers were
officially issued and communicated to them only on March 19, 2010, well within
the period of the constitutional ban, as shown by the congratulatory letters
individually issued to them.
Given this premise, the petitioner claims that he correctly impleaded Escueta in
this case since his appointment also violates the Constitution. The petitioner adds
that Escueta was appointed on July 21, 2008, although then as acting
NAPOLCOM Commissioner. By permanently appointing him as NAPOLCOM
Commissioner, he stands to be in office for more than six years, in violation of
R.A. No. 6975. 28 cETDIA
The petitioner argues that even granting that the President can extend
appointments in an acting capacity to NAPOLCOM Commissioners, it may not
be done by "successive appointments" in the same capacity without violating
R.A. No. 6975, as amended, which provides a fixed and staggered term of office
for NAPOLCOM Commissioners. 29
THE COURT'S RULING

We dismiss the petition for lack of merit.
When questions of constitutional significance are raised, the Court can exercise
its power of judicial review only if the following requisites are present: (1) the
existence of an actual and appropriate case; (2) the existence of personal and
substantial interest on the part of the party raising the constitutional question; (3)
recourse to judicial review is made at the earliest opportunity; and (4) the
constitutional question is the lis mota of the case. 30
Both parties dwelt lengthily on the issue of constitutionality of the respondents'

appointments in light of E.O. No. 2 and the subsequent filing before the Court of
several petitions questioning this Executive Order. The parties, however, appear
to have overlooked the basic principle in constitutional adjudication that enjoins
the Court from passing upon a constitutional question, although properly
presented, if the case can be disposed of on some other ground. 31 In
constitutional law terms, this means that we ought to refrain from resolving any
constitutional issue "unless the constitutional question is the lis mota of the case."
Lis mota literally means "the cause of the suit or action." This last requisite of
judicial review is simply an offshoot of the presumption of validity accorded the
executive and legislative acts of our co-equal branches of the government.
Ultimately, it is rooted in the principle of separation of powers. Given the
presumed validity of an executive act, the petitioner who claims otherwise has
the burden of showing first that the case cannot be resolved unless the
constitutional question he raised is determined by the Court. 32
In the present case, the constitutionality of the respondents' appointments is not

the lis mota of the case. From the submitted pleadings, what is decisive is the
determination of whether the petitioner has a cause of action to institute and
maintain this present petition a quo warranto against respondent Urro. If the
petitioner fails to establish his cause of action for quo warranto, a discussion of the
constitutionality of the appointments of the respondents is rendered completely
unnecessary. The inclusion of the grounds for certiorari and/or prohibition does
not alter the essential character of the petitioner's action since he does not even
allege that he has a personal and substantial interest in raising the constitutional
issue insofar as the other respondents are concerned.
The resolution of whether a cause of action exists, in turn, hinges on the nature of
the petitioner's appointment. We frame the issues under the following questions:
1. What is the nature of the petitioner's appointment as

acting NAPOLCOM Commissioner?
2. Does the petitioner have the clear right to be reinstated to

his former position and to oust respondent Urro as
NAPOLCOM Commissioner?
I. Nature of petitioner's appointment

a. A staggered term of office is not inconsistent with an
acting appointment
The petitioner asserts that contrary to what appears in his appointment paper,
the appointment extended to him was really a regular appointment; thus, he
cannot be removed from office except for cause. The petitioner argues that the
appointment of an acting NAPOLCOM Commissioner or, at the very least, the
"successive appointments" of NAPOLCOM Commissioners in an acting capacity
contravenes the safeguards that the law R.A. No. 6975 33 intends through
the staggered term of office of NAPOLCOM Commissioners. TSIDEa
Notably, the petitioner does not expressly claim that he was issued a permanent
appointment; rather, he claims that his appointment is actually a regular
appointment since R.A. No. 6975 does not allegedly allow an appointment of a
NAPOLCOM Commissioner in an acting capacity.
At the outset, the petitioner's use of terms needs some clarification.

Appointments may be classified into two: first, as to its nature; and second, as to
the manner in which it is made. 34
Under the first classification, appointments can either be permanent or

temporary (acting). A basic distinction is that a permanent appointee can only be
removed from office for cause; whereas a temporary appointee can be removed
even without hearing or cause. 35 Under the second classification, an
appointment can either be regular or ad interim. A regular appointment is one
made while Congress is in session, while an ad interim appointment is one issued
during the recess of Congress. In strict terms, presidential appointments that
require no confirmation from the Commission on Appointments 36 cannot be
properly characterized as either a regular or an ad interim appointment.
In this light, what the petitioner may have meant is a permanent (as contrasted to
a temporary or acting) appointment to the office of a NAPOLCOM
Commissioner, at least for the duration of the unexpired portion of his
predecessor (Roces).
Generally, the power to appoint vested in the President includes the power to
make temporary appointments, unless he is otherwise specifically prohibited
by the Constitution or by the law, or where an acting appointment is
repugnant to the nature of the office involved. 37 The President's power to issue
an acting appointment is particularly authorized by the Administrative Code of
1987 (Executive Order No. 292).
CHAPTER 5
POWER OF APPOINTMENT
Section 16. Power of Appointment. The President shall

exercise the power to appoint such officials as provided for
in the Constitution and laws.
Section 17. Power to Issue Temporary Designation.
(1) The President may temporarily designate an officer

already in the government service or any other
competent person to perform the functions of an
office in the executive branch, appointment to
which is vested in him by law, when: (a) the officer
regularly appointed to the office is unable to
perform his duties by reason of illness, absence or
any other cause; or (b) there exists a vacancy;
(2) . . .
(3) In no case shall a temporary designation exceed one (1)

year.
The purpose of an acting or temporary appointment is to prevent a hiatus in the

discharge of official functions by authorizing a person to discharge those
functions pending the selection of a permanent or another appointee. An acting
appointee accepts the position on the condition that he shall surrender the office
once he is called to do so by the appointing authority. Therefore, his term of
office is not fixed but endures at the pleasure of the appointing authority. His
separation from the service does not import removal but merely the expiration of
his term a mode of termination of official relations that falls outside the
coverage of the constitutional provision on security of tenure 38 since no removal
from office is involved.
The power to appoint is essentially executive in nature 39 and the limitations on

or qualifications in the exercise of this power are strictly construed. 40 In the
present case, the petitioner posits that the law itself, R.A. No. 6975, prohibits the
appointment of a NAPOLCOM Commissioner in an acting capacity by
staggering his term of office. R.A. No. 6975, on the term of office, states: DCESaI
Section 16. Term of Office. The four (4) regular and full-
time Commissioners shall be appointed by the President
upon the recommendation of the Secretary. Of the first four
(4) commissioners to be appointed, two (2) commissioners
shall serve for six (6) years and the two (2) other
commissioners for four (4) years. All subsequent
appointments shall be for a period of six (6) years each,
without reappointment or extension.
Generally, the purpose for staggering the term of office is to minimize the
appointing authority's opportunity to appoint a majority of the members of a
collegial body. It also intended to ensure the continuity of the body and its
policies. 41 A staggered term of office, however, is not a statutory prohibition,
direct or indirect, against the issuance of acting or temporary appointment. It
does not negate the authority to issue acting or temporary appointments that the
Administrative Code grants.
Ramon P. Binamira v. Peter D. Garrucho, Jr., 42 involving the Philippine Tourism

Authority (PTA), is an example of how this Court has recognized the validity of
temporary appointments in vacancies in offices whose holders are appointed on
staggered basis. Under Presidential Decree (P.D.) No. 189, 43 (the charter of the
PTA, as amended by P.D. No. 564 44 and P.D. No. 1400), 45 the members of the
PTA's governing body are all presidential appointees whose terms of office are
also staggered. 46 This, notwithstanding, the Court sustained the temporary
character of the appointment extended by the President in favor of the PTA
General Manager, even if the law 47 also fixes his term of office at six years
unless sooner removed for cause.
Interestingly, even a staggered term of office does not ensure that at no instance
will the appointing authority appoint all the members of a body whose members
are appointed on staggered basis.
The post-war predecessor of the NAPOLCOM was the Police Commission

created under R.A. No. 4864. 48 Pursuant to the 1987 Constitutional provision
mandating the creation of one national civilian police force, 49 Congress enacted
R.A. No. 6975 and created the NAPOLCOM to exercise, inter alia, "administrative
control over the Philippine National Police." Later, Congress enacted R.A. No.
8551 which substantially retained the organizational structure, powers and
functions of the NAPOLCOM. 50 Under these laws, the President has appointed
the members of the Commission whose terms of office are staggered.
Under Section 16 of R.A. No. 6975, the NAPOLCOM Commissioners are all given
a fixed term of six years (except the two of the first appointees who hold office
only for four years). By staggering their terms of office however, the four regular
commissioners would not vacate their offices at the same time since a vacancy
will occur every two years.
Under the NAPOLCOM set up, the law does not appear to have been designed
to attain the purpose of preventing the same President from appointing all the
NAPOLCOM Commissioners by staggering their terms of office. R.A. No. 6975
took effect on January 1, 1991. In the usual course, the term of office of the first
two regular commissioners would have expired in 1997, while the term of the
other two commissioners would have expired in 1995. Since the term of the
President elected in the first national elections under the 1987 Constitution
expired on June 30, 1998, then, theoretically, the sitting President for the 1992-
1998 term could appoint all the succeeding four regular NAPOLCOM
Commissioners. The next President, on the other hand, whose term ended in
2004, would have appointed the next succeeding Commissioners in 2001 and
2003.
It is noteworthy, too, that while the Court nullified the attempt of Congress to
consider the terms of office of the then NAPOLCOM Commissioners as
automatically expired on the ground that there was no bona fide reorganization of
the NAPOLCOM, 51 a provision on the staggering of terms of office is evidently
absent in R.A. No. 8551 the amendatory law to R.A. No. 6975. Section 7 of R.A.
No. 8551 reads:
Section 7. Section 16 of Republic Act No. 6975 is hereby

amended to read as follows:
"SEC. 16. Term of Office. The four (4) regular and full-time
Commissioners shall be appointed by the President for a
term of six (6) years without re-appointment or extension."
Thus, as the law now stands, the petitioner's claim that the appointment of an
acting NAPOLCOM Commissioner is not allowed based on the staggering of
terms of office does not even have any statutory basis.
Given the wide latitude of the President's appointing authority (and the strict
construction against any limitation on or qualification of this power), the
prohibition on the President from issuing an acting appointment must either be
specific, or there must be a clear repugnancy between the nature of the office and
the temporary appointment. No such limitation on the President's appointing
power appears to be clearly deducible from the text of R.A. No. 6975 in the
manner we ruled in Nacionalista Party v. Bautista. 52 In that case, we nullified the
acting appointment issued by the President to fill the office of a Commissioner of
the Commission on Elections (COMELEC) on the ground that it would undermine
the independence of the COMELEC. We ruled that given the specific nature of the
functions performed by COMELEC Commissioners, only a permanent
appointment to the office of a COMELEC Commissioner can be made.
Under the Constitution, the State is mandated to establish and maintain a police
force to be administered and controlled by a national police commission.
Pursuant to this constitutional mandate, the Congress enacted R.A. No. 6975,
creating the NAPOLCOM with the following powers and functions: 53 aDcETC
Section 14. Powers and Functions of the Commission. The

Commission shall exercise the following powers and
functions:
(a) Exercise administrative control and operational

supervision over the Philippine National Police which shall
mean the power to:
xxx xxx xxx
b) Advise the President on all matters involving police

functions and administration;
c) Render to the President and to the Congress an annual

report on its activities and accomplishments during the
thirty (30) days after the end of the calendar year, which
shall include an appraisal of the conditions obtaining in the
organization and administration of police agencies in the
municipalities, cities and provinces throughout the country,
and recommendations for appropriate remedial legislation;
d) Recommend to the President, through the Secretary,

within sixty (60) days before the commencement of each
calendar year, a crime prevention program; and
e) Perform such other functions necessary to carry out the

provisions of this Act and as the President may direct.
[Emphasis added.]
We find nothing in this enumeration of functions of the members of the

NAPOLCOM that would be subverted or defeated by the President's
appointment of an acting NAPOLCOM Commissioner pending the selection and
qualification of a permanent appointee. Viewed as an institution, a survey of
pertinent laws and executive issuances 54 will show that the NAPOLCOM has
always remained as an office under or within the Executive Department. 55
Clearly, there is nothing repugnant between the petitioner's acting appointment,
on one hand, and the nature of the functions of the NAPOLCOM Commissioners
or of the NAPOLCOM as an institution, on the other.
b. R.A. No. 6975 does not prohibit the appointment of an acting

NAPOLCOM Commissioner in filling up vacancies in
the NAPOLCOM
The petitioner next cites Section 18 of R.A. No. 6975 to support his claim that the
appointment of a NAPOLCOM Commissioner to fill a vacancy due to the
permanent incapacity of a regular Commissioner can only be permanent and not
temporary:
Section 18. Removal from Office. The members of the

Commission may be removed from office for cause. All
vacancies in the Commission, except through expiration of
term, shall be filled up for the unexpired term only:
Provided, That any person who shall be appointed in this
case shall be eligible for regular appointment for another full
term.
Nothing in the cited provision supports the petitioner's conclusion. By using the
word "only" in Section 18 of R.A. No. 6975, the law's obvious intent is only to
prevent the new appointee from serving beyond the term of office of the original
appointee. It does not prohibit the new appointee from serving less than the
unexpired portion of the term as in the case of a temporary appointment.
While the Court previously inquired into the true nature of a supposed acting
appointment for the purpose of determining whether the appointing power is
abusing the principle of temporary appointment, 56 the petitioner has not pointed
to any circumstance/s which would warrant a second look into and the
invalidation of the temporary nature of his appointment. 57
Even the petitioner's citation of Justice Puno's 58 dissenting opinion in Teodoro B.

Pangilinan v. Guillermo T. Maglaya, etc. 59 is inapt. Like the petitioner, Pangilinan
was merely appointed in an acting capacity and unarguably enjoyed no security
of tenure. He was relieved from the service after exposing certain anomalies
involving his superiors. Upon hearing his plea for reinstatement, the Court
unanimously observed that Pangilinan's relief was a punitive response from his
superiors. The point of disagreement, however, is whether Pangilinan's lack of
security of tenure deprives him of the right to seek reinstatement. Considering
that the law (Administrative Code of 1987) allows temporary appointments only
for a period not exceeding twelve (12) months, the majority considered
Pangilinan to be without any judicial remedy since at the time of his separation,
he no longer had any right to the office. Justice Puno dissented, arguing that
Pangilinan's superiors' abuse of his temporary appointment furnishes the basis
for the relief he seeks. EcDSHT
In the present case, the petitioner does not even allege that his separation from
the office amounted to an abuse of his temporary appointment that would entitle
him to the incidental benefit of reinstatement. 60 As we did in Pangilinan, 61 we
point out that the petitioner's appointment as Acting Commissioner was time-
limited. His appointment ipso facto expired on July 21, 2009 when it was not
renewed either in an acting or a permanent capacity. With an expired
appointment, he technically now occupies no position on which to anchor his quo
warranto petition.
c. The petitioner is estopped from claiming that he

was permanently appointed
The petitioner's appointment paper is dated July 21, 2008. From that time until he
was apprised on March 22, 2010 of the appointment of respondent Urro, the
petitioner faithfully discharged the functions of his office without expressing any
misgivings on the character of his appointment. However, when called to
relinquish his office in favor of respondent Urro, the petitioner was quick on his
feet to refute what appeared in his appointment papers.
Under these facts, the additional circumstance of estoppel clearly militates

against the petitioner. A person who accepts an appointment in an acting
capacity, extended and received without any protest or reservation, and who acts
by virtue of that appointment for a considerable time, cannot later on be heard to
say that the appointment was really a permanent one so that he could not be
removed except for cause. 62
II. An acting appointee has no cause of action for quo warranto against
the new appointee
The Rules of Court requires that an ordinary civil action must be based on a cause
of action, 63 which is defined as an act or omission of one party in violation of
the legal right of the other which causes the latter injury. While a quo warranto is
a special civil action, the existence of a cause of action is not any less required
since both special and ordinary civil actions are governed by the rules on
ordinary civil actions subject only to the rules prescribed specifically for a
particular special civil action. 64
Quo warranto is a remedy to try disputes with respect to the title to a public
office. Generally, quo warranto proceedings are commenced by the Government
as the proper party-plaintiff. However, under Section 5, Rule 66 of the Rules of
Court, an individual may commence such action if he claims to be entitled to the
public office allegedly usurped by another. We stress that the person instituting
the quo warranto proceedings in his own behalf must show that he is entitled to
the office in dispute; otherwise, the action may be dismissed at any stage. 65
Emphatically, Section 6, Rule 66 of the same Rules requires the petitioner to state
in the petition his right to the public office and the respondent's unlawful
possession of the disputed position.
As early as 1905, 66 the Court already held that for a petition for quo warranto to
be successful, the suing private individual must show a clear right to the
contested office. 67 His failure to establish this right warrants the dismissal of the
suit for lack of cause of action; it is not even necessary to pass upon the right of
possession of his office. 68
Since the petitioner merely holds an acting appointment (and an expired one at
that), he clearly does not have a cause of action to maintain the present petition.
69 The essence of an acting appointment is its temporariness and its consequent
revocability at any time by the appointing authority. 70 The petitioner in a quo
warranto proceeding who seeks reinstatement to an office, on the ground of
usurpation or illegal deprivation, must prove his clear right 71 to the office for
his suit to succeed; otherwise, his petition must fail.
From this perspective, the petitioner must first clearly establish his own right to
the disputed office as a condition precedent to the consideration of the
unconstitutionality of the respondents' appointments. The petitioner's failure in
this regard renders a ruling on the constitutional issues raised completely
unnecessary. Neither do we need to pass upon the validity of the respondents'
appointment. These latter issues can be determined more appropriately in a
proper case. IEHSDA
WHEREFORE, the petition is DISMISSED.
||| (General v. Urro, G.R. No. 191560, March 29, 2011)
THIRD DIVISION
[G.R. No. 168053. September 21, 2011.]
REBECCA T. ARQUERO, petitioner, vs. COURT OF

APPEALS (Former Thirteenth Division); EDILBERTO C.
DE JESUS, in his capacity as Secretary of the Department
of Education; DR. PARALUMAN GIRON, Director,
Regional Office IV-MIMAROPA, Department of
Education; DR. EDUARDO LOPEZ, Schools Division
Superintendent, Puerto Princesa City; and NORMA
BRILLANTES, respondents.
DECISION
PERALTA, J p:
This is a petition for review on certiorari under Rule 45 of the Rules of Court filed
by petitioner Rebecca T. Arquero against public respondents Edilberto C. De
Jesus (De Jesus), in his capacity as Secretary of Education, Dr. Paraluman Giron
(Dr. Giron), Department of Education (DepEd) Director, Regional Office IV-
MIMAROPA, Dr. Eduardo Lopez (Lopez), Schools Division Superintendent,
Puerto Princesa City, and private respondent Norma Brillantes. Petitioner assails
the Court of Appeals (CA) Decision 1 dated December 15, 2004 and Resolution 2
dated May 3, 2005 in CA-G.R. SP No. 85899. The assailed decision reversed and
set aside the Judgment by Default 3 of the Regional Trial Court (RTC), Branch 95,
Puerto Princesa City, while the assailed resolution denied petitioner's motion for
reconsideration.
On October 13, 1989, Congress approved Republic Act (RA) No. 6765, or "An Act
Integrating Certain High Schools in the City of Puerto Princesa and in the Province of
Palawan with the Palawan National School and Appropriating Funds Therefor." Under
the law, the following schools were converted into national schools and
integrated with the Palawan National School (PNS) in the City of Puerto
Princesa, Province of Palawan, as branches thereof: (1) Puerto Princesa School of
Philippine Craftsmen; (2) San Jose Barangay High School; (3) Inagawan Barangay
High School; (4) Puerto Princesa Rural High School; all in the City of Puerto
Princesa and (5) Plaridel Barangay High School in the Municipality of Aborlan;
(6) Narra Barangay High School in the Municipality of Narra; (7) Quezon
Municipal High School in the Municipality of Quezon; (8) Pulot Barangay High
School in the Municipality of Brooke's Point; (9) Bataraza Barangay High School
in the Municipality Bataraza; and (10) Balabac Barangay High School in the
Municipality of Balabac; all in the Province of Palawan. 4
Section 2 of the law provides that the PNS shall, in addition to general secondary
education program, offer post-secondary technical-vocational and other relevant
courses to carry out its objectives. The PNS shall thus be considered the "mother
unit" and the integrated schools should benefit from a centralized curriculum
planning to eliminate duplication of functions and efforts relative to human
resource development for the province. 5 The law also provides that the Palawan
Integrated National Schools (PINS) shall be headed by a Vocational School
Superintendent (VSS) who shall be chosen and appointed by the Secretary of the
Department of Education, Culture, and Sports (now the DepEd). 6 Except for
Puerto Princesa School of Philippine Craftsmen, which shall be headed by the
Home Industries Training Supervisor, the PNS and each of its units or branches
shall be headed either by a Principal or Secondary School Head Teacher to be
chosen in accordance with the DepEd Rules and Regulations. 7 aIHCSA
However, no VSS was appointed. Instead, then DECS Region IV Office

designated then PNS Principal Eugenio J. dela Cuesta in a concurrent capacity as
Officer-in-Charge (OIC) of the PINS. After the retirement of Dela Cuesta,
petitioner took over as Secondary School Principal of the PNS. 8 On March 18,
1993, then DECS-Region IV Director IV Desideria Rex (Director Rex) designated
petitioner as OIC of the PINS. 9
On December 1, 1994, Director Rex's successor, Pedro B. Trinidad placed all

satellite schools of the PINS under the direct supervision of the Schools Division
Superintendent for Palawan effective January 1, 1995. 10 This directive was later
approved by the DepEd in September 1996. Petitioner was instructed to turn
over the administration and supervision of the PINS branches or units. 11 In
another memorandum, Schools Division Superintendent Portia Gesilva was
designated as OIC of the PINS. These events prompted different parties to
institute various actions restraining the enforcement of the DepEd orders.
Pursuant to RA 8204, separate City Schools Division Offices were established for
the City of Puerto Princesa and the Province of Palawan. 12
On March 14, 2000, Regional Director Belen H. Magsino issued an Order

addressed to the Schools Division Superintendent of Palawan and Puerto
Princesa City, and petitioner stating that the PINS satellite schools shall be under
the supervision of the division schools superintendents concerned, while
petitioner should concentrate on the supervision and administration of the PNS.
13 Again, this prompted the filing of various court actions.
On May 14, 2002, then DECS Undersecretary Jaime D. Jacob issued an Order 14
addressed to Dr. Giron, OIC, DepEd Regional Office No. 4, stating that there
being no more legal impediment to the integration, he ordered that the
secondary schools integrated with the PNS be under the direct administrative
management and supervision of the schools division superintendents of the
divisions of Palawan and Puerto Princesa City, as the case may be, according to
their geographical and political boundaries. Consequently, Dr. Giron instructed
the secondary schools' principals concerned of the assumption of jurisdiction by
the superintendent of the schools division offices of the city and province, and
that their fiscal and financial transaction as turned over will be effected on July 1,
2002. However, then DepEd Undersecretary Ramon C. Bacani (Bacani) ordered
that the status quo be maintained and that no turn over of schools be made. 15 In
the meantime, petitioner remained as the OIC of the PINS.
On September 19, 2002, Dr. Giron withdrew the designation of petitioner as OIC
of the PINS, enjoining her from submitting to the Regional Office all
appointments and personnel movement involving the PNS and the satellite
schools. On November 7, 2002, petitioner appealed to the Civil Service
Commission assailing the withdrawal of her designation as OIC of the PINS. 16
On March 28, 2003, then DepEd Secretary Edilberto C. De Jesus designated
Assistant Schools Division Superintendent Norma B. Brillantes (hereafter
referred to as private respondent) in concurrent capacity as OIC of the PINS
entitled to representation and transportation allowance, except the salary of the
position. 17 Petitioner filed a Motion for Reconsideration and/or Clarification 18
before the Office of the DepEd Secretary as to the designation of private
respondent. aDcHIS
On September 18, 2003, Dr. Giron filed a formal charge 19 against petitioner who
continued to defy the orders issued by the Regional Office relative to the exercise
of her functions as OIC of the PINS despite the designation of private respondent
as such. The administrative complaint charged petitioner with grave misconduct,
gross insubordination and conduct prejudicial to the best interest of the service.
Petitioner was also preventively suspended for ninety (90) days. 20
On October 2, 2003, petitioner filed the Petition for Quo Warranto with Prayer for
Issuance of Temporary Restraining Order and/or Injunctive Writ 21 before the
RTC of Palawan 22 against public and private respondents. The case was
docketed as Civil Case No. 3854. Petitioner argued that the designation of private
respondent deprived her of her right to exercise her function and perform her
duties in violation of her right to security of tenure. Considering that petitioner
was appointed in a permanent capacity, she insisted that private respondent's
designation as OIC of the PNS is null and void there being no vacancy to the
position. Petitioner thus prayed that the RTC issue an order granting the writ of
quo warranto enjoining private respondent from assuming the position of OIC of
the PNS, declaring the questioned designation null and void and without
operative effect, and declaring petitioner to be entitled to the office of the
principal of the PNS. 23
On October 6, 2003, the Executive Judge issued a 72-Hour TRO 24 enjoining and
restraining private respondent from assuming the position of OIC and
performing the functions of the Office of the Principal of the PNS; and
restraining public respondents from giving due course or recognizing the
assailed designation of private respondent. The RTC later issued the writ of
preliminary injunction. 25
Respondents failed to file their Answer. Hence, on motion 26 of petitioner, the

Court declared respondents in default in an Order 27 dated December 15, 2003.
In the same order, petitioner was allowed to present her evidence ex parte.
On June 14, 2004, the RTC rendered a Judgment by Default, 28 the dispositive
WHEREFORE, premises considered and by preponderance

of evidence, judgment is hereby rendered:
1. Declaring petitioner Rebecca T. Arquero as the
lawful Principal and Head of the Palawan
Integrated National High School who is
lawfully entitled to manage the operation
and finances of the school subject to
existing laws;
2. Declaring the formal charge against petitioner,

the preventive suspension, the
investigating committee, the proceedings
therein and any orders, rulings, judgments
and decisions that would arise therefrom
as null, void and of no effect;
3. Ordering respondent Norma Brillantes, or any

person acting in her behalf, to cease and
desist from assuming and exercising the
functions of the Office of the Principal of
Palawan Integrated National High School,
and respondents Edilberto C. De Jesus,
Paraluman R. Giron and Eduardo V.
Lopez, or any person acting in their behalf,
from giving due course or recognizing the
same; and HCaIDS
4. Making the writ of preliminary injunction issued

in this case permanent.
The RTC held that considering that the integrated school failed to offer post-
secondary technical-vocational courses, the VSS position became functus officio.
The PNS, therefore, remains to be a general secondary school under the
jurisdiction of the DepEd. 30 Consequently, supervision of the integrated school
was automatically vested with the principal of the PNS without the necessity of
appointment or designation. As to the administrative case filed against
petitioner, the RTC opined that the formal charge and preventive suspension are
illegal for lack of due process. 31
On appeal, the CA reversed and set aside the RTC decision, the dispositive

hereby GRANTED. The appealed decision of the court a quo
in Civil Case No. 3854 is hereby REVERSED and SET ASIDE.
A new judgment is hereby entered DISMISSING the petition
for quo warranto filed by appellee Rebecca T. Arquero.
SO ORDERED. 32
Applying the rules on statutory construction, the appellate court emphasized the
need to harmonize the laws. The CA held that the PINS and its satellite schools
remain under the complete administrative jurisdiction of the DepEd and not
transferred to the Technical Education and Skills Development Authority
(TESDA). It also explained that by providing for a distinct position of VSS with a
higher qualification, specifically chosen and appointed by the DepEd Secretary
that is separate from the school head of the PNS offering general secondary
education program, RA 6765 intended that the functions of a VSS and School
Principal of PNS be discharged by two separate persons. 33 The CA added that if
we follow the RTC conclusion, petitioner would assume the responsibilities and
exercise the functions of a division schools superintendent without appointment
and compliance with the qualifications required by law. 34 The appellate court
likewise held that petitioner failed to establish her clear legal right to the position
of OIC of the PINS as she was not appointed but merely designated to the
position in addition to her functions as incumbent school principal of the PNS. 35
Clearly, there was no violation of her right to due process and security of tenure
when private respondent replaced her. As to the validity of filing the
administrative charge against her and the subsequent imposition of preventive
suspension, the CA refused to rule on the matter due to the pendency of the
administrative case which is within the jurisdiction of the DepEd.
Hence, this petition raising the following issues: cIHCST
A. THE COURT OF APPEALS' DECISION DATED THE

15TH DECEMBER 2004, AND THE RESOLUTION
OF 3RD MAY 2005, HAVE DECIDED A
QUESTION OF SUBSTANCE, NOT
THERETOFORE DETERMINED BY THE
SUPREME COURT, OR THE APPELLATE COURT
HAS DECIDED IT IN A WAY PROBABLY NOT IN
ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THE HIGHEST
COURT; OR THE RESPONDENT COURT OF
APPEALS HAS SO FAR DEPARTED FROM THE
ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS AS TO CALL FOR AN EXERCISE
OF THE POWER OF SUPERVISION.
B. THE CHALLENGED DECISION WAS RENDERED ON
THE BASIS OF MERE UNSUBSTANTIATED
"ARGUMENTATIONS" OF THE INDIVIDUAL
RESPONDENTS.
NO IOTA OF EVIDENCE, TESTIMONIAL OR

DOCUMENTARY, WERE PRESENTED AND
OFFERED FOR A SPECIFIC PURPOSE BY THE
RESPONDENTS (WHO WERE DECLARED IN
DEFAULT).
THEREFORE, THE CONCLUSION OF THE IMPUGNED

DECISION IS NOT SUPPORTED BY RECORDED
EVIDENCE. 36
The petition is without merit.
Petitioner insists that respondents could not have appealed the RTC decision
having been declared in default. She explains that the only issue that could have
been raised is a purely legal question, therefore, the appeal should have been
filed with the Court and not with the CA.
In Martinez v. Republic, 37 the Court has clearly discussed the remedies of a party
declared in default in light of the 1964 and 1997 Rules of Court and a number of
jurisprudence applying and interpreting said rules. Citing Lina v. Court of
Appeals, 38 the Court enumerated the above-mentioned remedies, to wit:
a) The defendant in default may, at any time after discovery

thereof and before judgment, file a motion, under
oath, to set aside the order of default on the ground
that his failure to answer was due to fraud,
accident, mistake or excusable neglect, and that he
has meritorious defenses; (Sec. 3, Rule 18)
b) If the judgment has already been rendered when the

defendant discovered the default, but before the
same has become final and executory, he may file a
motion for new trial under Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment

has become final and executory, he may file a
petition for relief under Section 2 of Rule 38; and
d) He may also appeal from the judgment rendered against

him as contrary to the evidence or to the law, even
if no petition to set aside the order of default has
been presented by him. (Sec. 2, Rule 41) 39
cDEHIC
The Court explained in Martinez that the fourth remedy, that of appeal, is
anchored on Section 2, Rule 41 of the 1964 Rules. Even after the deletion of that
provision under the 1997 Rules, the Court did not hesitate to expressly rely on
the Lina doctrine, including the pronouncement that a defaulted defendant may
appeal from the judgment rendered against him. Moreover, in Rural Bank of Sta.
Catalina v. Land Bank of the Philippines, 40 the Court provided a comprehensive
restatement of the remedies of the defending party declared in default:
It bears stressing that a defending party declared in default

loses his standing in court and his right to adduce evidence
and to present his defense. He, however, has the right to
appeal from the judgment by default and assail said
judgment on the ground, inter alia, that the amount of the
judgment is excessive or is different in kind from that
prayed for, or that the plaintiff failed to prove the material
allegations of his complaint, or that the decision is contrary
to law. Such party declared in default is proscribed from
seeking a modification or reversal of the assailed decision on
the basis of the evidence submitted by him in the Court of
Appeals, for if it were otherwise, he would thereby be
allowed to regain his right to adduce evidence, a right which
he lost in the trial court when he was declared in default,
and which he failed to have vacated. In this case, the
petitioner sought the modification of the decision of the trial
court based on the evidence submitted by it only in the
Court of Appeals. 41
Undoubtedly, a defendant declared in default retains the right to appeal

from the judgment by default on the ground that the plaintiff failed to prove
the material allegations of the complaint, or that the decision is contrary to
law, even without need of the prior filing of a motion to set aside the order
of default except that he does not regain his right to adduce evidence. 42 The
appellate court, in turn, can review the assailed decision and is not
precluded from reversing the same based solely on the evidence submitted
by the plaintiff.
The next question to be resolved is whether petitioner has the right to the
contested public office and to oust private respondent from its enjoyment. We
answer in the negative.
A quo warranto proceeding is the proper legal remedy to determine the right or
title to the contested public office and to oust the holder from its enjoyment. 43 It
is brought against the person who is alleged to have usurped, intruded into, or
unlawfully held or exercised the public office. 44 It may be brought by the
Republic of the Philippines or by the person claiming to be entitled to such office.
45
is entitled to the subject public office. In other words, the private person suing
must show a clear right to the contested position. 46 Otherwise, the person who
holds the same has a right to undisturbed possession and the action for quo
warranto may be dismissed. 47 It is not even necessary to pass upon the right of
possession of his office. 48 IECcAT
On the basis of the evidence presented solely by petitioner and without

considering the arguments and attachments made by respondents to rebut
petitioner's claims, we find that petitioner failed to prove that she is entitled to
the contested position.
It is undisputed that petitioner was appointed as the principal of the PNS. In

addition, she was designated as the OIC of the PINS. Said designation was,
however, withdrawn. Private respondent was, thereafter, designated as the new
OIC. This prompted petitioner to file the quo warranto petition before the court a
quo.
The contested position was created by RA 6765. Section 3 of the law provides:
Section 3. The school shall be headed by a Vocational School

Superintendent. He shall be chosen and appointed by the
Secretary of Education, Culture and Sports [now Secretary of
Education].
Moreover, Section 4 thereof states:

Section 4. The Home Industries Training Supervisor of the
Puerto Princesa School of Philippine Craftsmen shall
continue to serve as such. The main school and each of its
units or branches shall be headed either by a Principal or
Secondary School Head Teacher to be chosen in accordance
with the rules and regulations of the Department of
Education, Culture and Sports [now the Department of
Education].
As aptly observed by the CA, the law created two positions the VSS and the
principal or secondary school head teacher of each of the units or branches of the
integrated school. The legislators clearly intended that the integrated schools
shall be headed by a superintendent. Admittedly, petitioner did not possess the
qualifications to hold the position and she was merely designated by the DepEd
as the OIC of the PINS. At that time, she held in a concurrent capacity, the
permanent position of principal of the PNS. Having been appointed as OIC
without the necessary qualifications, petitioner held the position only in a
temporary capacity. The purpose of an acting or temporary appointment is to
prevent a hiatus in the discharge of official functions by authorizing a person to
discharge those functions pending the selection of a permanent or another
appointee. An acting appointee accepts the position on the condition that he shall
surrender the office once he is called to do so by the appointing authority.
Therefore, his term of office is not fixed, but endures at the pleasure of the
appointing authority. 49 The essence of an acting appointment is its
temporariness and its consequent revocability at any time by the appointing
authority. 50
Thus, under RA 6765, petitioner can only insist on her security of tenure as
principal of the PNS but not as OIC of the integrated school. Upon the
withdrawal of her designation, her right to the contested position ceased to exist.
Petitioner also bases her right to the contested position on the enactment of RA
7796, or "An Act Creating the Technical Education and Skills Development Authority,
Providing for its Powers, Structure and for Other Purposes," and RA 9155, or "An Act
Instituting a Framework of Governance for Basic Education, Establishing Authority and
Accountability, Renaming the Department of Education Culture and Sports as the
Department of Education, and for Other Purposes." She contends that under RA
7796, the position of VSS could no longer be filled up by the DepEd having been
absorbed by TESDA. As such, the right to manage the operation and finances of
the integrated schools is automatically vested with petitioner being the principal
of the PNS without further appointment or designation.
Again, we do not agree. HDICSa
As found by the RTC and affirmed by the CA, the PINS failed to implement its
technical-vocational education program. Consequently, the PNS and the other
satellite schools never came under the jurisdiction of the Bureau of Technical and
Vocational Education of the DepEd nor the technical-vocational education in
DepEd's regional offices. Thus, except for the Puerto Princesa School of
Philippine Craftsmen, which is now within the jurisdiction of the TESDA, the
PNS and the other units remained under the complete administrative jurisdiction
of the DepEd. Although the technical-vocational education program was not
implemented, it does not alter the law's intent that the main school, which is the
PNS and the other units integrated with it, shall be headed either by a principal
or secondary school head teacher; while the PINS or the integrated school shall
be headed by another. We cannot subscribe to petitioner's insistence that the
principal automatically heads the PINS without appointment or designation. As
clearly explained by the CA, "by providing for a distinct position with a higher
qualification (that of a superintendent), specifically chosen and appointed by the
DepEd Secretary, separate from the school head of the PNS offering general
secondary education program, the law clearly intended the functions of a VSS
and school principal of the PNS to be discharged and performed by two different
individuals." 51
Neither can petitioner rely on the enactment of RA 9155. The law, in fact,
weakens petitioner's claim. RA 9155 provides the framework for the governance
of basic education. It also emphasizes the principle of shared governance which
recognizes that every unit (which includes the national, regional, division, school
district, and school levels) in the education bureaucracy has a particular role, task
and responsibility. The school shall be headed by a [principal] or school head; a
school district by a schools district supervisor; a division by a schools division
superintendent; a region by a director; and the national level by the Secretary of
Education. It must be recalled that the integration under RA 6765 involved
certain high schools in different municipalities of the Province of Palawan and
the City of Puerto Princesa. We also note that RA 6765 intended that the
integrated school shall be headed by a superintendent. Nowhere in the above
laws can we find justification for petitioner's insistence that she, and not private
respondent, has a better right to hold the contested position.
Clearly, petitioner failed to establish her right to the contested position.

Therefore, the dismissal of her quo warranto petition is in order. It must be
emphasized, however, that this declaration only involves the position of
petitioner as OIC of the PINS. It does not in any way affect her position as
principal of the PNS which she holds in a permanent capacity.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.

The Court of Appeals Decision dated December 15, 2004 and Resolution dated
May 3, 2005 in CA-G.R. SP No. 85899, are AFFIRMED.
SO ORDERED.
||| (Arquero v. Court of Appeals, G.R. No. 168053, September 21, 2011)
EN BANC
[G.R. No. 194076. October 18, 2011.]
ALFAIS T. MUNDER, petitioner, vs. COMMISSION ON

ELECTIONS AND ATTY. TAGO R. SARIP, respondents.
[G.R. No. 194160. October 18, 2011.]
ATTY. TAGO R. SARIP, petitioner, vs. ALFAIS T.

MUNDER, OLOMODIN M. MACABALANG, JAMAL M.
MANUA AND COMMISSION ON ELECTIONS,
respondents.
DECISION
SERENO, J p:
Jurisprudence has clearly established the doctrine that a petition for

disqualification and a petition to deny due course to or to cancel a certificate of
candidacy, are two distinct remedies to prevent a candidate from entering an
electoral race. Both remedies prescribe distinct periods to file the corresponding
petition, on which the jurisdiction of the Commission on Elections (Comelec)
over the case is dependent. The present case, assailing a resolution of the
Comelec En Banc, is not an exception. It must follow the rule set by law and
jurisprudential doctrine.
The consolidated cases before us stem from a controversy resolved by the

Comelec En Banc in SPA No. 10-086 (DC) in its Resolution * promulgated on 04
October 2010. 1 The Comelec En Banc reversed the earlier Resolution 2 of the
Comelec Second Division and disqualified petitioner Alfais T. Munder (Munder)
from holding office as Mayor of Bubong, Lanao del Sur.
The Antecedents
In the last national election, which included the election of local
elective officials, petitioner Munder ran as mayor of Bubong, Lanao del Sur,
and filed his certificate of candidacy (CoC) on 26 November 2009. The last day
for filing the certificate of candidacy was on 30 November 2009. 3 Under Sec. 4
(A) (1) of Comelec Resolution 8696, a petition to deny due course or to cancel a
certificate of candidacy must be filed within five days from the last day of the
filing of the certificate of candidacy but not later than twenty-five days from
the filing thereof. 4 Respondent Atty. Tago Sarip ("Sarip") likewise filed a
certificate of candidacy and vied for the same position in the same
municipality.
On 13 April 2010, Sarip filed a Petition for Disqualification 5 with the Comelec on
the ground that Munder was not a registered voter of Bubong, Lanao del Sur,
and that the latter's application for candidacy was not accomplished in full.
Sarip corroborated his allegation that Munder was not a registered voter by
presenting a Certification from Amerah M. Hadji Sarip Election Officer of
Bubong, Lanao del Sur that, in the election list, there was no "Alfais T.
Munder" born on 7 May 1987. 6 He also presented a copy of a Voter Certification
of one "Munder, Alfais Tocalo", residing at Rogero, Bubong, Lanao del Sur,
whose date of birth was "05/07/1984", and who was registered as a voter on
"7/26/2003". The said person was 18 years old at that time. 7 On the other hand,
petitioner Munder's CoC for Mayor contained the name of a candidate as
"Munder, Alfais Tocalo", 22 years old, with residence at Barangay Montia-an,
Bubong, Lanao del Sur, and whose date of birth was "05-07-1987". 8 TCDHIc
Capitalizing on the seeming inconsistencies, Sarip argued that the candidate

Munder was different from the registered voter Munder, since they had different
birth years. Consequently, according to Sarip, Munder did not possess the
qualification to run as elective official and should be disqualified. Sarip also
maintained that Munder had committed dishonesty and falsity in stating that the
latter was a registered voter of Bubong, Lanao del Sur. Sarip filed his Petition for
Disqualification pursuant to Resolution No. 8696, Section 4 (B) 1 and argued that
he had timely filed the petition. Munder, on the other hand, countered that he
was a registered voter of Precinct No. 0033, Barangay Rogero, Municipality of
Bubong, Lanao del Sur. 9
In the 10 May 2010 elections, Munder won overwhelmingly. Garnering 4,793

votes, he had more than twice the number obtained by Sarip, who came in
second with 2,356 votes. The Municipal Board of Canvassers of Bubong, Lanao
del Sur, thus proclaimed Munder as mayor on 15 May 2010. He filed his answer
on 22 May 2010.
In his Answer with Affirmative Defenses, 10 Munder denied committing any

misrepresentation in his CoC. He also argued that false representations,
dishonesty and mockery of justice were not grounds for disqualification of a
candidate under Comelec Resolution No. 8696. In effect, he argued that Sarip had
availed himself of the wrong remedy and that the latter's petition should be
treated as a Petition to Deny Due Course to or to Cancel Certificate of Candidacy.
At the time Sarip filed his petition, the said period had already lapsed. Munder
thus prayed for the dismissal of the former's petition against him.
On 29 June 2010, the Comelec Second Division sustained Munder's arguments

and dismissed Sarip's Petition. It agreed with Munder that the grounds invoked
by Sarip were not proper for a petition for disqualification, and that the latter's
petition was actually seeking the purging of Munder's CoC. It partly held:
. . . [I]t appears that the nucleus of petitioner's cause of action

to sustain his petition are the misrepresentations
(respondent not being a registered voter of Municipality of
Bubong, Lanao del Sur and the respondent was still a minor
when he registered as a voter of the said municipality)
allegedly perpetrated by the respondent, and the failure of
the respondent to accomplish the formalities of his COC (the
respondent's failure to indicate his precinct and to affix his
thumbprint therein). We view all these disputations raised
by the petitioner inappropriate for the petition for
disqualification. These are not grounds for the petition for
disqualification contemplated by the rules. In quintessence
(sic) of the action taken the petitioner is actually seeking the
denial or cancellation of the respondent's COC invoking
false material representation of the respondent's
qualification(s). However, the filing of a petition under this
remedy has a prescriptive period which must be strictly
followed. Under the rules, a verified petition to deny due
course or to cancel certificate of candidacy may be filed by
any person within five (5) days from the last day for the
filing of certificate of candidacy but not later than twenty-
five (25) days from the filing of certificate of candidacy
under Section 78 of the Omnibus Election Code. Pursuant to
the above rule, the petitioner has twenty-five (25) days
after the filing the assailed COC or until December 21,
2009 to file the petition. Since the instant petition was filed
only on March 13, 2010 or one hundred-seven (107) days
beyond the reglementary period to file a petition to deny
due course or to cancel the respondent's COC, the petitioner
miserably failed to file his petition within the prescribed
period. A petition to deny due course or to cancel a
certificate of candidacy filed beyond the required period is
filed out of time and may be not entertained. An attempt to
circumvent the rules on prescription of period to file a
petition to deny due course or to cancel COC in disguise of a
petition for qualification will not be countenanced in this
jurisdiction. CEcaTH
Anent the contention of the petitioner vis-a-vis the failure of

the respondent to comply with the formalities of the COC,
the law governing the contents of the COC is Section 74 of
the Omnibus Election Code. The alleged defect on the COC
of the respondent, which is, failure to indicate therein his
precinct and his failure to affix his thumbprint are not
among those mandatory requirements enumerated under
the aforementioned law. Hence, those assailed flaw in the
formalities of the respondent's COC does not warrant the
invalidation of the same. At most, it can only be considered
as a minor inadvertence on the part of the respondent which
does not necessarily nullify his COC. It has been held that
when the law does not provide otherwise, a departure from
the requirements of law which has been due to honest
mistake or misinterpretation of the law on the part of him
who is obligated to observe it and such departure has not
been used as a means for fraudulent practices, will he held
directory and such departure will be considered a harmless
irregularity." 11 (Emphases supplied)
The outcome was, however, different when the Comelec En Banc, upon Sarip's
Motion for Reconsideration, 12 reversed the ruling of the Second Division and
disqualified Munder in its 4 October 2010 Resolution. The Comelec ruled directly
on the substantive merit of the case, and not on the propriety of the remedy
taken by Sarip. It thus ruled on the question of the continuing possession by
Munder of one of the qualifications of the office of the Mayor being a
registered voter of the municipality where he runs as a candidate.
The Comelec En Banc decided the case on a single issue whether the person
described in the CoC and in the Certificate of Live Birth referred to the same
person in the Voter's Certification, petitioner Alfais Tocalo Munder. The Comelec
En Banc ruled on this factual issue, stating that the said persons were not one
and the same, as they had different birth years. The Comelec held thus:
. . . It is difficult to reconcile that the ALFAIS TOCALO

MUNDER who filed his COC, showing his intent to run as
municipal mayor of Bubong, Lanao del Sur is one and the
same person as that of ALFAIS TOCALO MUNDER who
registered as voter of Barangay Rogero, Bubong, Lanao del
Sur when records show that the ALFAIS TOCALO
MUNDER who filed his COC indicated his date of birth as
MAY 7, 1987 (as supported by the Certificate of Live Birth
issued by the NSO) while the ALFAIS TOCALO MUNDER
who registered as voter of Barangay Rogero, Bubong, Lanao
del Sur indicated his date of birth as MAY 7, 1984. No person
can be born twice. 13
The Comelec also disregarded the fact that Munder had already been proclaimed
as mayor of Bubong, Lanao del Sur. Consequently, it ruled against him and
proceeded to declare him disqualified to hold the office of the mayor, for which
he had been elected. The Comelec En Banc held:
The Supreme Court has time and again ruled that

qualifications for an elective office are continuing
requirements and once any of them is lost, title to the office
is forfeited. Munder lacking the requisite qualification of
being a registered voter, should be removed from office. 14
It ordered Munder to vacate the Office of the Mayor, and the elected vice-
mayor to assume the position of mayor. It further directed the Department
of Interior and Local Government and the Philippine National Police (PNP)
to implement the Resolution against Munder. From this Resolution
originated the two petitions filed by the two rivals for the mayoral position.
At the instance of Munder, we issued on 18 January 2011, a Temporary
Restraining Order against the Comelec, DILG and PNP from implementing the 4
October 2010 Resolution of the Comelec removing Munder from the office. 15
The impending execution of the Comelec's Resolution created divisiveness and
disorder in the municipality of Bubong such that even the military attested that
they were on "red alert" due to the volatile political situation in the area brought
about by the possible ouster of Munder. The Vice Mayor also prematurely
assumed the office of the mayor and allegedly withdrew the Internal Revenue
Allocation without a resolution from the Sangguniang Bayan. This aggravated
the tension that had already been created by the election dispute between the
petitioners of these consolidated petitions. The Court, thus, deemed a TRO
justified to prevent disorder and bloodshed in Bubong. IEaCDH
In his petition, Munder argues that the Comelec acted without or in excess of its
jurisdiction in taking cognizance of Sarip's petition which was filed beyond the
reglementary period provided by law. Munder claims that Sarip should have
instead filed a petition for quo warranto after the former's proclamation as the
winning candidate. Munder likewise asserts that the Comelec committed grave
abuse of discretion in effectively ruling upon his right to vote, when it attacked
his status as a registered voter, in order to disqualify him from the mayoralty
office.
Sarip, on the other hand, argues that the Comelec En Banc also acted with grave
abuse of discretion in not declaring him entitled to assume the office of the
municipal mayor of Bubong, Lanao del Sur after the disqualification of
respondent Munder.
Public respondent Comelec, through the Office of the Solicitor General, chose to
file its Comment only with respect to G.R. No. 194160, Sarip's Petition. It
reiterated the legal doctrine that the second placer cannot be declared a winner in
case the candidate who obtained the highest number of votes is disqualified. The
OSG opposed Sarip's prayer that he, instead of the Vice-Mayor, be installed as
Mayor of Bubong, Lanao del Sur.
The Issues
(1)May a petition filed as a Petition for Disqualification
properly invoke, as a ground, that the candidate sought to
be disqualified was not a registered voter and thus not be
barred by the earlier prescriptive period applicable to
Petition to Deny Due Course to or to Cancel Certificate of
Candidacy?
(2)Did the Comelec commit grave abuse of discretion in

concluding that the Alfais Munder in the voters' list is not
the same as Alfais Munder the candidate?
(3)Does Sarip have the right to be installed as Mayor of

Bubong, Lanao del Sur for having placed second in the
electoral contest therefor?
The Court's Ruling

The Comelec has the constitutional mandate to "enforce and administer all laws
and regulations relative to the conduct of an election." 16 It has the power to
create its own rules and regulations, a power it exercised on 11 November 2009
in promulgating Resolution No. 8696, or the "Rules on Disqualification of Cases
filed in Connection with the May 10, 2010 Automated National and Local
Elections." Section 4 thereof provides for the procedure to be followed in filing
the following petitions: 1) Petition to Deny Due Course to or Cancel Certificate of
Candidacy; 2) Petition to Declare a Nuisance Candidate, and 3) petition to
disqualify a candidate pursuant to Section 68 of the Election Code and petition to
disqualify for lack of qualifications or for possessing some grounds for
disqualification.
Resolution No. 8696 provides for the venue for the filing of the petitions and the
period within which they should be filed. The validity of the said Resolution has
been recognized by this Court in the fairly recent case of Amora v. Comelec. 17
Munder alleges that Sarip's petition with the Comelec should be considered as
one to deny due course to or to cancel a CoC, and not for disqualification. One of
the important differences between the two petitions is their prescriptive periods.
For a Petition to Deny Due Course or to Cancel a Certificate of Candidacy, the
period to file is within five days from the last day of the filing of the certificate of
candidacy, but not later than 25 days from the filing thereof. On the other hand, a
petition to disqualify a candidate may be filed at any day after the last day of
filing of the certificate of candidacy, but not later than the date of proclamation.
EaCSTc
It has been argued by Munder, who was earlier sustained by the Comelec Second
Division, that the petition for disqualification should be treated as a petition to
deny due course to or to cancel a certificate of candidacy, which had already
prescribed.
We agree with Munder as to the nature of the petition filed by Sarip. The main
ground of the said petition is that Munder committed dishonesty in declaring
that he was a registered voter of Barangay Rogero, Bubong, Lanao del Sur, when
in fact he was not. This ground is appropriate for a Petition to Deny Due Course
or to Cancel Certificate of Candidacy.
Amora v. Comelec is applicable to the present controversy. In that case, similar to

the present one, a mayoralty candidate was disqualified by the Comelec
pursuant to a Petition for Disqualification. The petition was filed by one of the
candidates for councilor in the same municipality, on the ground that the CoC
had not been properly sworn to. Amora won in the election, but was disqualified
by the Comelec after he was proclaimed as mayor of Candijay, Bohol. One of the
issues clarified in the said case was the distinction between a Petition for
Disqualification and a Petition to Deny Due Course or to Cancel Certificate of
Candidacy. The Court, in effect, held that the Comelec should have dismissed the
petition outright, since it was premised on a wrong ground. A Petition for
Disqualification has specific grounds different from those of a Petition to Deny
Due Course to or to Cancel Certificate of Candidacy. The latter is anchored on
the false representation by a candidate as to material information in the CoC. 18
For a petition for disqualification, the law expressly enumerates the grounds in
Section 68 of Batas Pambansa Blg. 881 as amended, and which was replicated in
Section 4 (b) of Comelec Resolution No. 8696. The grounds stated by respondent
in his Petition for Disqualification that Munder was not qualified to run for
not being a registered voter therein was not included in the enumeration of
the grounds for disqualification. The grounds in Section 68 may be categorized
into two. First, those comprising "prohibited" acts of candidates; and second, the
fact of their permanent residency in another country when that fact affects the
residency requirement of a candidate according to the law.
In the earlier case of Fermin v. Comelec, 19 the Court clarified the two remedies
that may be availed of by a candidate to prevent another from running in an
electoral race. The Court held:
The ground raised in the Dilangalen petition is that Fermin

allegedly lacked one of the qualifications to be elected as
mayor of Northern Kabuntalan, i.e., he had not established
residence in the said locality for at least one year
immediately preceding the election. Failure to meet the one-
year residency requirement for the public office is not a
ground for the "disqualification" of a candidate under Section 68.
The provision only refers to the commission of prohibited acts
and the possession of a permanent resident status in a foreign
country as grounds for disqualification. . . . DIEAHc
xxx xxx xxx
To emphasize, a petition for disqualification, on the one

hand, can be premised on Section 12 or 68 of the [Omnibus
Election Code], or Section 40 of the [Local Government
Code]. On the other hand, a petition to deny due course to or
cancel a CoC can only be grounded on a statement of a
material representation in the said certificate that is false.
The petitions also have different effects. While a person who
is disqualified under Section 68 is merely prohibited to
continue as a candidate, the person whose certificate is
cancelled or denied due course under Section 78 is not
treated as a candidate at all, as if he/she never filed a CoC.
20
In Fermin, the Court has debunked the interpretation that a petition for
disqualification covers the absence of the substantive qualifications of a
candidate (with the exception of the existence of the fact of the candidate's
permanent residency abroad). It has, in effect, even struck down a Comelec
Resolution Resolution No. 7800, which enumerated the grounds for a petition
for disqualification to include the non-registration of a candidate as voter in the
locality where he or she is running as a candidate. In ruling as such, Resolution
No. 7800 which was considered as infringement of the powers of the legislature,
the Court reiterated an earlier ruling:
A COMELEC rule or resolution cannot supplant or vary the

legislative enactments that distinguish the grounds for
disqualification from those of ineligibility, and the
appropriate proceedings to raise the said grounds. In other
words, Rule 25 and COMELEC Resolution No. 7800 cannot
supersede the dissimilar requirements of the law for the
filing of a petition for disqualification under Section 68, and
a petition for the denial of due course to or cancellation of
CoC under Section 78 of the OEC. 21
Responding to the above ruling, the Comelec's subsequent Resolution on the

same matter deleted the enumerated grounds, interpreted by the Court as
improper for a petition for disqualification, found in Comelec Resolution 7800. 22
It is thus clear that the ground invoked by Sarip in his Petition for
Disqualification against Munder the latter's alleged status as unregistered
voter in the municipality was inappropriate for the said petition. The said
ground should have been raised in a petition to cancel Munder's CoC. Since the
two remedies vary in nature, they also vary in their prescriptive period. A
petition to cancel a CoC gives a registered candidate the chance to question the
qualification of a rival candidate for a shorter period: within 5 days from the last
day of their filing of CoCs, but not later than 25 days from the filing of the CoC
sought to be cancelled. 23 A petition for disqualification may be filed any day
after the last day of the filing of CoC but not later than the date of the
proclamation. 24 DTCSHA
The Comelec Second Division stated that the last day of filing of the CoCs was on
21 December 2009. Thus, the period to file a Petition to Deny Due Course or to
Cancel Certificate of Candidacy had already prescribed when Sarip filed his
petition against Munder.
It was therefore grave abuse of discretion on the part of the Comelec En Banc to
gloss over the issue of whether the petition was one for disqualification or for the
cancellation of CoC. The nature of the petition will determine whether the action
has prescribed, and whether the Commission can take cognizance of the petition.
In directly tackling the factual issues without determining whether it can
properly take cognizance of the petition, the Comelec En Banc committed grave
abuse of discretion.
Assuming arguendo that the Comelec En Banc could answer the factual issue of
Munder's non-registration as a voter in Bubong by considering it as a ground for
the disqualification of his candidacy, we find that the Comelec committed grave
abuse of discretion in concluding that Munder the voter was not Munder the
mayoralty candidate. We observe that the Comelec En Banc relied on the Voter's
Certification indicating one Alfaiz Tocalo Munder registering for the first time in
2003, with 7 May 1984 as birth date, and stating therein that he was 18 years old
at the time of the registration. We find this evidence insufficient to impeach the
fact that he was a registered voter of Bubong, Lanao del Sur. In the first place, the
registration was in 2003, while the election was in 2010. The said evidence would
not negate the fact that in 2010, he had already attained eligibility to run for
mayor. In such a small municipality like Bubong, the likelihood of not being able
to know whether one has a namesake, especially when one is running for a
public office, is very slim. Sarip should have proved that another Alfais Tocalo
Munder is in existence, and that the latter is the registered voter and not herein
petitioner. In such a case, Sarip's remedy is not a Petition for Disqualification, but
a Petition to Deny Due Course or to Cancel Certificate of Candidacy which must
comply with the prescriptive period. Otherwise, his remedy, after Munder has
been proclaimed is to file a quo warranto action with the Regional Trial Court to
prove that Munder lacks the eligibility required by law.
It may be true that in 2003, Munder, who was still a minor, registered himself as
a voter and misrepresented that he was already of legal age. Even if it was
deliberate, we cannot review his past political acts in this petition. Neither can
the Comelec review those acts in an inappropriate remedy. In so doing, it
committed grave abuse of discretion, and the act resulting therefrom must be
nullified.
With this conclusion, Sarip's petition has become moot. There is no longer any
issue of whether to apply the rule on succession to an elective office, since
Munder is necessarily established in the position for which the people have
elected him.
IN VIEW OF THE FOREGOING, G.R. No. 194076 is hereby GRANTED. The

Comelec En Banc Resolution dated 4 October 2010 which granted the petition to
disqualify Alfais Tocalo Munder as Mayor of Bubong, Lanao del Sur is hereby
NULLIFIED and SET ASIDE. The Comelec Second Division Resolution dated 29
June 2010 dismissing the petition for disqualification filed by Atty. Tago R. Sarip
against Alfais Tocalo Munder is REINSTATED. G.R. No. 194160 is hereby
DISMISSED. For having been rendered moot by this Decision, the Temporary
Restraining Order we issued on 18 January 2011 in favor of Alfais Tocalo
Munder is hereby made permanent. CIAacS
SO ORDERED.
||| (Munder v. COMELEC, G.R. No. 194076, G.R. No. 194160, October 18, 2011)
SECOND DIVISION
[G.R. No. 197329. September 8, 2014.]
NATIONAL POWER CORPORATION, petitioner, vs. LUIS

SAMAR and MAGDALENA SAMAR, respondents.
DECISION
DEL CASTILLO, J p:
This Petition for Review on Certiorari 1 seeks to set aside the June 17, 2011
Decision 2 of the Court of Appeals (CA) in CA-G.R. CV No. 82231 which denied
the herein petitioner's appeal and affirmed the February 21, 2003 Decision 3 of
the Regional Trial Court (RTC) of Iriga City, Fifth Judicial Region, Branch 34 in
Civil Case No. IR-2678.
Factual Antecedents
Civil Case No. IR-2243
Sometime in 1990, petitioner National Power Corporation (NPC) filed Civil Case
No. IR-2243 with the RTC, seeking to expropriate respondent spouses Luis and
Magdalena Samar's 1,020-square meter lot covered by Tax Declaration No.
30573 and situated in San Jose (Baras), Nabua, Camarines Sur which NPC
needed for the construction of a transmission line.
In an August 29, 1990 Order, 4 the RTC directed the issuance of a Writ of
Condemnation in favor of NPC. Accordingly, NPC entered the subject lot and
constructed its transmission line, denominated as Tower No. 83. aHcACT
However, on July 12, 1994, the trial court issued another Order 5 dismissing Civil
Case No. IR-2243 without prejudice for failure to prosecute, as follows:
In the Order dated 14 August 1991, Atty. Raymundo

Nagrampa was designated as the representative of his
clients in the Committee of Appraisers to appraise the
reasonable value of the land together with the Court's and
plaintiffs' representatives, namely, the Branch Clerk of Court
and Mr. Lorenzo Orense, respectively for the purpose of
fixing the amount with which the plaintiff may be
compensated for the land in question.
After almost three (3) years since the said order was issued,
the Committee has not met nor deliberated on said matter
and the parties in this case have not exerted efforts in
pursuing their claims despite so long a time.
Hence, this case is hereby dismissed without prejudice for

failure to prosecute within a reasonable period of time.
SO ORDERED. 6
It appears that the above July 12, 1994 Order was not assailed by appeal or
otherwise; nor did NPC commence any other expropriation proceeding.
Civil Case No. IR-2678

On December 5, 1994, respondents filed with the same trial court a Complaint, 7
docketed as Civil Case No. IR-2678, for compensation and damages against NPC
relative to the subject lot which NPC took over but for which it failed to pay just
compensation on account of the dismissal of Civil Case No. IR-2243. The
Complaint contained the following prayer:
WHEREFORE, considering the above premises, it is most
respectfully prayed for the Honorable Court to: aECTcA
1. Order the defendant to compensate the plaintiff

of [sic] the lot they are now occupying in
accordance with the current market value
existing in the place;
2. Order the defendant to pay the plaintiff moral

and actual damages and unrealized profits
in the amount of not less than P50,000.00;
3. Order the defendant to pay the exemplary

damages of [sic] the amount of P10,000.00
and to pay the cost of suit;
Plaintiffs pray for other reliefs which are just and equitable
under the premises. 8
As agreed by the parties during pre-trial, a panel of commissioners composed

of one representative each from the parties, and a third from the court was
constituted for the purpose of determining the value of the subject lot.
After conducting their appraisal, the commissioners submitted their individual

reports. Atty. Wenifredo Pornillos, commissioner for the respondents,
recommended a valuation within the range of P1,000.00 to P1,500.00 per square
meter. Lorenzo C. Orense, commissioner for NPC, did not set an amount,
although he stated that the lot should be valued at the prevailing market prices
of agricultural, and not residential, lands within the area. The court
representative, Esteban D. Colarina, proposed a P1,100.00 per square meter
valuation. 9
Ruling of the Regional Trial Court

On February 21, 2003, the RTC rendered a Decision 10 pegging the value of the
subject lot at P1,000.00 per square meter, thus:

rendered ordering defendant National Power Corporation to
pay plaintiffs the total sum of P1,020,000.00, representing the
value of plaintiffs' land expropriated by the defendant. All
other claims in the complaint and in the answer with
counterclaim are hereby dismissed.
SO ORDERED. 11
Ruling of the Court of Appeals

NPC filed an appeal with the CA claiming that pursuant to Section 4, Rule 67 of
the 1964 Rules of Court, 12 just compensation for the lot should have been
computed based on its value at the time of the taking or the filing of the
expropriation case (Civil Case No. IR-2243) in 1990, and prayed that the case be
remanded to the lower court for further reception of evidence based on said
Section 4, Rule 67 of the 1964 Rules of Court.
On June 17, 2011, the CA rendered the assailed Decision containing the following
decretal portion: ACcHIa
WHEREFORE, premises considered, the instant appeal is

DENIED. The assailed Decision [dated] 21 February 2003
rendered by the Regional Trial Court of Iriga City, Fifth
Judicial Region, Branch 34 in Civil Case No. IR-2678 is
hereby AFFIRMED.
SO ORDERED. 13
The CA held that in the resolution of Civil Case No. IR-2678, the principles and
rules of procedure in eminent domain cases under Rule 67 of the 1964 Rules of
Court cannot apply; thus, the rule that just compensation shall be computed
from the time of the taking or filing of the expropriation case is inapplicable,
since the case is not one for expropriation. Instead, Civil Case No. IR-2678 should
be treated as a simple case for the recovery of damages. Finally, the CA held that
the trial court properly exercised its judicial function of ascertaining the fair
market value of the property as just compensation.
NPC thus instituted the instant Petition.
Issues
The Petition raises the following issues: SaCIDT
THE COURT OF APPEALS COMMITTED REVERSIBLE

ERROR IN AFFIRMING THE COURT A QUO'S
DECISION DATED FEBRUARY 21, 2003 IN CIVIL CASE
NO. IR-2678 WHICH FIXED THE AMOUNT OF JUST
COMPENSATION FOR THE EXPROPRIATED
PROPERTY OF RESPONDENTS AT P1,000.00 PER
SQUARE METER IN CONTRAVENTION OF SECTION 4,
RULE 67 OF THE REVISED RULES OF COURT WHICH
PROVIDES THAT THE JUST COMPENSATION FOR
THE EXPROPRIATED PROPERTY MUST BE
DETERMINED EITHER AS OF THE DATE OF THE
TAKING OF THE PROPERTY OR THE FILING OF THE
COMPLAINT, WHICHEVER COMES FIRST.
II
THE COURT OF APPEALS COMMITTED REVERSIBLE

ERROR IN NOT REMANDING THE CASE TO THE
COURT A QUO FOR THE PURPOSE OF DETERMINING
THE AMOUNT OF JUST COMPENSATION FOR THE
EXPROPRIATED PROPERTY IN ACCORDANCE WITH
SECTION 4, RULE 67 OF THE REVISED RULES OF
COURT. 14 TcIHDa
Petitioner's Arguments
In its Petition and Reply, 15 NPC insists that Section 4, Rule 67 of the 1964 Rules
of Court should apply to Civil Case No. IR-2678; therefore, just compensation
should be based not on 1995 market values, but on those prevailing on the date
of taking or the filing of the expropriation case in 1990; that the dismissal without
prejudice of the expropriation case did not necessarily nullify the proceedings in
said case specifically, the August 29, 1990 Order of expropriation/writ of
condemnation, which became final and executory for failure of any of the parties
to appeal the same which proceedings for expropriation may continue
through the present Civil Case No. IR-2678 for compensation and damages filed
by respondents; and that the cited National Power Corporation v. Court of Appeals
16 case does not apply since the factual milieu is different, and it does not appear
that the lot was damaged by NPC's entry therein.
NPC thus prays that the assailed CA disposition be set aside and that the case be
remanded to the trial court for further proceedings to determine the proper
amount of just compensation in accordance with Section 4, Rule 67 of the 1964
Rules of Court.
Respondents' Arguments
Praying that the Petition be denied for lack of merit, the respondents in their
Comment 17 plainly echo the assailed CA Decision, adding that the trial court's
basis for arriving at the proper amount of just compensation was correct as the
market value of adjacent properties were taken into account. Respondents add
that by agreeing to have the valuation determined by a panel of commissioners,
NPC is bound by whatever findings such panel makes, and it may not raise the
issue that valuation should be computed from the time of taking or filing of the
expropriation case in 1990. aIcHSC
Our Ruling
The Court grants the Petition.
NPC insists that Section 4, Rule 67 of the 1964 Rules of Court should have been
observed in fixing the amount of just compensation for the subject lot; that the
value of the lot at the time of NPC's taking thereof or filing of Civil Case No. IR-
2243 in 1990 should have been the basis for computing just compensation and
not the prevailing market value at the time of the filing or pendency of Civil Case
No. IR-2678 in 1995. NPC thus prays that Civil Case No. IR-2678 be remanded to
the trial court for determination of just compensation applying Section 4, Rule 67
of the 1964 Rules of Court.
We agree with NPC's contention.
In Republic v. Court of Appeals, 18 we held that:
Just compensation is based on the price or value of the

property at the time it was taken from the owner and
appropriated by the government. However, if the
government takes possession before the institution of
expropriation proceedings, the value should be fixed as of
the time of the taking of said possession, not of the filing of
the complaint. The value at the time of the filing of the
complaint should be the basis for the determination of the
value when the taking of the property involved coincides
with or is subsequent to the commencement of the
proceedings.
The procedure for determining just compensation is set forth

in Rule 67 of the 1997 Rules of Civil Procedure. Section 5 of
Rule 67 partly states that 'upon the rendition of the order of
expropriation, the court shall appoint not more than three (3)
competent and disinterested persons as commissioners to
ascertain and report to the court the just compensation for
the property sought to be taken.' However, we held in
Republic v. Court of Appeals that Rule 67 presupposes a prior
filing of complaint for eminent domain with the appropriate
court by the expropriator. If no such complaint is filed, the
expropriator is considered to have violated procedural
requirements, and hence, waived the usual procedure
prescribed in Rule 67, including the appointment of
commissioners to ascertain just compensation. In National
Power Corporation v. Court of Appeals, we clarified that when
there is no action for expropriation and the case involves
only a complaint for damages or just compensation, the
provisions of the Rules of Court on ascertainment of just
compensation (i.e., provisions of Rule 67) are no longer
applicable, and a trial before commissioners is dispensable . .
. . IEaHSD
Records show that sometime in 1990, NPC filed an expropriation case docketed
as Civil Case No. IR-2243. However, in an Order dated July 12, 1994, the
expropriation case was dismissed by the RTC for failure of NPC to prosecute.
Subsequently, or on December 5, 1994, respondents filed Civil Case No. IR-2678
which is a complaint for compensation and recovery of damages. Considering
the dismissal of the expropriation case for failure of the NPC to prosecute, it is as
if no expropriation suit was filed. Hence, pursuant to the above-quoted ruling,
NPC is deemed "to have violated procedural requirements, and hence, waived
the usual procedure prescribed in Rule 67, including the appointment of
commissioners to ascertain just compensation." Nevertheless, just compensation
for the property must be based on its value at the time of the taking of said
property, not at the time of the filing of the complaint. Consequently, the RTC
should have fixed the value of the property at the time NPC took possession of
the same in 1990, and not at the time of the filing of the complaint for
compensation and damages in 1994 or its fair market value in 1995.
In this case, the RTC formed a panel of commissioners in determining the just
compensation of the property. Although this is not required considering our
pronouncement in Republic v. Court of Appeals, 19 nonetheless, its constitution is
not improper. 20 "The appointment was done mainly to aid the trial court in
determining just compensation, and it was not opposed by the parties. Besides,
the trial court is not bound by the commissioner's recommended valuation of the
subject property. The court has the discretion on whether to adopt the
commissioners' valuation or to substitute its own estimate of the value as
gathered from the records." 21
In this case, records show that respondents' representative recommended a

valuation of P1,000.00 to P1,500.00 per square meter; while the court's
representative recommended a value of P1,100.00 per square meter. Notably,
NPC's representative did not give any value; he merely opined that the subject
property should be classified as agricultural and not residential land and valued
at the prevailing market values. Significantly, the values recommended by the
commissioners were those values prevailing in 1994 and 1995, or during the time
the complaint for compensation and damages was filed. Considering that these
are not the relevant values at the time NPC took possession of the property in
1990, it was incumbent upon the RTC to have disregarded the same.
Unfortunately, it adopted these values. On this score alone, we find a need to
remand this case to the RTC for further proceedings. SIcTAC
Moreover, we note that the RTC simply adopted the above values without citing
its basis therefor. The pertinent portions of the trial court's Decision read:
Pursuant to the said Order of May 3, 1995, the Court formed
a Commission chaired by Mr. Esteban D. Colarina, an
employee in Branch 34 of this Court; Atty. Wenifredo
Pornillos representing the plaintiffs; and Mr. Lorenzo C.
Orense representing the defendant NAPOCOR. These
gentlemen took the required oath and functioned as a
committee, submitting however their respective individual
Commissioner's Report. . . . SacTCA
On July 11, 1995, Atty. Pornillos recommended that the land

be valued at P1,000.00 to P1,500.00 per square meter (page
58). On July 13, 1995, Mr. Esteban D. Colarina submitted his
report recommending P1,100.00 as the fair market value of
the property per square meter. Attached to said report was
the affidavit of Mr. Nicasio V. Dio, then the Assistant City
Assessor of Iriga City pegging the value of the said land at
P1,500.00 to P1,800.00 per square meter. On August 3, 1995,
Mr. Lorenzo Orense of the NAPOCOR submitted his
Commissioner's Report wherein he recommended that the
valuation of the land be based on its agricultural value,
without however naming a price.
On the basis of past proceedings, the parties were allowed to

file their respective memoranda. Only the defendant
NAPOCOR filed a memorandum wherein it undertook to
pay plaintiffs the value of their land, although praying that
the Court consider the land as agricultural. NAPOCOR
admits that plaintiffs['] property, per Tax Declaration No.
30573 has been classified as residential, but assails said
classification with arguments which are mere speculations.
In the light of all the postures taken by both parties which, in

effect, results in a failure to agree on how the land should be
valued, this Court shall fall back on the Order of May 3, 1995
wherein the report of the Court's representative shall be
taken as a factor in determining . . . the value of the land,
including other matters germane thereto and others that
may be of judicial notice. aIDHET
In view of the above consideration, this Court hereby fixes

the fair market value of the land in question at P1,000.00 per
square meter.

rendered ordering defendant National Power Corporation to
pay the plaintiffs the total sum of P1,020,000.00, representing
the value of plaintiffs' land expropriated by the defendant.
All other claims in the complaint and in the answer with
counterclaim are hereby dismissed.
SO ORDERED. 22
Indeed, the trial court merely recited the values fixed by each commissioner.
Although it stated in general terms that it considered other factors germane
thereto and of judicial notice, it failed to specify what these factors were. It did
not even clarify whether it considered the values recommended by the two
commissioners. In Republic v. Court of Appeals, 23 we remanded the case to the
trial court and directed it to reconvene the panel of commissioners after it was
shown that its valuation of just compensation has no basis, viz.:
However, we agree with the appellate court that the trial

court's decision is not clear as to its basis for ascertaining just
compensation. The trial court mentioned in its decision the
valuations in the reports of the City Appraisal Committee
and of the commissioners appointed pursuant to Rule 67.
But whether the trial court considered these valuations in
arriving at the just compensation, or . . . made its own
independent valuation based on the records, [is] obscure in
the decision. The trial court simply gave the total amount of
just compensation due to the property owner without laying
down its basis. Thus, there is no way to determine whether
the adjudged just compensation is based on competent
evidence. For this reason alone, a remand of the case to the
trial court for proper determination of just compensation is
in order. In National Power Corporation v. Bongbong, we held
that although the determination of just compensation lies
within the trial court's discretion, it should not be done
arbitrarily or capriciously. The decision of the trial court
must be based on established rules, correct legal principles,
and competent evidence. The court is proscribed from
basing its judgment on speculations and surmises. 24
DIEcHa
Finally, we hold that based on prevailing jurisprudence, respondents are entitled

to "legal interest on the price of the land from the time of the taking up to the
time of full payment" 25 by the NPC.
WHEREFORE, the Petition is GRANTED. The June 17, 2011 Decision of the
Court of Appeals in CA-G.R. CV No. 82231 is REVERSED and SET ASIDE. This
case is REMANDED to the Regional Trial Court of Iriga City, Fifth Judicial
Region, Branch 34 which is directed to re-convene the commissioners or appoint
new commissioners to determine, in accordance with this Decision, the just
compensation of the subject property.
SO ORDERED.
||| (NPC v. Spouses Samar, G.R. No. 197329, September 08, 2014)
SECOND DIVISION
[G.R. No. 165386. July 29, 2013.]
NATIONAL POWER CORPORATION, petitioner, vs.

SPOUSES SALVADOR and NENITA CRUZ, SPOUSES
EDMUNDO and MERLA BARZAGA, SPOUSES
CRISANTO and JULIETA DELA CRUZ, SPOUSES
LORENZO and ROSALINA PALAGANAS, SPOUSES
RICARDO and LOLITA SAGUID, SPOUSES
CARMELITA and RESTITUTO ALCID, HIPOLITA
NASALGA, CRISELDA and REDENTOR REYES,
ILUMINADA ALIPIO, REYNALDO ALIPIO, CORAZON
PELAYO, SPOUSES ROLANDO and FELICIDAD
BOANGUIS, SPOUSES JOSELITO and CAROLINE
MENDOZA, SPOUSES ERLINDA and CELSO DE
GUZMAN, SPOUSES MIGUEL and VIRGINIA CASAS,
SPOUSES ERLINDA and CELSO DICCION, MA.
RENITA MARIANO, VICTORIA ESPIRITU, SPOUSES
VICTOR and ROSARION SOTELO, RENATO GUIEB,
DANIEL STA. MARIA, SPOUSES MELANIO and
SOTERIA TORRES, SPOUSES CIRIACO and PERLITA
BENDIJO, SPOUSES LILIA and DOMINGO TORRES,
PACITA TORRES and GREGORIA CASTILLO, SPOUSES
HILARIO and AMANDA DONIZA, SPOUSES JEREMIAS
and ISABEL GARCIA, SPOUSES EDUARDO and MA.
MARIN CALDERON, SPOUSES ERNESTO and
PELAGIA LUCAS, CORAZON ACOSTA, TERESITA
LACSON and JULIANA DE GUZMAN, PERLA REYES,
SPOUSES ESMELITON and REMEDIOS ESPIRITU,
SPOUSES ROGELIO and AURORA ABALON, DITAS
GARCIA, TERESITA CAPATI, SPOUSES EFREN and
MERCEDES MARTIN, SPOUSES HIPOLITO and
ANTONIA STA. MARIA, DIONISIO and ATANACIA
DOMONDON, JAOQUIN and MA. THERESA DELA
ROSA, SPOUSES ROMULO and NORMA DUCUSIN,
GENOVEVA CRUZ and A. BAUTISTA, PURITA
SUNICO, SPOUSES MINERVA and ROQUE NUALLA,
and SPOUSES GABINO, JR. and CRISPINA ALIPIO,
respondents.
DECISION
BRION, J p:
For the Court's resolution is the petition for review on certiorari 1 filed under
Rule 45 of the Rules of Court by the National Power Corporation (Napocor).
Napocor seeks to annul and set aside the decision 2 dated February 10, 2004 and
the resolution 3 dated September 13, 2004 of the Court of Appeals (CA) in CA-
G.R. CV No. 62911, which affirmed with modification the order dated March 31,
1998 of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 15, in Civil
Case No. 111-M-97.
THE FACTS
Civil Case No. 111-M-97 was an expropriation proceeding commenced by
Napocor against respondents Spouses Salvador and Nenita Cruz, Spouses
Edmundo and Merla Barzaga, Spouses Crisanto and Julieta dela Cruz, Spouses
Lorenzo and Rosalina Palaganas, Spouses Ricardo and Lolita Saguid, Spouses
Carmelita and Restituto Alcid, Hipolita Nasalga, Criselda and Redentor Reyes,
Iluminada Alipio, Reynaldo Alipio, Corazon Pelayo, Spouses Rolando and
Felicidad Boanguis, Spouses Joselito and Caroline Mendoza, Spouses Erlinda
and Celso de Guzman, Spouses Miguel and Virginia Casas, Spouses Erlinda and
Celso Diccion, Ma. Renita Mariano, Victoria Espiritu, Spouses Victor and
Rosarion Sotelo, Renato Guieb, Daniel Sta. Maria, Spouses Melanin and Soteria
Torres, Spouses Ciriaco and Perlita Bendijo, Spouses Lilia and Domingo Torres,
Pacita Torres and Gregoria Castillo, Spouses Hilario and Amanda Doniza,
Spouses Jeremias and Isabel Garcia, Spouses Eduardo and Ma. Marin Calderon,
Spouses Ernesto and Pelagia Lucas, Corazon Acosta, Teresita Lacson and Juliana
de Guzman, Perla Reyes, Spouses Esmeliton and Remedios Espiritu, Spouses
Rogelio and Aurora Abalon, Ditas Garcia, Teresita Capati, Spouses Efren and
Mercedes Martin, Spouses Hipolito and Antonia Sta. Maria, Dionisio and
Atanacia Domondon, Jaoquin and Ma. Theresa dela Rosa, Spouses Romulo and
Norma Ducusin, Genoveva Cruz and A. Bautista, Purita Sunico, Spouses
Minerva and Roque Nualla, and Spouses Gabino, Jr. and Crisping Alipio, who
are the owners of individual lots located in Del Monte Park Subdivision, Dulong
Bayan, San Jose Del Monte, Bulacan. The complaint, filed on February 17, 1997,
primarily sought the determination of just compensation due the respondents
after the negotiations for the purchase of the lots failed. AHDaET
In its order dated September 17, 1997, the RTC directed the Bulacan Provincial
Appraisal Committee (PAC) "to review and submit an updated appraisal report
on the properties to be acquired by [Napocor] in order 'to judicially guide the
Court in fixing the amount to be paid by the plaintiff to the defendants.'" 4 In the
meantime, the RTC allowed Napocor to take possession of the lots, after Napocor
deposited an amount equivalent to their assessed value pursuant to Section 2,
Rule 67 of the Rules of Court. 5
On October 22, 1997, the PAC submitted its report 6 to the RTC which pegged
the just compensation at P2,200.00 per square meter. After considering the PAC's
report, the RTC issued an order dated March 31, 1998 fixing the just
compensation at P3,000.00 per square meter. Although the RTC found the PAC's
recommended amount of P2,200.00 reasonable, it noted that an additional
amount of P800.00 was necessary in view of the then prevailing economic crises
and the devaluation of the peso.
Napocor appealed the RTC's March 31, 1998 order with the CA. It assailed the
appointment of the PAC, claiming that its appointment was contrary to Rule 67
of the Rules of Court. It also alleged that the determination of the amount of just
compensation was without basis.
THE CA RULING
The CA affirmed the RTC's March 31, 1998 order, subject to a modification. It
upheld the appointment of the PAC and the recommendation to set the just
compensation at P2,200.00 per square meter, but removed the additional P800.00
that the RTC imposed. The CA instead imposed legal interest at 12% per annum
on the amount of just compensation, to compensate for the constant fluctuation
and inflation of the value of the currency.
Its motion for reconsideration of the CA decision having been denied, 7 Napocor
elevates the case to us through the present petition. DCaEAS
THE PARTIES' ARGUMENTS

Napocor asserts that the appointment of the PAC as commissioners was contrary
to Rule 67 of the Rules of Court, specifically, Section 5 thereof which states:
Section 5.Ascertainment of compensation. Upon the

rendition of the order of expropriation, the court shall
appoint not more than three (3) competent and
disinterested persons as commissioners to ascertain and
report to the court the just compensation for the property
sought to be taken. The order of appointment shall
designate the time and place of the first session of the
hearing to be held by the commissioners and specify the
time within which their report shall be submitted to the
court.
Copies of the order shall be served on the parties. Objections

to the appointment of any of the commissioners shall be filed
with the court within ten (10) days from service, and shall be
resolved within thirty (30) days after all the commissioners
shall have received copies of the objections. [italics supplied;
emphases ours]
It contends that Rule 67 requires the trial court to appoint three persons, and
not a committee like the PAC. The members of the PAC also did not
subscribe to an oath which is required under Section 6, Rule 67 of the Rules
of Court. 8
Napocor also points out that the RTC's March 31, 1998 order did not specify the
time and place for the first hearing of the commissioners and the time the
commissioners' report should be submitted. No notice of hearing on the
commissioners' report was, in fact, given to Napocor, depriving it of its right to
present evidence to controvert the findings of the PAC. STaHIC
Napocor further alleges that the CA erred in disregarding the compromise

agreement it entered into with the respondents. The agreement was executed
during the pendency of the appeal with the CA and fixed the amount of just
compensation at P1,900.00 per square meter. As the agreement was validly
entered into by the parties, Napocor claims it is binding on the parties and could
not be disregarded by the CA.
The respondents, on the other hand, assert that Napocor's allegations are
unmeritorious. They claim that the appointment of the PAC constituted
substantial compliance with Section 5, Rule 67 of the Rules of Court, since the
PAC was composed of three members (the provincial assessor, the provincial
engineer, and the provincial treasurer) who are government officials without
interest in the outcome of the litigation, and who are competent to evaluate and
assess valuation of the properties. They have been specifically tasked "to guide
the Court in fixing the amount to be paid by the plaintiff to the defendants," 9
which is the same task required of the commissioners by Rule 67 of the Rules of
Court.
They further claim that it was Napocor's inaction itself that denied it the
opportunity to present evidence due to its own failure to question the
appointment of the commissioners and the commissioners' report within the
period provided under the Rules. Likewise, it was Napocor which should be
faulted for the CA's refusal to take cognizance of the compromise agreement.
Although Napocor manifested that an agreement was entered into by the parties,
it consistently failed to submit a copy to the CA for the latter's approval. For over
a year, the CA granted Napocor's numerous motions for extension to submit a
copy, but Napocor failed to comply. Consequently, the CA should not be faulted
for refusing to consider and approve the agreement. At any rate, the respondents
claim that the agreement does not bind them, as they were made to sign it
without the benefit of counsel during the pendency of the case. HADTEC
Finally, the respondents allege that the amount of P2,200.00 as just compensation
is fully supported not only by the findings in the report, but also by the
Appraisal Report, which Napocor obtained from the Land Bank of the
Philippines (LBP). The LBP Appraisal Report fixed the market value of the
expropriated properties at P2,200.00. 10
Incidental Matters
The majority of the respondents who filed the Comment dated February 16, 2005
are represented by Atty. Reynaldo B. Hernandez. 11 During the pendency of the
case, Atty. Hernandez submitted before the Court an Omnibus Motion 12 (1)
seeking clarification on the participation of one Atty. Pedro S. Principe of
Principe, Villano, Villacorta, Clemente and Associates in the present proceeding, and
(2) praying for an order from the Court enjoining the RTC from hearing and
resolving Atty. Principe's Motion to Enter Attorney's Charging Lien into the Records
of This Case Even Before Final Judgment is Rendered.
According to Atty. Hernandez, Atty. Principe claims to be the counsel of the

same respondents that he (Atty. Hernandez) is representing. However, the
respondents themselves have repudiated Atty. Principe's claim. Atty. Hernandez
also states that, as borne by the records, the RTC has already denied Atty.
Principe's appearance and motion to intervene in the expropriation proceedings.
Atty. Principe wanted to intervene, supposedly to protect his 40% share in the
expropriated properties, which he (Atty. Principe) claimed constituted part of his
legal fees. CHTAIc
In response to Atty. Hernandez's allegations, Atty. Principe denies that he is a

"nuisance interloper." Atty. Principe claims that he is the counsel for SANDAMA,
13 an organization formed by owners of the affected expropriated properties, of
which the respondents are members. It was SANDAMA, through its President,
Danilo Elfa, which engaged his and his firm's legal services; to date, his authority
has not been withdrawn or revoked. Hence, Atty. Principe should be recognized
as the counsel of record for the respondents. As counsel for the respondents,
Atty. Principe claims that there is nothing improper with his motion to enter into
the records his charging lien, adding that the lien will not anyway be enforced
until final judgment in this case.
Also, during the pendency of this case, Napocor filed a Motion to Approve
Attached Compromise Agreement, 14 which it entered into with respondent Ditas C.
Garcia on July 3, 2006. In light of the compromise agreement, the Court issued a
Resolution 15 dated March 28, 2011 and considered the case closed and
terminated insofar as respondent Ditas was concerned.
THE COURT'S RULING

The Court denies the petition.
The appointment of the PAC as commissioners

The settled rule in expropriation proceedings is that the determination of just
compensation is a judicial function. 16 To assist the courts in this task, Section 5,
Rule 67 of the Rules of Court requires the appointment of "not more than three
(3) competent and disinterested persons as commissioners to ascertain and report
to the court the just compensation for the property sought to be taken." Although
the appointment of commissioners is mandatory, the Rules do not impose any
qualifications or restrictions on the appointment, other than that the
commissioners should not number more than three and that they should be
competent and disinterested parties. IcAaSD
In this case, the Court finds that the appointment of the PAC as commissioners
substantially complies with Section 5, Rule 67 of the Rules of Court. It is
immaterial that the RTC appointed a committee instead of three persons to act as
commissioners, since the PAC is composed of three members the Provincial
Assessor, the Provincial Engineer, and the Provincial Treasurer. Considering
their positions, we find each member of the PAC competent to perform the duty
required of them, i.e., to appraise the valuation of the affected lots. As correctly
found by the CA, they "are government officials entrusted with the updating and
time-to-time determination of currently assessed, as well as, market value of
properties within their jurisdiction[.]" 17 The mere fact that they are government
officials does not disqualify them as disinterested persons, as the provincial
government has no significant interest in the case.
Instead, what we find material is that the PAC was tasked to perform precisely
the same duty that the commissioners, under Section 5, Rule 67 of the Rules of
Court, are required to discharge. The RTC order dated September 17, 1997
directed the PAC "to review and submit an updated appraisal report on the
property to be acquired by the plaintiff NAPOCOR from the defendants to
judicially guide the [c]ourt in fixing the amount to be paid [by] the plaintiff to the
defendants." 18 The appointment of the PAC served the same function as an
appointment of three persons as commissioners under the Rules. HTSIEa
If Napocor found the appointment of the PAC to be objectionable, it should have
filed its objections early on and not belatedly raise them in its appeal with the
CA. The second paragraph of Section 5, Rule 67 states that
Copies of the order [of appointment] shall be served on

the parties. Objections to the appointment of any of the
commissioners shall be filed with the court within ten
(10) days from service, and shall be resolved within thirty
(30) days after all the commissioners shall have received
copies of the objections. [emphasis ours]
We find nothing in the records indicating that Napocor seasonably objected

to the appointment of the PAC or to any aspect in the order of appointment
(e.g., the supposed failure of the order to state the time and place of the first
session of the hearing, and the time which the commissioners' report shall be
submitted). Instead, Napocor belatedly raised its objections only in its
appeal with the CA. For its failure to comply with the Rules, we consider
Napocor to have waived its objections against any supposed irregularity in
the appointment of the PAC. HSTaEC
The determination of just compensation
Neither do we find significant Napocor's claim that it was denied due process in
the determination of the amount of just compensation. As against Napocor's bare
allegation that it was not notified of the PAC's hearing, the obtaining
circumstances, set out below, lead us to believe otherwise.
The PAC members, upon their appointment and oath, are considered officers of
the court, and we can extend to them the presumption of regularity in the
performance of their official functions. 19 It is hard to believe that Napocor was
completely left in the dark in the proceedings conducted by the PAC to
determine just compensation, considering its interest in the case. acIASE
Likewise, we find untenable Napocor's claim that the amount of just

compensation was without factual and legal basis. That the properties were
valued at P427.76 per square meter in August 1996, then at P2,200.00 in October
1997 does not necessarily indicate that the assessment by the PAC was
manipulated. Napocor itself acknowledge an increase in the value of the
properties when it modified its offered settlement from P427.76 to P1,900.00.
Also, the LBP Appraisal Report, which Napocor itself commissioned, has pegged
the fair market value of the properties at P2,200.00 per square meter. The report
considered important improvements in the vicinity, among them, the
construction of a school, a church and several public buildings.
If Napocor had any objections on the amount of just compensation fixed in the
commissioners' report, its remedy was to file its objections within ten (10) days
from receipt of the notice of the report. Section 7, Rule 67 of the Rules of Court
states:
Section 7.Report by commissioners and judgment thereupon. . .

. Except as otherwise expressly ordered by the court, such
report shall be filed within sixty (60) days from the date the
commissioners were notified of their appointment, which
time may be extended in the discretion of the court. Upon
the filing of such report, the clerk of the court shall serve
copies thereof on all interested parties, with notice that
they are allowed ten (10) days within which to file
objections to the findings of the report, if they so desire.
[italics supplied; emphasis ours]
However, as with the objections to the appointment of the PAC, Napocor

failed to make a timely objection to the report of the commissioners and
raised them only before the CA. HASDcC
The compromise agreement
It appears to us that Napocor has demonstrated a pattern of procrastination in
this case. We note that not only did it belatedly file its objections to the
appointment of the PAC and to the commissioners' report; it also failed to submit
copies of the compromise agreement with the CA despite the numerous
extensions it requested.
As early as August 2001, during the pendency of its appeal with the CA,
Napocor already manifested that it had entered into a compromise agreement
with the respondents and would be filing a copy thereof with the CA.
The CA initially gave Napocor 60 days to submit a copy of the agreement, but
Napocor requested for (and was granted) an extension of 30 days. Days before
the extension expired, Napocor requested for another 30-day extension. Napocor
would repeat these requests for extension whenever the deadline loomed,
without it filing a copy of the agreement. All in all, Napocor requested for an
extension of 180 days. The long delay compelled the CA to finally resolve the
appeal on the basis of the available records, notwithstanding Napocor's
manifestation of a compromise agreement. IAETDc
Significantly, the execution of the compromise agreement, by itself, did not

enjoin the CA from resolving the appeal. By its terms and as found out by the
CA, the compromise agreement required the approval of the CA for it to take
effect. Thus, Napocor can no longer assail the CA's authority to resolve the
appeal after it consistently failed to furnish the CA a copy of the agreement.
The representation of Atty. Principe

We take note of the respondents' misgivings on the claims of Atty. Principe.
However, we point out that the Court has resolved the issue of Atty. Principe's
interest in the expropriation proceedings in Malonso v. Principe. 20 Julian
Malonso is the owner of one of the expropriated properties and a member of
SANDAMA. 21 He assailed the authority of Atty. Principe to represent him in
the same expropriation proceedings that is the subject of the present case and the
latter's claim of 40% of the amount to be paid by Napocor. On the basis of these
contentions, he sought Atty. Principe's disbarment. ADcSHC
Ruling in favor of Atty. Principe, we found reasonable grounds supporting his

claim that he possessed authority to represent SANDAMA and its members in
the expropriation proceedings 22 and could not validly be accused of
misrepresentation. Since Atty. Principe and his law firm have already rendered
legal and even extra-legal services for SANDAMA, they rightfully moved to
recover the attorney's fees due them and to protect this interest. However, the
Court refrained from ruling on Atty. Principe's entitlement to the claimed
attorney's fees of 40% of the purchase price since Malonso only involved a
disbarment proceeding.
Although the Court's ruling in Malonso has become final, we cannot fully adopt it
in the present case so as to make a conclusive finding on the question of Atty.
Principe's representation and entitlement to attorney's fees as far as the present
respondents are concerned. The available documents in the records disclose that
only a few of the respondents have executed a special power of attorney, similar
to the one Malonso executed in favor of Danilo Elfa (then SANDAMA President),
that would authorize Elfa to hire Atty. Principe and his law firm to represent
them. The same documents do not show if these respondents are members of
SANDAMA, which Atty. Principe claims he represents. Also, nothing in the
records would show the extent of services that Atty. Principe has performed for
the respondents. In the absence of these pertinent facts, we deem it prudent to
remand the matter to the RTC the determination of Atty. Principe's authority to
represent the respondents and his entitlement to attorney's fees, taking into
consideration the Court's ruling in Malonso.
WHEREFORE, in view of the foregoing, the assailed decision dated February 10,
2004 and the resolution dated September 13, 2004 of the Court of Appeals in CA-
G.R. CV No. 62911 are AFFIRMED. aIcSED
The questions of Atty. Pedro Principe's representation and his entitlement to

attorney's fees, insofar as the respondents are concerned, are REMANDED to the
Regional Trial Court of Malolos, Bulacan, Branch 15, for resolution. The trial
court is hereby ordered to resolve these matters with due haste.
SO ORDERED.
||| (NAPOCOR v. Spouses Cruz, G.R. No. 165386, July 29, 2013)
FIRST DIVISION
[G.R. No. 187677. April 17, 2013.]
REPUBLIC OF THE PHILIPPINES, represented by the

DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS
(DPWH), petitioner, vs. HON. ROSA SAMSON-TATAD, as
Presiding Judge of the Regional Trial Court, Branch 105,
Quezon City, and SPOUSES WILLIAM AND REBECCA
GENATO, respondents.
DECISION
SERENO, C.J p:
This is an appeal via a Petition for Review on Certiorari 1 dated 19 June 2009
assailing the Decision 2 and Resolution 3 of the Court of Appeals (CA) in C.A.
G.R. SP No. 93227 which affirmed the Orders 4 of the Regional Trial Court (RTC),
Branch 105, Quezon City in Civil Case No. Q-01-44595. The RTC barred
petitioner from presenting evidence to prove its claim of ownership over the
subject property, as the presentation thereof would constitute a collateral attack
on private respondents' title.
The antecedent facts are as follows:
On 13 July 2001, petitioner Republic of the Philippines, represented by the

Department of Public Works and Highways (DPWH), filed a Complaint against
several defendants, including private respondents, for the expropriation of
several parcels of land affected by the construction of the EDSA-Quezon Avenue
Flyover. 5 Private respondents, Spouses William and Rebecca Genato, are the
registered owners of a piece of land ("subject property") covered by Transfer
Certificate of Title (TCT) No. RT-11603 (383648) 6 and having an area of 460
square meters.
During the pendency of the proceedings, petitioner received a letter dated 14

June 2002 from Engr. Patrick B. Gatan, Project Manager IV of the DPWH-NCR,
reporting that the subject property was "government land and that the transfer
certificate of title of the said claimant [respondent] . . . is of dubious origin and of
fabrication as it encroached or overlapped on a government property." 7 As a
result, petitioner filed an Amended Complaint on 24 June 2002, 8 seeking to limit
the coverage of the proceedings to an area conforming to the findings of the
DPWH:
4.To accomplish said project, which is to be undertaken by

the Department of Public Works and Highways [DPWH], it
is necessary and urgent for plaintiff to acquire in fee simple
portions of the following parcels of land belonging to,
occupied, possessed, and/or the ownership of which are
being claimed by the defendants, to wit:
xxx xxx xxx
[c]Defendants William O. Genato and Rebecca G.

Genato.
xxx xxx xxx
5.The portion of the above properties that are affected by the

project and shaded green in the sketch plan hereto attached
and made integral part hereof as Annex E, consisting of an
area of: . . . [c] 460 square meters of the aforedescribed
property registered in the name of defendants spouses
William and Rebecca Genato; . . . . (Emphasis in the original)
On 18 July 2002, petitioner filed a Manifestation and Motion 9 to have the subject
property "declared or considered of uncertain ownership or subject to conflicting
claims."
In an Order dated 10 December 2002, 10 the RTC admitted petitioner's Amended

Complaint, deferred the release to respondents the amount of eighteen million
four hundred thousand pesos (P18,400,000) deposited in the bank, equivalent to
the current zonal valuation of the land, and declared the property as the subject
of conflicting claims.
While petitioner was presenting evidence to show that the subject property
actually belonged to the Government, private respondents interposed objections
saying that petitioner was barred from presenting the evidence, as it constituted
a collateral attack on the validity of their TCT No. RT-11603 (383648). The RTC
then required the parties to submit their respective Memoranda.
Upon receipt of the Memoranda, the trial court issued on 12 July 2005 an Order
11 as follows:
WHEREFORE, premises considered, the Court finds that the

issue of the validity of the TCT No. 11603 (383648) can only
be raised in an action expressly instituted for that purpose
and not in this instant proceeding. Accordingly, plaintiff is
barred from presenting evidence as they [sic] constitute
collateral attack on the validity of the title to the subject lot in
violation of Sec. 48 of P.D. 1529.
On 4 August 2005, petitioner seasonably filed a Motion for Reconsideration, 12

but the motion was denied by the RTC in an Order dated 17 November 2005. 13
On 4 January 2006, private respondents filed a Motion for the payment of just
compensation amounting to twenty million seven hundred thousand pesos
(P20,700,000) and for the release of eighteen million four hundred thousand
pesos (P18,400,000) deposited in the Land Bank-South Harbor Branch as partial
payment. 14 This Motion remains pending in the RTC to date.
On 9 February 2006, petitioner filed with the CA a Petition for Certiorari with
Prayer for the Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction. 15
The appellate court ruled that since the subject property was covered by a
Torrens title, Presidential Decree No. 1529, or the Property Registration Decree
(P.D. 1529), necessarily finds significance. Thus, it held that the RTC rightly
applied Sec. 48. Accordingly, the CA issued its 29 September 2008 Decision, 16
the dispositive portion of which reads:
WHEREFORE, the Petition for Certiorari is DISMISSED.

The prayer for the issuance of a Writ of Preliminary
Injunction is accordingly DENIED.
On 29 October 2008, petitioner filed a Motion for Reconsideration, 17 but the

motion was also denied in a Resolution dated 27 April 2009. 18
Hence, the instant Petition.
A Comment 19 on the Petition was filed by private respondents on 1 September

2009, and a Reply 20 thereto by petitioner on 27 January 2010.
ISSUE
From the foregoing, the sole issue submitted for resolution before this Court is
whether petitioner may be barred from presenting evidence to assail the validity
of respondents' title under TCT No. RT-11603 (383648).
THE COURT'S RULING

Petitioner argues that under Section 9, Rule 67 of the Rules of Court, if the
ownership of a property to be expropriated is uncertain, the court in the same
expropriation proceeding is also given authority to make a proper adjudication
of the matter. Section 9 of Rule 67 reads:
SECTION 9.Uncertain Ownership. Conflicting Claims. If the

ownership of the property taken is uncertain, or there are
conflicting claims to any part thereof, the court may order
any sum or sums awarded as compensation for the property
to be paid to the clerk of the court for the benefit of the
persons adjudged in the same proceeding to be entitled
thereto. But the judgment shall require the payment of the
sum or sums awarded to either the defendant or the clerk
before the plaintiff can enter upon the property, or retain it
for the public use or purpose if entry has already been made.
This view is allegedly supported by Republic v. Court of First Instance of Pampanga,

presided formerly by Judge L. Pasicolan 21 (Republic) in which the trial court hearing
the expropriation proceeding was also allowed to resolve the issue of ownership.
Petitioner further argues that the original Complaint was amended "precisely to
reflect the fact that herein private respondents, albeit ostensibly appearing as
registered owners, are to be considered as mere claimants of one of the
properties subject of the expropriation." This is the reason why the RTC issued
an Order declaring the property subject of conflicting claims.
Moreover, this being an in rem proceeding, "plaintiff Republic of the Philippines

seeks the relief, both in the original and amended complaints, to transfer to
plaintiff the titles to said parcels of land together with their improvements free
from all liens and encumbrances. For this particular purpose, the expropriation
suit is essentially a direct proceeding." 22
Private respondents, on the other hand, invoke Section 48 of P.D. 1529, viz.:
SECTION 48.Certificate Not Subject to Collateral Attack. A

certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or cancelled except in a direct
proceeding in accordance with law.
It is their contention that by allowing petitioner to present adversarial evidence,

the court is in effect allowing respondents' Torrens title to be collaterally attacked
an action prohibited by P.D. 1529.
We rule that petitioner may be allowed to present evidence to assert its

ownership over the subject property, but for the sole purpose of determining
who is entitled to just compensation.
I
Proper interpretation of Section 9, Rule 67
Proceeding from the principle of jus regalia, the right to eminent domain has
always been considered as a fundamental state power that is inseparable from
sovereignty. 23 It is described as the State's inherent power that need not be
granted even by the Constitution, 24 and as the government's right to
appropriate, in the nature of compulsory sale to the State, private property for
public use or purpose. 25
Expropriation, or the exercise of the State's right to eminent domain, is

proscribed by the restraints of public use and just compensation. 26 It is
governed by Rule 67 of the Rules of Court, which presents procedural guidelines
for the court to ensure that due process is observed and just compensation
rightly paid to the private owners.
Indeed, this Court first had the occasion to interpret Section 9, Rule 67 in the case
of Republic. In addressing the issue of "whether or not the court that hears the
expropriation case has also jurisdiction to determine, in the same proceeding, the
issue of ownership of the land sought to be condemned," the Court answered in
the affirmative:
The sole issue in this case, i.e., whether or not the court that
hears the expropriation case has also jurisdiction to
determine, in the same proceeding, the issue of ownership of
the land sought to be condemned, must be resolved in the
affirmative. That the court is empowered to entertain the
conflicting claims of ownership of the condemned or sought
to be condemned property and adjudge the rightful owner
thereof, in the same expropriation case, is evident from
Section 9 of the Revised Rule 69, which provides:
SEC. 9.Uncertain ownership. Conflicting claims. If

the ownership of the property taken is uncertain, or
there are conflicting claims to any part thereof, the
court may order any sum or sums awarded as
compensation for the property to be paid to the
clerk of court for the benefit of the persons adjudged
in the same proceeding to be entitled thereto. But the
judgment shall require the payment of the sum or
sums awarded to either the defendant or the clerk
before the plaintiff can enter upon the property, or
retain it for the public use or purpose if entry has
already been made.
In fact, the existence of doubt or obscurity in the title of the
person or persons claiming ownership of the properties to be
expropriated would not preclude the commencement of the
action nor prevent the court from assuming jurisdiction
thereof. The Rules merely require, in such eventuality, that
the entity exercising the right of eminent domain should
state in the complaint that the true ownership of the
property cannot be ascertained or specified with accuracy.
27
We arrived at the same conclusion in Republic v. Rural Bank of Kabacan, Inc., 28 in

which we held thus:
The trial court should have been guided by Rule 67, Section
9 of the 1997 Rules of Court, which provides thus:
SEC. 9.Uncertain ownership; conflicting claims. If

court for the benefit of the person adjudged in the
same proceeding to be entitled thereto. But the
sums awarded to either the defendant or the court
already been made.
Hence, the appellate court erred in affirming the trial

court's Order to award payment of just compensation to
the defendants-intervenors. There is doubt as to the real
owner of Lot No. 3080. Despite the fact that the lot was
covered by TCT No. T-61963 and was registered under its
name, the Rural Bank of Kabacan manifested that the owner
of the lot was no longer the bank, but the defendants-
intervenors; however, it presented no proof as to the
conveyance thereof. In this regard, we deem it proper to
remand this case to the trial court for the reception of
evidence to establish the present owner of Lot No. 3080
who will be entitled to receive the payment of just
compensation. (Emphases supplied)
However, the authority to resolve ownership should be taken in the proper

context. The discussion in Republic was anchored on the question of who among
the respondents claiming ownership of the property must be indemnified by the
Government:
Now, to determine the person who is to be indemnified for

the expropriation of Lot 6, Block 6, Psd-2017, the court taking
cognizance of the expropriation must necessarily determine
if the sale to the Punzalan spouses by Antonio Feliciano is
valid or not. For if valid, said spouses must be the ones to be
paid by the condemnor; but if invalid, the money will be
paid to someone else. . . . . 29
Thus, such findings of ownership in an expropriation proceeding should not be

construed as final and binding on the parties. By filing an action for
expropriation, the condemnor (petitioner), merely serves notice that it is taking
title to and possession of the property, and that the defendant is asserting title to
or interest in the property, not to prove a right to possession, but to prove a right
to compensation for the taking. 30
If at all, this situation is akin to ejectment cases in which a court is temporarily

authorized to determine ownership, if only to determine who is entitled to
possession. This is not conclusive, and it remains open to challenge through
proper actions. 31 The consequences of Sec. 9, Rule 67 cannot be avoided, as they
are due to the intimate relationship of the issue of ownership with the claim for
the expropriation payment. 32
II
Inapplicability of Section 48, P.D. 1529
Verily, our interpretation of Sec. 9, Rule 67 does not run counter to Section 48 of
P.D. 1529. Under Sec. 48, collateral attacks on a Torrens title are prohibited. We
have explained the concept in Oo v. Lim, 33 to wit:
An action or proceeding is deemed an attack on a title when

its objective is to nullify the title, thereby challenging the
judgment pursuant to which the title was decreed. The
attack is direct when the objective is to annul or set aside
such judgment, or enjoin its enforcement. On the other hand,
the attack is indirect or collateral when, in an action to obtain
a different relief, an attack on the judgment is nevertheless
made as an incident thereof.
In several instances, we have considered an Answer praying for the cancellation

of the plaintiff's Torrens title as a form of a collateral attack. 34 We have afforded
the similar treatment in a petition questioning the validity of a deed of sale for a
registered land, 35 and in a reformation of a deed of sale to include areas
registered under the name of another party. 36 But a resolution on the issue of
ownership in a partition case was deemed neither to be a direct or collateral
attack, for "until and unless this issue of co-ownership is definitely and finally
resolved, it would be premature to effect a partition of the disputed properties."
37
Here, the attempt of petitioner to present evidence cannot be characterized as an

"attack." It must be emphasized that the objective of the case is to appropriate
private property, and the contest on private respondents' title arose only as an
incident to the issue of whom should be rightly compensated.
Contrary to petitioner's allegations, the Complaint and Amended Complaint

cannot also be considered as a direct attack. The amendment merely limited the
coverage of the expropriation proceedings to the uncontested portion of the
subject property. The RTC's Order declaring the property as subject of conflicting
claims is a recognition that there are varying claimants to the sums to be
awarded as just compensation. This serves as an authority for the court to
conduct a limited inquiry on the property's ownership.
WHEREFORE, the Court GRANTS the Petition for Review on Certiorari and the
prayer for a Writ of Preliminary Injunction. The assailed Decision and Resolution
of the Court of Appeals in CA-G.R. SP No. 93227, as well as the Decision of the
Regional Trial Court, Branch 105, Quezon City in Civil Case No. Q-01-44595, are
hereby REVERSED and SET ASIDE. This case is REMANDED to the RTC to
hear the issue of ownership for the purpose of just compensation.
SO ORDERED.
||| (Republic v. Samson-Tatad, G.R. No. 187677, April 17, 2013)
THIRD DIVISION
[G.R. No. 169263. September 21, 2011.]
CITY OF MANILA, petitioner, vs. MELBA TAN TE,

respondent.
DECISION
PERALTA, J p:
In this Petition for Review, 1 the City of Manila assails the April 29, 2005
Decision 2 of the Court of Appeals in CA-G.R. CV No. 71894, as well as the
August 12, 2005 Resolution, 3 in the said case denying reconsideration.
The assailed decision affirmed the June 13, 2001 Order 4 of the Regional Trial
Court of Manila, Branch 24 issued in Civil Case No. 00-99264 one for
expropriation filed by petitioner, the City of Manila. The said Order, in turn,
granted the motion to dismiss the complaint that was filed by respondent Melba
Tan Te, in lieu of an answer.
The facts follow.
On March 15, 1998, then Manila City Mayor Joselito L. Atienza approved
Ordinance No. 7951 an expropriation measure enacted on February 3, 1998 by
the city council authorizing him to acquire by negotiation or expropriation
certain pieces of real property along Maria Clara and Governor Forbes Streets
where low-cost housing units could be built and then awarded to bona fide
residents therein. For this purpose, the mayor was also empowered to access the
city's funds or utilize funding facilities of other government agencies. 5 In the
aggregate, the covered property measures 1,425 square meters, and includes the
475-square-meter lot owned by respondent Melba Tan Te. 6
The records bear that respondent had acquired the property from the heirs of
Emerlinda Dimayuga Reyes in 1996, and back then it was being occupied by a
number of families whose leasehold rights had long expired even prior to said
sale. In 1998, respondent had sought before the Metropolitan Trial Court of
Manila, Branch 15 the ejectment of these occupants from the premises. The
favorable ruling in that case evaded execution; hence, the court, despite
opposition of the City of Manila, issued a Writ of Demolition at respondent's
instance. 7 It appears that in the interim between the issuance of the writ of
execution and the order of demolition, the City of Manila had instituted an
expropriation case 8 affecting the same property. Respondent had moved for the
dismissal of that first expropriation case for lack of cause of action, lack of
showing of an ordinance authorizing the expropriation, and non-compliance
with the provisions of Republic Act (R.A.) No. 7279, otherwise known as the
Urban Development and Housing Act of 1992. 9 The trial court found merit in the
motion and dismissed the complaint without prejudice. 10 AcICHD
On November 16, 2000, petitioner 11 filed this second Complaint 12 for

expropriation before the Regional Trial Court of Manila, Branch 24. 13 This time,
it attached a copy of Ordinance No. 7951 and alleged that pursuant thereto, it
had previously offered to purchase the subject property from respondent for
P824,330.00. 14 The offer was contained in a letter sent to respondent by the City
Legal Officer on May 21, 1999, 15 but respondent allegedly failed to retrieve it
despite repeated notices, 16 thereby compelling petitioner to institute the present
expropriation proceedings after depositing in trust with the Land Bank of the
Philippines P1,000,000.00 cash, representing the just compensation required by
law to be paid to respondent. 17
Respondent did not file an answer and in lieu of that, she submitted a Motion to
Dismiss 18 and raised the following grounds: that Ordinance No. 7951 was an
invalid expropriation measure because it violated the rule against taking private
property without just compensation; that petitioner did not comply with the
requirements of Sections 9 19 and 10 20 of R.A. No. 7279; and that she qualified
as a small property owner and, hence, exempt from the operation of R.A. No.
7279, the subject lot being the only piece of realty that she owned.
Petitioner moved that it be allowed to enter the property, but before it could be
resolved, the trial court issued its June 13, 2001 Order 21 dismissing the
complaint. First, the trial court held that while petitioner had deposited with the
bank the alleged P1M cash in trust for respondent, petitioner nevertheless did
not submit any certification from the City Treasurer's Office of the amount
needed to justly compensate respondent for her property. Second, it emphasized
that the provisions of Sections 9 and 10 of R.A. No. 7279 are mandatory in
character, yet petitioner had failed to show that it exacted compliance with them
prior to the commencement of this suit. Lastly, it conceded that respondent had
no other real property except the subject lot which, considering its total area,
should well be considered a small property exempted by law from expropriation.
In view of the dismissal of the complaint, petitioner's motion to enter was
rendered moot and academic. 22
Petitioner interposed an appeal to the Court of Appeals which, finding no merit

therein, dismissed the same. 23 Petitioner sought reconsideration, 24 but it was
denied. 25
In this Petition, 26 petitioner posits that the trial court's dismissal of its complaint
was premature, and it faults the Court of Appeals for having failed to note that
by such dismissal it has been denied an opportunity to show previous
compliance with the requirements of Sections 9 and 10 of R.A. No. 7279 as well
as to establish that respondent actually owns other realty apart from the subject
property. Besides, continues petitioner, whether or not it had truly complied
with the requirements of the law is a matter which can be determined only after
a trial of the case on the merits and not, as what happened in this case, at the
hearing of the motion to dismiss. 27
Respondent, for her part, points out that Ordinance No. 7951 is an invalid
expropriation measure as it does not even contain an appropriation of funds in
its implementation. In this respect, respondent believes that the P1M cash
deposit certified by the bank seems to be incredible, since petitioner has not
shown any certification from the City Treasurer's Office on the amount necessary
to implement the expropriation measure. More importantly, she believes that the
dismissal of the complaint must be sustained as it does not allege previous
compliance with Sections 9 and 10 of R.A. No. 7279 and, hence, it does not
present a valid cause of action. 28 She theorizes that the expropriation for
socialized housing must abide by the priorities in land acquisition and the
available modes of land acquisition laid out in the law, and that expropriation of
privately-owned lands avails only as the last resort. 29 She also invokes the
exemptions provided in the law. She professes herself to be a small property
owner under Section 3 (q), 30 and claims that the subject property is the only
piece of land she owns where she, as of yet, has not been able to build her own
home because it is still detained by illegal occupants whom she had already
successfully battled with in the ejectment court. 31
In its Reply, petitioner adopts a different and bolder theory. It claims that by
virtue of the vesture of eminent domain powers in it by its charter, it is thereby
not bound by the requirements of Sections 9 and 10 of R.A. No. 7279. It also
asserts its right to immediately enter the subject property because not only is its
complaint supposedly sufficient in form and substance but also because it has
already deposited P1M cash with the bank in trust for respondent. It reiterates
that the dismissal of its complaint constitutes a denial of due process because all
the issues propounded by respondent, initially in her motion to dismiss and all
the way in the present appeal, must be resolved in a full-blown trial. CIDcHA
Prefatorily, the concept of socialized housing, whereby housing units are

distributed and/or sold to qualified beneficiaries on much easier terms, has
already been included in the expanded definition of "public use or purpose" in
the context of the State's exercise of the power of eminent domain. Said the Court
in Sumulong v. Guerrero, 32 citing the earlier case of Heirs of Juancho Ardona v.
Reyes: 33
The public use requirement for a valid exercise of the power

of eminent domain is a flexible and evolving concept
influenced by changing conditions.
The taking to be valid must be for public use. There was a

time where it was felt that a literal meaning should be
attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of
streets or parks. Otherwise, expropriation is not allowable. It
is not anymore. As long as the purpose of the taking is
public, then the power of eminent domain comes into play. .
. . The constitution in at least two cases, to remove any
doubt, determines what is public use. One is the
expropriation of lands to be divided into small lots for resale
at cost to individuals. The other is in the transfer, through
the exercise of this power, of utilities and other enterprise to
the government. It is accurate to state then that at present
whatever may be beneficially employed for the general
welfare satisfies the requirement of public use.
The term "public use" has acquired a more comprehensive

coverage. To the literal import of the term signifying strict
use or employment by the public has been added the
broader notion of indirect public benefit or advantage. . . .
The restrictive view of public use may be appropriate for a

nation which circumscribes the scope of government
activities and public concerns and which possesses big and
correctly located public lands that obviate the need to take
private property for public purposes. Neither circumstance
applies to the Philippines. We have never been a laissez-faire
state. And the necessities which impel the exertion of
sovereign power are all too often found in areas of scarce
public land or limited government resources.
Specifically, urban renewal or development and the

construction of low-cost housing are recognized as a public
purpose, not only because of the expanded concept of
public use but also because of specific provisions in the
Constitution. . . . The 1987 Constitution [provides]:
The State shall promote a just and dynamic social

order that will ensure the prosperity and
independence of the nation and free the people
from poverty through policies that provide
adequate social services, promote full employment,
a rising standard of living and an improved quality
of life for all. (Article II, Section 9)
The State shall, by law and for the common good,

undertake, in cooperation with the private sector, a
continuing program for urban land reform and
housing which will make available at affordable
cost decent housing and basic services to
underprivileged and homeless citizens in urban
centers and resettlement areas. . . . In the
implementation of such program the State shall
respect the rights of small property owners. (Article
XIII, Section 9)
Housing is a basic human need. Shortage in housing is a
matter of state concern since it directly and significantly
affects public health, safety, the environment and in sum, the
general welfare. The public character of housing measures
does not change because units in housing projects cannot be
occupied by all but only by those who satisfy prescribed
qualifications. A beginning has to be made, for it is not
possible to provide housing for all who need it, all at once.
Population growth, the migration to urban areas and the

mushrooming of crowded makeshift dwellings is a
worldwide development particularly in developing
countries. So basic and urgent are housing problems that the
United Nations General Assembly proclaimed 1987 as the
"International Year of Shelter for the Homeless" "to focus the
attention of the international community on those
problems." The General Assembly is seriously concerned
that, despite the efforts of Governments at the national and
local levels and of international organizations, the driving
conditions of the majority of the people in slums and
squatter areas and rural settlements, especially in
developing countries, continue to deteriorate in both relative
and absolute terms." [G.A. Res. 37/221, Yearbook of the
United Nations 1982, Vol. 36, p. 1043-4] ECDAcS
In light of the foregoing, the Court is satisfied that

"socialized housing" falls within the confines of "public
use." 34
Congress passed R.A. No. 7279, 35 to provide a comprehensive and continuing

urban development and housing program as well as access to land and housing
by the underprivileged and homeless citizens; uplift the conditions of the
underprivileged and homeless citizens in urban areas by making available
decent housing at affordable cost; optimize the use and productivity of land and
urban resources; reduce urban dysfunctions which affect public health, safety
and ecology; and improve the capability of local governments in undertaking
urban development and housing programs and projects, among others. 36
Accordingly, all city and municipal governments are mandated to inventory all
lands and improvements within their respective locality and identify lands
which may be utilized for socialized housing and as resettlement sites for
acquisition and disposition to qualified beneficiaries. 37 Section 10 thereof
authorizes local government units to exercise the power of eminent domain to
carry out the objectives of the law, but subject to the conditions stated therein
and in Section 9. 38
It is precisely this aspect of the law which constitutes the core of the present
controversy, yet this case presents a serious procedural facet overlooked by
both the trial court and the Court of Appeals which needs foremost attention
ahead of the issues propounded by the parties.
Expropriation is a two-pronged proceeding: first, the determination of the

authority of the plaintiff to exercise the power and the propriety of its exercise in
the context of the facts which terminates in an order of dismissal or an order of
condemnation affirming the plaintiff's lawful right to take the property for the
public use or purpose described in the complaint and second, the determination
by the court of the just compensation for the property sought to be expropriated.
39
Expropriation proceedings are governed by Rule 67 of the Rules of Court. Under

the Rules of Court of 1940 and 1964, where the defendant in an expropriation
case conceded to the plaintiff's right to expropriate (or where the trial court
affirms the existence of such right), the court-appointed commissioners would
then proceed to determine the just compensation to be paid. 40 Otherwise, where
the defendant had objections to and defenses against the expropriation of his
property, he was required to file a single motion to dismiss containing all such
objections and defenses. 41
This motion to dismiss was not covered by Rule 15 which governed ordinary
motions, and was then the required responsive pleading, taking the place of an
answer, where the plaintiff's right to expropriate the defendant's property could
be put in issue. 42 Any relevant and material fact could be raised as a defense,
such as that which would tend to show that the exercise of the power to
condemn was unauthorized, or that there was cause for not taking defendant's
property for the purpose alleged in the petition, or that the purpose for the
taking was not public in character. With that, the hearing of the motion and the
presentation of evidence would follow. The rule is based on fundamental
constitutional provisions affecting the exercise of the power of eminent domain,
such as those that seek to protect the individual property owner from the
aggressions of the government. 43 However, the rule, which was derived from
the practice of most American states, proved indeed to be a source of confusion
because it likewise permitted the filing of another motion to dismiss, such as that
referred to in Rule 16, where the defendant could raise, in addition, the
preliminary objections authorized under it. 44
The Supreme Court, in its en banc Resolution in Bar Matter No. 803 dated April 8,
1997, has provided that the revisions made in the Rules of Court were to take
effect on July 1, 1997. Thus, with said amendments, the present state of Rule 67
dispenses with the filing of an extraordinary motion to dismiss such as that
required before in response to a complaint for expropriation. The present rule
requires the filing of an answer as responsive pleading to the complaint. Section
3 thereof provides:
Sec. 3. Defenses and objections. If a defendant has no

objection or defense to the action or the taking of his
property, he may and serve a notice or appearance and a
manifestation to that effect, specifically designating or
identifying the property in which he claims to be interested,
within the time stated in the summons. Thereafter, he shall
be entitled to notice of all proceedings affecting the same.
If a defendant has any objection to the filing of or the

allegations in the complaint, or any objection or defense to
the taking of his property, he shall serve his answer within
the time stated in the summons. The answer shall
specifically designate or identify the property in which he
claims to have an interest, state the nature and extent of the
interest claimed, and adduce all his objections and
defenses to the taking of his property. No counterclaim,
cross-claim or third-party complaint shall be alleged or
allowed in the answer or any subsequent pleading. HcDATC
A defendant waives all defenses and objections not so

alleged but the court, in the interest of justice, may permit
amendments to the answer to be made not later than ten (10)
days from the filing thereof. However, at the trial of the
issue of just compensation, whether or not a defendant has
previously appeared or answered, he may present evidence
as to the amount of the compensation to be paid for his
property, and he may share in the distribution of the award.
45
The defendant in an expropriation case who has objections to the taking of his
property is now required to file an answer and in it raise all his available
defenses against the allegations in the complaint for eminent domain. While the
answer is bound by the omnibus motion rule under Section 8, 46 Rule 15, much
leeway is nevertheless afforded to the defendant because amendments may be
made in the answer within 10 days from its filing. Also, failure to file the answer
does not produce all the disastrous consequences of default in ordinary civil
actions, because the defendant may still present evidence on just compensation.
47
At the inception of the case at bar with the filing of the complaint on November
16, 2000, the amended provisions of Rule 67 have already been long in force.
Borre v. Court of Appeals 48 teaches that statutes which regulate procedure in the
courts apply to actions pending and undetermined at the time those statutes
were passed. And in Laguio v. Gamet, 49 it is said that new court rules apply to
proceedings which take place after the date of their effectivity.
In the case of Robern Development Corporation v. Quitain, 50 a similar motion to

dismiss was filed by the private property owner, petitioner therein, in an
expropriation case filed by the National Power Corporation (NPC), alleging
certain jurisdictional defects as well as issues on the impropriety of the
expropriation measure being imposed on the property. The trial court in that
case denied the motion inasmuch as the issues raised therein should be dealt
with during the trial proper. On petition for certiorari, the Court of Appeals
affirmed the trial court's denial of the motion to dismiss. On appeal, the Supreme
Court affirmed the Court of Appeals, but declared that under the amended
provisions of Section 3, Rule 67, which were already in force at about the time the
motion to dismiss had been submitted for resolution, all objections and defenses
that could be availed of to defeat the expropriator's exercise of the power of
eminent domain must be contained in an answer and not in a motion to dismiss
because these matters require the presentation of evidence. Accordingly, while
the Court in that case sustained the setting aside of the motion to dismiss, it
nevertheless characterized the order of dismissal as a nullity. Hence, it referred
the case back to the trial court and required the NPC to submit its answer to the
complaint within 10 days from the finality of the decision.
Thus, the trial court in this case should have denied respondent's motion to
dismiss and required her to submit in its stead an answer within the
reglementary period. This, because whether petitioner has observed the
provisions of Sections 9 and 10 of R.A. No. 7279 before resorting to
expropriation, and whether respondent owns other properties than the one
sought to be expropriated, and whether she is actually a small property owner
beyond the reach of petitioner's eminent domain powers, are indeed issues in the
nature of affirmative defenses which require the presentation of evidence aliunde.
51 Besides, Section 1, Rule 16 of the Rules of Court does not consider these
matters grounds for a motion to dismiss, and an action can be dismissed only on
the grounds authorized by this provision. 52
The Court declared in Robern Development Corporation, thus:
Accordingly, Rule 16, Section 1 of the Rules of Court, does

not consider as grounds for a motion to dismiss the
allotment of the disputed land for another public purpose or
the petition for a mere easement of right-of-way in the
complaint for expropriation. The grounds for dismissal are
exclusive to those specifically mentioned in Section 1, Rule
16 of the Rules of Court, and an action can be dismissed only
on a ground authorized by this provision.
To be exact, the issues raised by the petitioner are

affirmative defenses that should be alleged in an answer,
since they require presentation of evidence aliunde. Section 3
of Rule 67 provides that "if a defendant has any objection to
the filing of or the allegations in the complaint, or any
objection or defense to the taking of his property," he should
include them in his answer. Naturally, these issues will have
to be fully ventilated in a full-blown trial and hearing. It
would be precipitate to dismiss the Complaint on such
grounds as claimed by the petitioner. Dismissal of an action
upon a motion to dismiss constitutes a denial of due process
if, from a consideration of the pleadings, it appears that
there are issues that cannot be decided without a trial of the
case on the merits.
Inasmuch as the 1997 Rules had just taken effect when this
case arose, we believe that in the interest of substantial
justice, the petitioner should be given an opportunity to file
its answer to the Complaint for expropriation in accordance
with Section 3, Rule 67 of the 1997 Rules of Civil Procedure. .
. . 53
WHEREFORE, the Petition is hereby GRANTED. The Order of the Regional

Trial Court of Manila, Branch 24 in Civil Case No. 00-99264 dated June 13, 2001,
as well as the April 29, 2005 Decision of the Court of Appeals in CA-G.R. CV No.
71894 affirming said order, and the August 12, 2005 Resolution therein which
denied reconsideration, are hereby SET ASIDE. The case is hereby REMANDED
to the trial court for further proceedings. Respondent is DIRECTED to file her
Answer to the complaint within ten (10) days from the finality of this Decision.
||| (City of Manila v. Melba Tan Te, G.R. No. 169263, September 21, 2011)
SECOND DIVISION
[G.R. No. 191251. September 7, 2011.]
EDNA LOPEZ DELICANO, EDUARDO ALBERTO

LOPEZ, MARIO DIEZ CRUZ, HOWARD E. MENESES,
and CORAZON E. MENESES, petitioners, vs. PECHATEN
CORPORATION, respondent.
RESOLUTION
CARPIO, J p:
The Case
This petition for review 1 assails the 13 November 2009 Amended Decision 2 of
the Court of Appeals in CA-G.R. SP No. 105360. The Court of Appeals set aside
its earlier Decision 3 dated 18 February 2009, which affirmed the 27 August 2008
Order of the Regional Trial Court (RTC), Branch 37, Manila. EcHIDT
The Facts
Respondent Pechaten Corporation (respondent) is the registered owner of a
parcel of land (property) located at 852 Vicente Cruz Street, Sampaloc, Manila,
and covered by Transfer Certificate of Title No. 95052 (TCT No. 95052).
In June 1993, respondent and Teodoro Alberto, Honorata Salmorin, Aquilina

Hizon, and Dalmacia Meneses entered into a two-year lease contract 4 involving
the property. The parties agreed that the monthly rental for the first year 5 would
be P864, to be increased to P1,037 per month during the second year 6 of the
contract. Subsequently, the lessees executed a waiver of their rights or interest in
the lease contract in favor of Virgilio Meneses, the son of Dalmacia Meneses.
When the lease contract expired on 30 June 1995, respondent offered Virgilio
Meneses to renew the lease agreement or purchase the property. Virgilio
Meneses ignored the offer and failed to pay monthly rentals for the property
starting July 1995.
On 6 October 1999, respondent sent a demand letter to Virgilio Meneses to vacate

the property and pay the accrued rent of P141,032 or reasonable compensation
for the use of the property. When Virgilio Meneses refused, respondent filed
with the Metropolitan Trial Court (MeTC) a case for unlawful detainer with
damages against Virgilio Meneses.
In his defense, Virgilio Meneses claimed that the MeTC has no jurisdiction over
the ejectment suit since it was filed more than four (4) years from the time the
contract expired on 30 June 1995. Virgilio Meneses argued that the remedy of
respondent should have been accion publiciana. Furthermore, Virgilio Meneses
asserted that he was not a party to the lease contract, and thus, respondent has
no cause of action against him.
On 12 February 2002, the Manila MeTC-Branch 2 rendered a judgment 7 in favor

of respondent, the dispositive portion of which reads:
Wherefore, judgment is rendered ordering defendant
[Virgilio Meneses], his heirs, assigns, successors-in-interest
and/or any other person claiming right under him:
1. to vacate the premises located at 852 Vicente Cruz St.,

Sampaloc, Manila;
2. to pay the plaintiff corporation the amount of P1,200.00

per month from July 1995 until the time that
defendant vacate the premises as reasonable
compensation for the use and occupation of the
premises;
3. to pay the plaintiff the amount of P8,000.00 as attorney's

fees; and
4. to pay the costs.
SO ORDERED. 8
On appeal, the Manila RTC-Branch 37 affirmed the MeTC judgment. In a

Decision 9 dated 30 May 2008, the Manila RTC-Branch 37 agreed with the MeTC
that the one-year period should be reckoned from the time the last demand was
made. In this case, the last demand to vacate the property was made on 6
October 1999. 10 The complaint for unlawful detainer was filed on 25 November
1999, which is within the one-year reglementary period.
Meanwhile, the City of Manila filed on 12 August 2004 a complaint for

expropriation against respondent involving the property. The expropriation case,
docketed as Civil Case No. 04-110675, was raffled to Manila RTC-Branch 11,
which issued a Writ of Possession in favor of the City of Manila. On 27 March
2008, the Manila RTC-Branch 11 issued an Order of Expropriation in favor of the
City of Manila.
Upon the death of Virgilio Meneses, he was substituted by his heirs, who are the
petitioners in this case. In view of the Orders of the Manila RTC-Branch 11
involving the property in the expropriation case, petitioners filed a motion for
reconsideration in the Manila RTC-Branch 37 of its Decision dated 30 May 2008.
Petitioners moved to dismiss the unlawful detainer case, alleging that the case
was rendered moot by virtue of the Writ of Possession issued by the Manila
RTC-Branch 11 in the expropriation case involving the property. Furthermore,
petitioners stated that the City of Manila had already turned over the property to
them. Respondent opposed the motion, alleging that the Order dated 27 March
2008 of the Manila RTC-Branch 11, declaring that the City of Manila has the
lawful right to take the property for public use, is the subject of appeal before the
Court of Appeals. DTEAHI
On 27 August 2008, the Manila RTC-Branch 37 issued an Order partially
reconsidering its Decision dated 30 May 2008. The dispositive portion of the
Order reads:
WHEREFORE, the Decision dated May 30, 2008 is partially

reconsidered. The Decision dated February 12, 2002 issued
by the court a quo is MODIFIED as follows:
1. the order requiring appellant to vacate the premises

located at 852 Vicente Cruz St., Sampaloc, Manila,
is Set Aside for being moot and academic;
2. appellant to pay the appellee the amount of P1,200.00 per

month from July 1995 up to February 9, 2005;
3. appellant to pay appellee the amount of P8,000.00 as

attorney's fees; and
4. cost of suit.
SO ORDERED. 11
Respondent filed a petition for review with the Court of Appeals, seeking to
annul the Order dated 27 August 2008 of the Manila RTC-Branch 37. In its
Decision dated 18 February 2009, the Court of Appeals dismissed respondent's
petition and affirmed the 27 August 2008 Order of the Manila RTC-Branch 37.
Respondent filed a motion for reconsideration and a supplemental motion for

reconsideration. In its supplemental motion for reconsideration, respondent
attached a copy of the Decision 12 dated 24 March 2009 of the Court of Appeals-
Special Sixth Division in the related expropriation case entitled City of Manila v.
Pechaten Corporation. The Court of Appeals-Special Sixth Division reversed the
Order dated 27 March 2008 of the Manila RTC-Branch 11 and dismissed the
complaint for eminent domain filed by the City of Manila. Respondent alleged
that the decision of the Court of Appeals-Special Sixth Division in the
expropriation case, which became final and executory as of 14 April 2009, 13 is a
supervening event which warrants the reconsideration of the Decision dated 18
February 2009 of the Court of Appeals in this unlawful detainer case.
The Ruling of the Court of Appeals

On 13 November 2009, the Court of Appeals promulgated its Amended Decision
in favor of respondent. The Court of Appeals agreed with respondent that the
dismissal of the expropriation case is a supervening event which warrants the
reconsideration of its Decision dated 18 February 2009. The dispositive portion of
the Amended Decision reads:
WHEREFORE, premises considered, the instant Motion for
Reconsideration and Supplemental Motion for
Reconsideration are hereby GRANTED. Our Decision dated
18 February 2009 is hereby RECONSIDERED and SET
ASIDE. Accordingly, the writ of possession issued by Branch
11 of Manila RTC in favor of the City of Manila over the
subject property is hereby DISSOLVED. 14
The Court of Appeals explained:
This court is justified in suspending or nullifying the writ of

execution issued by Manila RTC Branch 11 granting
possession of the subject property to the City of Manila. An
order may be suspended or nullified when a supervening
event, occurring subsequent to the said order, bring about a
material change in the situation of the parties. In this case,
the supervening event is the finality of the decision rendered
by the Special Sixth Division on the appeal from the Order of
the Manila RTC Branch 11 dated 27 March 2008. The said
Special Sixth Division Decision reversed and set aside the
order of the RTC and accordingly dismissed the complaint
for eminent domain filed by the City of Manila. This
decision became final and executory as of 14 April 2009.
xxx xxx xxx
A writ of possession is an order whereby the sheriff is

commanded to place a person in possession of real or
personal property. The decision rendered in the
expropriation case by the Special Sixth Division is a
judgment on the merits a consequence of the finality of
the said judgment is the revocation of the writ of possession.
The order [issuing the writ of possession] placed the City of
Manila, which in turn granted the same to the Respondents
[petitioners], in possession prior to the decision of the
Special Sixth Division. Notwithstanding the writ of
possession, title to the said property is still in the name of the
Petitioner. The possession of the property must revert back
to legal owner of the said property, in this case to Pechaten
Corporation, because the expropriation case was also
rendered final and executory. 15 EHSIcT
Hence, this petition.
The Issue
The issue in this case is whether petitioners are still entitled to retain possession
over the subject property despite the dismissal of the expropriation case.
The Ruling of the Court

We find the petition without merit.
Section 11, Rule 67 (Expropriation) of the Rules of Civil Procedure provides:
Sec. 11. Entry not delayed by appeal; effect of reversal. The

right of the plaintiff to enter upon the property of the
defendant and appropriate the same to public use or
purpose shall not be delayed by an appeal from judgment.
But if the appellate court determines that plaintiff has no
right of expropriation, judgment shall be rendered
ordering the Regional Trial Court to forthwith enforce the
restoration to the defendant of the possession of the
property, and to determine the damages which the
defendant sustained and may recover by reason of the
possession taken by the plaintiff. (Emphasis supplied)
In this case, the Court of Appeals-Special Sixth Division, in the related

expropriation case entitled City of Manila v. Pechaten Corporation, held that the
expropriation of the property was not for public use. In its Decision dated 24
March 2009, the Court of Appeals-Special Sixth Division found that the
expropriation of the property pursuant to City Ordinance No. 7984 was intended
for the sole benefit of the family of Virgilio Meneses. 16 Thus, the Court of
Appeals-Special Sixth Division dismissed the complaint for eminent domain. The
City of Manila did not appeal the Decision, which became final and executory on
14 April 2009.
Considering that the Decision of the Court of Appeals-Special Sixth Division

reversing the judgment of expropriation already became final and executory, it is
only proper that respondent should be restored to its rightful possession of the
property in accordance with Section 11, Rule 67 of the Rules of Civil Procedure.
WHEREFORE, we DENY the petition. We AFFIRM the 13 November 2009

Amended Decision of the Court of Appeals in CA-G.R. SP No. 105360. The
Decision dated 30 May 2008 of the Manila Regional Trial Court, Branch 37, in
Civil Case No. 04-108960, affirming the 12 February 2002 Judgment of the Manila
Metropolitan Trial Court, Branch 2, is REINSTATED.
SO ORDERED.
||| (Delicano v. Pechaten Corp., G.R. No. 191251, September 07, 2011)
FIRST DIVISION
[G.R. No. 193936. December 11, 2013.]
NATIONAL POWER CORPORATION, petitioner, vs.

YCLA SUGAR DEVELOPMENT CORPORATION,
respondent.
DECISION
REYES, J p:
Before this Court is a petition for review on certiorari 1 under Rule 45 of the Rules
of Court seeking to annul and set aside the Decision 2 dated September 23, 2010
of the Court of Appeals (CA) in CA-G.R. CV No. 86508, which affirmed with
modification the Decision 3 dated May 12, 2005 of the Regional Trial Court (RTC)
of Calapan City, Oriental Mindoro, Branch 40, in Civil Case No. R-4600.
The Facts
Petitioner National Power Corporation (NPC) is a government owned and
controlled corporation created for the purpose of undertaking the development
of hydroelectric power throughout the Philippines. NPC is thus authorized to
exercise the power of eminent domain to carry out the said purpose. 4
Respondent YCLA Sugar Development Corporation (YCLA) is the registered

owner of three parcels of land situated in Puerto Galera, Oriental Mindoro,
covered by Transfer Certificates of Title Nos. T-5209, T-21280 and T-78583.
In order to complete its 69 KV Calapan-Mamburao Island Grid Project in Puerto

Galera, Oriental Mindoro, NPC had to construct transmission lines that would
traverse several private properties, including the said parcels of land owned by
YCLA. SDHITE
Accordingly, on December 2, 1997, NPC filed a Complaint 5 for expropriation

with the RTC against YCLA and several other individuals. The NPC sought the
expropriation of a portion of the parcels of land owned by the said defendants
for the acquisition of an easement of right-of-way over areas that would be
affected by the construction of transmission lines. The portion of YCLA's
properties that would be affected by the construction of NPC's transmission lines
has an aggregate area of 5,846 square meters.
YCLA filed its Answer 6 dated July 9, 1998, alleging that the Complaint should
be dismissed outright due to NPC's failure to allege the public use for the
intended expropriation of its properties.
On April 30, 1999, the parties moved, inter alia, for the constitution of a Board of
Commissioners to be appointed by the RTC to determine the reasonable amount
of just compensation to be paid by the NPC. Thus, on even date, the RTC issued
an order terminating the pre-trial conference and directing the constitution of a
Board of Commissioners, which would submit a report and recommendation as
to the reasonable amount of just compensation for the properties sought to be
expropriated.
Meanwhile, on June 4, 1999, the RTC, acting on NPC's urgent ex-parte motion,
issued a writ of possession placing NPC in possession of the properties sought to
be expropriated.
On May 2, 2001, the Board of Commissioners submitted its Report, 7 which fixed
the amount of just compensation of the subject properties at P500.00 per sq.m.
YCLA objected to the amount recommended by the Board of Commissioners,
claiming that the amount of just compensation should be fixed at P900.00 per
sq.m. considering the improvements in their properties.
On October 19, 2001, the RTC issued an Order directing YCLA to submit its
written manifestation, together with supporting documents, on its position on
the proper valuation of the subject properties. NPC was likewise given 15 days to
comment thereon. Trial on the determination of the reasonable amount of just
compensation ensued thereafter. caAICE
Consequently, YCLA filed a motion asking the RTC to direct the Board of
Commissioners to conduct an ocular inspection over the subject properties and,
thereafter, amend/revise the Board of Commissioner's Report dated May 2, 2001.
YCLA's motion was granted by the RTC on July 25, 2003.
Meanwhile, on November 25, 2002, the RTC rendered a Partial Decision as

regards the amount of just compensation that would be paid by the NPC to the
other defendants.
On September 15, 2003, the Board of Commissioners submitted its second

Report, 8 which fixed the just compensation of the subject properties at P1,000.00
per sq.m. The Board of Commissioners' Report dated September 15, 2003, in part,
reads:
The undersigned secured from the office of the Provincial

Assessor the actual appraised value per square meter . . . of
the Agricultural Land subject matter of the case which is
[P11.50] per square meter[.] [H]owever, the prevailing
market value is Five Hundred Pesos ([P]500.00) to One
Thousand Five Hundred Pesos ([P]1,500.00) per square
meters . . ., per actual sale and opinion value of reliable
persons . . . .
In view thereof, the undersigned is submitting this report to

the Honorable Court that the amount of One Thousand
Pesos ([P]1,000.00) per square meter should be the basis in
the computation of the price per square meter of the land
subject matter of the instant case, justified by its location on
[a] strategic place and the consequential damages to the
whole properties of the defendants because the plaintiff
occupied the front portion along the highway. 9
On May 12, 2005, the RTC rendered a Decision, 10 which adopted the report and
recommendation of the Board of Commissioners, viz.:
ACCORDINGLY, judgment is hereby rendered directing the

plaintiff National Power Corporation to pay herein
defendant YCLA the total amount of [P]5,786,000.00
representing the value of the expropriated lands owned by
the said defendant and its 26 molave trees which were cut
down to make way for the plaintiff['s] project, with legal
interest from the time the plaintiff had actually took
possession of the subject properties on 19 April 1999 until
full payment has been made.
SO ORDERED. 11
The RTC pointed out that the Board of Commissioner's Report dated May 2,
2001, which recommended that the amount of just compensation be fixed at
P500.00 per sq.m., was arrived at without conducting an ocular inspection of the
subject properties. That, upon YCLA's request, the Board of Commissioners
subsequently conducted an ocular inspection of the subject properties, which
prompted them to revise their earlier recommendation. ITCHSa
Unperturbed, NPC appealed the RTC Decision dated May 12, 2005 to the CA,
alleging that the RTC erred in relying on the recommendation of the Board of
Commissioners as regards the amount of just compensation. NPC claimed that
the amount of P1,000.00 per sq.m. recommended by the Board of Commissioners
as the reasonable amount of just compensation, which was adopted by the RTC,
is too excessive considering that the subject properties were barren and
undeveloped agricultural lands at the time it instituted the action for
expropriation.
On September 23, 2010, the CA rendered the Decision 12 which affirmed with
modification the RTC Decision dated May 12, 2005, thus:
WHEREFORE, the assailed Decision is AFFIRMED with the

MODIFICATION only in so far as the value of just
compensation for the property involved is concerned.
Resultantly, the herein appellant is ordered to pay YCLA
Sugar Development Corporation the award of [P]900.00 per
square meter, as and by way of just compensation for the
expropriated property. Costs against the herein appellant.
SO ORDERED. 13
The CA held that the RTC's determination of the amount of just compensation
was reasonable notwithstanding that it was merely based on the Report
submitted by the Board of Commissioners. The RTC pointed out that there was
no showing that the said Report was tainted with irregularity, fraud or bias.
Nevertheless, the CA modified the award rendered by the RTC, by fixing the
amount of just compensation to P900.00 per sq.m. instead of P1,000.00 per sq.m.,
since YCLA only sought an award of P900.00 per sq.m. as just compensation for
the subject properties in the proceedings before the RTC.
The Issue
Essentially, the issue presented to the Court for resolution is whether the RTC
and the CA had sufficient basis in arriving at the questioned amount of just
compensation of the subject properties.
The NPC posits that the Board of Commissioners' Report dated September 15,
2003 lacks factual basis; that both the RTC and the CA erred in giving credence to
the Report dated September 15, 2003 as to the recommended amount of just
compensation for the subject properties. NPC maintains that the amount of
P900.00 per sq.m. that was fixed by the CA as just compensation is excessive
considering that the subject properties were barren and undeveloped agricultural
lands at the time it filed the complaint for expropriation. Thus, NPC prayed that
the Court fix the amount of just compensation for the subject properties at
P500.00 per sq.m. pursuant to the Board of Commissioners' Report dated May 2,
2001.
On the other hand, YCLA contends that the RTC and the CA aptly relied on the
Board of Commissioners' Report dated September 15, 2003, pointing out that the
Board of Commissioners was in the best position to determine the amount of just
compensation considering that its members undertook intensive ocular
inspection of the subject properties. THacES
The Court's Ruling

In expropriation proceedings, just compensation is defined as the full and fair

equivalent of the property taken from its owner by the expropriator. The
measure is not the taker's gain, but the owner's loss. The word "just" is used to
intensify the meaning of the word "compensation" and to convey thereby the
idea that the equivalent to be rendered for the property to be taken shall be real,
substantial, full and ample. The constitutional limitation of "just compensation" is
considered to be a sum equivalent to the market value of the property, broadly
defined as the price fixed by the seller in open market in the usual and ordinary
course of legal action and competition; or the fair value of the property; as
between one who receives and one who desires to sell it, fixed at the time of the
actual taking by the government. 14
It is settled that the amount of just compensation is to be ascertained as of the

time of the taking, which usually coincides with the commencement of the
expropriation proceedings. Where the institution of the action precedes entry
into the property, the amount of just compensation is to be ascertained as of the
time of the filing of the complaint. 15
In this case, in arriving at the amount of just compensation, both the RTC and the
CA relied heavily on the Board of Commissioners' Report dated September 15,
2003, which, in turn, was arrived at after conducting an ocular inspection of the
subject properties on August 27, 2003. However, the Board of Commissioners'
recommendation as to the amount of just compensation was based on the
prevailing market value of the subject properties in 2003. What escaped the
attention of the lower courts is that the prevailing market value of the subject
properties in 2003 cannot be used to determine the amount of just compensation
considering that the Complaint for expropriation was filed by NPC on December
2, 1997.
Further, the Court notes that the Board of Commissioners, in its Report dated
September 15, 2003, merely alleged that its members arrived at the amount of
P1,000.00 per sq.m. as just compensation for the subject properties based on
actual sales, presumably of surrounding parcels of land, and on the opinion of
"reliable persons" that were interviewed. However, the Report dated September
15, 2003 is not supported by any corroborative documents such as sworn
declarations of the "reliable persons" that were supposedly interviewed.
The Court has consistently ruled that just compensation cannot be arrived at
arbitrarily; several factors must be considered such as, but not limited to,
acquisition cost, current market value of like properties, tax value of the
condemned property, its size, shape, and location. But before these factors can be
considered and given weight, the same must be supported by documentary
evidence. 16 The amount of just compensation could only be attained by using
reliable and actual data as bases for fixing the value of the condemned property.
A commissioners' report of land prices which is not based on any documentary
evidence is manifestly hearsay and should be disregarded by the court. 17
Under the Rules of Court, any evidence whether oral or documentary is

hearsay if its probative value is not based on the personal knowledge of the
witness, but on that of some other person who is not on the witness stand. 18
A commissioners' report of land prices is considered as evidence in the

determination of the amount of just compensation due the land owner in
expropriation cases. The recommended amount of just compensation contained
in the commissioners' report of land prices, in turn, is based on various factors
such as the fair market value of the property, the value of like properties. Thus, it
becomes imperative that the commissioners' report of land prices be supported
by pertinent documents, which impelled the commissioners to arrive at the
recommended amount for the condemned properties, to aid the court in its
determination of the amount of just compensation. Otherwise, the
commissioner's report becomes hearsay and should thus not be considered by
the court. STaIHc
The trial court, in expropriation cases, may accept or reject, whether in whole or
in part, the report submitted by the Board of Commissioners, which is merely
advisory and recommendatory in character. It may also recommit the report or
set aside the same and appoint new commissioners. 19 In this case, the lower
courts gave full faith and credence to the Board of Commissioners' Report dated
September 15, 2003 notwithstanding that it was not supported by any
documentary evidence.
Considering that the legal basis for the determination of just compensation for
the subject properties is insufficient, the respective Decisions of the RTC and the
CA should be set aside.
Nevertheless, the Court cannot fix the amount of just compensation for the
subject properties at P500.00 per sq.m. pursuant to the Board of Commissioners'
Report dated May 2, 2001. The said Report suffers from the same infirmity as the
Report dated September 15, 2003 it is unsupported by any documentary
evidence and its recommendation as regards the amount of just compensation
are based on the prevailing market value of the subject properties in 2001.
WHEREFORE, in consideration of the foregoing disquisitions, the instant

petition is PARTIALLY GRANTED. The Decision dated September 23, 2010 of
the Court of Appeals in CA-G.R. CV No. 86508 and the Decision dated May 12,
2005 of the Regional Trial Court of Calapan City, Oriental Mindoro, Branch 40, in
Civil Case No. R-4600 are hereby SET ASIDE. This case is remanded to the trial
court for the proper determination of just compensation, in conformity with this
Decision.
SO ORDERED.
Sereno, C.J., Leonardo-de Castro, Bersamin and Villarama, Jr., JJ., concur.
||| (NPC v. YCLA Sugar Development Corp., G.R. No. 193936, December 11, 2013)
SECOND DIVISION
[G.R. No. 136349. January 23, 2006.]
LOURDES DE LA PAZ MASIKIP, petitioner, vs. THE CITY

OF PASIG, HON. MARIETTA A. LEGASPI, in her
capacity as Presiding Judge of the Regional Trial Court of
Pasig City, Branch 165 and THE COURT OF APPEALS,
respondents.
Carpio Villaraza & Cruz for petitioner.
Socrates A. Verayo for private respondent.
SYLLABUS
1.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EXPROPRIATION; DEFENSES

AND OBJECTIONS; MOTION TO DISMISS CONTEMPLATED IN RULE 67,
SECTION 3 OF THE RULES OF CIVIL PROCEDURE CLEARLY CONSTITUTES
THE RESPONSIVE PLEADING WHICH TAKES THE PLACE OF AN ANSWER
TO THE COMPLAINT FOR EXPROPRIATION. The motion to dismiss
contemplated in the above Rule clearly constitutes the responsive pleading
which takes the place of an answer to the complaint for expropriation. Such
motion is the pleading that puts in issue the right of the plaintiff to expropriate
the defendant's property for the use specified in the complaint. All that the law
requires is that a copy of the said motion be served on plaintiff's attorney of
record. It is the court that at its convenience will set the case for trial after the
filing of the said pleading. The Court of Appeals therefore erred in holding that
the motion to dismiss filed by petitioner hypothetically admitted the truth of the
facts alleged in the complaint, "specifically that there is a genuine necessity to
expropriate petitioner's property for public use." Pursuant to the above Rule, the
motion is a responsive pleading joining the issues. What the trial court should
have done was to set the case for the reception of evidence to determine whether
there is indeed a genuine necessity for the taking of the property, instead of
summarily making a finding that the taking is for public use and appointing
commissioners to fix just compensation. This is especially so considering that the
purpose of the expropriation was squarely challenged and put in issue by
petitioner in her motion to dismiss. Significantly, the above Rule allowing a
defendant in an expropriation case to file a motion to dismiss in lieu of an answer
was amended by the 1997 Rules of Civil Procedure, which took effect on July 1,
1997. Section 3, Rule 67 now expressly mandates that any objection or defense to
the taking of the property of a defendant must be set forth in an answer. The fact
that the Court of Appeals rendered its Decision in CA-G.R. SP No. 41860 on
October 31, after the 1997 Rules of Civil Procedure took effect, is of no moment. It
is only fair that the Rule at the time petitioner filed her motion to dismiss should
govern. The new provision cannot be applied retroactively to her prejudice.
2.CONSTITUTIONAL LAW; POWER OF EMINENT DOMAIN; CONSTRUED.

In the early case of US v. Toribio, this Court defined the power of eminent
domain as "the right of a government to take and appropriate private property to
public use, whenever the public exigency requires it, which can be done only on
condition of providing a reasonable compensation therefor." It has also been
described as the power of the State or its instrumentalities to take private
property for public use and is inseparable from sovereignty and inherent in
government. The power of eminent domain is lodged in the legislative branch of
the government. It delegates the exercise thereof to local government units, other
public entities and public utility corporations, subject only to Constitutional
limitations. Local governments have no inherent power of eminent domain and
may exercise it only when expressly authorized by statute. Section 19 of the Local
Government Code of 1991 (Republic Act No. 7160) prescribes the delegation by
Congress of the power of eminent domain to local government units and lays
down the parameters for its exercise. Judicial review of the exercise of eminent
domain is limited to the following areas of concern: (a) the adequacy of the
compensation, (b) the necessity of the taking, and (c) the public use character of
the purpose of the taking.
3.ID.; ID.; NO "GENUINE NECESSITY" TO JUSTIFY EXPROPRIATION IN

CASE AT BAR; PURPOSE OF EXPROPRIATION IS NOT CLEARLY AND
CATEGORICALLY PUBLIC. In this case, petitioner contends that respondent
City of Pasig failed to establish a genuine necessity which justifies the
condemnation of her property. While she does not dispute the intended public
purpose, nonetheless, she insists that there must be a genuine necessity for the
proposed use and purposes. According to petitioner, there is already an
established sports development and recreational activity center at Rainforest
Park in Pasig City, fully operational and being utilized by its residents, including
those from Barangay Caniogan. Respondent does not dispute this. Evidently,
there is no "genuine necessity" to justify the expropriation. The right to take
private property for public purposes necessarily originates from "the necessity"
and the taking must be limited to such necessity. In City of Manila v. Chinese
Community of Manila, we held that the very foundation of the right to exercise
eminent domain is a genuine necessity and that necessity must be of a public
character. Moreover, the ascertainment of the necessity must precede or
accompany and not follow, the taking of the land. In City of Manila v. Arellano
Law College, we ruled that "necessity within the rule that the particular property
to be expropriated must be necessary, does not mean an absolute but only a
reasonable or practical necessity, such as would combine the greatest benefit to
the public with the least inconvenience and expense to the condemning party
and the property owner consistent with such benefit." Applying this standard,
we hold that respondent City of Pasig has failed to establish that there is a
genuine necessity to expropriate petitioner's property. Our scrutiny of the
records shows that the Certification issued by the Caniogan Barangay Council
dated November 20, 1994, the basis for the passage of Ordinance No. 42 s. 1993
authorizing the expropriation, indicates that the intended beneficiary is the
Melendres Compound Homeowners Association, a private, non-profit
organization, not the residents of Caniogan. It can be gleaned that the members
of the said Association are desirous of having their own private playground and
recreational facility. Petitioner's lot is the nearest vacant space available. The
purpose is, therefore, not clearly and categorically public. The necessity has not
been shown, especially considering that there exists an alternative facility for
sports development and community recreation in the area, which is the
Rainforest Park, available to all residents of Pasig City, including those of
Caniogan.
4.ID.; ID.; THE RIGHT TO OWN AND POSSESS PROPERTY IS ONE OF THE
MOST CHERISHED RIGHTS OF MEN; UNLESS THE REQUISITE OF
GENUINE NECESSITY FOR THE EXPROPRIATION OF ONE'S PROPERTY IS
CLEARLY ESTABLISHED, IT SHALL BE THE DUTY OF THE COURTS TO
PROTECT THE RIGHTS OF INDIVIDUALS TO THEIR PRIVATE PROPERTY.
The right to own and possess property is one of the most cherished rights of
men. It is so fundamental that it has been written into organic law of every
nation where the rule of law prevails. Unless the requisite of genuine necessity
for the expropriation of one's property is clearly established, it shall be the duty
of the courts to protect the rights of individuals to their private property.
Important as the power of eminent domain may be, the inviolable sanctity which
the Constitution attaches to the property of the individual requires not only that
the purpose for the taking of private property be specified. The genuine necessity
for the taking, which must be of a public character, must also be shown to exist.
DECISION
SANDOVAL GUTIERREZ, J p:
Where the taking by the State of private property is done for the benefit of a
small community which seeks to have its own sports and recreational facility,
notwithstanding that there is such a recreational facility only a short distance
away, such taking cannot be considered to be for public use. Its expropriation is
not valid. In this case, the Court defines what constitutes a genuine necessity for
public use.
This petition for review on certiorari assails the Decision 1 of the Court of
Appeals dated October 31, 1997 in CA-G.R. SP No. 41860 affirming the Order 2 of
the Regional Trial Court, Branch 165, Pasig City, dated May 7, 1996 in S.C.A. No.
873. Likewise assailed is the Resolution 3 of the same court dated November 20,
1998 denying petitioner's Motion for Reconsideration.
The facts of the case are:
Petitioner Lourdes Dela Paz Masikip is the registered owner of a parcel of land
with an area of 4,521 square meters located at Pag-Asa, Caniogan, Pasig City,
Metro Manila.
In a letter dated January 6, 1994, the then Municipality of Pasig, now City of
Pasig, respondent, notified petitioner of its intention to expropriate a 1,500
square meter portion of her property to be used for the "sports development and
recreational activities" of the residents of Barangay Caniogan. This was pursuant
to Ordinance No. 42, Series of 1993 enacted by the then Sangguniang Bayan of
Pasig.
Again, on March 23, 1994, respondent wrote another letter to petitioner, but this
time the purpose was allegedly "in line with the program of the Municipal
Government to provide land opportunities to deserving poor sectors of our
community."
On May 2, 1994, petitioner sent a reply to respondent stating that the intended
expropriation of her property is unconstitutional, invalid, and oppressive, as the
area of her lot is neither sufficient nor suitable to "provide land opportunities to
deserving poor sectors of our community." DTcASE
In its letter of December 20, 1994, respondent reiterated that the purpose of the
expropriation of petitioner's property is "to provide sports and recreational
facilities to its poor residents."
Subsequently, on February 21, 1995, respondent filed with the trial court a
complaint for expropriation, docketed as SCA No. 873. Respondent prayed that
the trial court, after due notice and hearing, issue an order for the condemnation
of the property; that commissioners be appointed for the purpose of determining
the just compensation; and that judgment be rendered based on the report of the
commissioners.
On April 25, 1995, petitioner filed a Motion to Dismiss the complaint on the
following grounds:
PLAINTIFF HAS NO CAUSE OF ACTION FOR THE

EXERCISE OF THE POWER OF EMINENT DOMAIN,
CONSIDERING THAT:
(A)THERE IS NO GENUINE NECESSITY FOR

THE TAKING OF THE PROPERTY SOUGHT TO
BE EXPROPRIATED.
(B)PLAINTIFF HAS ARBITRARILY AND

CAPRICIOUSLY CHOSEN THE PROPERTY
SOUGHT TO BE EXPROPRIATED.
(C)EVEN ASSUMING ARGUENDO THAT

DEFENDANTS PROPERTY MAY BE
EXPROPRIATED BY PLAINTIFF, THE FAIR
MARKET VALUE OF THE PROPERTY TO BE
EXPROPRIATED FAR EXCEEDS SEVENTY-
EIGHT THOUSAND PESOS (P78,000.00)
II
PLAINTIFFS COMPLAINT IS DEFECTIVE IN FORM AND

SUBSTANCE, CONSIDERING THAT:
(A)PLAINTIFF FAILS TO ALLEGE WITH

CERTAINTY THE PURPOSE OF THE
EXPROPRIATION.
(B)PLAINTIFF HAS FAILED TO COMPLY WITH

THE PREREQUISITES LAID DOWN IN SECTION
34, RULE VI OF THE RULES AND
REGULATIONS IMPLEMENTING THE LOCAL
GOVERNMENT CODE; THUS, THE INSTANT
EXPROPRIATION PROCEEDING IS
PREMATURE.
III
THE GRANTING OF THE EXPROPRIATION WOULD

VIOLATE SECTION 261 (V) OF THE OMNIBUS ELECTION
CODE.
IV
PLAINTIFF CANNOT TAKE POSSESSION OF THE

SUBJECT PROPERTY BY MERELY DEPOSITING AN
AMOUNT EQUAL TO FIFTEEN PERCENT (15%) OF THE
VALUE OF THE PROPERTY BASED ON THE CURRENT
TAX DECLARATION OF THE SUBJECT PROPERTY. 4
On May 7, 1996, the trial court issued an Order denying the Motion to Dismiss, 5
on the ground that there is a genuine necessity to expropriate the property for
the sports and recreational activities of the residents of Pasig. As to the issue of
just compensation, the trial court held that the same is to be determined in
accordance with the Revised Rules of Court.
Petitioner filed a motion for reconsideration but it was denied by the trial court
in its Order of July 31, 1996. Forthwith, it appointed the City Assessor and City
Treasurer of Pasig City as commissioners to ascertain the just compensation. This
prompted petitioner to file with the Court of Appeals a special civil action for
certiorari, docketed as CA-G.R. SP No. 41860. On October 31, 1997, the Appellate
Court dismissed the petition for lack of merit. Petitioner's Motion for
Reconsideration was denied in a Resolution dated November 20, 1998.
Hence, this petition anchored on the following grounds:
THE QUESTIONED DECISION DATED 31 OCTOBER 1997

(ATTACHMENT "A") AND RESOLUTION DATED 20
NOVEMBER 1998 (ATTACHMENT "B") ARE CONTRARY
TO LAW, THE RULES OF COURT AND JURISPRUDENCE
CONSIDERING THAT:
A.THERE IS NO EVIDENCE TO PROVE THAT

THERE IS GENUINE NECESSITY FOR
THE TAKING OF THE PETITIONER'S
PROPERTY.
B.THERE IS NO EVIDENCE TO PROVE THAT

THE PUBLIC USE REQUIREMENT FOR
THE EXERCISE OF THE POWER OF
EMINENT DOMAIN HAS BEEN
COMPLIED WITH.
C.THERE IS NO EVIDENCE TO PROVE THAT

RESPONDENT CITY OF PASIG HAS
COMPLIED WITH ALL CONDITIONS
PRECEDENT FOR THE EXERCISE OF
THE POWER OF EMINENT DOMAIN.
THE COURT A QUO'S ORDER DATED 07 MAY 1996 AND

31 JULY 1996, WHICH WERE AFFIRMED BY THE COURT
OF APPEALS, EFFECTIVELY AMOUNT TO THE TAKING
OF PETITIONER'S PROPERTY WITHOUT DUE PROCESS
OF LAW:
II
THE COURT OF APPEALS GRAVELY ERRED IN

APPLYING OF RULE ON ACTIONABLE
DOCUMENTS TO THE DOCUMENTS
ATTACHED TO RESPONDENT CITY OF PASIG'S
COMPLAINT DATED 07 APRIL 1995 TO JUSTIFY
THE COURT A QUO'S DENIAL OF
PETITIONER'S RESPONSIVE PLEADING TO THE
COMPLAINT FOR EXPROPRIATION (THE
MOTION TO DISMISS DATED 21 APRIL 1995).
III
THE COURT OF APPEALS GRAVELY ERRED IN

APPLYING THE RULE ON HYPOTHETICAL
ADMISSION OF FACTS ALLEGED IN A
COMPLAINT CONSIDERING THAT THE
MOTION TO DISMISS FILED BY PETITIONER IN
THE EXPROPRIATION CASE BELOW WAS THE
RESPONSIVE PLEADING REQUIRED TO BE
FILED UNDER THE THEN RULE 67 OF THE
RULES OF COURT AND NOT AN ORDINARY
MOTION TO DISMISS UNDER RULE 16 OF THE
RULES OF COURT.
The foregoing arguments may be synthesized into two main issues one
substantive and one procedural. We will first address the procedural issue.
Petitioner filed her Motion to Dismiss the complaint for expropriation on April
25, 1995. It was denied by the trial court on May 7, 1996. At that time, the rule on
expropriation was governed by Section 3, Rule 67 of the Revised Rules of Court
which provides:
"SEC. 3.Defenses and objections. Within the time specified

in the summons, each defendant, in lieu of an answer, shall
present in a single motion to dismiss or for other appropriate
relief, all his objections and defenses to the right of the
plaintiff to take his property for the use or purpose specified
in the complaint. All such objections and defenses not so
presented are waived. A copy of the motion shall be served
on the plaintiff's attorney of record and filed with the court
with proof of service."
The motion to dismiss contemplated in the above Rule clearly constitutes the
responsive pleading which takes the place of an answer to the complaint for
expropriation. Such motion is the pleading that puts in issue the right of the
plaintiff to expropriate the defendant's property for the use specified in the
complaint. All that the law requires is that a copy of the said motion be served on
plaintiff's attorney of record. It is the court that at its convenience will set the case
for trial after the filing of the said pleading. 6
The Court of Appeals therefore erred in holding that the motion to dismiss filed
by petitioner hypothetically admitted the truth of the facts alleged in the
complaint, "specifically that there is a genuine necessity to expropriate
petitioner's property for public use." Pursuant to the above Rule, the motion is a
responsive pleading joining the issues. What the trial court should have done
was to set the case for the reception of evidence to determine whether there is
indeed a genuine necessity for the taking of the property, instead of summarily
making a finding that the taking is for public use and appointing commissioners
to fix just compensation. This is especially so considering that the purpose of the
expropriation was squarely challenged and put in issue by petitioner in her
motion to dismiss.
Significantly, the above Rule allowing a defendant in an expropriation case to file

a motion to dismiss in lieu of an answer was amended by the 1997 Rules of Civil
Procedure, which took effect on July 1, 1997. Section 3, Rule 67 now expressly
mandates that any objection or defense to the taking of the property of a
defendant must be set forth in an answer.
The fact that the Court of Appeals rendered its Decision in CA-G.R. SP No. 41860
on October 31, after the 1997 Rules of Civil Procedure took effect, is of no
moment. It is only fair that the Rule at the time petitioner filed her motion to
dismiss should govern. The new provision cannot be applied retroactively to her
prejudice.
We now proceed to address the substantive issue.
In the early case of US v. Toribio, 7 this Court defined the power of eminent
domain as "the right of a government to take and appropriate private property to
public use, whenever the public exigency requires it, which can be done only on
condition of providing a reasonable compensation therefor." It has also been
described as the power of the State or its instrumentalities to take private
property for public use and is inseparable from sovereignty and inherent in
government. 8
The power of eminent domain is lodged in the legislative branch of the

government. It delegates the exercise thereof to local government units, other
public entities and public utility corporations, 9 subject only to Constitutional
limitations. Local governments have no inherent power of eminent domain and
may exercise it only when expressly authorized by statute. 10 Section 19 of the
Local Government Code of 1991 (Republic Act No. 7160) prescribes the
delegation by Congress of the power of eminent domain to local government
units and lays down the parameters for its exercise, thus:
"SEC. 19.Eminent Domain. A local government unit may,

through its chief executive and acting pursuant to an
ordinance, exercise the power of eminent domain for public
use, purpose or welfare for the benefit of the poor and the
landless, upon payment of just compensation, pursuant to
the provisions of the Constitution and pertinent laws:
Provided, however, That, the power of eminent domain may
not be exercised unless a valid and definite offer has been
previously made to the owner and such offer was not
accepted: Provided, further, That, the local government unit
may immediately take possession of the property upon the
filing of expropriation proceedings and upon making a
deposit with the proper court of at least fifteen percent (15%)
of the fair market value of the property based on the current
tax declaration of the property to be expropriated: Provided,
finally, That, the amount to be paid for expropriated
property shall be determined by the proper court, based on
the fair market value at the time of the taking of the
property." CSHcDT
Judicial review of the exercise of eminent domain is limited to the following

areas of concern: (a) the adequacy of the compensation, (b) the necessity of the
taking, and (c) the public use character of the purpose of the taking. 11
In this case, petitioner contends that respondent City of Pasig failed to establish a
genuine necessity which justifies the condemnation of her property. While she
does not dispute the intended public purpose, nonetheless, she insists that there
must be a genuine necessity for the proposed use and purposes. According to
petitioner, there is already an established sports development and recreational
activity center at Rainforest Park in Pasig City, fully operational and being
utilized by its residents, including those from Barangay Caniogan. Respondent
does not dispute this. Evidently, there is no "genuine necessity" to justify the
expropriation.
The right to take private property for public purposes necessarily originates from
"the necessity" and the taking must be limited to such necessity. In City of Manila
v. Chinese Community of Manila, 12 we held that the very foundation of the right
to exercise eminent domain is a genuine necessity and that necessity must be
of a public character. Moreover, the ascertainment of the necessity must precede
or accompany and not follow, the taking of the land. In City of Manila v. Arellano
Law College, 13 we ruled that "necessity within the rule that the particular
property to be expropriated must be necessary, does not mean an absolute but
only a reasonable or practical necessity, such as would combine the greatest
benefit to the public with the least inconvenience and expense to the condemning
party and the property owner consistent with such benefit."
Applying this standard, we hold that respondent City of Pasig has failed to
establish that there is a genuine necessity to expropriate petitioner's property.
Our scrutiny of the records shows that the Certification 14 issued by the
Caniogan Barangay Council dated November 20, 1994, the basis for the passage
of Ordinance No. 42 s. 1993 authorizing the expropriation, indicates that the
intended beneficiary is the Melendres Compound Homeowners Association, a
private, non-profit organization, not the residents of Caniogan. It can be gleaned
that the members of the said Association are desirous of having their own
private playground and recreational facility. Petitioner's lot is the nearest vacant
space available. The purpose is, therefore, not clearly and categorically public.
The necessity has not been shown, especially considering that there exists an
alternative facility for sports development and community recreation in the area,
which is the Rainforest Park, available to all residents of Pasig City, including
those of Caniogan.
The right to own and possess property is one of the most cherished rights of
men. It is so fundamental that it has been written into organic law of every
nation where the rule of law prevails. Unless the requisite of genuine necessity
for the expropriation of one's property is clearly established, it shall be the duty
of the courts to protect the rights of individuals to their private property.
Important as the power of eminent domain may be, the inviolable sanctity which
the Constitution attaches to the property of the individual requires not only that
the purpose for the taking of private property be specified. The genuine necessity
for the taking, which must be of a public character, must also be shown to exist.
WHEREFORE, the petition for review is GRANTED. The challenged Decision

and Resolution of the Court of Appeals in CA-G.R. SP No. 41860 are REVERSED.
The complaint for expropriation filed before the trial court by respondent City of
Pasig, docketed as SCA No. 873, is ordered DISMISSED. cDSAEI
||| (Masikip v. City of Pasig, G.R. No. 136349, January 23, 2006)
FIRST DIVISION
[G.R. No. 109338. November 20, 2000.]
CAMARINES NORTE ELECTRIC COOPERATIVE, INC.

(CANORECO), petitioner, vs. COURT OF APPEALS, HON.
LUIS L. DICTADO, Presiding Judge, RTC, Branch 39,
Daet, Camarines Norte, EDUARDO R. MORENO, LT.
COL. RUFINO CHAVEZ, CAPT. ALFREDO BORJA,
CONRAD C. LEVISTE and VINES REALTY
CORPORATION, respondents.
Gancayco Law Offices for petitioner.
Ariel J.B. Arias for private respondents.
SYNOPSIS
In satisfaction to the decision of a case for collection of sum of money and

foreclosure of mortgage filed by Conrad L. Leviste against the Philippine Smelter
Corporation (PSC) as rendered by the Regional Trial Court of Daet, Camarines
Norte, the two parcels of land in the name of PSC were levied. At the public
auction, those parcels of land were sold to Vines Realty Corporation.
Subsequently, the trial court granted the motion for the issuance of a writ of
possession over said property. A copy of the writ of possession was served to the
petitioner Camarines Norte Electric Corporative, Inc. (CANORECO) as owner of
the power lines standing on certain portions of the subject property. Vines Realty
further filed an amended motion for an order of demolition and removal of
improvements on the subject land which includes the removal of power lines
and electric posts belonging to petitioner. Petitioner opposed the said motion on
the ground, among others, that it was not a party to the case and it had
subsisting right-of-way agreements over the said property. On November 27,
1992, during the hearing of said motion, counsel for petitioner manifested his
withdrawal of his appearance since his authority was only to file an opposition
to the amended motion. The trial court proceeded with the hearing despite the
fact that petitioner had no counsel present. On that same day, the trial court
ordered the issuance of a writ of demolition. On December 7, 1992, petitioner
filed with the Court of Appeals a petition for prohibition with restraining order
and preliminary injunction. On December 10, 1992, the Court of Appeals sent
telegrams to respondents informing them of the issuance of a restraining order.
On that same day, the trial court issued a writ of demolition addressed to sheriff
Eduardo de los Reyes who was not a respondent in the petition before the Court
of Appeals. As a consequence, Vines Realty cut down petitioner's electric posts
which resulted to the cutting off of power supply to various business
establishments and barangays. On January 19, 1993, the Court of Appeals
dismissed the petition for lack of merit. Meanwhile, in response to the public's
urgent basic need and with the authority of the District Engineer of the
Department of Public Works and Highways, petitioner constructed its power
lines along the provincial road. Vines Realty sent a letter to petitioner stating that
it was the owner of the roadside. Petitioner promptly replied that the power lines
were constructed within the right of way of the provincial road. Hence, this
petition.
The Court ruled that petitioner was denied due process. Petitioner could have
negated private respondent's claims by showing the absence of legal or factual
basis therefor if only the trial court in the exercise of justice and equity reset the
hearing instead of proceeding with the trial and issuing an order of demolition
on the same day. The Court cannot conceive how, knowing fully well that
destroying the power lines and electric posts would cause overwhelming losses
to a lot of business establishments and a great inconvenience to a lot of people,
the trial court still ordered the demolition of the property. The personal motives
aside, the Court found that the trial court gravely abused its discretion in hastily
ordering the removal of the electric posts. Electric cooperatives, like
CANORECO, are vested with the power of eminent domain. The acquisition of
an easement of a right-of-way falls within the purview of the power of eminent
domain. Consequently, a court's writ of demolition can not prevail over the
easement of a right-of-way which falls within the power of eminent domain.
SYLLABUS
1. POLITICAL LAW; CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE

PROCESS; TRIAL COURT MUST RECEIVE EVIDENCE ON PARTY'S RIGHT
OVER THE PROPERTY TO BE DEMOLISHED; VIOLATED IN CASE AT BAR.
The most basic tenet of due process is the right to be heard. A court denies a
party due process if it renders its orders without giving such party an
opportunity to present its evidence. We find that petitioner was denied due
process. Petitioner could have negated private respondent's claims by showing
the absence of legal or factual basis therefor if only the trial court in the exercise
of justice and equity reset the hearing instead of proceeding with the trial and
issuing an order of demolition on the same day. It is incumbent upon the trial
court to receive evidence on petitioner's right over the property to be
demolished. The essence of due process is an opportunity to be heard, or as
applied to administrative proceedings, an opportunity to explain one's side or an
opportunity to seek a reconsideration of the action or ruling complained of.
2. ID.; ID.; ID.; ID.; APPLICABLE TO A CASE INVOLVING PUBLIC UTILITIES

WHERE STRICT APPLICATION OF THE RULES WOULD BRING ABOUT THE
CATASTROPHIC INCONVENIENCES TO THE PUBLIC. Due process is
equally applicable in a case involving public utilities, where a strict application
of the rules would bring about catastrophic inconveniences to the public. Hence,
the act would do more harm that good to the public, which the government
seeks to protect. Damages and losses of a considerable amount of time (about 8
years) could have been prevented if the trial court did not gravely abuse its
discretion on the matter.
3. ID.; ID.; ID.; ID.; ID.; TRIAL COURT GRAVELY ABUSED ITS DISCRETION
IN HASTILY ORDERING THE REMOVAL OF THE ELECTRIC POST. Well
aware that the counsel was not authorized, the trial court could have stretched its
liberality a little to ensure that it would serve the ends of justice well for the
people of Camarines Norte. Petitioner must be given the chance to prove its
position. We cannot conceive how, knowing fully well that destroying the power
lines and electric posts would cause overwhelming losses to a lot of business
establishments and a great inconvenience to a lot of people, the trial court still
ordered the demolition of the property. Their personal motives aside, the Court
finds the trial court gravely abused its discretion in hastily ordering the removal
of the electric posts.
4. REMEDIAL LAW; COURTS; SUPREME COURT; CAN DETERMINE THE

LEGALITY OF THE ACTS OF THE TRIAL COURT. We are not a trier of facts.
We cannot determine whether petitioner's Agreements of Right of Way or that of
the authorization of the OIC District Engineer to construct electric posts within
the limits of the road right of way were genuine instruments. We can, however,
determine the legality of the acts of the trial court in issuing the writs of
demolition over the property.
5. POLITICAL LAW; ADMINISTRATIVE LAW; Presidential Decree No. 269;

ELECTRIC COOPERATIVE; VESTED WITH THE POWER OF EMINENT
DOMAIN. The trial court failed to appreciate the nature of electric
cooperatives as public utilities. Among the powers granted to electric
cooperatives by virtue of Presidential Decree No. 269 are: "Section 16 Powers (j)
To construct, maintain and operate electric transmission and distribution lines
along, upon, under and across publicly owned lands and public thoroughfares,
including, without limitation, all roads, highways, streets, alleys, bridges and
causeways; Provided, that such shall not prevent or unduly impair the primary
public uses to which such lands and thoroughfares are otherwise devoted; (k)
To exercise the power of eminent domain in the manner provided by law for the
exercise of such power by other corporations constructing or operating electric
generating plants and electric transmission and distribution lines or system."
Electric cooperatives, like CANORECO, are vested with the power of eminent
domain.
6. ID.; CONSTITUTIONAL LAW; EMINENT DOMAIN; INCLUDES

ACQUISITION OF AN EASEMENT OF RIGHT-OF-WAY BY AN ELECTRIC
COOPERATIVE. The acquisition of an easement of a right-of-way falls within
the purview of the power of eminent domain. Such conclusion finds support in
easements of right-of-way where the Supreme Court sustained the award of just
compensation for private property condemned for public use. The Supreme
Court, in Republic vs. PLDT thus held that: "Normally, of course, the power of
eminent domain results in the taking or appropriation of title to, and possession
of, the expropriated property; but no cogent reason appears why said power may
not be availed of to impose only a burden upon the owner of the condemned
property, without loss of title and possession. It is unquestionable that real
property may, through expropriation, be subjected to an easement of right-of-
way."
7. ID.; ID.; ID.; ID.; RIGHT OF WAY EASEMENT TRANSMITS NO RIGHTS

EXCEPT THE EASEMENT ITSELF. [A] simple right-of-way easement
transmits no rights, except the easement. Vines Realty retains full ownership and
is not totally deprived of the use of the land. It can continue doing what it wants
to do with the land, except those that would result in contact with the wires.
8. ID.; ID.; ID.; ID.; OWNER OF PROPERTY IS ENTITLED TO PAYMENT OF

JUST COMPENSATION. The acquisition of this easement, nevertheless, is not
gratis. Considering the nature and effect of the installation power lines the
limitations on the use of the land for an indefinite period deprives private
respondents of its ordinary use. For these reasons, Vines Realty is entitled to
payment of just compensation, which must be neither more or less than the
money equivalent of the property.
9. ID.; ID.; ID.; JUST COMPENSATION; DEFINED. Just compensation has

been understood to be the just and complete equivalent of the loss, which the
owner of the res expropriated has to suffer by reason of the expropriation. The
value of the land and its character at the time it was taken by the Government are
the criteria for determining just compensation. No matter how commendable
petitioner's purpose is, it is just and equitable that Vines Realty be compensated
the fair and full equivalent for the taking of its property, which is the measure of
the indemnity, not whatever gain would accrue to the expropriating entity.
10. ID.; ID.; ID.; CAN BE EXERCISED BY PUBLIC UTILITIES ALTHOUGH THE
TITLE IS NOT TRANSFERRED TO THE EXPROPRIATOR. CANORECO only
sought the continuation of the exercise of its right-of-way easement and not
ownership over the land. Public utilities' power of eminent domain may be
exercise although title is not transferred to the expropriator.
11. ID.; ID.; ID.; WRIT OF DEMOLITION CAN NOT PREVAIL OVER THE
EASEMENT OF RIGHT OF WAY. [W]e rule that a court's writ of demolition
can not prevail over the easement of a right-of-way which falls within the power
of eminent domain. cCEAHT
DECISION
PARDO, J p:
The acquisition of an easement of a right-of-way falls within the purview of the

power of eminent domain. aSEHDA
We have before the Court for consideration a petition for review on certiorari of
the decision of the Court of Appeals, 1 and its resolution, 2 which denied
petitioner's motion for reconsideration. 3
The facts of the case, as found by the Court of Appeals, are as follows:
On May 18, 1989, Conrad L. Leviste filed with the Regional Trial Court, Daet,
Camarines Norte, a complaint 4 for collection of a sum of money and foreclosure
of mortgage against Philippine Smelter Corporation (PSC).
For failure to file an answer to the complaint, the trial court declared PSC in
default and allowed plaintiff Leviste to present evidence ex-parte.
On November 23, 1989, the trial court rendered a decision, the dispositive
"WHEREFORE, judgment is hereby rendered in favor of

plaintiff and against the defendant ordering the latter . . .
"1. to pay the plaintiff the sum of P1,798,750.00 with interest

thereon at the rate of 12% per annum from November, 1989
until the whole amount shall have been fully paid;
"2. to pay the plaintiff the sum of P11,500.00 as attorney's

fees; to pay the plaintiff the sum of P5,000.00 as expenses
incidental to this litigation; and
"3. to pay the costs of this suit.
"IT IS SO ORDERED." 5
When the decision became final and executory, the trial court issued a writ of
execution and respondent sheriff Eduardo R. Moreno levied upon two (2) parcels
of land covered TCT Nos. T-13505 and T-13514 issued by the Registrar of Deeds
in the name of PSC. On April 24, 1990, the parcels of land were sold at public
auction in favor of Vines Realty Corporation (Vines Realty). On April 25, 1990,
the Clerk of Court, as ex-officio Provincial Sheriff, issued a Certificate of Sale, 6
which Judge Luis D. Dictado, in his capacity as executive judge, approved.
On June 23, 1992, Vines Realty moved for the issuance of a writ of possession
over said property. On June 25, 1992, the trial court granted the motion. 7
On August 7, 1992, copy of the writ of possession was served on petitioner as

owner of the power lines standing on certain portions of the subject property.
Later, on August 12, 1992, Vines Realty filed an amended motion for an order of
demolition and removal 8 of improvements on the subject land.
Among the improvements for removal were the power lines and electric posts
belonging to petitioner.
Petitioner opposed the motion 9 on the ground, among other reasons, that
petitioner was not a part to the case and therefore not bound by the judgment of
the trial court and that it had subsisting right-of-way agreements over said
property.
The trial court 10 set the hearing on the amended motion on September 29, 1992
but the hearing was re-scheduled on October 28, 1992, and then again on
November 10, 1992. 11 On all these dates, no hearing was conducted.
Then the case was re-raffled to Branch 39 of the regional trial court presided over
by respondent judge.
On November 27, 1992, the trial court 12 set the hearing on the amended motion
for demolition. However, instead of adducing evidence for petitioner, its counsel
13 manifested that he was withdrawing his appearance since the authority given
him by petitioner was only for the filing of the opposition to the amended
motion. The trial court proceeded with the hearing despite the fact that petitioner
had no counsel present. Thus, only Vines Realty presented its evidence.
On the same date, November 27, 1992, the trial court ordered the issuance of a
writ of demolition directing and deputizing Lt. Col. Rufino Chavez, Jr. and Capt.
Alfredo Borja to constitute an augmentation force for the immediate
implementation of the writ. 14
On December 7, 1992, petitioner filed with the Court of Appeals a petition for
prohibition with restraining order and preliminary injunction. 15 Petitioner
argued that the trial court acted without or in excess of its jurisdiction or with
grave abuse of discretion in issuing the order dated November 27, 1992.
On December 10, 1992, the Court of Appeals sent telegrams to respondents

informing them of the issuance of a restraining order. On the same day, however,
the trial court issued a writ of demolition. 16 The court addressed the writ to
sheriff Eduardo de los Reyes, 17 who was not a respondent in the petition before
the Court of Appeals, so that the latter can implement the writ on the pretext that
he was not covered by the restraining order.
On December 11, 1992, the trial court issued another order directing the National
Power Corporation sub-unit in Camarines Norte to shut off the power lines
energizing the New Lucena Oil Products Corporation, one of the consumers
serviced by petitioner, as shown by the radiogram 18 of Simeon P. Zao III, OIC
Labo, NPC. Mr. Zao filed a manifestation 19 with the trial court that if NPC
would shut off said power supply before the sub-station of petitioner, it would
deprive Benguet Mining Corporation of electricity and endanger the lives of its
miners.
On the same day, December 11, 1992, respondent Vines Realty cut down
petitioner's electric posts professedly using a chains 20 and resulting in a loud
blast affecting the area. Philippine National Police desk officer Bianito Cobacha
21 of Barangay Jose Panganiban Police Station entered in the police blotter that
on December 11, 1992, at about 2 p.m., men led by the provincial sheriff felled
petitioner's electric posts along the cemetery of Bagumbayan.
Even the members of the Sangguniang Bayan at San Jose appealed to respondent
Sheriff to desist from proceeding with the demolition due to a restraining order
but to no avail.
On January 4, 1993, Vines Realty filed with the trial court a motion for the
issuance of an alias writ of demolition. 22 The hearing was scheduled on January
12, 1993, at 8:30 a.m. but petitioner's lawyer, Atty. Jose Maacop, received a copy
only on January 11, 1994.
Atty. Bienvenido A. Paita made a special appearance for petitioner through a

manifestation with motion for reconsideration 23 dated January 21, 1993. Atty.
Paita declared it was impossible for him to appear and file an opposition to the
motion on very short notice. He said that petitioner was not a party to the case,
that the restraining order of the Court of Appeals was good until further orders,
and the writ of execution was executed on December 11, 1992. Petitioner
manifested that it was denied its day in court.
On January 25, 1993, 24 the trial court denied the motion for reconsideration on
the ground that the appearance of Atty. Paita was irregular and that Atty.
Maacop as the counsel in the appellate court must first make an entry of
appearance with the trial court.
On January 26, 1993, the trial court issued an alias writ of demolition. 25
The sheriff, at the request of Vines Realty demolished the remaining electric
posts resulting in the cutting off of power supply to various business
establishments and barangays.
Meantime, on January 19, 1993, the Court of Appeals, promulgated a decision 26

dismissing the petition for lack of merit.
"WHEREFORE, the present petition is DISMISSED for lack

of merit.
"Let it be stated that the temporary restraining order which

was issued by this Court on December 9, 1992 has a limited
life of twenty (20) days from date of issue (Carbungco vs. CA,
181 SCRA 313) and has therefore become void at the
expiration of the said twenty (20) days (Ilaw at Buklod ng
Manggagawa vs. NLRC, 198 SCRA 586).
"SO ORDERED."
On February 19, 1993, petitioner's new counsel, Gancayco Law Offices, filed with
the Court of Appeals an Urgent Appearance And Motion To Admit
Supplemental Petition. 27 This was a new petition for certiorari and prohibition
with prayer for issuance of a writ of mandatory injunction. 28
On March 15, 1993, the Court of Appeals denied the motion for reconsideration
as well as the admission of the supplemental petition on the ground that the
petition had been decided. 29
Meanwhile, in response to the public's urgent basic need, petitioner re-

constructed its power lines along the provincial road leading to the Port of
Osmea upon authority of the District Engineer of the Department of Public
Works and Highways [DPWH].
On April 23, 1993, however, petitioner received a letter dated April 10, 1993,
stating that Vines Realty was the owner of the roadside and that petitioner could
not construct power lines therein without its permission. Petitioner promptly
replied that the power lines were constructed within the right of way of the
provincial road leading to the port of Osmea as granted by the District Engineer
of DPWH.
Hence, this petition. 30
At issue is whether petitioner is entitled to retain possession of the power lines

located in the land sold at public auction as a result of extra-judicial foreclosure
of mortgage.
The most basic tenet of due process is the right to be heard. 31 A court denies a
party due process if it renders its orders without giving such party an
opportunity to present its evidence. 32
We find that petitioner was denied due process. Petitioner could have negated
private respondent's claims by showing the absence of legal or factual basis
therefor if only the trial court in the exercise of justice and equity reset the
hearing instead of proceeding with the trial and issuing an order of demolition
on the same day.
It is incumbent upon the trial court to receive evidence on petitioner's right over
the property to be demolished.
The essence of due process is an opportunity to be heard, or as applied to

administrative proceedings, an opportunity to explain one's side or an
opportunity to seek a reconsideration of the action or ruling complained of. 33
Due process is equally applicable in a case involving public utilities, where a
strict application of the rules would bring about catastrophic inconveniences to
the public. Hence, the act would do more harm than good to the public, which
the government seeks to protect. Damages and losses of a considerable amount
of time (about 8 years) could have been prevented if the trial court did not
gravely abuse its discretion on the matter.
Well aware that the counsel was not authorized, the trial court could have
stretched its liberality a little to ensure that it would serve the ends of justice well
for the people of Camarines Norte. Petitioner must be given the chance to prove
its position. IACDaS
We cannot conceive how, knowing fully well that destroying the power lines and
electric posts would cause overwhelming losses to a lot of business
establishments and a great inconvenience to a lot of people, the trial court still
ordered the demolition of the property. Their personal motives aside, the Court
finds that the trial court gravely abused its discretion in hastily ordering the
removal of the electric posts.
We are not a trier of facts. We cannot determine whether petitioner's Agreements

of Right of Way 34 or that of the authorization 35 of the OIC District Engineer to
construct electric posts within the limits of the road right of way were genuine
instruments. We can, however, determine the legality of the acts of the trial court
in issuing the writs of demolition over the property.
The trial court failed to appreciate the nature of electric cooperatives as public
utilities.
Among the powers granted to electric cooperatives by virtue of Presidential

Decree No. 269 36 are:
"Section 16. Powers
(j) To construct, maintain and operate electric transmission

and distribution lines along, upon, under and across
publicly owned lands and public thoroughfares, including,
without limitation, all roads, highways, streets, alleys,
bridges and causeways; Provided, that such shall not
prevent or unduly impair the primary public uses to which
such lands and thoroughfares are otherwise devoted;
(k) To exercise the power of eminent domain in the manner

provided by law for the exercise of such power by other
corporations constructing or operating electric generating
plants and electric transmission and distribution lines or
systems."
Electric cooperatives, like CANORECO, are vested with the power of eminent
domain.
The acquisition of an easement of a right-of-way falls within the purview of the

power of eminent domain. Such conclusion finds support in easements of right-
of-way where the Supreme Court sustained the award of just compensation for
private property condemned for public use. 37 The Supreme Court, in Republic
vs. PLDT 38 thus held that:
"Normally, of course, the power of eminent domain results

in the taking or appropriation of title to, and possession of,
the expropriated property; but no cogent reason appears
why said power may not be availed of to impose only a
burden upon the owner of condemned property, without
loss of title and possession. It is unquestionable that real
property may, through expropriation, be subjected to an
easement of right-of-way."
However, a simple right-of-way easement transmits no rights, except the

easement. 39 Vines Realty retains full ownership and it is not totally deprived of
the use of the land. It can continue doing what it wants to do with the land,
except those that would result in contact with the wires.
The acquisition of this easement, nevertheless, is not gratis. Considering the

nature and effect of the installation power lines, the limitations on the use of the
land for an indefinite period deprives private respondents of its ordinary use.
For these reasons, Vines Realty is entitled to payment of just compensation, 40
which must be neither more nor less than the money equivalent of the property.
Just compensation has been understood to be the just and complete equivalent of
the loss, which the owner of the res expropriated has to suffer by reason of the
expropriation. 41 The value of the land and its character at the time it was taken
by the Government are the criteria for determining just compensation. 42 No
matter how commendable petitioner's purpose is, it is just and equitable that
Vines Realty be compensated the fair and full equivalent for the taking of its
property, which is the measure of the indemnity, not whatever gain would
accrue to the expropriating entity. 43
Moreover, CANORECO only sought the continuation of the exercise of its right-
of-way easement and not ownership over the land. Public utilities' power of
eminent domain may be exercised although title is not transferred to the
expropriator. 44
Consequently, we rule that a court's writ of demolition can not prevail over the
easement of a right-of-way which falls within the power of eminent domain.
WHEREFORE, the petition is hereby GRANTED. The decision of the Court of

Appeals promulgated on January 19, 1993, and the resolution adopted on March
15, 1993, in CA-G.R. SP No. 29624, are SET ASIDE. The orders of the trial court
dated November 27, 1992, December 10, 1992, January 18, 1993, and January 25,
1993 and the writs of demolition issued on December 11, 1992, and January 26,
1993, are ANNULLED.
Private respondents are ordered to restore or restitute petitioner's electric posts

and power lines or otherwise indemnify petitioner for the cost of the restoration
thereof. Finally, private respondents are permanently enjoined or prohibited
from disturbing or interfering with the operation and maintenance of the
business of petitioner.
Costs against private respondents.
SO ORDERED.
Davide, Jr., C.J., Puno, Kapunan and Ynares-Santiago, JJ., concur.
||| (Camarines Norte Electric Cooperative, Inc. v. Court of Appeals, G.R. No. 109338,
November 20, 2000)
FIRST DIVISION
[G.R. No. 154411. June 19, 2003.]
NATIONAL HOUSING AUTHORITY, petitioner, vs.

HEIRS OF ISIDRO GUIVELONDO, COURT OF
APPEALS, HON. ISAIAS DICDICAN, Presiding Judge,
Regional Trial Court, Branch 11, Cebu City, and PASCUAL
Y. ABORDO, Sheriff, Regional Trial Court, Branch 11,
Cebu City, respondents.
Serecio Matthew B. Jo for respondents.
SYNOPSIS
Petitioner herein filed this petition for review raising the issues of whether or not
the State can be compelled by the courts to exercise or continue with the exercise
of its inherent power of eminent domain, and whether or not writs of execution
and garnishment may be issued against the State in an expropriation case
wherein the exercise of the power of eminent domain will not serve public use or
purpose. This case arose from a complaint for eminent domain which was filed
by herein petitioner against private respondents. However, after finding that the
just compensation set by the court for the land sought to be expropriated was too
high for the implementation of a socialized housing project, the petitioner filed
with the trial court a motion to dismiss the expropriation case. The motion was
denied by the trial court on the ground that the partial judgment for fixing the
just compensation had already become final and executory. Petitioner filed a
petition for certiorari with the Court of Appeals. In the meantime, the sheriff of
the trial court served on petitioner a notice of levy pursuant to a writ of execution
issued to enforce the trial court's partial judgment and later, he levied on the
funds and personal properties of petitioner. The Court of Appeals, issued the
assailed order dismissing the petition for certiorari. Hence, this appeal.
According to the Supreme Court, the petitioner did not appeal the order of the
trial court, which declared that it had a lawful right to expropriate the properties
of private respondent. Hence, the order became final and may no longer be a
subject of review or reversal in any court. Respondent landowners had already
been prejudiced by the expropriation case. Petitioner cannot be permitted to
institute condemnation proceedings against respondents only to abandon it later
when it finds the amount of just compensation unacceptable. As to the issue of
garnishment, the Court ruled that it was important to know the true character of
the government entity to determine whether it could not be the object of
garnishment proceedings. If the funds belong to a public corporation clothed
with a personality of its own, separate and distinct from the government, then its
funds are not exempt from garnishment, then its funds are not exempt from
garnishment. This is so because when a government entity entered into a
commercial business, it abandoned its sovereign capacity like any other
corporation. Here the funds of petitioner NHA are not exempt from garnishment
or execution. The instant petition was denied and the decision of the Court of
Appeal was affirmed.
SYLLABUS
1. POLITICAL LAW; STATE; POWER OF EMINENT DOMAIN; TWO STAGES

OF EXPROPRIATION; CONSTRUED. Expropriation proceedings consists of
two stages: first, condemnation of the property after it is determined that its
acquisition will be for a public purpose or public use and, second, the
determination of just compensation to be paid for the taking of private property
to be made by the court with the assistance of not more than three
commissioners. Thus: There are two (2) stages in every action for expropriation.
The first is concerned with the determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its exercise in the
context of the facts involved in the suit. It ends with an order, if not of dismissal
of the action, "of condemnation declaring that the plaintiff has a lawful right to
take the property sought to be condemned, for the public use or purpose
described in the complaint, upon the payment of just compensation to be
determined as of the date of the filing of the complaint." An order of dismissal, if
this be ordained, would be a final one, of course, since it finally disposes of the
action and leaves nothing more to be done by the Court on the merits. So, too,
would an order of condemnation be a final one, for thereafter, as the Rules
expressly state, in the proceedings before the Trial Court, "no objection to the
exercise of the right of condemnation (or the propriety thereof) shall be filled or
heard." The second phase of the eminent domain action is concerned with the
determination by the Court of "the just compensation for the property sought to
be taken." This is done by the Court with the assistance of not more than three (3)
commissioners. The order fixing the just compensation on the basis of the
evidence before, and findings of, the commissioners would be final, too. It would
finally dispose of the second stage of the suit, and leave nothing more to be done
by the Court regarding the issue. Obviously, one or another of the parties may
believe the order to be erroneous in its appreciation of the evidence or findings of
fact or otherwise. Obviously, too, such a dissatisfied party may seek a reversal of
the order by taking an appeal therefrom. The outcome of the first phase of
expropriation proceedings, which is either an order of expropriation or an order
of dismissal, is final since it finally disposes of the case. On the other hand, the
second phase ends with an order fixing the amount of just compensation. Both
orders, being final, are appealable. An order of condemnation or dismissal is
final, resolving the question of whether or not the plaintiff has properly and
legally exercised its power of eminent domain. Once the first order becomes final
and no appeal thereto is taken, the authority to expropriate and its public use can
no longer be questioned. AIHECa
2. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENTS; A FINAL AND

EXECUTORY DECISION OR ORDER CAN NO LONGER BE DISTURBED OR
REOPENED NO MATTER HOW ERRONEOUS IT MAY BE. In the case at bar,
petitioner did not appeal the Order of the trial court dated December 10, 1999,
which declared that it has a lawful right to expropriate the properties of
respondent Heirs of Isidro Guivelondo. Hence, the Order became final and may
no longer be subject to review or reversal in any court. A final and executory
decision or order can no longer be disturbed or reopened no matter how
erroneous it may be. Although judicial determinations are not infallible, judicial
error should be corrected through appeals, not through repeated suits on the
same claim.
DECISION
On February 23, 1999, petitioner National Housing Authority filed with the
Regional Trial Court of Cebu City, Branch 11, an Amended Complaint for
eminent domain against Associacion Benevola de Cebu, Engracia Urot and the
Heirs of Isidro Guivelondo, docketed as Civil Case No. CEB-23386. Petitioner
alleged that defendant Associacion Benevola de Cebu was the claimant/owner of
Lot 108-C located in the Banilad Estate, Cebu City; that defendant Engracia Urot
was the claimant/owner of Lots Nos. 108-F, 108-I, 108-G, 6019-A and 6013-A, all
of the Banilad Estate; that defendant Heirs of Isidro Guivelondo were the
claimants/owners of Cadastral Lot No. 1613-D located at Carreta, Mabolo, Cebu
City; and that the lands are within a blighted urban center which petitioner
intends to develop as a socialized housing project. 1
On November 12, 1999, the Heirs of Isidro Guivelondo, respondents herein, filed
a Manifestation stating that they were waiving their objections to petitioner's
power to expropriate their properties. Hence, the trial court issued an Order as
follows:
WHEREFORE, the Court hereby declares that the plaintiff

has a lawful right to expropriate the properties of the
defendants who are heirs of Isidro Guivelondo.
The appointment of commissioners who would ascertain

and report to the Court the just compensation for said
properties will be done as soon as the parties shall have
submitted to the Court the names of persons desired by
them to be appointed as such commissioners.
SO ORDERED. 2
Thereafter, the trial court appointed three Commissioners to ascertain the correct
and just compensation of the properties of respondents. On April 17, 2000, the
Commissioners submitted their report wherein they recommended that the just
compensation of the subject properties be fixed at P11,200.00 per square meter. 3
On August 7, 2000, the trial court rendered Partial Judgment adopting the
recommendation of the Commissioners and fixing the just compensation of the
lands of respondent Heirs of Isidro Guivelondo at P11,200.00 per square meter,
to wit:
WHEREFORE, in view of the foregoing premises, judgment

is hereby rendered by the Court in this case fixing the just
compensation for the lands of the defendants who are the
heirs of Isidro Guivelondo, more particularly Lots Nos. 1, 2,
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 19, 20, 6016-F, 6016-H,
6016-E and 6016-D of Csd-10219, which were sought to be
expropriated by the plaintiff at P11,200.00 per square meter
and ordering the plaintiff to pay to the said defendants the
just compensation for the said lands computed at P11,200.00
per square meter.
IT IS SO ORDERED. 4
Petitioner NHA filed two motions for reconsideration dated August 30, 2000 and
August 31, 2000, assailing the inclusion of Lots 12, 13 and 19 as well as the
amount of just compensation, respectively. Respondent Heirs also filed a motion
for reconsideration of the Partial Judgment. On October 11, 2000, the trial court
issued an Omnibus Order denying the motion for reconsideration of respondent
Heirs and the August 31, 2000 motion of petitioner, on the ground that the fixing
of the just compensation had adequate basis and support. On the other hand, the
trial court granted petitioner's August 30, 2000 motion for reconsideration on the
ground that the Commissioner's Report did not include Lots 12, 13 and 19 within
its coverage. Thus:
WHEREFORE, in view of the foregoing premises, the Court

hereby denies the motion of the heirs of Isidro Guivelondo
(with the exception of Carlota Mercado and Juanita Suemith)
for reconsideration of the partial judgment rendered in this
case on August 7, 2000 and plaintiff's motion for
reconsideration of said judgment, dated August 31, 2000.
EASCDH
However, the Court hereby grants the plaintiff's motion for

reconsideration of said judgment, dated August 30, 2000.
Accordingly, the judgment rendered in this case on August
7, 2000 is hereby set aside insofar as it has fixed just
compensations for Lots Nos. 12, 13 and 19 of Csd-10219
because the fixing of said just compensations appears to lack
adequate basis.
SO ORDERED. 5
Petitioner filed with the Court of Appeals a petition for certiorari, which was
docketed as CA-G.R. SP No. 61746. 6 Meanwhile, on October 31, 2000, the trial
court issued an Entry of Judgment over the Partial Judgment dated August 7,
2000 as modified by the Omnibus Order dated October 11, 2000. 7 Subsequently,
respondent Heirs filed a Motion for Execution, which was granted on November
22, 2000.
On January 31, 2001, the Court of Appeals dismissed the petition for certiorari on
the ground that the Partial Judgment and Omnibus Order became final and
executory when petitioner failed to appeal the same. 8
Petitioner's Motion for Reconsideration and Urgent Ex-Parte Motion for a

Clarificatory Ruling were denied in a Resolution dated March 18, 2001. 9 A
petition for review was filed by petitioner with this Court, which was docketed
as G.R. No. 147527. However, the same was denied in a Minute Resolution dated
May 9, 2001 for failure to show that the Court of Appeals committed a reversible
error. 10
Petitioner filed a Motion for Reconsideration which was however denied with
finality on August 20, 2001. 11
Prior to the aforesaid denial of the Motion for Reconsideration, petitioner, on July
16, 2001, filed with the trial court a Motion to Dismiss Civil Case No. CEB-23386,
complaint for eminent domain, alleging that the implementation of its socialized
housing project was rendered impossible by the unconscionable value of the land
sought to be expropriated, which the intended beneficiaries can not afford. 12
The Motion was denied on September 17, 2001, on the ground that the Partial
Judgment had already become final and executory and there was no just and
equitable reason to warrant the dismissal of the case. 13 Petitioner filed a Motion
for Reconsideration, which was denied in an Order dated November 20, 2001. 14
Petitioner thus filed a petition for certiorari with the Court of Appeals, which was
docketed as CA-G.R. SP No. 68670, praying for the annulment of the Order of the
trial court denying its Motion to Dismiss and its Motion for Reconsideration. 15
On February 5, 2002, the Court of Appeals summarily dismissed the petition.

Immediately thereafter, respondent Sheriff Pascual Y. Abordo of the Regional
Trial Court of Cebu City, Branch 11, served on petitioner a Notice of Levy
pursuant to the Writ of Execution issued by the trial court to enforce the Partial
Judgment of August 7, 2000 and the Omnibus Order of October 11, 2000. 16
On February 18, 2002, the Court of Appeals set aside the dismissal of the petition
and reinstated the same. 17 Thereafter, a temporary restraining order was issued
enjoining respondent sheriff to preserve the status quo. 18
On May 27, 2002, respondent sheriff served on the Landbank of the Philippines a
Notice of Third Garnishment against the deposits, moneys and interests of
petitioner therein. 19 Subsequently, respondent sheriff levied on funds and
personal properties of petitioner. 20
On July 16, 2002, the Court of Appeals rendered the assailed decision dismissing
the petition for certiorari. 21
Hence, petitioner filed this petition for review, raising the following issues:
1) WHETHER OR NOT THE STATE CAN BE COMPELLED

AND COERCED BY THE COURTS TO EXERCISE
OR CONTINUE WITH THE EXERCISE OF ITS
INHERENT POWER OF EMINENT DOMAIN;
2) WHETHER OR NOT JUDGMENT HAS BECOME FINAL

AND EXECUTORY AND IF ESTOPPEL OR
LACHES APPLIES TO GOVERNMENT;
3) WHETHER OR NOT WRITS OF EXECUTION AND

GARNISHMENT MAY BE ISSUED AGAINST THE
STATE IN AN EXPROPRIATION WHEREIN THE
EXERCISE OF THE POWER OF EMINENT
DOMAIN WILL NOT SERVE PUBLIC USE OR
PURPOSE {APPLICATION OF SUPREME COURT
ADMINISTRATIVE CIRCULAR NO. 10-2000}. 22
Respondent Heirs of Isidro Guivelondo filed their Comment, arguing as follows:
AS EARLIER UPHELD BY THE HONORABLE COURT,

THE JUDGMENT OF THE TRIAL COURT IS ALREADY
FINAL AND EXECUTORY, HENCE, COULD NO LONGER
BE DISTURBED NOR SET ASIDE
II
THE FUNDS AND ASSETS OF THE PETITIONER ARE

NOT EXEMPT FROM LEVY AND GARNISHMENT
III
THE ISSUES RAISED IN THIS SECOND PETITION FOR

REVIEW WERE ALREADY RESOLVED BY THE
HONORABLE COURT 23
In the early case of City of Manila v. Ruymann, 24 the Court was confronted with
the question: May the petitioner, in an action for expropriation, after he has been
placed in possession of the property and before the termination of the action,
dismiss the petition? It resolved the issue in the affirmative and held:
The right of the plaintiff to dismiss an action with the

consent of the court is universally recognized with certain
well-defined exceptions. If the plaintiff discovers that the
action which he commenced was brought for the purpose of
enforcing a right or a benefit, the advisability or necessity of
which he later discovers no longer exists, or that the result of
the action would be different from what he had intended,
then he should be permitted to withdraw his action, subject
to the approval of the court. The plaintiff should not be
required to continue the action, subject to some well-defined
exceptions, when it is not to his advantage to do so.
Litigation should be discouraged and not encouraged.
Courts should not require parties to litigate when they no
longer desire to do so. Courts, in granting permission to
dismiss an action, of course, should always take into
consideration the effect which said dismissal would have
upon the rights of the defendant. 25
Subsequently, in Metropolitan Water District v. De Los Angeles, 26 the Court had

occasion to apply the above-quoted ruling when the petitioner, during the
pendency of the expropriation case, resolved that the land sought to be
condemned was no longer necessary in the maintenance and operation of its
system of waterworks. It was held:
It is not denied that the purpose of the plaintiff was to

acquire the land in question for a public use. The
fundamental basis then of all actions brought for the
expropriation of lands, under the power of eminent domain,
is public use. That being true, the very moment that it
appears at any stage of the proceedings that the
expropriation is not for a public use, the action must
necessarily fail and should be dismissed, for the reason that
the action cannot be maintained at all except when the
expropriation is for some public use. That must be true even
during the pendency of the appeal of at any other stage of
the proceedings. If, for example, during the trial in the lower
court, it should be made to appear to the satisfaction of the
court that the expropriation is not for some public use, it
would be the duty and the obligation of the trial court to
dismiss the action. And even during the pendency of the
appeal, if it should be made to appear to the satisfaction of
the appellate court that the expropriation is not for public
use, then it would become the duty and the obligation of the
appellate court to dismiss it. 27
Notably, the foregoing cases refer to the dismissal of an action for eminent
domain at the instance of the plaintiff during the pendency of the case. The rule
is different where the case had been decided and the judgment had already
become final and executory. CAIHTE
Expropriation proceedings consists of two stages: first, condemnation of the

property after it is determined that its acquisition will be for a public purpose or
public use and, second, the determination of just compensation to be paid for the
taking of private property to be made by the court with the assistance of not
more than three commissioners. 28 Thus:
There are two (2) stages in every action for expropriation.

The first is concerned with the determination of the
authority of the plaintiff to exercise the power of eminent
domain and the propriety of its exercise in the context of the
facts involved in the suit. It ends with an order, if not of
dismissal of the action, "of condemnation declaring that the
plaintiff has a lawful right to take the property sought to be
condemn, for the public use or purpose described in the
complaint, upon the payment of just compensation to be
determined as of the date of the complaint." An order of
dismissal, if this be ordained, would be a final one, of course,
since it finally disposes of the action and leaves nothing
more to be done by the Court on the merits. So, too, would
an order of condemnation be a final one, for thereafter, as
the Rules expressly state, in the proceedings before the Trial
Court, "no objection to the exercise of the right of
condemnation (or the propriety thereof) shall be filled or
heard."
The second phase of the eminent domain action is concerned

with the determination by the Court of "the just
compensation for the property sought to be taken." This is
done by the Court with the assistance of not more than three
(3) commissioners. The order fixing the just compensation
on the basis of the evidence before, and findings of, the
commissioners would be final, too. It would finally dispose
of the second stage of the suit, and leave nothing more to be
done by the Court regarding the issue. Obviously, one or
another of the parties may believe the order to be erroneous
in its appreciation of the evidence or findings of fact or
otherwise. Obviously, too, such a dissatisfied party may seek
a reversal of the order by taking an appeal therefrom. 29
The outcome of the first phase of expropriation proceedings, which is either an

order of expropriation or an order of dismissal, is final since it finally disposes of
the case. On the other hand, the second phase ends with an order fixing the
amount of just compensation. Both orders, being final, are appealable. 30 An
order of condemnation or dismissal is final, resolving the question of whether or
not the plaintiff has properly and legally exercised its power of eminent domain.
31 Once the first order becomes final and no appeal thereto is taken, the
authority to expropriate and its public use can no longer be questioned. 32
The above rule is based on Rule 67, Section 4 of the 1997 Rules of Civil
Procedure, which provides:
Order of expropriation. If the objections to and the defenses

against the right of the plaintiff to expropriate the property
are overruled, or when no party appears to defend as
required by this Rule, the court may issue an order of
expropriation declaring that the plaintiff has a lawful right
to take the property sought to be expropriated, for the public
use or purpose described in the complaint, upon the
payment of just compensation to be determined as of the
date of the taking of the property or the filing of the
complaint, whichever came first.
A final order sustaining the right to expropriate the property may

be appealed by any party aggrieved thereby. Such appeal,
however, shall not prevent the court from determining the
just compensation to be paid.
After the rendition of such an order, the plaintiff shall not be

permitted to dismiss or discontinue the proceeding except
on such terms as the court deems just and equitable. (italics
supplied)
In the case at bar, petitioner did not appeal the Order of the trial court dated
December 10, 1999, which declared that it has a lawful right to expropriate the
properties of respondent Heirs of Isidro Guivelondo. Hence, the Order became
final and may no longer be subject to review or reversal in any court. 33 A final
and executory decision or order can no longer be disturbed or reopened no
matter how erroneous it may be. Although judicial determinations are not
infallible, judicial error should be corrected through appeals, not through
repeated suits on the same claim. 34
Petitioner anchors its arguments on the last paragraph of the above-quoted Rule
67, Section 4. In essence, it contends that there are just and equitable grounds to
allow dismissal or discontinuance of the expropriation proceedings. More
specifically, petitioner alleges that the intended public use was rendered
nugatory by the unreasonable just compensation fixed by the court, which is
beyond the means of the intended beneficiaries of the socialized housing project.
The argument is tenuous.
Socialized housing has been recognized as public use for purposes of exercising
the power of eminent domain.
Housing is a basic human need. Shortage in housing is a matter of state concern

since it directly and significantly affects public health, safety, the environment
and in sum, the general welfare. The character of housing measures does not
change because units in housing projects cannot be occupied by all but only by
those who satisfy prescribed qualifications. A beginning has to be made, for it is
not possible to provide housing for all who need it, all at once.
xxx xxx xxx.
In the light of the foregoing, this Court is satisfied that

"socialized housing" falls with the confines of "public use". . .
. . . . . . .. Provisions on economic opportunities inextricably
linked with low-cost housing, or slum clearance, relocation
and resettlement, or slum improvement emphasize the
public purpose of the project. 35
The public purpose of the socialized housing project is not in any way
diminished by the amount of just compensation that the court has fixed. The
need to provide decent housing to the urban poor dwellers in the locality was
not lost by the mere fact that the land cost more than petitioner had expected. It
is worthy to note that petitioner pursued its petition for certiorari with the Court
of Appeals assailing the amount of just compensation and its petition for review
with this Court which eloquently indicates that there still exists a public use for
the housing project. It was only after its appeal and petitions for review were
dismissed that petitioner made a compete turn-around and decided it did not
want the property anymore. IEAaST
Respondent landowners had already been prejudiced by the expropriation case.

Petitioner cannot be permitted to institute condemnation proceedings against
respondents only to abandon it later when it finds the amount of just
compensation unacceptable. Indeed, our reprobation in the case of Cosculluela v.
Court of Appeals 36 is apropos:
It is arbitrary and capricious for a government agency to initiate expropriation

proceedings, seize a person's property, allow the judgment of the court to
become final and executory and then refuse to pay on the ground that there are
no appropriations for the property earlier taken and profitably used. We
condemn in the strongest possible terms the cavalier attitude of government
officials who adopt such a despotic and irresponsible stance.
In order to resolve the issue of the propriety of the garnishment against

petitioner's funds and personal properties, there is a need to first determine its
true character as a government entity. Generally, funds and properties of the
government cannot be the object of garnishment proceedings even if the consent
to be sued had been previously granted and the state liability adjudged. 37
The universal rule that where the State gives its consent to
be sued by private parties either by general or special law, it
may limit claimant's action "only up to the completion of
proceedings anterior to the stage of execution" and that the
power of the Courts ends when the judgment is rendered,
since government funds and properties may not be seized
under writs of execution or garnishment to satisfy such
judgments, is based on obvious considerations of public
policy. Disbursements of public funds must be covered by
the corresponding appropriation as required by law. The
functions and public services rendered by the State cannot
be allowed to be paralyzed or disrupted by the diversion of
public funds from their legitimate and specific objects, as
appropriated by law. 38
However, if the funds belong to a public corporation or a government-owned or

controlled corporation which is clothed with a personality of its own, separate
and distinct from that of the government, then its funds are not exempt from
garnishment. 39 This is so because when the government enters into commercial
business, it abandons its sovereign capacity and is to be treated like any other
corporation. 40
In the case of petitioner NHA, the matter of whether its funds and properties are
exempt from garnishment has already been resolved squarely against its
predecessor, the People's Homesite and Housing Corporation (PHHC), to wit:
The plea for setting aside the notice of garnishment was

premised on the funds of the People's Homesite and
Housing Corporation deposited with petitioner being
"public in character." There was not even a categorical
assertion to that effect. It is only the possibility of its being
"public in character." The tone was thus irresolute, the
approach diffident. The premise that the funds could be
spoken of as public in character may be accepted in the sense
that the People's Homesite and Housing Corporation was a
government-owned entity. It does not follow though that they
were exempt from garnishment. 41
This was reiterated in the subsequent case of Philippine Rock Industries, Inc. v.
Board of Liquidators: 42
Having a juridical personality separate and distinct from the

government, the funds of such government-owned and
controlled corporations and non-corporate agency, although
considered public in character, are not exempt from
garnishment. This doctrine was applied to suits filed against
the Philippine Virginia Tobacco Administration (PNB vs.
Pabalan, et al., 83 SCRA 695); the National Shipyard & Steel
Corporation (NASSCO vs. CIR, 118 Phil. 782); the Manila
Hotel Company (Manila Hotel Employees Asso. vs. Manila
Hotel Co., 73 Phil. 374); and the People's Homesite and Housing
Corporation (PNB vs. CIR, 81 SCRA 314). [emphasis supplied]
Hence, it is clear that the funds of petitioner NHA are not exempt from
garnishment or execution. Petitioner's prayer for injunctive relief to restrain
respondent Sheriff Pascual Abordo from enforcing the Notice of Levy and
Garnishment against its funds and properties must, therefore, be denied.
WHEREFORE, in view of the foregoing, the instant petition for review is

DENIED. The decision of the Court of Appeals in CA-G.R. SP No. 68670,
affirming the trial court's Order denying petitioner's Motion to Dismiss the
expropriation proceedings in Civil Case No. CEB-23386, is AFFIRMED.
Petitioner's prayer for injunctive relief against the levy and garnishment of its
funds and personal properties is DENIED. The Temporary Restraining Order
dated January 22, 2003 is LIFTED.
SO ORDERED.
||| (National Housing Authority v. Heirs of Guivelondo, G.R. No. 154411, June 19,
2003)
THIRD DIVISION
[G.R. No. 164079. April 3, 2007.]
NATIONAL POWER CORPORATION, petitioner, vs. DR.

ANTERO BONGBONG and ROSARIO BONGBONG,
respondents.
DECISION
CALLEJO, SR., J p:
Before the Court is a Petition for Review of the Decision 1 of the Court of
Appeals (CA) in CA-G.R. CV No. 65913 dated May 23, 2003, and the Resolution 2
dated April 12, 2004 denying the motion for reconsideration thereof.
Spouses Antero and Rosario Bongbong are the registered owners of a 364,451-
square-meter parcel of land situated at Barangay Sambulawan, Villaba, Leyte. The
property is covered by Original Certificate of Title (OCT) No. R-2189 of the
Register of Deeds of the Province of Leyte.
As early as 1996, the National Power Corporation (NPC) negotiated with the
spouses Bongbong to use a portion of the property for the construction of a 230
KV LCIP Malitbog-Tabango CETL TWR SITE 1046 for the Leyte-Cebu
Interconnection Project. When the spouses Bongbong agreed, NPC occupied a
25,100-sq-m portion of the property. ETISAc
On April 22, 1996, NPC paid the spouses Bongbong the amount of P33,582.00
representing the value of the improvements that were damaged by the
construction of the project. The voucher for the payment of easement fee was
prepared. However, when NPC offered a check for P163,150.00 (representing
10% of the total market value of the area affected) as payment for the easement
fee, Antero refused to accept the amount and demanded that NPC pay the full
value of the 25,100-sq-m portion it had occupied. On October 28, 1997, the
spouses Bongbong received the P163,150.00 under protest. 3
On October 3, 1997, the spouses Bongbong demanded that the NPC pay
P8,748,448.00 which they alleged to be the just and reasonable value for their
land and improvements. The refusal of NPC to heed their demands prompted
the spouses Bongbong to file a complaint 4 for just compensation before the
Regional Trial Court (RTC) of Palompon, Leyte. The case against NPC was
docketed as Civil Case No. PN-0207.
In the complaint, the spouses Bongbong alleged that NPC was given the
authority to enter the property due to its assurances and promises that it would
pay just compensation, but it never did. It pointed out that nearby landowners
were paid P300.00 per sq.m.; considering that the price of land has increased
with the devaluation of the peso, the amount of P250.00 per sq.m. was
reasonable. They prayed, among others, that commissioners be appointed to
determine the fair market value of the land as well as the improvements thereon;
and to recommend that the total amount due and payable to them be at least
P7,493,448.00 (P250.00 per square meter), and that they be paid 10% of the
proceeds as attorney's fees, and P100,000.00 as litigation expenses. IESAac
In its Answer, NPC claimed that its obligation towards the spouses Bongbong
had already been extinguished when it paid the amount of P33,582.15 for the
damaged improvements on April 22, 1996, and the easement fee pursuant to
Republic Act (R.A.) No. 6395, as amended by Presidential Decree (P.D.) No. 938,
in the amount of P163,150.00 on October 28, 1997.
On May 21, 1999, the spouses Bongbong filed a Motion to Admit as Supplement
to the Amended Complaint the New Reappraisal of Plaintiffs' Real Property and
Improvements, 5 dated February 8, 1999. In the said Reappraisal, which was
issued by the Provincial Appraisal Committee (PAC) of Leyte (Resolution No.
03-99), the lot was valued at P300.00 per sq.m..
NPC opposed the motion, alleging that the payment of just compensation should
be based on the market value of the property at the time of its taking in 1997;
pursuant to its charter, it paid only an easement fee. 6
On July 2, 1999, the trial court issued another Order admitting the PAC
Reappraisal. 7 On August 2, 1999, the trial court directed the spouses Bongbong
to submit in writing their proposal on the amount of just compensation, and to
furnish a copy thereof to Atty. Marianito delos Santos, NPC's counsel, who was
given ten days to comment thereon. 8
On August 18, 1999, the spouses Bongbong filed a Motion to Resolve the Market
Value of Plaintiffs' Property and Improvements, 9 praying that the court declare
the value of the land at P350.00 per sq.m. or the total amount of P8,785,000.00,
and declare the value of the improvements to be P1,218,448.00, a total of
P10,003,448.00. cTCADI
Among the pertinent documents the spouses Bongbong submitted to the court
were the following:
1. List of Affected Improvements for the Province of Leyte

affected by the NPC Transmission Lines Project. 10
2. Original Certificate of Title No. N-2189 over the subject

property; 11
3. Tax Declaration No. ARP No. 00034 covering the subject

property; 12
4. Disbursement Voucher for the payment of the easement

fee of P163,150.00; 13
5. Certification dated October 24, 1997, acknowledging

receipt under protest of the payment of P163,150.00
as easement fee; 14
6. Resolution No. 11-97 of the Provincial Appraisal

Committee dated May 2, 1997, finding the value of
the subject property consisting of 25,100 square
meters to be P1,631,500.00 at P65.00 per square
meter; 15 TCaEIc
7. Letter dated January 21, 1999 of Dante Polloso, Project

Manager of NPC, to Atty. Rafael Iriarte, Leyte
Provincial Assessor, requesting for the reappraisal
of the subject property; 16
8. Reappraisal by the Provincial Appraisal Committee dated

February 8, 1999, finding the market value of the
subject property to be P7,530,000.00 at P300.00 per
square meter; 17
9. Letter dated October 3, 1997 of Antero Bongbong to NPC,

demanding payment of P7,530,000.00 for the 25,100
square meters of land plus P1,218,448.00 for
coconuts and other damages; 18
10. Permission to Enter Property for Construction of

Transmission Line Project; 19
11. Deed of Absolute Sale dated January 16, 1997 between

NPC and Spouses Felipe and Mercedes Larrazabal
over a portion of a parcel of land situated in
Naghalin, Kananga, Leyte consisting of 11,281
square meters for P3,384,300.00 at P300.00 per
square meter; 20

NPC and Melchor Larrazabal, in behalf of Faustino
Larrazabal, over a portion of a parcel of land
situated in Naghalin, Kananga, Leyte consisting of
5,027 square meters for P1,508,000.00 at P300.00 per
square meter; 21

NPC and Fedelina L. Tuazon over a portion of a
parcel of land situated in Naghalin, Kananga, Leyte
consisting of 5,700 square meters for P1,710,000.00
at P300.00 per square meter; 22 cTDECH
14. Deed of Absolute Sale dated July 8, 1997 between NPC

and Merlo Aznar, as representative of Aznar
Enterprises, over a portion of a parcel of land
situated in Tabango, San Isidro, Leyte consisting of
61,008 square meters for P18,302,400.00 at P300.00
per square meter; 23

NPC and Florence Tan over a portion of a parcel of
land situated in Naghalin, Kananga, Leyte
consisting of 4,075 square meters for P1,426,250.00
at P350.00 per square meter; 24
16. Deed of Absolute Sale dated March 4, 1997 between NPC

and Yolinda O. Beduya over a portion of a parcel of
land situated in Campokpok, Tabango, Leyte
consisting of 2,109 square meters for P632,700.00 at
P300.00 per square meter; 25 and
17. Deed of Absolute Sale dated March 4, 1997 between NPC

and Trinidad O. Palanas over a parcel of land
situated in Campokpok, Tabango, Leyte consisting
of 2,109 square meters for P632,700.00 at P300.00
per square meter. 26
On November 5, 1999, the trial court issued an Order 27 fixing the just
compensation due to respondent, thus:
WHEREFORE, all the foregoing premises considered, this

Court has determined that the value of the plaintiffs'
property at the time of taking in 1997 is THREE HUNDRED
(P300.00) PESOS per square meter or the total amount of
SEVEN MILLION FIVE HUNDRED THIRTY THOUSAND
(P7,530,000.00) PESOS.
SO ORDERED. 28
The trial court stressed that just compensation should be reckoned from 1997
when the taking took place. It noted that, in 1997, NPC consistently paid P300.00
per square meter to the spouses Felipe and Mercedes Larrazabal, Melchor
Larrazabal, Fedelina Tuazon, Aznar Enterprises, Inc., Yolinda Beduya, and
Trinidad Palanas for the properties it acquired for its transmission lines. It held
that NPC should not discriminate against the spouses Bongbong, who should
thus be paid the same rate. TEDaAc
NPC elevated the case to the CA through a notice of appeal. On May 23, 2003, the
CA rendered a Decision 29 affirming the RTC decision, thus:
WHEREFORE, the assailed November 5, 1999 Order of the

Regional Trial Court of Palompon, Leyte is AFFIRMED in its
entirety.
SO ORDERED. 30
The CA found no cogent reason to reverse the finding of the trial court. It agreed
with the trial court that the spouses Bongbong should not be discriminated
against in the determination of just compensation. Considering therefore that
NPC had paid P300.00 per square meter for properties belonging to other
landowners in the Province of Leyte for the construction of its transmission line,
it should pay respondents the same amount. The appellate court stressed that the
value of the property at the time the government took possession of the land, not
the increased value resulting from the passage of time, represents the true value
to be paid as just compensation for the property taken. 31
Moreover, the CA held that Section 5, Rule 67 of the Revised Rules of Civil
Procedure on the creation of a board of commissioners does not apply to the
present case since it is not an expropriation proceeding. 32
On April 12, 2004, the CA resolved to deny NPC's motion for reconsideration. 33
NPC, now petitioner, filed the instant petition seeking the reversal of the CA
decision on the following grounds:
1. The Court of Appeals seriously and grossly erred in

failing to consider: (a) the value of the land (which
was P65.00 per square meter as of May 2, 1997) and
its character (which was and still is agricultural) at
the time of its taking by NAPOCOR in early 1997;
and (b) that the P300.00 per square meter valuation
thereof is the post-taking reappraisal value made
by the Provincial Appraisal Committee (PAC) on
February 8, 1999, and as such is inapplicable and
cannot be given retroactive effect. aHcDEC
2. The Court of Appeals seriously and grossly erred in

ignoring and in not applying NAPOCOR's Charter
RA No. 6395, as amended, as legal basis for the
payment of just compensation which should consist
of simple right-of-way easement fee of ten [percent]
(10%) of the value of the land, instead of full
compensation, as the reasonable and adequate
disturbance or compensation fee for the right-of-
way easement on agricultural land of respondents
traversed by its overhead transmission lines.
3. Assuming arguendo that full compensation, instead of

simple easement fee is proper, the Court of Appeals
seriously and grossly erred in not ordering the
transfer of the title and ownership over the subject
parcel of land in favor of NAPOCOR. 34
Petitioner argues that the deeds of sale relied upon by the trial court involve
parcels of land 20 to 40 kilometers away from Villaba, Leyte, and as such are
classified and declared as either residential, industrial or commercial lots. On the
other hand, respondents' property is classified as agricultural. It asserts that the
value of the land and its character at the time it was taken by the government
should be the criteria in determining just compensation; hence, it should not
have been based on the reappraisal made by the PAC on February 8, 1999. 35
Petitioner further contends that it should only pay an easement fee and not the
full value of the property since it acquired only a simple right-of-way easement
for the passage of its overhead transmission lines; respondents retained the full
ownership and right to use the land. It points out that under Sec. 3-A 36 of R.A.
No. 6395, as amended by P.D. No. 938, it is only authorized to acquire a right-of-
way easement where a portion of a land will be traversed by transmission lines,
and to pay only an easement fee 10% of the market value of the land. 37
Finally, petitioner submits that the CA should have ordered the transfer of the
title and ownership over the subject portion of the land to petitioner after it had
adjudged the latter liable for the full market value of the property. 38
Respondents, for their part, aver that the present petition should be dismissed for
having been filed out of time. Petitioner's Motion for Extension to File a Petition
for Review should have been filed on or before June 30, 2004, that is, fifteen days
from its receipt of the notice denying its motion for reconsideration; respondent
filed the petition only on July 8, 2006. The Court, in effect, granted no extension
of time since petitioner failed to file its motion for extension of time. 39 cSCTID
Respondents further contend that the court a quo and the CA did not err in fixing
the value of the land at P300.00 per sq.m., the "reappraisal price" determined by
the PAC of Leyte. They aver that, since petitioner did not file an expropriation
case, it had no basis to insist that just compensation be fixed at the price of the
property at the time of the taking (P65.00 per sq.m.). Finally, they assert that the
CA was under no duty to order the transfer of the title and ownership of the land
to petitioner since no payment had yet been made. 40
The issues in this case are as follows: (1) whether the petition for review should
be denied for having been filed out of time; (2) whether the trial court, as
affirmed by the CA, was correct in fixing just compensation at P300.00 per sq.m.;
(3) whether petitioner is obliged to pay the full value of the property taken or
easement fee only; (4) whether the procedure laid down in Rule 67 should be
followed in determining just compensation; and (5) whether the CA erred in not
ordering the transfer of the title over the subject property to petitioner after it
was ordered to pay its full market value.
The petition is partially granted.
The present petition has, indeed, been filed out of time. The records show that
petitioner's Regional Counsel in Cebu City received the CA Resolution denying
the motion for reconsideration on June 15, 2004; hence, petitioner had until June
30, 2004 to file a petition for review or a motion for extension of time to file a
petition for review with this Court. On June 23, 2004, however, the case was
indorsed to the Office of the Solicitor General (OSG). It was only on July 8, 2004
that the OSG was able to file a motion for extension of time to file a petition for
review with the Court. CAaSED
While we agree with respondent that the petition has been filed out of time, we
do not agree with its plea that the petition should be dismissed solely on this
ground. As much as possible, appeals should not be dismissed on a mere
technicality in order to afford the litigants the maximum opportunity for the
adjudication of their cases on the merits. 41 While rules of procedure must be
faithfully followed, they may be relaxed, for persuasive and weighty reasons, to
relieve a litigant of an injustice commensurate with his failure to comply with the
prescribed procedure. 42
Petitioner, through the OSG, explained that it failed to file the motion for
extension of time because it did not participate in the proceedings below and the
case had been indorsed to it only on June 23, 2004. Further, the Solicitor to whom
it was assigned received the records of the case only on July 2, 2004. We find this
explanation adequate to warrant the relaxation of the rules. As will be shown
later, a contrary view would cause an injustice to petitioner whose appeal
deserves to be heard on the merits.
We agree with the contention of petitioner that the trial court erred in the
determination of just compensation at P300.00 per sq.m. based on the fact that it
paid a similar rate to the other landowners whose properties were likewise
acquired by petitioner.
Just compensation is the fair value of the property as between one who receives,
and one who desires to sell, fixed at the time of the actual taking by the
government. This rule holds true when the property is taken before the filing of
an expropriation suit, and even if it is the property owner who brings the action
for compensation. 43 The nature and character of the land at the time of its taking
is the principal criterion for determining how much just compensation should be
given to the landowner. 44 In determining just compensation, all the facts as to
the condition of the property and its surroundings, its improvements and
capabilities, should be considered. 45 IAEcCa
In the present case, the trial court determined just compensation without
considering the differences in the nature and character or condition of the
property compared to the other properties in the province which petitioner had
purchased. It simply relied on the fact that petitioner paid P300.00 per sq.m. to
the other landowners whose lands had been taken as a result of the construction
of transmission lines. But a perusal of the Deeds of Sale shows that the properties
covered by the transmission lines are located in the municipalities of Kananga,
Leyte or Tabango, Leyte, while the subject property is located in Villaba, Leyte;
the Deeds of Sale describe the properties as industrial, residential/commercial,
while the tax declaration of the subject property describes it as "agricultural."
Petitioner consistently pointed out these differences and the trial court should
not have ignored them. It must be stressed that although the determination of the
amount of just compensation is within the court's discretion, it should not be
done arbitrarily or capriciously. It must be based on all established rules, upon
correct legal principles and competent evidence. 46
In addition, petitioner insists that commissioners should at least be appointed to

determine just compensation in accordance with the procedure in Section 5 47 of
Rule 67. On this point, we do not agree with petitioner. Rule 67 need not be
followed where the expropriator has violated procedural requirements. This is
clearly expressed in Republic v. Court of Appeals. 48 In the said case, the National
Irrigation Administration (NIA) contended that it was deprived of due process
when the trial court determined just compensation without the assistance of
commissioners. The Court held as follows:
Rule 67, however, presupposes that NIA exercised its right

of eminent domain by filing a complaint for that purpose
before the appropriate court. Judicial determination of the
propriety of the exercise of the power of eminent domain
and the just compensation for the subject property then
follows. The proceedings give the property owner the
chance to object to the taking of his property and to present
evidence on its value and on the consequential damage to
other parts of his property. cDCaTS
Respondent was not given these opportunities, as NIA did

not observe the procedure in Rule 67. Worse, NIA refused to
pay respondent just compensation. The seizure of one's
property without payment, even though intended for public
use, is a taking without due process of law and a denial of
the equal protection of the laws. NIA, not respondent,
transgressed the requirements of due process.
When a government agency itself violates procedural

requirements, it waives the usual procedure prescribed in
Rule 67. This Court ruled in the recent case of National Power
Corporation ("NPC") v. Court of Appeals, to wit:
We have held that the usual procedure in the determination

of just compensation is waived when the government itself
initially violates procedural requirements. NPC's taking of
Pobre's property without filing the appropriate
expropriation proceedings and paying him just
compensation is a transgression of procedural due process.
(Emphasis supplied.)
Like in NPC, the present case is not an action for

expropriation. NIA never filed expropriation proceedings
although it had ample opportunity to do so. Respondent's
complaint is an ordinary civil action for the recovery of
possession of the Property or its value, and damages. Under
these circumstances, a trial before commissioners is not
necessary. 49 THEDCA
In National Power Corporation v. Court of Appeals, 50 the Court clarified that when
there is no action for expropriation and the case involves only a complaint for
damages or just compensation, the provisions of Rule 67 would not apply, thus:
In this case, NPC appropriated Pobre's Property without

resort to expropriation proceedings. NPC dismissed its own
complaint for the second expropriation. At no point did
NPC institute expropriation proceedings for the lots outside
the 5,554 square-meter portion subject of the second
expropriation. The only issues that the trial court had to
settle were the amount of just compensation and damages
that NPC had to pay Pobre.
This case ceased to be an action for expropriation when NPC

dismissed its complaint for expropriation. Since this case
has been reduced to a simple case of recovery of damages,
the provisions of the Rules of Court on the ascertainment
of the just compensation to be paid were no longer
applicable. A trial before commissioners, for instance, was
dispensable. 51
Further, petitioner insists that if any amount should be paid to respondents, it

should only be an easement fee of 10% the value of the property, not the full
value, since it acquired only a simple right-of-way easement for the passage of its
overhead transmission lines. It points out that its charter authorizes the
acquisition only of a right-of-way easement for its transmission lines and the
payment of an easement fee.
Again, we do not agree. The Court has consistently held that the determination
of just compensation is a judicial function. No statute, decree, or executive order
can mandate that its own determination shall prevail over the court's findings. 52
In National Power Corporation v. Manubay Agro-Industrial Development Corporation,
53 petitioner (also the NPC) likewise sought the expropriation of certain
properties which would be traversed by its transmission lines. In the said case,
petitioner similarly argued that only an easement fee should be paid to
respondent since the construction of the transmission lines would be a mere
encumbrance on the property, and respondent would not be deprived of its
beneficial enjoyment. It posited that respondent should be compensated only for
what it would actually lose, that is, a portion of the aerial domain above its
property. The Court noted, however, that petitioner sought, and was later
granted, authority to enter the property and demolish all the improvements
thereon. It, therefore, concluded that the expropriation would, in fact, not be
limited to an easement of a right of way only. TADaCH
Similarly, the expropriation by petitioner in the present case does not amount to
a mere encumbrance on the property. The records in this case show that
petitioner has occupied a 25,100-sq-m area of respondents' property. This was
not disputed by respondents. Further, the Court ruled in the Manubay case that:
Granting arguendo that what petitioner acquired over

respondent's property was purely an easement of a right of
way, still, we cannot sustain its view that it should pay only
an easement fee, and not the full value of the property. The
acquisition of such an easement falls within the purview of
the power of eminent domain. This conclusion finds support
in similar cases in which the Supreme Court sustained the
award of just compensation for private property condemned
for public use. Republic v. PLDT held, thus:
". . . . Normally, of course, the power of eminent

domain results in the taking or appropriation of
title to, and possession of, the expropriated
property; but no cogent reason appears why the
said power may not be availed of to impose only a
burden upon the owner of condemned property,
without loss of title and possession. It is
unquestionable that real property may, through
expropriation, be subjected to an easement of right
of way."
True, an easement of a right of way transmits no rights

except the easement itself, and respondent retains full
ownership of the property. The acquisition of such easement
is, nevertheless, not gratis. As correctly observed by the CA,
considering the nature and the effect of the installation
power lines, the limitations on the use of the land for an
indefinite period would deprive respondent of normal use
of the property. For this reason, the latter is entitled to
payment of just compensation, which must be neither
more nor less than the monetary equivalent of the land. 54
DSacAE
Finally, the CA did not err in not directing the transfer of the title over the subject
property to petitioner since no payment has yet been made. It is only upon
payment of just compensation that title over the property passes to the
expropriator. 55
In sum, we find that the trial court arbitrarily fixed the amount of just
compensation due to respondent at P300.00 per sq.m. without considering the
differences in the nature, character and condition of the subject property
compared to other properties in the province which petitioner had acquired. For
this reason, the Court has no alternative but to remand the case to the trial court
for the proper determination of just compensation.
IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED.

The case is REMANDED to the Regional Trial Court of Palompon, Leyte, for the
proper determination of just compensation.
SO ORDERED.
||| (National Power Corporation v. Bongbong, G.R. No. 164079, April 03, 2007)
EN BANC
[G.R. No. 166429. December 19, 2005.]
REPUBLIC OF THE PHILIPPINES, Represented by

Executive Secretary Eduardo R. Ermita, the
DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS (DOTC), and the MANILA
INTERNATIONAL AIRPORT AUTHORITY (MIAA),
petitioners, vs. HON. HENRICK F. GINGOYON, In his
capacity as Presiding, and Judge of the Regional Trial
Court, Branch 117, Pasay City and PHILIPPINE
INTERNATIONAL AIR TERMINALS CO., INC.,
respondents.
Romulo Mabanta Buenaventura Sayoc and Delos Angeles for PIATCO.
SYLLABUS
1.POLITICAL LAW; CONSTITUTIONAL LAW; INHERENT RIGHTS OF THE

STATE; RIGHT OF EMINENT DOMAIN; EXTENDS TO PERSONAL AND
REAL PROPERTY; CASE AT BAR. The right of eminent domain extends to
personal and real property, and the NAIA 3 structures, adhered as they are to the
soil, are considered as real property. The public purpose for the expropriation is
also beyond dispute. It should also be noted that Section 1 of Rule 67 (on
Expropriation) recognizes the possibility that the property sought to be
expropriated may be titled in the name of the Republic of the Philippines,
although occupied by private individuals, and in such case an averment to that
effect should be made in the complaint. The instant expropriation complaint did
aver that the NAIA 3 complex "stands on a parcel of land owned by the Bases
Conversion Development Authority, another agency of [the Republic of the
Philippines]."
2.ID.; ID.; STATUTES; REPUBLIC ACT NO. 8974; APPLIES IN INSTANCES

WHEN THE NATIONAL GOVERNMENT EXPROPRIATES PROPERTY FOR
NATIONAL GOVERNMENT INFRASTRUCTURE PROJECTS. Rep. Act No.
8974, which provides for a procedure eminently more favorable to the property
owner than Rule 67, inescapably applies in instances when the national
government expropriates property "for national government infrastructure
projects." Thus, if expropriation is engaged in by the national government for
purposes other than national infrastructure projects, the assessed value standard
and the deposit mode prescribed in Rule 67 continues to apply.
3.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EXPROPRIATION; RULE 67

AND REPUBLIC ACT NO. 8974, DISTINGUISHED. Under both Rule 67 and
Rep. Act No. 8974, the Government commences expropriation proceedings
through the filing of a complaint. Unlike in the case of local governments which
necessitate an authorizing ordinance before expropriation may be accomplished,
there is no need under Rule 67 or Rep. Act No. 8974 for legislative authorization
before the Government may proceed with a particular exercise of eminent
domain. The most crucial difference between Rule 67 and Rep. Act No. 8974
concerns the particular essential step the Government has to undertake to be
entitled to a writ of possession. . . . Rule 67 merely requires the Government to
deposit with an authorized government depositary the assessed value of the
property for expropriation for it to be entitled to a writ of possession. On the
other hand, Rep. Act No. 8974 requires that the Government make a direct
payment to the property owner before the writ may issue. Moreover, such
payment is based on the zonal valuation of the BIR in the case of land, the value
of the improvements or structures under the replacement cost method, or if no
such valuation is available and in cases of utmost urgency, the proffered value of
the property to be seized.
4.POLITICAL LAW; CONSTITUTIONAL LAW; STATUTES; REPUBLIC ACT

NO. 8974; NATIONAL GOVERNMENT PROJECTS, DEFINED. Rep. Act No.
8974 is entitled "An Act to Facilitate the Acquisition of Right-of-Way, Site or
Location for National Government Infrastructure Projects and for Other
Purposes." Obviously, the law is intended to cover expropriation proceedings
intended for national government infrastructure projects. Section 2 of Rep. Act
No. 8974 explains what are considered as "national government projects." "Sec. 2.
National Government Projects. The term "national government projects" shall
refer to all national government infrastructure, engineering works and service
contracts, including projects undertaken by government-owned and controlled
corporations, all projects covered by Republic Act No. 6957, as amended by
Republic Act No. 7718, otherwise known as the Build-Operate-and-Transfer Law,
and other related and necessary activities, such as site acquisition, supply and/or
installation of equipment and materials, implementation, construction,
completion, operation, maintenance, improvement, repair and rehabilitation,
regardless of the source of funding."
5.ID.; ID.; ID.; ID.; CONTEMPLATES WITHIN ITS COVERAGE REAL

PROPERTY ACQUIRED FOR NATIONAL INFRASTRUCTURE PROJECTS;
CASE AT BAR. Since the rights of PIATCO over the NAIA 3 facilities are
established, the nature of these facilities should now be determined. Under
Section 415 (1) of the Civil Code, these facilities are ineluctably immovable or real
property, as they constitute buildings, roads and constructions of all kinds
adhered to the soil. Certainly, the NAIA 3 facilities are of such nature that they
cannot just be packed up and transported by PIATCO like a traveling circus
caravan. Thus, the property subject of expropriation, the NAIA 3 facilities, are
real property owned by PIATCO. . . . Rep. Act No. 8974 contemplates within its
coverage such real property constituting land, buildings, roads and constructions
of all kinds adhered to the soil. Section 1 of Rep. Act No. 8974, which sets the
declaration of the law's policy, refers to "real property acquired for national
government infrastructure projects are promptly paid just compensation."
Section 4 is quite explicit in stating that the scope of the law relates to the
acquisition of "real property," which under civil law includes buildings, roads
and constructions adhered to the soil.
6.ID.; ID.; ID.; ID.; IN CASE THE COMPLETION OF A GOVERNMENT

INFRASTRUCTURE PROJECT IS OF UTMOST URGENCY AND THERE IS NO
EXISTING VALUATION OF THE AREA CONCERNED, THE IMPLEMENTING
AGENCY SHALL IMMEDIATELY PAY THE OWNER OF THE PROPERTY ITS
PROFFERED VALUE. Admittedly, there is no way, at least for the present, to
immediately ascertain the value of the improvements and structures since such
valuation is a matter for factual determination. Yet Rep. Act No. 8974 permits an
expedited means by which the Government can immediately take possession of
the property without having to await precise determination of the valuation.
Section 4 (c) of Rep. Act No. 8974 states that "in case the completion of a
government infrastructure project is of utmost urgency and importance, and
there is no existing valuation of the area concerned, the implementing agency
shall immediately pay the owner of the property its proffered value, taking into
consideration the standards prescribed in Section 5 [of the law]." The "proffered
value" may strike as a highly subjective standard based solely on the intuition of
the government, but Rep. Act No. 8974 does provide relevant standards by
which "proffered value" should be based, as well as the certainty of judicial
determination of the propriety of the proffered value.
7.ID.; ID.; ID.; ID.; MANDATES THE IMMEDIATE PAYMENT OF THE INITIAL
JUST COMPENSATION PRIOR TO THE ISSUANCE OF THE WRIT OF
POSSESSION IN FAVOR OF THE GOVERNMENT. Rep. Act No. 8974
represents a significant change from previous expropriation laws such as Rule
67, or even Section 19 of the Local Government Code. Rule 67 and the Local
Government Code merely provided that the Government deposit the initial
amounts antecedent to acquiring possession of the property with, respectively,
an authorized Government depositary or the proper court. In both cases, the
private owner does not receive compensation prior to the deprivation of
property. On the other hand, Rep. Act No. 8974 mandates immediate payment of
the initial just compensation prior to the issuance of the writ of possession in
favor of the Government. Rep. Act No. 8974 is plainly clear in imposing the
requirement of immediate prepayment, and no amount of statutory
deconstruction can evade such requisite. It enshrines a new approach towards
eminent domain that reconciles the inherent unease attending expropriation
proceedings with a position of fundamental equity. While expropriation
proceedings have always demanded just compensation in exchange for private
property, the previous deposit requirement impeded immediate compensation to
the private owner, especially in cases wherein the determination of the final
amount of compensation would prove highly disputed. Under the new modality
prescribed by Rep. Act No. 8974, the private owner sees immediate monetary
recompense with the same degree of speed as the taking of his/her property.
8.ID.; ID.; ID.; ID.; PROVIDES FOR THE STANDARD THAT GOVERNS THE
EXTENT OF THE ACTS THE GOVERNMENT MAY BE AUTHORIZED TO
PERFORM UPON THE ISSUANCE OF THE WRIT OF POSSESSION; CASE AT
BAR. Rep. Act No. 8974 provides the appropriate answer for the standard that
governs the extent of the acts the Government may be authorized to perform
upon the issuance of the writ of possession. Section 4 states that "the court shall
immediately issue to the implementing agency an order to take possession of the
property and start the implementation of the project." We hold that accordingly,
once the Writ of Possession is effective, the Government itself is authorized to
perform the acts that are essential to the operation of the NAIA 3 as an
international airport terminal upon the effectivity of the Writ of Possession.
These would include the repair, reconditioning and improvement of the
complex, maintenance of the existing facilities and equipment, installation of
new facilities and equipment, provision of services and facilities pertaining to the
facilitation of air traffic and transport, and other services that are integral to a
modern-day international airport.
9.ID.; ID.; ID.; ID.; FINAL DETERMINATION OF JUST COMPENSATION;

PROCEDURE; CASE AT BAR. Rep. Act No. 8974 mandates a speedy method
by which the final determination of just compensation may be had. Section 4
provides: "In the event that the owner of the property contests the implementing
agency's proffered value, the court shall determine the just compensation to be
paid the owner within sixty (60) days from the date of filing of the expropriation
case. When the decision of the court becomes final and executory, the
implementing agency shall pay the owner the difference between the amount
already paid and the just compensation as determined by the court." We hold
that this provision should apply in this case. The sixty (60)-day period prescribed
in Rep. Act No. 8974 gives teeth to the law's avowed policy "to ensure that
owners of real property acquired for national government infrastructure projects
are promptly paid just compensation." In this case, there already has been
irreversible delay in the prompt payment of PIATCO of just compensation, and it
is no longer possible for the RTC to determine the just compensation due
PIATCO within sixty (60) days from the filing of the complaint last 21 December
2004, as contemplated by the law. Still, it is feasible to effectuate the spirit of the
law by requiring the trial court to make such determination within sixty (60)
days from finality of this decision, in accordance with the guidelines laid down
in Rep. Act No. 8974 and its Implementing Rules.
10.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EXPROPRIATION; THE

APPOINTMENT OF COMMISSIONERS UNDER RULE 67 MAY BE RESORTED
TO EVEN IN EXPROPRIATION PROCEEDINGS UNDER REPUBLIC ACT NO.
8974. Rep. Act No. 8974 is silent on the appointment of commissioners tasked
with the ascertainment of just compensation. This protocol though is sanctioned
under Rule 67. We rule that the appointment of commissioners under Rule 67
may be resorted to, even in expropriation proceedings under Rep. Act No. 8974,
since the application of the provisions of Rule 67 in that regard do not conflict
with the statute. As earlier stated, Section 14 of the Implementing Rules does
allow such other incidents affecting the complaint to be resolved under the
provisions on expropriation of Rule 67 of the Rules of Court. Even without Rule
67, reference during trial to a commissioner of the examination of an issue of fact
is sanctioned under Rule 32 of the Rules of Court. But while the appointment of
commissioners under the aegis of Rule 67 may be sanctioned in expropriation
proceedings under Rep. Act No. 8974, the standards to be observed for the
determination of just compensation are provided not in Rule 67 but in the
statute. In particular, the governing standards for the determination of just
compensation for the NAIA 3 facilities are found in Section 10 of the
Implementing Rules for Rep. Act No. 8974, which provides for the replacement
cost method in the valuation of improvements and structures.
11.ID.; ID.; ID.; ID.; OBJECTIONS TO THE ORDER OF APPOINTMENT OF THE

COMMISSIONERS SHOULD BE FILED WITH THE TRIAL COURT. What
Rule 67 does allow though is for the parties to protest the appointment of any of
these commissioners, as provided under Section 5 of the Rule. These objections
though must be filed within ten (10) days from service of the order of
appointment of the commissioners. In this case, the proper recourse of the
Government to challenge the choice of the commissioners is to file an objection
with the trial court, conformably with Section 5, Rule 67, and not as it has done,
assail the same through a special civil action for certiorari. Considering that the
expropriation proceedings in this case were effectively halted seven (7) days after
the Order appointing the commissioners, it is permissible to allow the parties to
file their objections with the RTC within five (5) days from finality of this
decision.
12.JUDICIAL ETHICS; JUDGES; INHIBITION; DISQUALIFICATION OF A

JUDGE IS A DEPRIVATION OF HIS JUDICIAL POWER AND SHOULD NOT
BE ALLOWED ON THE BASIS OF MERE SPECULATIONS AND SURMISES.
The disqualification of a judge is a deprivation of his/her judicial power and
should not be allowed on the basis of mere speculations and surmises. It
certainly cannot be predicated on the adverse nature of the judge's rulings
towards the movant for inhibition, especially if these rulings are in accord with
law. Neither could inhibition be justified merely on the erroneous nature of the
rulings of the judge.
13.REMEDIAL LAW; COURTS; POWERS; COURTS HAVE THE INHERENT

POWER TO AMEND AND CONTROL ITS PROCESSES AND ORDERS SO AS
TO MAKE THEM CONFORMABLE TO LAW AND JUSTICE; CASE AT BAR.
The motu proprio amendment by a court of an erroneous order previously
issued may be sanctioned depending on the circumstances, in line with the long-
recognized principle that every court has inherent power to do all things
reasonably necessary for the administration of justice within the scope of its
jurisdiction. Section 5 (g), Rule 135 of the Rules of Court further recognizes the
inherent power of courts "to amend and control its process and orders so as to
make them conformable to law and justice," a power which Hon. Gingoyon
noted in his 10 January 2005 Omnibus Order. This inherent power includes the
right of the court to reverse itself, especially when in its honest opinion it has
committed an error or mistake in judgment, and that to adhere to its decision
will cause injustice to a party litigant.
14.JUDICIAL ETHICS; JUDGES; INHIBITION; INCOMPETENCE MAY BE A

GROUND FOR ADMINISTRATIVE SANCTION, BUT NOT FOR INHIBITION.
Incompetence may be a ground for administrative sanction, but not for
inhibition, which requires lack of objectivity or impartiality to sit on a case.
PUNO, J., separate opinion:
POLITICAL LAW; CONSTITUTIONAL LAW; JUDICIAL DEPARTMENT;

SUPREME COURT; POWERS; THE POWER TO PROMULGATE RULES OF
PLEADING, PRACTICE AND PROCEDURE IS NO LONGER SHARED BY THE
SUPREME COURT WITH CONGRESS; CASE AT BAR. Article VIII, Sec. 5 of
the 1987 Constitution gave the Supreme Court the following powers: . . . (5)
Promulgate rules concerning the protection and enforcement of constitutional
rights, pleading, practice, and procedure in all courts, the admission to the
practice of law, the Integrated Bar, and legal assistance to the underprivileged.
Such rules shall provide a simplified and inexpensive procedure for the speedy
disposition of cases, shall be uniform for all courts of the same grade, and shall
not diminish, increase, or modify substantive rights. Rules of procedure of
special courts and quasi-judicial bodies shall remain effective unless disapproved
by the Supreme Court. In Echegaray v. Secretary of Justice we emphasized that
the 1987 Constitution strengthened the rule making power of this Court, thus:
The 1987 Constitution molded an even stronger and more independent judiciary.
Among others, it enhanced the rule making power of this Court. . . . The rule
making power of this Court was expanded. This Court for the first time was
given the power to promulgate rules concerning the protection and enforcement
of constitutional rights. . . . But most importantly, the 1987 Constitution took
away the power of Congress to repeal, alter, or supplement rules concerning
pleading, practice and procedure. In fine, the power to promulgate rules of
pleading, practice and procedure is no longer shared by this Court with
Congress . . . . Undoubtedly, Rule 67 is the rule this Court promulgated to govern
the proceedings in expropriation cases filed in court. It has been the undeviating
rule for quite a length of time. Following Article VIII, Section 5 (5) of the 1987
Constitution and the Echegaray jurisprudence, Rule 67 cannot be repealed or
amended by Congress. This prohibition against non-repeal or non-amendment
refers to any part of Rule 67 for Rule 67 is pure procedural law. Consequently,
the Court should not chop Rule 67 into pieces and hold that some can be
changed by Congress but others can be changed. The stance will dilute the rule
making power of this Court which can not be allowed for it will weaken its
institutional independence.
CARPIO, J., separate opinion:
POLITICAL LAW; CONSTITUTIONAL LAW; STATUTES; REPUBLIC ACT NO.

8974; THE IMMEDIATE PAYMENT TO THE PROPERTY OWNER OF THE
FULL ZONAL OR PROFFERED VALUE PRIOR TO TAKEOVER BY THE
GOVERNMENT MUST APPLY TO ALL EXPROPRIATION CASES UNDER
REPUBLIC ACT NO. 8974 INVOLVING THE ACQUISITION OF REAL
PROPERTY FOR NATIONAL GOVERNMENT PROJECTS; CASE AT BAR.
Congress has no power to amend or repeal rules of procedure adopted by the
Supreme Court. However, Congress can enact laws on substantive matters which
are the subject of court procedures. Thus, Congress can prescribe the initial or
minimum amount for just compensation in expropriation cases, and require
immediate payment of such initial or minimum amount as condition for the
immediate takeover of the property by the government. The rules of procedure,
like Rule 67 of the Rules of Court, must adjust automatically to such new laws on
substantive matters. Section 4 of Republic Act No. 8974, mandating immediate
payment to the property owner of the full zonal or proffered value prior to
takeover by the government, is a substantive requirement in expropriation cases.
Thus, Section 4 must apply to all expropriation cases under RA No. 8974
involving the acquisition of real property, like the NAIA Terminal III, for
"national government projects." Even assuming, for the sake of argument, that
Section 4 of RA 8974 is not applicable to the expropriation of NAIA Terminal III,
the Court must still apply the substantive concept in Section 4 of RA 8974 to
expropriation proceedings under Rule 67 to insure equal protection of the law to
property owners. There is no substantial reason to discriminate against property
owners in expropriation cases under Rule 67. Under RA 8974, when private
property is expropriated for a national government project, the government must
first pay the zonal or proffered value to the property owner before the
government can take over the property. In the present case, private property is
expropriated for an admittedly national government project. Thus, the Court
must extend the substantive benefits in Section 4 of RA 8974 to expropriation
cases under Rule 67 to prevent denial of the equal protection of the law.
CORONA, J., dissenting opinion:
1.POLITICAL LAW; CONSTITUTIONAL LAW; INHERENT POWERS OF THE

STATE; EMINENT DOMAIN; LIMITATIONS. The exercise of eminent
domain is circumscribed by two limitations in the Constitution: (1) the taking
must be for public use and (2) just compensation must be paid to the owner of
the private property. These twin proscriptions are grounded on the necessity to
achieve a balance between the interests of the State, on the one hand, and the
private rights of the individual, on the other hand, by effectively restraining the
former and affording protection to the latter. "Public use" as a limitation to the
power of eminent domain is not defined in the Constitution. It is thus considered
in its general notion of meeting a public need or a public exigency. It is not
restricted to clear cases of "use by the public" but embraces whatever may be
beneficially employed for the community. The concept now covers uses which,
while not directly available to the public, redound to their indirect advantage or
benefit. It is generally accepted that it is just as broad as "public welfare."
2.ID.; ID.; ID.; ID.; JUST COMPENSATION; DEFINED. Just compensation is

the just and complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation. The compensation
given to the owner is just if he receives for his property a sum equivalent to its
market value at the time of the taking. "Market value" is the price fixed by the
buyer and the seller in the open market in the usual and ordinary course of legal
trade and competition.
3.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EXPROPRIATION; RULE 67

AND REPUBLIC ACT 8974, DISTINGUISHED. Rule 67 and RA 8974 differ in
the manner of compensating the owner of the property under expropriation.
Under Rule 67, before the government can take possession of the property to be
expropriated, the deposit of an amount equivalent to the assessed value of the
property for taxation purposes is sufficient for the time being, that is, until the
conclusion of the court proceedings where both parties shall have proven their
claims and the court shall have made a factual determination of the price of the
property. Under RA 8974, on the other hand, immediate payment of the full
zonal value (a much bigger sum than the assessed value required by Rule 67) of
the property and improvements and/or structures as determined under Section
7 of the law is required before the government can take possession of the
property.
4.ID.; CIVIL PROCEDURE; JUDGMENTS; LAW OF THE CASE; FINDS

APPLICATION ONLY IN THE SAME CASE BETWEEN THE PARTIES. It is
incorrect to say that Agan constitutes the law of the case. The "law of the case"
doctrine is defined as a term applied to an established rule that, when an
appellate court passes on a question and remands the case to the lower court for
further proceedings, the question there settled becomes the law of the case on
subsequent appeal. Unlike the doctrine of stare decisis, the doctrine of the law of
the case operates only in the particular case. The law of the case finds application
only in the same case between the parties. This case (which refers to the
expropriation of NAIA IPT3) is irrefutably not the same as Agan (which was
about the validity of the so-called "PIATCO contracts"). Hence, the
pronouncements in Agan cannot constitute the law of the case here.
5.ID.; SPECIAL CIVIL ACTIONS; EXPROPRIATION; RULE 67 IS APPLICABLE

IN CASE AT BAR. The application of Rule 67 in the expropriation
proceedings of NAIA IPT3 is in consonance with Agan. The determination and
payment of just compensation pursuant to Rule 67 are in accordance with law.
Under Rule 67, PIATCO will be given FULL JUST COMPENSATION by the
government for the taking of NAIA IPT3. That is mandatory. The Constitution
itself ordains it. Under Rule 67, there is no way the government can unjustly
enrich itself at the expense of PIATCO. Section 9 of Rule 67 ensures this by
requiring the payment of interest from the time government takes possession of
the property.
6.STATUTORY CONSTRUCTION; STATUTES; INTERPRETATION OF;

IMPLIED REPEALS ARE NOT FAVORED; CASE AT BAR. Respondent
judge's theory about Rule 67's supposed repeal by RA 8974 was totally devoid of
factual and legal basis. RA 8974 did not repeal Rule 67 at all. The Constitution
will not allow it. In fact, neither its repealing clause nor any of its provisions even
mentioned or referred to the Rules of Court, whether on expropriation or
anything else. But even assuming (but not conceding) that respondent judge's
theory had been based on an implied repeal, still there would have been no legal
justification for it. Settled is the rule in statutory construction that implied repeals
are not favored. Thus: "The two laws must be absolutely incompatible, and a
clear finding thereof must surface, before the inference of implied repeal may be
drawn. The rule is expressed in the maxim, interpretare et concordare legibus est
optimus interpretendi, i.e., every statute must be so interpreted and brought into
accord with other laws as to form a uniform system of jurisprudence. The
fundament is that the legislature should be presumed to have known the existing
laws on the subject and not have enacted conflicting statutes. Hence, all doubts
must be resolved against any implied repeal, and all efforts should be exerted in
order to harmonize and give effect to all laws on the subject." The foregoing
becomes all the more significant when, as in this case, the provisions of RA 8974
reveal no manifest intent to revoke Rule 67. In fact, Section 14 of the IRR of RA
8974 makes an explicit reference to Rule 67 and mandates its applicability to all
matters regarding defenses and objections to the complaint, issues on uncertain
ownership and conflicting claims, effects of appeal on the rights of the parties
and such other incidents affecting the complaint. If only for this reason,
respondent judge's "repeal theory" is totally erroneous.
7.POLITICAL LAW; CONSTITUTIONAL LAW; JUDICIAL DEPARTMENT;

SUPREME COURT; THE POWER TO PROMULGATE RULES OF PLEADING,
PRACTICE AND PROCEDURE IS NO LONGER SHARED BY THE SUPREME
COURT WITH CONGRESS. [A]ny talk of repeal (whether express or implied)
by legislative enactment of the rules of procedure duly promulgated by this
Court goes against the Constitution itself. The power to promulgate rules of
pleading, practice and procedure was granted by the Constitution to this Court
to enhance its independence. It is no longer shared by this Court with Congress.
The legislature now has no power to annul, modify or augment the Rules of
Court. We expressly declared in Echegaray v. Secretary of Justice that the 1987
Constitution took away the power of Congress to repeal, alter or supplement
rules concerning pleading, practice and procedure.
8.ID.; ID.; ID.; ID.; ID.; CASE AT BAR. There is no question that the
appropriate standard of just compensation is a substantive matter, not
procedural. However, the manner of determining just compensation (including
how it shall be paid and under what conditions a writ of possession may be
issued) is a matter of procedure, not of substantive law. If a rule or statute creates
a right or takes away a vested right, it is substantive. If it operates as a means of
implementing an existing right, then it is procedural. The provisions of Rule 67
neither vest a new power on the State nor create a new right in favor of the
property owner. Rule 67 merely provides the procedure for the State's exercise of
eminent domain and, at the same time, ensures the enforcement of the right of
the private owner to receive just compensation for the taking of his property. It is
purely a matter of procedure. It is therefore exclusively the domain of this Court.
The Constitution prohibits Congress from transgressing this sphere. Congress
cannot legislate the manner of payment of just compensation. Neither can
Congress impose a condition on the issuance of a writ of possession. Yet that is
what RA 8974 precisely does.
9.ID.; ID.; STATUTES; REPUBLIC ACT 8974; WHEN INAPPLICABLE. Section

1 of the IRR of RA 8974 provides that the law covers: "[A]ll acquisition of private
real properties, including improvements therein, needed as right-of-way, site or
location for national government projects undertaken by any department, office
or agency of the national government, including any government-owned or
controlled corporation or state college or university, authorized by law or its
respective charter to undertake national government projects." From this, we can
clearly infer that the law does not apply to the following: (1) expropriation of
private property which is personal or movable property; (2) taking of private
property, whether personal or real, for a purpose other than for right-of-way, site
or location of a national government project; (3) appropriation of private
property for right-of-way, site or location of a project not classified as a national
government project; (4) acquisition of private property for right-of-way, site or
location of a national government project but to be undertaken by an entity not
enumerated in Section 1 of the IRR of RA 8974. In the foregoing situations, it is
Rule 67 of the Rules of Court or the relevant special law (if any) that will apply.
Here, the expropriation of NAIA IPT3 falls under the second category since
petitioners seek to take private property for a purpose other than for a right-of-
way, site or location for a national government project.
10.ID.; ID.; ID.; ID.; INAPPLICABLE IN CASE AT BAR. [U]nder Section 2 (d)
of the IRR of RA 8974 defining "national government projects", an airport (which
NAIA IPT3 essentially is) is specifically listed among the national government
projects for which expropriation proceedings may be initiated under the law.
However, the law and its IRR also provide that the expropriation should be for
the purpose of providing for a right of way, site or location for the intended
national government project. A national government project is separate and
distinct from the purpose of expropriation. Otherwise, there would have been no
need to define them separately. Thus, respondent judge erred when he equated
one with the other and obliterated the clear distinction made by the law.
Moreover, under Section 2 (e) of the IRR, the specific objects or purposes of
expropriation were lumped as 'ROW' which is defined as the "right-of-way, site
or location, with defined physical boundaries, used for a national government
project." Obviously, the NAIA IPT3 is not a right of way, site or location for any
national government infrastructure project but the infrastructure itself albeit still
under construction. The construction (and now the completion) of NAIA IPT3
never required the acquisition of private property for a right of way, site or
location since the terminal, including all its access roads, stands completely on
government land. Conformably, RA 8974 does not apply to the expropriation of
NAIA IPT3. And there being no special law on the matter, Rule 67 of the Rules of
Court governs the procedure for its expropriation.
11.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EXPROPRIATION;

REQUISITES FOR THE ISSUANCE OF THE WRIT OF POSSESSION;
COMPLIED WITH IN CASE AT BAR. Under Section 2 of Rule 67, the only
requisites for authorizing immediate entry (that is, for the issuance of the writ of
possession) in expropriation proceedings are: (1) the filing of a complaint for
expropriation sufficient in form and substance, and (2) a deposit equivalent to
the assessed value for taxation purposes of the property subject to expropriation.
Upon compliance with these two requirements, the issuance of a writ of
possession becomes ministerial. Petitioners complied fully with the requirements
of Rule 67 pertaining to the issuance of the writ allowing entry into the
expropriated facility. First, they duly filed the verified complaint with the court a
quo. Second, PIATCO was served with and notified of the complaint. Third,
petitioners set aside and earmarked P3,022,125,000 as provisional deposit,
equivalent to the assessed value of the property for taxation purposes with the
depositary bank. From then on, it became the ministerial duty of the trial court
presided over by respondent judge to issue the writ of possession. Section 2 of
Rule 67 categorically prescribes the amount to be deposited with the authorized
government depositary as the pre-condition for the issuance of a writ of
possession. This is the assessed value of the property for purposes of taxation.
The figure is exact and permits the court no discretion in determining what the
provisional value should be.
12.POLITICAL LAW; CONSTITUTIONAL LAW; STATUTES; REPUBLIC ACT

8974; WHERE THERE IS NO EXISTING VALUATION OF THE PROPERTY
CONCERNED, ONLY THE PROFFERED VALUE OF THE PROPERTY BY THE
AGENCY REQUESTING EXPROPRIATION IS REQUIRED TO BE PAID FOR
THE ISSUANCE OF THE WRIT. Even assuming for the sake of argument that
it was RA 8974 that was applicable, still the trial court could not order petitioners
to increase their deposit and to immediately pay the zonal value of NAIA IPT3.
Section 4 (c) of the law states that, in cases where there is no existing valuation of
the property concerned, only the proffered value of the property by the agency
requesting expropriation is required to be paid for issuance of the writ. So even if
it had been RA 8974 that was applicable which was not so the amount
deposited by petitioners would have constituted the proffered value estimated
by them, based on comparative values made by the City Assessor. In any case,
the final determination of the total just compensation due the owner will have to
be made in accordance with Rule 67. The provisional deposit shall then be
deducted and petitioners shall pay the balance plus legal interest from the time
petitioners took possession of the property until PIATCO is fully paid.
13.ID.; ID.; INHERENT POWERS OF THE STATE; EMINENT DOMAIN; JUST

COMPENSATION; FULL PAYMENT THEREOF, THOUGH A CONDITION
PRECEDENT FOR THE TRANSFER OF TITLE OR OWNERSHIP, IS NOT A
CONDITION PRECEDENT FOR THE TAKING OF THE PROPERTY. In
expropriation, private property is taken for public use. What constitutes taking is
well-settled in our jurisprudence. The owner is ousted from his property and
deprived of his beneficial enjoyment thereof. The owner's right to possess and
exploit the property (that is to say, his beneficial ownership of it) is "destroyed".
And it is only after the property is taken that the court proceeds to determine just
compensation, upon full payment of which shall title pass on to the expropriator.
. . . Full payment of just compensation, though a condition precedent for the
transfer of title or ownership, is not a condition precedent for the taking of the
property.
14.ID.; ID.; ID.; ID.; THE RIGHT OF BENEFICIAL OWNERSHIP ENJOYED BY

THE EXPROPRIATOR INCLUDES THE RIGHT TO LEASE; CASE AT BAR.
[A]n important element of taking is that the owner's right to possess and exploit
the land (in other words, his beneficial ownership of it) is transferred to and
thenceforth exercised by the expropriator. . . . The question now is whether this
right of beneficial ownership enjoyed by the expropriator includes the right to
lease out the property (or portions thereof) and to award concessions within
NAIA IPT3 to third parties. It does. . . . In this case, petitioners aim to acquire the
NAIA IPT3 as the site of a world-class passenger terminal and airport, and to
complete its construction and operate it for the benefit of the Filipino people.
This is the "public use" purpose of the expropriation. On the other hand, the lease
and concession contracts are the means by which the public purpose of the
expropriation can be attained. Since PIATCO never challenged the "public use"
purpose of the expropriation, the reasonable implications of such public use,
including the award of leases and concessions in the terminal, are deemed
admitted as necessary consequences of such expropriation. Furthermore, in a
contract of lease, only the use and enjoyment of the thing are extended to the
lessee. Thus, one need not be the legal owner of the property in order to give it in
lease. The same is true for the award of concessions which petitioners, as
beneficial owner of the property, can legally grant. Hence, respondent judge
committed grave abuse of discretion when he prohibited petitioners from
exercising acts of ownership in NAIA IPT3.
15.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EXPROPRIATION;

ASCERTAINMENT OF COMPENSATION; APPOINTMENT OF
COMMISSIONERS; OBJECTION THERETO MUST BE FILED WITH THE TRIAL
COURT WITHIN THE PRESCRIBED PERIOD. . . . Rule 67 does not require
consultation with the parties before the court appoints the commissioners.
Neither notice to the parties nor hearing is required for the appointment of
commissioners by the judge. However, in Municipality of Talisay v. Ramirez, we
held that "while it is true that, strictly speaking, it is the court that shall appoint
the said commissioners, there is nothing to prevent it from seeking the
recommendations of the parties on this matter . . . to ensure their fair
representation." This ruling was more or less integrated into the revised rules of
court as the latter now gives the parties ten days from the service of the order
appointing the commissioners to file their objections to any of the appointees.
This, in effect, allows them to protest the appointment of the commissioners
while providing them the opportunity to recommend their own choices. But the
objection must come after the appointment. This is apparent from the second
paragraph of Section 5, Rule 67: "[o]bjections to the appointment of any of the
commissioners shall be filed in court within ten (10) days from service, and shall
be resolved within thirty (30) days after all the commissioners shall have
received copies of the objections." Consequently, if petitioners are unable to
accept the competence of any of the commissioners, their remedy is to file an
objection with the trial court within the stated period. Initiating a certiorari
proceeding on this issue is premature.
16.ID.; ID.; ID.; ID.; ID.; THE COURT IS NOT BOUND BY THE FINDINGS OF
THE COMMISSIONERS. In any case, even if the commissioners are appointed
by the court, the latter is not bound by their findings. . . . The report of the
commissioners on the value of the condemned property is neither final nor
conclusive. The court is permitted to act on the report in any of several ways
enumerated in the rules, at its discretion. It may render such judgment as shall
secure to the plaintiff the property essential to the exercise of his right of
condemnation and, to the defendant, just compensation for the property
expropriated. The court may substitute its own estimate of the value as gathered
from the records.
17.JUDICIAL ETHICS; JUDGES; DISQUALIFICATION; COMPULSORY
DISQUALIFICATION AND VOLUNTARY INHIBITION, DISTINGUISHED.
As a general rule, judges are mandated to hear and decide cases, unless legally
disqualified. However, they may voluntarily excuse themselves, in the exercise
of their sound discretion, for just or valid reasons. The rule on disqualification of
a judge to hear a case finds its rationale in the principle that no judge should
preside in a case in which he is not wholly free, disinterested, impartial and
independent. It is aimed at preserving the people's faith and confidence in the
courts of justice. In compulsory disqualification, the law conclusively presumes
that a judge cannot objectively or impartially sit in a case. In voluntary inhibition,
the law leaves it to the judge to decide for himself whether he will desist from
sitting in a case with only his conscience to guide him.
18.ID.; ID.; ID.; A JUDGE SHOULD INHIBIT HIMSELF FROM THE CASE AT
THE VERY FIRST SIGN OF LACK OF FAITH AND TRUST IN HIS ACTIONS;
CASE AT BAR. A judge, like Caesar's wife, must be above suspicion. He must
hold himself above reproach and suspicion. At the very first sign of lack of faith
and trust in his actions, whether well-grounded or not, the judge has no other
alternative but to inhibit himself from the case. That way, he avoids being
misunderstood. His reputation for probity and objectivity is maintained. Even
more important, the ideal of an impartial administration of justice is preserved.
Justice must not merely be done but must also be seen and perceived to be done.
Besides, where a case has generated a strained personal relationship, animosity
and hostility between the party or his counsel and the judge that the former has
lost confidence in the judge's impartiality or the latter is unable to display the
cold neutrality of an impartial judge, it is a violation of due process for the judge
not to recuse himself from hearing the case. Due process cannot be satisfied in
the absence of that objectivity on the part of a judge sufficient to reassure
litigants of his being fair and just. Respondent judge should have recused himself
from hearing the case in the light of petitioners' patent distrust: "The presiding
judge's impartiality has been irreparably impaired. . . . [A]ny decision, order or
resolution he would make on the incidents of the case would now be under a
cloud of distrust and skepticism. The presiding judge is no longer effective in
dispensing justice to the parties herein." Clearly, it would have been more
prudent for respondent judge to inhibit himself instead of placing any of his
decisions, orders or resolutions under a cloud of distrust. It would have likewise
deprived petitioners or any one else of reason to cast doubt on the integrity of
these expropriation proceedings with national and international implications.
DECISION
TINGA, J p:
The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was
conceived, designed and constructed to serve as the country's show window to
the world. Regrettably, it has spawned controversies. Regrettably too, despite the
apparent completion of the terminal complex way back it has not yet been
operated. This has caused immeasurable economic damage to the country, not to
mention its deplorable discredit in the international community.
In the first case that reached this Court, Agan v. PIATCO, 1 the contracts which
the Government had with the contractor were voided for being contrary to law
and public policy. The second case now before the Court involves the matter of
just compensation due the contractor for the terminal complex it built. We decide
the case on the basis of fairness, the same norm that pervades both the Court's
2004 Resolution in the first case and the latest expropriation law.
The present controversy has its roots with the promulgation of the Court's
decision in Agan v. PIATCO, 2 promulgated in 2003 (2003 Decision). This decision
nullified the "Concession Agreement for the Build-Operate-and-Transfer
Arrangement of the Ninoy Aquino International Airport Passenger Terminal III"
entered into between the Philippine Government (Government) and the
Philippine International Air Terminals Co., Inc. (PIATCO), as well as the
amendments and supplements thereto. The agreement had authorized PIATCO
to build a new international airport terminal (NAIA 3), as well as a franchise to
operate and maintain the said terminal during the concession period of 25 years.
The contracts were nullified, among others, that Paircargo Consortium,
predecessor of PIATCO, did not possess the requisite financial capacity when it
was awarded the NAIA 3 contract and that the agreement was contrary to public
policy. 3
At the time of the promulgation of the 2003 Decision, the NAIA 3 facilities had
already been built by PIATCO and were nearing completion. 4 However, the
ponencia was silent as to the legal status of the NAIA 3 facilities following the
nullification of the contracts, as well as whatever rights of PIATCO for
reimbursement for its expenses in the construction of the facilities. Still, in his
Separate Opinion, Justice Panganiban, joined by Justice Callejo, declared as
follows:
Should government pay at all for reasonable expenses

incurred in the construction of the Terminal? Indeed it
should, otherwise it will be unjustly enriching itself at the
expense of Piatco and, in particular, its funders, contractors
and investors both local and foreign. After all, there is no
question that the State needs and will make use of Terminal
III, it being part and parcel of the critical infrastructure and
transportation-related programs of government. 5
PIATCO and several respondents-intervenors filed their respective motions for

the reconsideration of the 2003 Decision. These motions were denied by the
Court in its Resolution dated 21 January 2004 (2004 Resolution). 6 However, the
Court this time squarely addressed the issue of the rights of PIATCO to refund,
compensation or reimbursement for its expenses in the construction of the NAIA
3 facilities. The holding of the Court on this crucial point follows:
This Court, however, is not unmindful of the reality that

the structures comprising the NAIA IPT III facility are
almost complete and that funds have been spent by
PIATCO in their construction. For the government to take
over the said facility, it has to compensate respondent
PIATCO as builder of the said structures. The
compensation must be just and in accordance with law and
equity for the government can not unjustly enrich itself at
the expense of PIATCO and its investors. 7
After the promulgation of the rulings in Agan, the NAIA 3 facilities have
remained in the possession of PIATCO, despite the avowed intent of the
Government to put the airport terminal into immediate operation. The
Government and PIATCO conducted several rounds of negotiation regarding the
NAIA 3 facilities. 8 It also appears that arbitral proceedings were commenced
before the International Chamber of Commerce International Court of
Arbitration and the International Centre for the Settlement of Investment
Disputes, 9 although the Government has raised jurisdictional questions before
those two bodies. 10
Then, on 21 December 2004, the Government 11 filed a Complaint for

expropriation with the Pasay City Regional Trial Court (RTC), together with an
Application for Special Raffle seeking the immediate holding of a special raffle. The
Government sought upon the filing of the complaint the issuance of a writ of
possession authorizing it to take immediate possession and control over the
NAIA 3 facilities. The Government also declared that it had deposited the
amount of P3,002,125,000.00 12 (3 Billion) 13 in Cash with the Land Bank of the
Philippines, representing the NAIA 3 terminal's assessed value for taxation
purposes. 14
The case 15 was raffled to Branch 117 of the Pasay City RTC, presided by
respondent judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). On the same day
that the Complaint was filed, the RTC issued an Order 16 directing the issuance of
a writ of possession to the Government, authorizing it to "take or enter upon the
possession" of the NAIA 3 facilities. Citing the case of City of Manila v. Serrano, 17
the RTC noted that it had the ministerial duty to issue the writ of possession
upon the filing of a complaint for expropriation sufficient in form and substance,
and upon deposit made by the government of the amount equivalent to the
assessed value of the property subject to expropriation. The RTC found these
requisites present, particularly noting that "[t]he case record shows that [the
Government has] deposited the assessed value of the [NAIA 3 facilities] in the
Land Bank of the Philippines, an authorized depositary, as shown by the
certification attached to their complaint." Also on the same day, the RTC issued a
Writ of Possession. According to PIATCO, the Government was able to take
possession over the NAIA 3 facilities immediately after the Writ of Possession was
issued. 18
However, on 4 January 2005, the RTC issued another Order designed to

supplement its 21 December 2004 Order and the Writ of Possession. In the 4
January 2005 Order, now assailed in the present petition, the RTC noted that its
earlier issuance of its writ of possession was pursuant to Section 2, Rule 67 of the
1997 Rules of Civil Procedure. However, it was observed that Republic Act No.
8974 (Rep. Act No. 8974), otherwise known as "An Act to Facilitate the
Acquisition of Right-of-Way, Site or Location for National Government
Infrastructure Projects and For Other Purposes" and its Implementing Rules and
Regulations (Implementing Rules) had amended Rule 67 in many respects.
CIAcSa
There are at least two crucial differences between the respective procedures
under Rep. Act No. 8974 and Rule 67. Under the statute, the Government is
required to make immediate payment to the property owner upon the filing of
the complaint to be entitled to a writ of possession, whereas in Rule 67, the
Government is required only to make an initial deposit with an authorized
government depositary. Moreover, Rule 67 prescribes that the initial deposit be
equivalent to the assessed value of the property for purposes of taxation, unlike
Rep. Act No. 8974 which provides, as the relevant standard for initial
compensation, the market value of the property as stated in the tax declaration or
the current relevant zonal valuation of the Bureau of Internal Revenue (BIR),
whichever is higher, and the value of the improvements and/or structures using
the replacement cost method.
Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10
of the Implementing Rules, the RTC made key qualifications to its earlier
issuances. First, it directed the Land Bank of the Philippines, Baclaran Branch
(LBP-Baclaran), to immediately release the amount of US$62,343,175.77 to
PIATCO, an amount which the RTC characterized as that which the Government
"specifically made available for the purpose of this expropriation;" and such
amount to be deducted from the amount of just compensation due PIATCO as
eventually determined by the RTC. Second, the Government was directed to
submit to the RTC a Certificate of Availability of Funds signed by authorized
officials to cover the payment of just compensation. Third, the Government was
directed "to maintain, preserve and safeguard" the NAIA 3 facilities or "perform
such as acts or activities in preparation for their direct operation" of the airport
terminal, pending expropriation proceedings and full payment of just
compensation. However, the Government was prohibited "from performing acts
of ownership like awarding concessions or leasing any part of [NAIA 3] to other
parties." 19
The very next day after the issuance of the assailed 4 January 2005 Order, the
Government filed an Urgent Motion for Reconsideration, which was set for hearing
on 10 January 2005. On 7 January 2005, the RTC issued another Order, the second
now assailed before this Court, which appointed three (3) Commissioners to
ascertain the amount of just compensation for the NAIA 3 Complex. That same
day, the Government filed a Motion for Inhibition of Hon. Gingoyon.
The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition on
10 January 2005. On the same day, it denied these motions in an Omnibus Order
dated 10 January 2005. This is the third Order now assailed before this Court.
Nonetheless, while the Omnibus Order affirmed the earlier dispositions in the 4
January 2005 Order, it excepted from affirmance "the superfluous part of the
Order prohibiting the plaintiffs from awarding concessions or leasing any part of
[NAIA 3] to other parties." 20
Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed on
13 January 2005. The petition prayed for the nullification of the RTC orders dated
4 January 2005, 7 January 2005, and 10 January 2005, and for the inhibition of
Hon. Gingoyon from taking further action on the expropriation case. A
concurrent prayer for the issuance of a temporary restraining order and
preliminary injunction was granted by this Court in a Resolution dated 14 January
2005. 21
The Government, in imputing grave abuse of discretion to the acts of Hon.

Gingoyon, raises five general arguments, to wit:
(i)that Rule 67, not Rep. Act No. 8974, governs the present expropriation
proceedings;
(ii)that Hon. Gingoyon erred when he ordered the immediate release of the
amount of US$62.3 Million to PIATCO considering that the assessed value as
alleged in the complaint was only P3 Billion;
(iii)that the RTC could not have prohibited the Government from enjoining the
performance of acts of ownership;
(iv)that the appointment of the three commissioners was erroneous; and IcCDAS
(v)that Hon. Gingoyon should be compelled to inhibit himself from the

expropriation case. 22
Before we delve into the merits of the issues raised by the Government, it is
essential to consider the crucial holding of the Court in its 2004 Resolution in
Agan, which we repeat below:
This Court, however, is not unmindful of the reality that the

structures comprising the NAIA IPT III facility are almost
complete and that funds have been spent by PIATCO in
their construction. For the government to take over the said
facility, it has to compensate respondent PIATCO as
builder of the said structures. The compensation must be
just and in accordance with law and equity for the
government can not unjustly enrich itself at the expense of
PIATCO and its investors. 23
This pronouncement contains the fundamental premises which permeate this

decision of the Court. Indeed, Agan, final and executory as it is, stands as
governing law in this case, and any disposition of the present petition must
conform to the conditions laid down by the Court in its 2004 Resolution.
The 2004 Resolution Which Is Law of This Case Generally Permits Expropriation
The pronouncement in the 2004 Resolution is especially significant to this case
in two aspects, namely: (i) that PIATCO must receive payment of just
compensation determined in accordance with law and equity; and (ii) that the
government is barred from taking over NAIA 3 until such just compensation is
paid. The parties cannot be allowed to evade the directives laid down by this
Court through any mode of judicial action, such as the complaint for eminent
domain.
It cannot be denied though that the Court in the 2004 Resolution prescribed
mandatory guidelines which the Government must observe before it could
acquire the NAIA 3 facilities. Thus, the actions of respondent judge under
review, as well as the arguments of the parties must, to merit affirmation, pass
the threshold test of whether such propositions are in accord with the 2004
Resolution.
The Government does not contest the efficacy of this pronouncement in the 2004
Resolution, 24 thus its application to the case at bar is not a matter of controversy.
Of course, questions such as what is the standard of "just compensation" and
which particular laws and equitable principles are applicable, remain in dispute
and shall be resolved forthwith.
The Government has chosen to resort to expropriation, a remedy available under
the law, which has the added benefit of an integrated process for the
determination of just compensation and the payment thereof to PIATCO. We
appreciate that the case at bar is a highly unusual case, whereby the Government
seeks to expropriate a building complex constructed on land which the State
already owns. 25 There is an inherent illogic in the resort to eminent domain on
property already owned by the State. At first blush, since the State already owns
the property on which NAIA 3 stands, the proper remedy should be akin to an
action for ejectment.
However, the reason for the resort by the Government to expropriation

proceedings is understandable in this case. The 2004 Resolution, in requiring the
payment of just compensation prior to the takeover by the Government of NAIA
3, effectively precluded it from acquiring possession or ownership of the NAIA 3
through the unilateral exercise of its rights as the owner of the ground on which
the facilities stood. Thus, as things stood after the 2004 Resolution, the right of
the Government to take over the NAIA 3 terminal was preconditioned by lawful
order on the payment of just compensation to PIATCO as builder of the
structures.
The determination of just compensation could very well be agreed upon by the
parties without judicial intervention, and it appears that steps towards that
direction had been engaged in. Still, ultimately, the Government resorted to its
inherent power of eminent domain through expropriation proceedings. Is
eminent domain appropriate in the first place, with due regard not only to the
law on expropriation but also to the Court's 2004 Resolution in Agan?
The right of eminent domain extends to personal and real property, and the
NAIA 3 structures, adhered as they are to the soil, are considered as real
property. 26 The public purpose for the expropriation is also beyond dispute. It
should also be noted that Section 1 of Rule 67 (on Expropriation) recognizes the
possibility that the property sought to be expropriated may be titled in the name
of the Republic of the Philippines, although occupied by private individuals, and
in such case an averment to that effect should be made in the complaint. The
instant expropriation complaint did aver that the NAIA 3 complex "stands on a
parcel of land owned by the Bases Conversion Development Authority, another
agency of [the Republic of the Philippines]." 27
Admittedly, eminent domain is not the sole judicial recourse by which the
Government may have acquired the NAIA 3 facilities while satisfying the
requisites in the 2004 Resolution. Eminent domain though may be the most
effective, as well as the speediest means by which such goals may be
accomplished. Not only does it enable immediate possession after satisfaction of
the requisites under the law, it also has a built-in procedure through which just
compensation may be ascertained. Thus, there should be no question as to the
propriety of eminent domain proceedings in this case.
Still, in applying the laws and rules on expropriation in the case at bar, we are
impelled to apply or construe these rules in accordance with the Court's
prescriptions in the 2004 Resolution to achieve the end effect that the
Government may validly take over the NAIA 3 facilities. Insofar as this case is
concerned, the 2004 Resolution is effective not only as a legal precedent, but as
the source of rights and prescriptions that must be guaranteed, if not enforced, in
the resolution of this petition. Otherwise, the integrity and efficacy of the rulings
of this Court will be severely diminished. aDIHTE
It is from these premises that we resolve the first question, whether Rule 67 of the
Rules of Court or Rep. Act No. 8974 governs the expropriation proceedings in
this case.
Application of Rule 67 Violates the 2004 Agan Resolution

The Government insists that Rule 67 of the Rules of Court governs the
expropriation proceedings in this case to the exclusion of all other laws. On the
other hand, PIATCO claims that it is Rep. Act No. 8974 which does apply.
Earlier, we had adverted to the basic differences between the statute and the
procedural rule. Further elaboration is in order.
Rule 67 outlines the procedure under which eminent domain may be exercised
by the Government. Yet by no means does it serve at present as the solitary
guideline through which the State may expropriate private property. For
example, Section 19 of the Local Government Code governs as to the exercise by
local government units of the power of eminent domain through an enabling
ordinance. And then there is Rep. Act No. 8974, which covers expropriation
proceedings intended for national government infrastructure projects.
Rep. Act No. 8974, which provides for a procedure eminently more favorable to
the property owner than Rule 67, inescapably applies in instances when the
national government expropriates property "for national government
infrastructure projects." 28 Thus, if expropriation is engaged in by the national
government for purposes other than national infrastructure projects, the assessed
value standard and the deposit mode prescribed in Rule 67 continues to apply.
Under both Rule 67 and Rep. Act No. 8974, the Government commences
expropriation proceedings through the filing of a complaint. Unlike in the case of
local governments which necessitate an authorizing ordinance before
expropriation may be accomplished, there is no need under Rule 67 or Rep. Act
No. 8974 for legislative authorization before the Government may proceed with a
particular exercise of eminent domain. The most crucial difference between Rule
67 and Rep. Act No. 8974 concerns the particular essential step the Government
has to undertake to be entitled to a writ of possession.
The first paragraph of Section 2 of Rule 67 provides:
SEC. 2.Entry of plaintiff upon depositing value with

authorized government depository. Upon the filing of the
complaint or at any time thereafter and after due notice to
the defendant, the plaintiff shall have the right to take or
enter upon the possession of the real property involved if he
deposits with the authorized government depositary an
amount equivalent to the assessed value of the property
for purposes of taxation to be held by such bank subject to
the orders of the court. Such deposit shall be in money,
unless in lieu thereof the court authorizes the deposit of a
certificate of deposit of a government bank of the Republic
of the Philippines payable on demand to the authorized
government depositary.
In contrast, Section 4 of Rep. Act No. 8974 relevantly states:
SEC. 4.Guidelines for Expropriation Proceedings. Whenever it

is necessary to acquire real property for the right-of-way, site
or location for any national government infrastructure
project through expropriation, the appropriate proceedings
before the proper court under the following guidelines:
a)Upon the filing of the complaint, and after due

notice to the defendant, the implementing agency
shall immediately pay the owner of the property
the amount equivalent to the sum of (1) one
hundred percent (100%) of the value of the
property based on the current relevant zonal
valuation of the Bureau of Internal Revenue (BIR);
and (2) the value of the improvements and/or
structures as determined under Section 7 hereof;
xxx xxx xxx

c)In case the completion of a government
infrastructure project is of utmost urgency and
importance, and there is no existing valuation of
the area concerned, the implementing agency shall
immediately pay the owner of the property its
proffered value taking into consideration the
standards prescribed in Section 5 hereof. ScAHTI
Upon completion with the guidelines abovementioned, the

court shall immediately issue to the implementing agency an
order to take possession of the property and start the
implementation of the project.
Before the court can issue a Writ of Possession, the

implementing agency shall present to the court a certificate
of availability of funds from the proper official concerned.
xxx xxx xxx
As can be gleaned from the above-quoted texts, Rule 67 merely requires the
Government to deposit with an authorized government depositary the assessed
value of the property for expropriation for it to be entitled to a writ of possession.
On the other hand, Rep. Act No. 8974 requires that the Government make a
direct payment to the property owner before the writ may issue. Moreover, such
payment is based on the zonal valuation of the BIR in the case of land, the value
of the improvements or structures under the replacement cost method, 29 or if no
such valuation is available and in cases of utmost urgency, the proffered value of
the property to be seized.
It is quite apparent why the Government would prefer to apply Rule 67 in lieu of
Rep. Act No. 8974. Under Rule 67, it would not be obliged to immediately pay
any amount to PIATCO before it can obtain the writ of possession since all it
need do is deposit the amount equivalent to the assessed value with an
authorized government depositary. Hence, it devotes considerable effort to point
out that Rep. Act No. 8974 does not apply in this case, notwithstanding the
undeniable reality that NAIA 3 is a national government project. Yet, these
efforts fail, especially considering the controlling effect of the 2004 Resolution in
Agan on the adjudication of this case.
It is the finding of this Court that the staging of expropriation proceedings in this
case with the exclusive use of Rule 67 would allow for the Government to take
over the NAIA 3 facilities in a fashion that directly rebukes our 2004 Resolution
in Agan. This Court cannot sanction deviation from its own final and executory
orders.
Section 2 of Rule 67 provides that the State "shall have the right to take or enter
upon the possession of the real property involved if [the plaintiff] deposits with
the authorized government depositary an amount equivalent to the assessed
value of the property for purposes of taxation to be held by such bank subject to
the orders of the court." 30 It is thus apparent that under the provision, all the
Government need do to obtain a writ of possession is to deposit the amount
equivalent to the assessed value with an authorized government depositary.
Would the deposit under Section 2 of Rule 67 satisfy the requirement laid down
in the 2004 Resolution that "[f]or the government to take over the said facility, it
has to compensate respondent PIATCO as builder of the said structures"?
Evidently not.
If Section 2 of Rule 67 were to apply, PIATCO would be enjoined from receiving

a single centavo as just compensation before the Government takes over the
NAIA 3 facility by virtue of a writ of possession. Such an injunction squarely
contradicts the letter and intent of the 2004 Resolution. Hence, the position of the
Government sanctions its own disregard or violation the prescription laid down
by this Court that there must first be just compensation paid to PIATCO before
the Government may take over the NAIA 3 facilities.
Thus, at the very least, Rule 67 cannot apply in this case without violating the
2004 Resolution. Even assuming that Rep. Act No. 8974 does not govern in this
case, it does not necessarily follow that Rule 67 should then apply. After all,
adherence to the letter of Section 2, Rule 67 would in turn violate the Court's
requirement in the 2004 Resolution that there must first be payment of just
compensation to PIATCO before the Government may take over the property.
aCcADT
It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit
under Rule 67 with the scheme of "immediate payment" in cases involving
national government infrastructure projects. The following portion of the Senate
deliberations, cited by PIATCO in its Memorandum, is worth quoting to cogitate
on the purpose behind the plain meaning of the law:
THE CHAIRMAN (SEN. CAYETANO). ". . . Because the

Senate believes that, you know, we have to pay the
landowners immediately not by treasury bills but by cash.
Since we are depriving them, you know, upon payment,

'no, of possession, we might as well pay them as much, 'no,
hindi lang 50 percent.
xxx xxx xxx
THE CHAIRMAN (REP. VERGARA). Accepted.
xxx xxx xxx
THE CHAIRMAN (SEN. CAYETANO). Oo. Because this is

really in favor of the landowners, e.
THE CHAIRMAN (REP. VERGARA). That's why we need to

really secure the availability of funds.
xxx xxx xxx
THE CHAIRMAN (SEN. CAYETANO). No, no. It's the

same. It says here: iyong first paragraph, diba? Iyong zonal
talagang magbabayad muna. In other words, you know,
there must be a payment kaagad. (TSN, Bicameral
Conference on the Disagreeing Provisions of House Bill 1422
and Senate Bill 2117, August 29, 2000, pp. 14-20)
xxx xxx xxx
THE CHAIRMAN (SEN. CAYETANO). Okay, okay, 'no.

Unang-una, it is not deposit, 'no. It's payment."
REP. BATERINA. It's payment, ho, payment." (Id., p. 63) 31
It likewise bears noting that the appropriate standard of just compensation is a

substantive matter. It is well within the province of the legislature to fix the
standard, which it did through the enactment of Rep. Act No. 8974. Specifically,
this prescribes the new standards in determining the amount of just
compensation in expropriation cases relating to national government
infrastructure projects, as well as the payment of the provisional value as a
prerequisite to the issuance of a writ of possession. Of course, rules of procedure,
as distinguished from substantive matters, remain the exclusive preserve of the
Supreme Court by virtue of Section 5(5), Article VIII of the Constitution. Indeed,
Section 14 of the Implementing Rules recognizes the continued applicability of
Rule 67 on procedural aspects when it provides "all matters regarding defenses
and objections to the complaint, issues on uncertain ownership and conflicting
claims, effects of appeal on the rights of the parties, and such other incidents
affecting the complaint shall be resolved under the provisions on expropriation
of Rule 67 of the Rules of Court." 32
Given that the 2004 Resolution militates against the continued use of the norm
under Section 2, Rule 67, is it then possible to apply Rep. Act No. 8974? We find
that it is, and moreover, its application in this case complements rather than
contravenes the prescriptions laid down in the 2004 Resolution.
Rep. Act No. 8974 Fits to the Situation at Bar and Complements the 2004 Agan
Resolution
Rep. Act No. 8974 is entitled "An Act To Facilitate The Acquisition Of Right-Of-
Way, Site Or Location For National Government Infrastructure Projects And For
Other Purposes." Obviously, the law is intended to cover expropriation
proceedings intended for national government infrastructure projects. Section 2
of Rep. Act No. 8974 explains what are considered as "national government
projects."
Sec. 2.National Government Projects. The term "national

government projects" shall refer to all national government
infrastructure, engineering works and service contracts,
including projects undertaken by government-owned and
controlled corporations, all projects covered by Republic Act
No. 6957, as amended by Republic Act No. 7718, otherwise
known as the Build-Operate-and-Transfer Law, and other
related and necessary activities, such as site acquisition,
supply and/or installation of equipment and materials,
implementation, construction, completion, operation,
maintenance, improvement, repair and rehabilitation,
regardless of the source of funding.
As acknowledged in the 2003 Decision, the development of NAIA 3 was made

pursuant to a build-operate-and-transfer arrangement pursuant to Republic Act
No. 6957, as amended, 33 which pertains to infrastructure or development
projects normally financed by the public sector but which are now wholly or
partly implemented by the private sector. 34 Under the build-operate-and-
transfer scheme, it is the project proponent which undertakes the construction,
including the financing, of a given infrastructure facility. 35 In Tatad v. Garcia, 36
the Court acknowledged that the operator of the EDSA Light Rail Transit project
under a BOT scheme was the owner of the facilities such as "the rail tracks,
rolling stocks like the coaches, rail stations, terminals and the power plant." 37
There can be no doubt that PIATCO has ownership rights over the facilities
which it had financed and constructed. The 2004 Resolution squarely recognized
that right when it mandated the payment of just compensation to PIATCO prior
to the takeover by the Government of NAIA 3. The fact that the Government
resorted to eminent domain proceedings in the first place is a concession on its
part of PIATCO's ownership. Indeed, if no such right is recognized, then there
should be no impediment for the Government to seize control of NAIA 3
through ordinary ejectment proceedings. cDTSHE
Since the rights of PIATCO over the NAIA 3 facilities are established, the nature
of these facilities should now be determined. Under Section 415(1) of the Civil
Code, these facilities are ineluctably immovable or real property, as they
constitute buildings, roads and constructions of all kinds adhered to the soil. 38
Certainly, the NAIA 3 facilities are of such nature that they cannot just be packed
up and transported by PIATCO like a traveling circus caravan.
Thus, the property subject of expropriation, the NAIA 3 facilities, are real
property owned by PIATCO. This point is critical, considering the Government's
insistence that the NAIA 3 facilities cannot be deemed as the "right-of-way",
"site" or "location" of a national government infrastructure project, within the
coverage of Rep. Act No. 8974.
There is no doubt that the NAIA 3 is not, under any sensible contemplation, a
"right-of-way." Yet we cannot agree with the Government's insistence that
neither could NAIA 3 be a "site" or "location". The petition quotes the definitions
provided in Black's Law Dictionary of "location'" as the specific place or position
of a person or thing and 'site' as pertaining to a place or location or a piece of
property set aside for specific use.'" 39 Yet even Black's Law Dictionary provides
that "[t]he term [site] does not of itself necessarily mean a place or tract of land
fixed by definite boundaries." 40 One would assume that the Government, to
back up its contention, would be able to point to a clear-cut rule that a "site" or
"location" exclusively refers to soil, grass, pebbles and weeds. There is none.
Indeed, we cannot accept the Government's proposition that the only properties
that may be expropriated under Rep. Act No. 8974 are parcels of land. Rep. Act
No. 8974 contemplates within its coverage such real property constituting land,
buildings, roads and constructions of all kinds adhered to the soil. Section 1 of
Rep. Act No. 8974, which sets the declaration of the law's policy, refers to "real
property acquired for national government infrastructure projects are promptly
paid just compensation." 41 Section 4 is quite explicit in stating that the scope of
the law relates to the acquisition of "real property," which under civil law
includes buildings, roads and constructions adhered to the soil.
It is moreover apparent that the law and its implementing rules commonly
provide for a rule for the valuation of improvements and/or structures
thereupon separate from that of the land on which such are constructed. Section
2 of Rep. Act No. 8974 itself recognizes that the improvements or structures on
the land may very well be the subject of expropriation proceedings. Section 4(a),
in relation to Section 7 of the law provides for the guidelines for the valuation of
the improvements or structures to be expropriated. Indeed, nothing in the law
would prohibit the application of Section 7, which provides for the valuation
method of the improvements and or structures in the instances wherein it is
necessary for the Government to expropriate only the improvements or
structures, as in this case.
The law classifies the NAIA 3 facilities as real properties just like the soil to
which they are adhered. Any sub-classifications of real property and divergent
treatment based thereupon for purposes of expropriation must be based on
substantial distinctions, otherwise the equal protection clause of the Constitution
is violated. There may be perhaps a molecular distinction between soil and the
inorganic improvements adhered thereto, yet there are no purposive distinctions
that would justify a variant treatment for purposes of expropriation. Both the
land itself and the improvements thereupon are susceptible to private ownership
independent of each other, capable of pecuniary estimation, and if taken from the
owner, considered as a deprivation of property. The owner of improvements
seized through expropriation suffers the same degree of loss as the owner of land
seized through similar means. Equal protection demands that all persons or
things similarly situated should be treated alike, both as to rights conferred and
responsibilities imposed. For purposes of expropriation, parcels of land are
similarly situated as the buildings or improvements constructed thereon, and a
disparate treatment between those two classes of real property infringes the
equal protection clause. STcDIE
Even as the provisions of Rep. Act No. 8974 call for that law's application in this
case, the threshold test must still be met whether its implementation would
conform to the dictates of the Court in the 2004 Resolution. Unlike in the case of
Rule 67, the application of Rep. Act No. 8974 will not contravene the 2004
Resolution, which requires the payment of just compensation before any
takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does
not particularize the extent such payment must be effected before the takeover,
but it unquestionably requires at least some degree of payment to the private
property owner before a writ of possession may issue. The utilization of Rep. Act
No. 8974 guarantees compliance with this bare minimum requirement, as it
assures the private property owner the payment of, at the very least, the
proffered value of the property to be seized. Such payment of the proffered value
to the owner, followed by the issuance of the writ of possession in favor of the
Government, is precisely the schematic under Rep. Act No. 8974, one which
facially complies with the prescription laid down in the 2004 Resolution.
Clearly then, we see no error on the part of the RTC when it ruled that Rep. Act
No. 8974 governs the instant expropriation proceedings.
The Proper Amount to be Paid under Rep. Act No. 8974

Then, there is the matter of the proper amount which should be paid to PIATCO
by the Government before the writ of possession may issue, consonant to Rep.
Act No. 8974.
At this juncture, we must address the observation made by the Office of the
Solicitor General in behalf of the Government that there could be no "BIR zonal
valuations" on the NAIA 3 facility, as provided in Rep. Act No. 8974, since zonal
valuations are only for parcels of land, not for airport terminals. The Court
agrees with this point, yet does not see it as an impediment for the application of
Rep. Act No. 8974.
It must be clarified that PIATCO cannot be reimbursed or justly compensated for
the value of the parcel of land on which NAIA 3 stands. PIATCO is not the
owner of the land on which the NAIA 3 facility is constructed, and it should not
be entitled to just compensation that is inclusive of the value of the land itself. It
would be highly disingenuous to compensate PIATCO for the value of land it
does not own. Its entitlement to just compensation should be limited to the value
of the improvements and/or structures themselves. Thus, the determination of
just compensation cannot include the BIR zonal valuation under Section 4 of Rep.
Act No. 8974.
Under Rep. Act No. 8974, the Government is required to "immediately pay" the
owner of the property the amount equivalent to the sum of (1) one hundred
percent (100%) of the value of the property based on the current relevant zonal
valuation of the [BIR]; and (2) the value of the improvements and/or structures
as determined under Section 7. As stated above, the BIR zonal valuation cannot
apply in this case, thus the amount subject to immediate payment should be
limited to "the value of the improvements and/or structures as determined
under Section 7," with Section 7 referring to the "implementing rules and
regulations for the equitable valuation of the improvements and/or structures on
the land." Under the present implementing rules in place, the valuation of the
improvements/structures are to be based using 'the replacement cost method."
42 However, the replacement cost is only one of the factors to be considered in
determining the just compensation.
In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also mandated that
the payment of just compensation should be in accordance with equity as well.
Thus, in ascertaining the ultimate amount of just compensation, the duty of the
trial court is to ensure that such amount conforms not only to the law, such as
Rep. Act No. 8974, but to principles of equity as well. ATHCac
Admittedly, there is no way, at least for the present, to immediately ascertain the
value of the improvements and structures since such valuation is a matter for
factual determination. 43 Yet Rep. Act No. 8974 permits an expedited means by
which the Government can immediately take possession of the property without
having to await precise determination of the valuation. Section 4(c) of Rep. Act
No. 8974 states that "in case the completion of a government infrastructure
project is of utmost urgency and importance, and there is no existing valuation
of the area concerned, the implementing agency shall immediately pay the
owner of the property its proferred value, taking into consideration the
standards prescribed in Section 5 [of the law]." 44 The "proffered value" may
strike as a highly subjective standard based solely on the intuition of the
government, but Rep. Act No. 8974 does provide relevant standards by which
"proffered value" should be based, 45 as well as the certainty of judicial
determination of the propriety of the proffered value. 46
In filing the complaint for expropriation, the Government alleged to have
deposited the amount of P3 Billion earmarked for expropriation, representing the
assessed value of the property. The making of the deposit, including the
determination of the amount of the deposit, was undertaken under the erroneous
notion that Rule 67, and not Rep. Act No. 8974, is the applicable law. Still, as
regards the amount, the Court sees no impediment to recognize this sum of P3
Billion as the proffered value under Section 4(b) of Rep. Act No. 8974. After all, in
the initial determination of the proffered value, the Government is not strictly
required to adhere to any predetermined standards, although its proffered value
may later be subjected to judicial review using the standards enumerated under
Section 5 of Rep. Act No. 8974.
How should we appreciate the questioned order of Hon. Gingoyon, which

pegged the amount to be immediately paid to PIATCO at around $62.3 Million?
The Order dated 4 January 2005, which mandated such amount, proves
problematic in that regard. While the initial sum of P3 Billion may have been
based on the assessed value, a standard which should not however apply in this
case, the RTC cites without qualification Section 4(a) of Rep. Act No. 8974 as the
basis for the amount of $62.3 Million, thus leaving the impression that the BIR
zonal valuation may form part of the basis for just compensation, which should
not be the case. Moreover, respondent judge made no attempt to apply the
enumerated guidelines for determination of just compensation under Section 5 of
Rep. Act No. 8974, as required for judicial review of the proffered value.
The Court notes that in the 10 January 2005 Omnibus Order, the RTC noted that
the concessions agreement entered into between the Government and PIATCO
stated that the actual cost of building NAIA 3 was "not less than" US$350 Million.
47 The RTC then proceeded to observe that while Rep. Act No. 8974 required the
immediate payment to PIATCO the amount equivalent to 100% of the value of
NAIA 3, the amount deposited by the Government constituted only 18% of this
value. At this point, no binding import should be given to this observation that
the actual cost of building NAIA 3 was "not less than" US$350 Million, as the
final conclusions on the amount of just compensation can come only after due
ascertainment in accordance with the standards set under Rep. Act No. 8974, not
the declarations of the parties. At the same time, the expressed linkage between
the BIR zonal valuation and the amount of just compensation in this case, is
revelatory of erroneous thought on the part of the RTC.
We have already pointed out the irrelevance of the BIR zonal valuation as an
appropriate basis for valuation in this case, PIATCO not being the owner of the
land on which the NAIA 3 facilities stand. The subject order is flawed insofar as
it fails to qualify that such standard is inappropriate.
It does appear that the amount of US$62.3 Million was based on the certification
issued by the LBP-Baclaran that the Republic of the Philippines maintained a
total balance in that branch amounting to such amount. Yet the actual
representation of the $62.3 Million is not clear. The Land Bank Certification
expressing such amount does state that it was issued upon request of the Manila
International Airport Authority "purportedly as guaranty deposit for the
expropriation complaint." 48 The Government claims in its Memorandum that
the entire amount was made available as a guaranty fund for the final and
executory judgment of the trial court, and not merely for the issuance of the writ
of possession. 49 One could readily conclude that the entire amount of US$62.3
Million was intended by the Government to answer for whatever guaranties may
be required for the purpose of the expropriation complaint. aIcTCS
Still, such intention the Government may have had as to the entire US$62.3
Million is only inferentially established. In ascertaining the proffered value
adduced by the Government, the amount of P3 Billion as the amount deposited
characterized in the complaint as "to be held by [Land Bank] subject to the
[RTC's] orders," 50 should be deemed as controlling. There is no clear evidence
that the Government intended to offer US$62.3 Million as the initial payment of
just compensation, the wording of the Land Bank Certification notwithstanding,
and credence should be given to the consistent position of the Government on
that aspect.
In any event, for the RTC to be able to justify the payment of US$62.3 Million to
PIATCO and not P3 Billion Pesos, he would have to establish that the higher
amount represents the valuation of the structures/improvements, and not the
BIR zonal valuation on the land wherein NAIA 3 is built. The Order dated 5
January 2005 fails to establish such integral fact, and in the absence of
contravening proof, the proffered value of P3 Billion, as presented by the
Government, should prevail.
Strikingly, the Government submits that assuming that Rep. Act No. 8974 is
applicable, the deposited amount of P3 Billion should be considered as the
proffered value, since the amount was based on comparative values made by the
City Assessor. 51 Accordingly, it should be deemed as having faithfully
complied with the requirements of the statute. 52 While the Court agrees that P3
Billion should be considered as the correct proffered value, still we cannot deem
the Government as having faithfully complied with Rep. Act No. 8974. For the
law plainly requires direct payment to the property owner, and not a mere
deposit with the authorized government depositary. Without such direct
payment, no writ of possession may be obtained.
Writ of Possession May Not Be Implemented Until Actual Receipt by PIATCO of

Proferred Value
The Court thus finds another error on the part of the RTC. The RTC authorized
the issuance of the writ of possession to the Government notwithstanding the
fact that no payment of any amount had yet been made to PIATCO, despite the
clear command of Rep. Act No. 8974 that there must first be payment before the
writ of possession can issue. While the RTC did direct the LBP-Baclaran to
immediately release the amount of US$62 Million to PIATCO, it should have
likewise suspended the writ of possession, nay, withdrawn it altogether, until the
Government shall have actually paid PIATCO. This is the inevitable consequence
of the clear command of Rep. Act No. 8974 that requires immediate payment of
the initially determined amount of just compensation should be effected.
Otherwise, the overpowering intention of Rep. Act No. 8974 of ensuring
payment first before transfer of repossession would be eviscerated.
Rep. Act No. 8974 represents a significant change from previous expropriation
laws such as Rule 67, or even Section 19 of the Local Government Code. Rule 67
and the Local Government Code merely provided that the Government deposit
the initial amounts 53 antecedent to acquiring possession of the property with,
respectively, an authorized Government depositary 54 or the proper court. 55 In
both cases, the private owner does not receive compensation prior to the
deprivation of property. On the other hand, Rep. Act No. 8974 mandates
immediate payment of the initial just compensation prior to the issuance of the
writ of possession in favor of the Government.
Rep. Act No. 8974 is plainly clear in imposing the requirement of immediate
prepayment, and no amount of statutory deconstruction can evade such
requisite. It enshrines a new approach towards eminent domain that reconciles
the inherent unease attending expropriation proceedings with a position of
fundamental equity. While expropriation proceedings have always demanded
just compensation in exchange for private property, the previous deposit
requirement impeded immediate compensation to the private owner, especially
in cases wherein the determination of the final amount of compensation would
prove highly disputed. Under the new modality prescribed by Rep. Act No. 8974,
the private owner sees immediate monetary recompense with the same degree of
speed as the taking of his/her property.
While eminent domain lies as one of the inherent powers of the State, there is no
requirement that it undertake a prolonged procedure, or that the payment of the
private owner be protracted as far as practicable. In fact, the expedited procedure
of payment, as highlighted under Rep. Act No. 8974, is inherently more fair,
especially to the layperson who would be hard-pressed to fully comprehend the
social value of expropriation in the first place. Immediate payment placates to
some degree whatever ill-will that arises from expropriation, as well as satisfies
the demand of basic fairness.
The Court has the duty to implement Rep. Act No. 8974 and to direct compliance
with the requirement of immediate payment in this case. Accordingly, the Writ
of Possession dated 21 December 2004 should be held in abeyance, pending
proof of actual payment by the Government to PIATCO of the proffered value of
the NAIA 3 facilities, which totals P3,002,125,000.00.
Rights of the Government upon Issuance of the Writ of Possession

Once the Government pays PIATCO the amount of the proffered value of P3
Billion, it will be entitled to the Writ of Possession. However, the Government
questions the qualification imposed by the RTC in its 4 January 2005 Order
consisting of the prohibition on the Government from performing acts of
ownership such as awarding concessions or leasing any part of NAIA 3 to other
parties. To be certain, the RTC, in its 10 January 2005 Omnibus Order, expressly
stated that it was not affirming "the superfluous part of the Order [of 4 January
2005] prohibiting the plaintiffs from awarding concessions or leasing any part of
NAIA [3] to other parties." 56 Still, such statement was predicated on the notion
that since the Government was not yet the owner of NAIA 3 until final payment
of just compensation, it was obviously incapacitated to perform such acts of
ownership. CHEIcS
In deciding this question, the 2004 Resolution in Agan cannot be ignored,

particularly the declaration that "[f]or the government to take over the said
facility, it has to compensate respondent PIATCO as builder of the said
structures." The obvious import of this holding is that unless PIATCO is paid just
compensation, the Government is barred from "taking over," a phrase which in
the strictest sense could encompass even a bar of physical possession of NAIA 3,
much less operation of the facilities.
There are critical reasons for the Court to view the 2004 Resolution less
stringently, and thus allow the operation by the Government of NAIA 3 upon the
effectivity of the Writ of Possession. For one, the national prestige is diminished
every day that passes with the NAIA 3 remaining mothballed. For another, the
continued non-use of the facilities contributes to its physical deterioration, if it
has not already. And still for another, the economic benefits to the Government
and the country at large are beyond dispute once the NAIA 3 is put in operation.
Rep. Act No. 8974 provides the appropriate answer for the standard that governs
the extent of the acts the Government may be authorized to perform upon the
issuance of the writ of possession. Section 4 states that "the court shall
property and start the implementation of the project." We hold that
accordingly, once the Writ of Possession is effective, the Government itself is
authorized to perform the acts that are essential to the operation of the NAIA 3
as an international airport terminal upon the effectivity of the Writ of Possession.
These would include the repair, reconditioning and improvement of the
complex, maintenance of the existing facilities and equipment, installation of
new facilities and equipment, provision of services and facilities pertaining to the
facilitation of air traffic and transport, and other services that are integral to a
modern-day international airport.
The Government's position is more expansive than that adopted by the Court. It
argues that with the writ of possession, it is enabled to perform acts de jure on the
expropriated property. It cites Republic v. Tagle, 57 as well as the statement
therein that "the expropriation of real property does not include mere physical
entry or occupation of land," and from them concludes that "its mere physical
entry and occupation of the property fall short of the taking of title, which
includes all the rights that may be exercised by an owner over the subject
property."
This conclusion is indeed lifted directly from statements in Tagle, 58 but not from
the ratio decidendi of that case. Tagle concerned whether a writ of possession in
favor of the Government was still necessary in light of the fact that it was already
in actual possession of the property. In ruling that the Government was entitled
to the writ of possession, the Court in Tagle explains that such writ vested not
only physical possession, but also the legal right to possess the property.
Continues the Court, such legal right to possess was particularly important in the
case, as there was a pending suit against the Republic for unlawful detainer, and
the writ of possession would serve to safeguard the Government from eviction.
59
At the same time, Tagle conforms to the obvious, that there is no transfer of
ownership as of yet by virtue of the writ of possession. Tagle may concede that
the Government is entitled to exercise more than just the right of possession by
virtue of the writ of possession, yet it cannot be construed to grant the
Government the entire panoply of rights that are available to the owner.
Certainly, neither Tagle nor any other case or law, lends support to the
Government's proposition that it acquires beneficial or equitable ownership of
the expropriated property merely through the writ of possession.
Indeed, this Court has been vigilant in defense of the rights of the property
owner who has been validly deprived of possession, yet retains legal title over
the expropriated property pending payment of just compensation. We reiterated
the various doctrines of such import in our recent holding in Republic v. Lim: 60
The recognized rule is that title to the property expropriated

shall pass from the owner to the expropriator only upon full
payment of the just compensation. Jurisprudence on this
settled principle is consistent both here and in other
democratic jurisdictions. In Association of Small Landowners in
the Philippines, Inc. et al., vs. Secretary of Agrarian Reform [ 61 ],
thus:
"Title to property which is the subject of

condemnation proceedings does not vest the
condemnor until the judgment fixing just
compensation is entered and paid, but the
condemnor's title relates back to the date on which
the petition under the Eminent Domain Act, or the
commissioner's report under the Local
Improvement Act, is filed.
. . . Although the right to appropriate and use land

taken for a canal is complete at the time of entry,
title to the property taken remains in the owner
until payment is actually made. (Emphasis
supplied.)
In Kennedy v. Indianapolis, the US Supreme Court

cited several cases holding that title to property
does not pass to the condemnor until just
compensation had actually been made. In fact, the
decisions appear to be uniform to this effect. As
early as 1838, in Rubottom v. McLure, it was held
that 'actual payment to the owner of the
condemned property was a condition precedent to
the investment of the title to the property in the
State' albeit 'not to the appropriation of it to
public use.' In Rexford v. Knight, the Court of
Appeals of New York said that the construction
upon the statutes was that the fee did not vest in
the State until the payment of the compensation
although the authority to enter upon and
appropriate the land was complete prior to the
payment. Kennedy further said that 'both on
principle and authority the rule is . . . that the
right to enter on and use the property is complete,
as soon as the property is actually appropriated
under the authority of law for a public use, but
that the title does not pass from the owner
without his consent, until just compensation has
been made to him."
Our own Supreme Court has held in Visayan
Refining Co. v. Camus and Paredes, that:
'If the laws which we have exhibited or cited in

the preceding discussion are attentively examined
it will be apparent that the method of
expropriation adopted in this jurisdiction is such
as to afford absolute reassurance that no piece of
land can be finally and irrevocably taken from an
unwilling owner until compensation is paid . .
.'"(Emphasis supplied.) IEaCDH
Clearly, without full payment of just compensation, there

can be no transfer of title from the landowner to the
expropriator. Otherwise stated, the Republic's acquisition of
ownership is conditioned upon the full payment of just
compensation within a reasonable time.
Significantly, in Municipality of Bian v. Garcia[ 62 ] this

Court ruled that the expropriation of lands consists of two
stages, to wit:
". . . The first is concerned with the determination

of the authority of the plaintiff to exercise the
power of eminent domain and the propriety of its
exercise in the context of the facts involved in the
suit. It ends with an order, if not of dismissal of the
action, "of condemnation declaring that the plaintiff
has a lawful right to take the property sought to be
condemned, for the public use or purpose
described in the complaint, upon the payment of
just compensation to be determined as of the date
of the filing of the complaint" . . . .
The second phase of the eminent domain action is

concerned with the determination by the court of
"the just compensation for the property sought to
be taken." This is done by the court with the
assistance of not more than three (3)
commissioners. . . . .
It is only upon the completion of these two stages that

expropriation is said to have been completed. In Republic v.
Salem Investment Corporation[ 63 ], we ruled that, "the process
is not completed until payment of just compensation." Thus,
here, the failure of the Republic to pay respondent and his
predecessors-in-interest for a period of 57 years rendered the
expropriation process incomplete.
Lim serves fair warning to the Government and its agencies who consistently
refuse to pay just compensation due to the private property owner whose
property had been expropriated. At the same time, Lim emphasizes the fragility
of the rights of the Government as possessor pending the final payment of just
compensation, without diminishing the potency of such rights. Indeed, the
public policy, enshrined foremost in the Constitution, mandates that the
Government must pay for the private property it expropriates. Consequently, the
proper judicial attitude is to guarantee compliance with this primordial right to
just compensation.
Final Determination of Just Compensation Within 60 Days

The issuance of the writ of possession does not write finis to the expropriation
proceedings. As earlier pointed out, expropriation is not completed until
payment to the property owner of just compensation. The proffered value stands
as merely a provisional determination of the amount of just compensation, the
payment of which is sufficient to transfer possession of the property to the
Government. However, to effectuate the transfer of ownership, it is necessary for
the Government to pay the property owner the final just compensation.
In Lim, the Court went as far as to countenance, given the exceptional

circumstances of that case, the reversion of the validly expropriated property to
private ownership due to the failure of the Government to pay just compensation
in that case. 64 It was noted in that case that the Government deliberately refused
to pay just compensation. The Court went on to rule that "in cases where the
government failed to pay just compensation within five (5) years from the
finality of the judgment in the expropriation proceedings, the owners concerned
shall have the right to recover possession of their property." 65
Rep. Act No. 8974 mandates a speedy method by which the final determination
of just compensation may be had. Section 4 provides:
In the event that the owner of the property contests the

implementing agency's proffered value, the court shall
determine the just compensation to be paid the owner within
sixty (60) days from the date of filing of the expropriation
case. When the decision of the court becomes final and
executory, the implementing agency shall pay the owner the
difference between the amount already paid and the just
compensation as determined by the court.
We hold that this provision should apply in this case. The sixty (60)-day period
prescribed in Rep. Act No. 8974 gives teeth to the law's avowed policy "to ensure
that owners of real property acquired for national government infrastructure
projects are promptly paid just compensation." 66 In this case, there already has
been irreversible delay in the prompt payment of PIATCO of just compensation,
and it is no longer possible for the RTC to determine the just compensation due
PIATCO within sixty (60) days from the filing of the complaint last 21 December
2004, as contemplated by the law. Still, it is feasible to effectuate the spirit of the
law by requiring the trial court to make such determination within sixty (60)
days from finality of this decision, in accordance with the guidelines laid down
in Rep. Act No. 8974 and its Implementing Rules.
Of course, once the amount of just compensation has been finally determined,
the Government is obliged to pay PIATCO the said amount. As shown in Lim
and other like-minded cases, the Government's refusal to make such payment is
indubitably actionable in court.
Appointment of Commissioners
The next argument for consideration is the claim of the Government that the RTC
erred in appointing the three commissioners in its 7 January 2005 Order without
prior consultation with either the Government or PIATCO, or without affording
the Government the opportunity to object to the appointment of these
commissioners. We can dispose of this argument without complication.
It must be noted that Rep. Act No. 8974 is silent on the appointment of
commissioners tasked with the ascertainment of just compensation. 67 This
protocol though is sanctioned under Rule 67. We rule that the appointment of
commissioners under Rule 67 may be resorted to, even in expropriation
proceedings under Rep. Act No. 8974, since the application of the provisions of
Rule 67 in that regard do not conflict with the statute. As earlier stated, Section 14
of the Implementing Rules does allow such other incidents affecting the
complaint to be resolved under the provisions on expropriation of Rule 67 of the
Rules of Court. Even without Rule 67, reference during trial to a commissioner of
the examination of an issue of fact is sanctioned under Rule 32 of the Rules of
Court. DTAHEC
But while the appointment of commissioners under the aegis of Rule 67 may be
sanctioned in expropriation proceedings under Rep. Act No. 8974, the standards
to be observed for the determination of just compensation are provided not in
Rule 67 but in the statute. In particular, the governing standards for the
determination of just compensation for the NAIA 3 facilities are found in Section
10 of the Implementing Rules for Rep. Act No. 8974, which provides for the
replacement cost method in the valuation of improvements and structures. 68
Nothing in Rule 67 or Rep. Act No. 8974 requires that the RTC consult with the
parties in the expropriation case on who should be appointed as commissioners.
Neither does the Court feel that such a requirement should be imposed in this
case. We did rule in Municipality of Talisay v. Ramirez 69 that "there is nothing to
prevent [the trial court] from seeking the recommendations of the parties on [the]
matter [of appointment of commissioners], the better to ensure their fair
representation." 70 At the same time, such solicitation of recommendations is not
obligatory on the part of the court, hence we cannot impute error on the part of
the RTC in its exercise of solitary discretion in the appointment of the
commissioners.
What Rule 67 does allow though is for the parties to protest the appointment of
any of these commissioners, as provided under Section 5 of the Rule. These
objections though must be made filed within ten (10) days from service of the
order of appointment of the commissioners. 71 In this case, the proper recourse
of the Government to challenge the choice of the commissioners is to file an
objection with the trial court, conformably with Section 5, Rule 67, and not as it
has done, assail the same through a special civil action for certiorari. Considering
that the expropriation proceedings in this case were effectively halted seven (7)
days after the Order appointing the commissioners, 72 it is permissible to allow
the parties to file their objections with the RTC within five (5) days from finality
of this decision.
Insufficient Ground for Inhibition of Respondent Judge

The final argument for disposition is the claim of the Government is that Hon.
Gingoyon has prejudged the expropriation case against the Government's cause
and, thus, should be required to inhibit himself. This grave charge is predicated
on facts which the Government characterizes as "undeniable." In particular, the
Government notes that the 4 January 2005 Order was issued motu proprio, without
any preceding motion, notice or hearing. Further, such order, which directed the
payment of US$62 Million to PIATCO, was attended with error in the
computation of just compensation. The Government also notes that the said
Order was issued even before summons had been served on PIATCO.
The disqualification of a judge is a deprivation of his/her judicial power 73 and

should not be allowed on the basis of mere speculations and surmises. It
certainly cannot be predicated on the adverse nature of the judge's rulings
towards the movant for inhibition, especially if these rulings are in accord with
law. Neither could inhibition be justified merely on the erroneous nature of the
rulings of the judge. We emphasized in Webb v. People: 74
To prove bias and prejudice on the part of respondent judge,

petitioners harp on the alleged adverse and erroneous
rulings of respondent judge on their various motions. By
themselves, however, they do not sufficiently prove bias
and prejudice to disqualify respondent judge. To be
disqualifying, the bias and prejudice must be shown to
have stemmed from an extrajudicial source and result in an
opinion on the merits on some basis other than what the
judge learned from his participation in the case. Opinions
formed in the course of judicial proceedings, although
erroneous, as long as they are based on the evidence
presented and conduct observed by the judge, do not prove
personal bias or prejudice on the part of the judge. As a
general rule, repeated rulings against a litigant, no matter
how erroneous and vigorously and consistently expressed,
are not a basis for disqualification of a judge on grounds
of bias and prejudice. Extrinsic evidence is required to
establish bias, bad faith, malice or corrupt purpose, in
addition to the palpable error which may be inferred from
the decision or order itself. Although the decision may
seem so erroneous as to raise doubts concerning a judge's
integrity, absent extrinsic evidence, the decision itself
would be insufficient to establish a case against the judge.
The only exception to the rule is when the error is so gross
and patent as to produce an ineluctable inference of bad
faith or malice. 75
The Government's contentions against Hon. Gingoyon are severely undercut by

the fact that the 21 December 2004 Order, which the 4 January 2005 Order sought
to rectify, was indeed severely flawed as it erroneously applied the provisions of
Rule 67 of the Rules of Court, instead of Rep. Act No. 8974, in ascertaining
compliance with the requisites for the issuance of the writ of possession. The 4
January 2005 Order, which according to the Government establishes Hon.
Gingoyon's bias, was promulgated precisely to correct the previous error by
applying the correct provisions of law. It would not speak well of the Court if it
sanctions a judge for wanting or even attempting to correct a previous erroneous
order which precisely is the right move to take. CacHES
Neither are we convinced that the motu proprio issuance of the 4 January 2005
Order, without the benefit of notice or hearing, sufficiently evinces bias on the
part of Hon. Gingoyon. The motu proprio amendment by a court of an erroneous
order previously issued may be sanctioned depending on the circumstances, in
line with the long-recognized principle that every court has inherent power to do
all things reasonably necessary for the administration of justice within the scope
of its jurisdiction. 76 Section 5(g), Rule 135 of the Rules of Court further
recognizes the inherent power of courts "to amend and control its process and
orders so as to make them conformable to law and justice," 77 a power which
Hon. Gingoyon noted in his 10 January 2005 Omnibus Order. 78 This inherent
power includes the right of the court to reverse itself, especially when in its
honest opinion it has committed an error or mistake in judgment, and that to
adhere to its decision will cause injustice to a party litigant. 79
Certainly, the 4 January 2005 Order was designed to make the RTC's previous
order conformable to law and justice, particularly to apply the correct law of the
case. Of course, as earlier established, this effort proved incomplete, as the 4
January 2005 Order did not correctly apply Rep. Act No. 8974 in several respects.
Still, at least, the 4 January 2005 Order correctly reformed the most basic premise
of the case that Rep. Act No. 8974 governs the expropriation proceedings.
Nonetheless, the Government belittles Hon. Gingoyon's invocation of Section

5(g), Rule 135 as "patently without merit". Certainly merit can be seen by the fact
that the 4 January 2005 Order reoriented the expropriation proceedings towards
the correct governing law. Still, the Government claims that the unilateral act of
the RTC did not conform to law or justice, as it was not afforded the right to be
heard.
The Court would be more charitably disposed towards this argument if not for
the fact that the earlier order with the 4 January 2005 Order sought to correct was
itself issued without the benefit of any hearing. In fact, nothing either in Rule 67
or Rep. Act No. 8975 requires the conduct of a hearing prior to the issuance of the
writ of possession, which by design is available immediately upon the filing of
the complaint provided that the requisites attaching thereto are present. Indeed,
this expedited process for the obtention of a writ of possession in expropriation
cases comes at the expense of the rights of the property owner to be heard or to
be deprived of possession. Considering these predicates, it would be highly awry
to demand that an order modifying the earlier issuance of a writ of possession in
an expropriation case be barred until the staging of a hearing, when the issuance
of the writ of possession itself is not subject to hearing. Perhaps the conduct of a
hearing under these circumstances would be prudent. However, hearing is not
mandatory, and the failure to conduct one does not establish the manifest bias
required for the inhibition of the judge.
The Government likewise faults Hon. Gingoyon for using the amount of US$350
Million as the basis for the 100% deposit under Rep. Act No. 8974. The Court has
noted that this statement was predicated on the erroneous belief that the BIR
zonal valuation applies as a standard for determination of just compensation in
this case. Yet this is manifest not of bias, but merely of error on the part of the
judge. Indeed, the Government was not the only victim of the errors of the RTC
in the assailed orders. PIATCO itself was injured by the issuance by the RTC of
the writ of possession, even though the former had yet to be paid any amount of
just compensation. At the same time, the Government was also prejudiced by the
erroneous ruling of the RTC that the amount of US$62.3 Million, and not P3
Billion, should be released to PIATCO. EAcIST
The Court has not been remiss in pointing out the multiple errors committed by
the RTC in its assailed orders, to the prejudice of both parties. This attitude of
error towards all does not ipso facto negate the charge of bias. Still, great care
should be had in requiring the inhibition of judges simply because the magistrate
did err. Incompetence may be a ground for administrative sanction, but not for
inhibition, which requires lack of objectivity or impartiality to sit on a case.
The Court should necessarily guard against adopting a standard that a judge
should be inhibited from hearing the case if one litigant loses trust in the judge.
Such loss of trust on the part of the Government may be palpable, yet inhibition
cannot be grounded merely on the feelings of the party-litigants. Indeed, every
losing litigant in any case can resort to claiming that the judge was biased, and
he/she will gain a sympathetic ear from friends, family, and people who do not
understand the judicial process. The test in believing such a proposition should
not be the vehemence of the litigant's claim of bias, but the Court's judicious
estimation, as people who know better than to believe any old cry of "wolf!",
whether such bias has been irrefutably exhibited.
The Court acknowledges that it had been previously held that "at the very first
sign of lack of faith and trust in his actions, whether well-grounded or not, the
judge has no other alternative but to inhibit himself from the case." 80 But this
doctrine is qualified by the entrenched rule that "a judge may not be legally
prohibited from sitting in a litigation, but when circumstances appear that will
induce doubt to his honest actuations and probity in favor of either party, or
incite such state of mind, he should conduct a careful self-examination. He
should exercise his discretion in a way that the people's faith in the Courts of
Justice is not impaired." 81 And a self-assessment by the judge that he/she is not
impaired to hear the case will be respected by the Court absent any evidence to
the contrary. As held in Chin v. Court of Appeals:
An allegation of prejudgment, without more, constitutes

mere conjecture and is not one of the "just and valid reasons"
contemplated in the second paragraph of Rule 137 of the
Rules of Court for which a judge may inhibit himself from
hearing the case. We have repeatedly held that mere
suspicion that a judge is partial to a party is not enough.
Bare allegations of partiality and prejudgment will not
suffice in the absence of clear and convincing evidence to
overcome the presumption that the judge will undertake his
noble role to dispense justice according to law and evidence
and without fear or favor. There should be adequate
evidence to prove the allegations, and there must be
showing that the judge had an interest, personal or
otherwise, in the prosecution of the case. To be a
disqualifying circumstance, the bias and prejudice must be
shown to have stemmed from an extrajudicial source and
result in an opinion on the merits on some basis other than
what the judge learned from his participation in the case. 82
The mere vehemence of the Government's claim of bias does not translate to
clear and convincing evidence of impairing bias. There is no sufficient ground to
direct the inhibition of Hon. Gingoyon from hearing the expropriation case.
CDcaSA
In conclusion, the Court summarizes its rulings as follows:
(1)The 2004 Resolution in Agan sets the base requirement that has to be observed
before the Government may take over the NAIA 3, that there must be payment to
PIATCO of just compensation in accordance with law and equity. Any ruling in
the present expropriation case must be conformable to the dictates of the Court
as pronounced in the Agan cases.
(2)Rep. Act No. 8974 applies in this case, particularly insofar as it requires the
immediate payment by the Government of at least the proffered value of the
NAIA 3 facilities to PIATCO and provides certain valuation standards or
methods for the determination of just compensation.
(3)Applying Rep. Act No. 8974, the implementation of Writ of Possession in

favor of the Government over NAIA 3 is held in abeyance until PIATCO is
directly paid the amount of P3 Billion, representing the proffered value of NAIA
3 under Section 4(c) of the law.
(4)Applying Rep. Act No. 8974, the Government is authorized to effectuate the
operation of the Ninoy Aquino International Airport Passenger Terminal III
(NAIA 3) by performing the acts that are essential to its functioning as such upon
the effectivity of the Writ of Possession, subject to the conditions above-stated.
As prescribed by the Court, such authority encompasses "the repair,
reconditioning and improvement of the complex, maintenance of the existing
facilities and equipment, installation of new facilities and equipment, provision
of services and facilities pertaining to the facilitation of air traffic and transport,
and other services that are integral to a modern-day international airport." 83
(5)The RTC is mandated to determine the just compensation within sixty (60)
days from finality of this Decision. In doing so, the RTC is obliged to comply with
"law and equity" as ordained in Again and the standard set under Implementing
Rules of Rep. Act No. 8974 which is the "replacement cost method" as the
standard of valuation of structures and improvements.
(6)There was no grave abuse of discretion attending the RTC Order appointing
the commissioners for the purpose of determining just compensation. The
provisions on commissioners under Rule 67 shall apply insofar as they are not
inconsistent with Rep. Act No. 8974, its Implementing Rules, or the rulings of the
Court in Agan.
(7)The Government shall pay the just compensation fixed in the decision of the
trial court to PIATCO immediately upon the finality of the said decision.
(8)There is no basis for the Court to direct the inhibition of Hon. Gingoyon.
All told, the Court finds no grave abuse of discretion on the part of the RTC to
warrant the nullification of the questioned orders. Nonetheless, portions of these
orders should be modified to conform with law and the pronouncements made
by the Court herein.
WHEREFORE, the Petition is GRANTED in PART with respect to the orders

dated 4 January 2005 and 10 January 2005 of the lower court. Said orders are
AFFIRMED with the following MODIFICATIONS:
1)The implementation of the Writ of Possession dated 21

December 2005 is HELD IN ABEYANCE, pending
payment by petitioners to PIATCO of the amount
of Three Billion Two Million One Hundred Twenty
Five Thousand Pesos (P3,002,125,000.00),
representing the proffered value of the NAIA 3
facilities;
2)Petitioners, upon the effectivity of the Writ of Possession,

are authorized start the implementation of the
Ninoy Aquino International Airport Pasenger
Terminal III project by performing the acts that are
essential to the operation of the said International
Airport Passenger Terminal project;
3)RTC Branch 117 is hereby directed, within sixty (60) days

from finality of this Decision, to determine the just
compensation to be paid to PIATCO by the
Government.
The Order dated 7 January 2005 is AFFIRMED in all respects subject to the
qualification that the parties are given ten (10) days from finality of this Decision
to file, if they so choose, objections to the appointment of the commissioners
decreed therein.
The Temporary Restraining Order dated 14 January 2005 is hereby LIFTED.
SO ORDERED.
Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, Callejo, Sr.,

Azcuna, Chico-Nazario and Garcia., JJ., concur.
Davide, Jr., C.J., I join Mr. Justice Corona in his dissent.
Puno, J., Pls see separate opinion.
Panganiban, J., I join the dissent of Mr. Justice Renato C. Corona.
Carpio, J., See separate opinion. In the result.
Corona, J., Please see dissenting opinion.
Carpio-Morales, J., I join the dissent of J. Corona.
||| (Republic v. Gingoyon, G.R. No. 166429, December 19, 2005)
November 7, 2000
REPUBLIC ACT NO. 8974
AN ACT TO FACILITATE THE ACQUISITION OF RIGHT-OF-WAY,

SITE OR LOCATION FOR NATIONAL GOVERNMENT
INFRASTRUCTURE PROJECTS AND FOR OTHER PURPOSES
SECTION 1. Declaration of Policy. Article III, Section 9 of the Constitution states

that private property shall not be taken for public use without just compensation.
Towards this end, the State shall ensure that owners of real property acquired for
national government infrastructure projects are promptly paid just
compensation. IcESDA
SECTION 2. National Government Projects. The term "national government

projects" shall refer to all national government infrastructure, engineering works
and service contracts, including projects undertaken by government-owned and -
controlled corporations, all projects covered by Republic Act No. 6957, as
amended by Republic Act No. 7718, otherwise known as the Build-Operate-and-
Transfer Law, and other related and necessary activities, such as site acquisition,
supply and/or installation of equipment and materials, implementation,
construction, completion, operation, maintenance, improvement, repair and
rehabilitation, regardless of the source of funding.
SECTION 3. Modes of Acquiring Real Property. The government may acquire

real property needed as right-of-way, site or location for any national
government infrastructure project through donation, negotiated sale,
expropriation or any other mode of acquisition as provided by law.
SECTION 4. Guidelines for Expropriation Proceedings. Whenever it is necessary

to acquire real property for the right-of-way, site or location for any national
government infrastructure project through expropriation, the appropriate
implementing agency shall initiate the expropriation proceedings before the
proper court under the following guidelines:
(a) Upon the filing of the complaint, and after due notice to
the defendant, the implementing agency shall
immediately pay the owner of the property the
amount equivalent to the sum of (1) one hundred
percent (100%) of the value of the property based
on the current relevant zonal valuation of the
Bureau of Internal Revenue (BIR); and (2) the value
of the improvements and/or structures as
determined under Section 7 hereof; DAEICc
(b) In provinces, cities, municipalities and other areas where

there is no zonal valuation, the BIR is hereby
mandated within the period of sixty (60) days from
the date of filing of the expropriation case, to come
up with a zonal valuation for said area; and
(c) In case the completion of a government infrastructure

project is of utmost urgency and importance, and
there is no existing valuation of the area concerned,
the implementing agency shall immediately pay the
owner of the property its proffered value taking
into consideration the standards prescribed in
Section 5 hereof.
Upon compliance with the guidelines abovementioned, the court shall

property and start the implementation of the project.
Before the court can issue a Writ of Possession, the implementing agency shall
present to the court a certificate of availability of funds from the proper official
concerned. acHITE
In the event that the owner of the property contests the implementing agency's
proffered value, the court shall determine the just compensation to be paid the
owner within sixty (60) days from the date of filing of the expropriation case.
When the decision of the court becomes final and executory, the implementing
agency shall pay the owner the difference between the amount already paid and
the just compensation as determined by the court.
SECTION 5. Standards for the Assessment of the Value of the Land Subject of
Expropriation Proceedings or Negotiated Sale. In order to facilitate the
determination of just compensation, the court may consider, among other well-
established factors, the following relevant standards:
(a) The classification and use for which the property is

suited;
(b) The developmental costs for improving the land;
(c) The value declared by the owners;
(d) The current selling price of similar lands in the vicinity;
(e) The reasonable disturbance compensation for the

removal and/or demolition of certain
improvements on the land and for the value of
improvements thereon;
(f) The size, shape or location, tax declaration and zonal

valuation of the land; HcACTE
(g) The price of the land as manifested in the ocular findings,

oral as well as documentary evidence presented;
and
(h) Such facts and events as to enable the affected property

owners to have sufficient funds to acquire
similarly-situated lands of approximate areas as
those required from them by the government, and
thereby rehabilitate themselves as early as possible.
SECTION 6. Guidelines for Negotiated Sale. Should the implementing agency

and the owner of the property agree on a negotiated sale for the acquisition of
right-of-way, site or location for any national government infrastructure project,
the standards prescribed under Section 5 hereof shall be used to determine the
fair market value of the property, subject to review and approval by the head of
the agency or department concerned.
SECTION 7. Valuation of Improvements and/or Structures. The Department of

Public Works and Highways and other implementing agencies concerned, in
coordination with the local government units concerned in the acquisition of
right-of-way, site or location for any national government infrastructure project,
are hereby mandated to adopt within sixty (60) days upon approval of this Act,
the necessary implementing rules and regulations for the equitable valuation of
the improvements and/or structures on the land to be expropriated. cCaEDA
SECTION 8. Ecological and Environmental Concerns. In cases involving the

acquisition of right-of-way, site or location for any national government
infrastructure project, the implementing agency shall take into account the
ecological and environmental impact of the project. Before any national
government project could be undertaken, the agency shall consider
environmental laws, land use ordinances and all pertinent provisions of Republic
Act No. 7160, as amended, otherwise known as the Local Government Code of
1991.
SECTION 9. Squatter Relocation. The government through the National

Housing Authority, in coordination with the local government units and
implementing agencies concerned, shall establish and develop squatter
relocation sites, including the provision of adequate utilities and services, in
anticipation of squatters that have to be removed from the right-of-way or site of
future infrastructure projects. Whenever applicable, the concerned local
government units shall provide and administer the relocation sites.
In case the expropriated land is occupied by squatters, the court shall issue the
necessary "Writ of Demolition" for the purpose of dismantling any and all
structures found within the subject property. The implementing agency shall
take into account and observe diligently the procedure provided for in Sections
28 and 29 of Republic Act No. 7279, otherwise known as the Urban Development
and Housing Act of 1992.
Funds for the relocation sites shall come from appropriations for the purpose
under the General Appropriations Act, as well as from appropriate infrastructure
projects funds of the implementing agency concerned.
SECTION 10. Appropriations for Acquisition of Right-of-Way, Site or Location for Any
National Government Infrastructure Project in Advance of Project Implementation.
The government shall provide adequate appropriations that will allow the
concerned implementing agencies to acquire the required right-of-way, site or
location for any national government infrastructure project. CTaIHE
SECTION 11. Sanctions. Violation of any provision of this Act shall subject the
government official or employee concerned to appropriate administrative, civil
and/or criminal sanctions, including suspension and/or dismissal from the
government service and forfeiture of benefits.
SECTION 12. Rules and Regulations. A committee composed of the Secretary of

the Department of Public Works and Highways as chairperson, and the
secretaries of the Department of Transportation and Communications, the
Department of Energy, and the Department of Justice, and the presidents of the
leagues of provinces, cities and municipalities as members shall prepare the
necessary rules and regulations for the proper implementation of this Act within
sixty (60) days from its approval.
SECTION 13. Separability Clause. If any provision of this Act is declared

unconstitutional or invalid, other parts or provisions hereof not affected thereby
shall continue to be in full force and effect.
SECTION 14. Repealing Clause. All laws, decrees, orders, rules and regulations
or parts thereof inconsistent with this Act are hereby repealed or amended
accordingly.
SECTION 15. Effectivity Clause. This Act shall take effect fifteen (15) days
following its publication in at least two (2) newspapers of general circulation.
cIADTC
Approved: November 7, 2000
Published in Malaya and the Manila Bulletin on November 11, 2000.

Published in the Official Gazette, Vol. 97 No. 19 page 2708 on May 7, 2001.
||| (Facilitating the Acquisition of Right-of-Way, Site or Location for National

Government Infrastructure Projects, REPUBLIC ACT NO. 8974 [2000])
February 12, 2001
IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT

NO. 8974 (AN ACT TO FACILITATE THE ACQUISITION OF RIGHT-
OF-WAY, SITE OR LOCATION FOR NATIONAL GOVERNMENT
INFRASTRUCTURE PROJECTS AND FOR OTHER PURPOSES)
Pursuant to the provisions of Section 12 of Republic Act No. 8974,

the following Implementing Rules and Regulations are hereby promulgated
to carry out the provisions of the said Act.
SECTION 1. Coverage. These Implementing Rules and
Regulations shall cover all acquisition of private real properties, including
improvements therein, needed as right-of-way, SITE OR LOCATION for
national government projects undertaken by any department, office and
agency of the national government, including any government-owned or
controlled corporation or state college or university, AUTHORIZED BY
LAW OR ITS RESPECTIVE CHARTER TO UNDERTAKE NATIONAL
GOVERNMENT PROJECTS.
SECTION 2. Definition of Terms. For purposes of these
Implementing Rules and Regulations, the terms hereunder shall be
understood as follows:
a. Act means Republic Act No. 8974, entitled "An Act to
Facilitate the Acquisition of Right-of-Way, Site or
Location for National Government Infrastructure
Projects and for Other Purposes."
b. Implementing Agency refers to any department, bureau,

office, commission, authority or agency of the
national government, including any government-
owned or -controlled corporation or state college or
university, authorized by law or its respective
charter to undertake national government projects.
c. IRR refers to these Implementing Rules and Regulations

for the Act.
d. National government projects based on Section 2 of the

Act, refer to all national government infrastructure,
engineering works and service contracts, including
all projects covered by Republic Act No. 6957, as
amended by Republic Act No. 7718, otherwise
known as the Build-Operate-and-Transfer Law, and
other related and necessary activities undertaken
by an Implementing Agency, such as but not
limited to site acquisition, supply and/or
installation of equipment and materials,
implementation, construction, completion,
operation, maintenance, improvement, repair and
rehabilitation, regardless of the source of funding.
These projects shall include, but not limited to,
highways, including expressways, roads, bridges,
interchanges, tunnels, and related facilities;
railways and mass transit facilities; port
infrastructure, like piers, wharves, quays, storage,
handling, and ferry services; airports and air
navigation; steam and power generation,
transmission and distribution; telecommunications;
information technology infrastructure; irrigation,
flood control and drainage; water and debris
retention structures and dams; water supply,
sewerage, and waste management facilities; schools
and health infrastructure; land reclamation,
dredging and development; industrial and tourism
estates; government schoolbuildings, hospitals, and
other buildings and housing projects; markets and
slaughterhouses; and other similar or related
infrastructure works and services of the national
government, which are intended for public use or
purpose. DaEcTC
e. ROW means right-of-way, site or location, with defined

physical boundaries, used for a national
government project.
SECTION 3. Modes of Acquisition. Pursuant to Section 3 of the

Act, in the acquisition of private lands together with improvements thereon,
an Implementing Agency may avail itself of the following modes of
acquisition:
a. Donation
b. Quit claim
c. Exchange or barter
d. Negotiated sale or purchase
e. Expropriation
f. Any other modes of acquisition authorized by law

SECTION 4. Donation. Any Implementing Agency, which
requires the acquisition of ROW for its projects, may explore, as its first
option, the donation by the private property owners concerned of the
needed portion or whole of their affected properties, i.e., lots with or
without improvements. If the property owner agrees to donate his property
to be acquired by the government as ROW, the deed of donation shall
immediately be prepared. The deed of donation shall be simple and
unconditional, and contain clauses to the effect that the donation is made not
to defraud the donor's creditors, and that the donor has, if necessary,
reserved for himself enough property for his family's subsistence,
sustenance, and support. The donation must be accepted by the donee, i.e.,
the Implementing Agency, and this shall be so indicated in the deed. Entry
to the property may be effected after registration of the deed of donation
with the proper office of the Register of Deeds.
SECTION 5. Quit Claim. If the private property or land is
acquired under the provisions of Special Laws, particularly Commonwealth
Act 141, known as the Public Land Act, which provides a 20-meter strip of
land easement by the government for public use with damages to
improvements only, P.D. No. 635 which increased the reserved area to a 60-
meter strip, and P.D. No. 1361 which authorizes government officials
charged with the prosecution of projects or their representative to take
immediate possession of portion of the property subject to the lien as soon as
the need arises and after due notice to the owners, then a quit claim from the
owners concerned shall be obtained by the Implementing Agency. No
payment by the government shall be made for land acquired under the quit
claim mode. DCaEAS
SECTION 6. Exchange or Barter. The owner of a property needed
for a ROW of a national government project may request the government to
exchange or barter an old abandoned government road or other government
property near the project with his said property, instead of being paid the
money value of his property. The Implementing Agency may favorably
consider this mode, subject to the provisions of relevant laws and the
following conditions:
a. The exchange shall be done on a "value-for-value" basis,
i.e., the properties being exchanged shall be
equivalent in market value or price.
b. If the government property to be exchanged by the

government with the private property was
originally donated by its previous owner, the
donation must be verified to ensure that there is no
condition which prohibits the government from
disposing of it to other private persons. If the said
government property was originally acquired
through sale, the previous owner shall have the
first priority to re-acquire the property if required
by law or by the contract or deed of sale.
c. Owners of property whose land abuts the said abandoned

government road or other property shall not be
deprived of an access, i.e., egress or ingress, to the
new highway to be built, if any.
SECTION 7. Negotiated Sale or Purchase. If the owner of the

property needed for a ROW is not willing to donate his property to the
government, the Implementing Agency shall negotiate with the owner for
the purchase of the property, offering as just compensation the price
indicated in the current zonal valuation issued by the Bureau of Internal
Revenue (BIR) for the area where the private property is located. If the
property owner agrees, then he shall issue to the Implementing Agency a
permit to enter the property so that the project may be started. A contract of
sale shall subsequently be executed between the property owner, and the
Implementing Agency.
In case the owner disagrees with the abovementioned price based
on the BIR zonal valuation, the Implementing Agency shall negotiate with
the owners the purchase price of the said property which shall not be higher
than the fair market value of the property to be determined by using, among
other well-established factors, the following relevant standards, pursuant to
Sections 5 and 6 of the Act:
a. The classification and use for which the property is suited.
This shall be based on the approved land use plan
and/or zoning ordinance, if any, of the city or
municipality concerned.
b. The development costs for improving the land. This shall

be based on the records and estimates of the City or
Municipal Assessor concerned.
c. The value declared by the property owners, as shown in

their latest Tax Declaration Certificates or Sworn
Statements.
d. The current selling price of similar properties in the

vicinity. This shall be based on the records on
Deeds of Sale in the office of the Register of Deeds
concerned. cAaETS
e. The reasonable disturbance compensation for the removal

and/or demolition of certain improvements on the
land and for the value of improvements thereon.
f. The size, shape or location, tax declaration and zonal

valuation of the land.
g. The price of the property as manifested in the ocular
findings, oral as well as documentary evidence
presented.
h. Such facts and events as to enable the affected property

owners to have sufficient funds to acquire
similarly-situated lands whose areas and values
approximate those required from them by the
government, and thereby rehabilitate themselves as
early as possible.
In all cases, the increase in the value of the affected property

brought about by the government project itself shall not be considered in the
determination of the purchase price.
Upon approval of the head of the Implementing Agency concerned
of the valuation using the above-prescribed standards, the said valuation
shall be offered in writing to the owners as the purchase price of the
property.
During the negotiation, the property owner shall be given fifteen
(15) days within which to accept the amount offered by the Implementing
Agency as payment for his property.
SECTION 8. Expropriation. If the owner of a private property
needed by the government implementing agency does not agree to convey
his property to the government by any of the foregoing modes of acquiring
and/or transferring ownership of the property, then the government shall
exercise its right of eminent domain by filing a complaint with the proper
Court for the expropriation of the private property.
The verified complaint shall state with certainty the right and
purpose of expropriation, describe the real or personal property sought to be
expropriated, and join as defendants all persons owning or claiming to own,
or occupying, any part thereof or interest therein, showing as far as
practicable, the interest of each defendant separately. If the title of any
property sought to be condemned appears to be in the name of the Republic
of the Philippines, although occupied by private individuals, or if the title is
otherwise obscure or doubtful so that the plaintiff cannot with accuracy or
certainly specify the real owners, averment to that effect may be made in the
complaint. DTAHSI
Pursuant to Section 4 of the Act, the Implementing Agency shall

comply with the following guidelines:
a. Upon the filing of the complaint, and after due notice to the
defendant/property owner, the Implementing Agency
shall immediately pay the property owner the amount
equivalent to the sum of (1) one hundred percent (100%)
of the value of the property based on the current zonal
valuation of the BIR; and (2) the value of the
improvements and/or structures as determined by the
Implementing Agency, in accordance with Section 10
hereof, pursuant to Section 7 of the Act.
b. In areas where there is no zonal valuation, the BIR is mandated
by the Act to come up with a zonal valuation for said area
within sixty (60) days from the date of the filing of the
expropriation case;
c. In case the completion of a national government project is of
utmost urgency and importance, and there is no existing
valuation of the area concerned, the Implementing Agency
shall immediately pay the owner of the property its
proffered value taking into consideration the standards
stated in the second paragraph of Section 8 hereof,
pursuant to Section 5 of the Act.
SECTION 9. Easement of Right-of-Way. If the portion of a lot
needed for a ROW is minimal such that expenses for surveying or
segregating the said portion from the main lot would be very much more
than the value of the portion of the lot needed, the Implementing Agency
may, if the property owner agrees, resort to the mode of Easement of Right-
of-Way provided for under the civil code. Under this mode, a ROW
easement agreement shall be executed by the property owner and the
Implementing Agency whereby the former will grant the latter an easement
of right-of-way or the right to use the affected portion of the lot as row, but
the owner retains ownership of the said portion of the lot. The implementing
agency shall pay the owner the value of the said portion of the lot based on
the existing zonal valuation declared by the BIR. In addition, the
implementing agency shall compensate the property owner of any
improvements and/or structures on the land affected by the right-of-way in
accordance with Section 10 hereof. Entry by the Implementing Agency to the
acquired property may be effected upon full payment of the value of the
property. AcSIDE
In case the portion of a lot needed is for a power transmission line
right-of-way and the same is classified as an agricultural land, fishpond or
raw land or its actual use or potential use based on actual classification is not
impaired by the construction and maintenance of the transmission line, then
a row easement-agreement shall be executed, but only an easement fee shall
be paid by the implementing agency to the lot owner, to be computed
pursuant to applicable laws, rules and regulations. In addition, the value of
any affected improvements and/or structure on the lot, if any, shall be paid
to the lot owner, to be computed pursuant to Section 10 hereof.
In all cases, the row easement agreement shall be immediately
registered with the Register of Deeds concerned.
SECTION 10. Valuation of Improvements and/or Structures.
Pursuant to Section 7 of the Act, the Implementing Agency shall determine
the valuation of the improvements and/or structures on the land to be
acquired using the replacement cost method. The replacement cost of the
improvements/structures is defined as the amount necessary to replace the
improvements/structures, based on the current market prices for materials,
equipment, labor, contractor's profit and overhead, and all other attendant
costs associated with the acquisition and installation in place of the affected
improvements/structures. In the valuation of the affected
improvements/structures, the Implementing Agency shall consider, among
other things, the kinds and quantities of materials/equipment used, the
location, configuration and other physical features of the properties, and
prevailing construction prices.
SECTION 11. Engagement of Appraisers. The Implementing
Agency may, if it deems necessary, engage the services of government
financing institutions and/or private appraisers duly accredited by the said
institutions to undertake the appraisal of the property, i.e., the land and/or
improvements/structures, and to determine its fair market value. The
Implementing Agency concerned shall consider the recommendations of the
said appraisers in deciding on the purchase price of or just compensation for
the property.
SECTION 12. Writ of Possession. Pursuant to Section 4 of the Act,
upon compliance with the guidelines stated in Section 8 of this IRR, the
court shall immediately issue to the Implementing Agency an order to take
possession of the property and start the implementation of the project.
Before the Court can issue a Writ of Possession, however, the
Implementing Agency shall present to the Court of Certificate of Availability
of Funds signed by authorized officials to cover the payment to be made to
the property owner. ECHSDc
After the Implementing Agency has complied with foregoing
requirements, the Court shall immediately issue the Writ of Possession to
the complainant Implementing Agency.
SECTION 13. Payment of Compensation. Should the property
owner concerned contest the proffered value of the Implementing Agency,
the Court shall determine the just compensation to be paid to the owner
within sixty (60) days from the date of the filing of the expropriation case,
considering the standards set out in Sections 8, 9 and 10 hereof, pursuant to
Section 5 of the Act. When the decision of the Court becomes final and
executory, the Implementing Agency shall pay the owner the difference
between the amount already paid as provided in Section 8 (a) hereof and the
just compensation determined by the court, pursuant to Section 4 of the Act.
SECTION 14. Trial Proceedings. Within the sixty (60)-day period
prescribed by the Act, all matters regarding defenses and objections to the
complaint, issues on uncertain ownership and conflicting claims, effects of
appeal on the rights of the parties, and such other incidents affecting the
complaint shall be resolved under the provisions on expropriation of Rule 67
of the Rules of Court.
SECTION 15. Registration and Recording of Agreements,
Grants/Deeds/Instruments/ Decisions. The Register of Deeds of the province
or city where the property affected by the national government project is
located shall immediately cause the registration or recording of the ROW
agreement, grant, or deed executed by the landowner in favor of the
government or decision on eminent domain cases concerning the acquisition
of the property or easement of ROW of his property or a portion hereof
upon presentation of said agreement, grant, deed or decision without the
need of presentation of the owner's duplicate of title, provided that the
agreement, grant or deed is in a public instrument, duly notarized before a
notary public, or the decision is final and executory as duly certified by the
Clerk of Court of the concerned Court which issued the same.
SECTION 16. Ecological and Environmental Concerns. In cases
involving acquisition of ROW, site or location for any national government
project, the Implementing Agency shall take into account the ecological and
environmental impact of the project. Before any such national government
project can be undertaken, the Implementing Agency shall consider
environmental laws, land use ordinances, and all pertinent provisions of
R.A. No. 7160, as amended, otherwise known as the Local Government Code
of 1991. ETDSAc
SECTION 17. Relocation/Assistance to Displaced Squatters.
Pursuant to Section 9 of the Act, the National Housing Authority (NHA)
shall establish and develop squatters relocation sites, including the provision
of adequate utilities and services, in anticipation of squatters that have to be
removed from the ROW in the site of future infrastructure projects. This
shall be done in coordination with the concerned local government units
(LGUs), the Housing and Urban Development Coordinating Council, the
Implementing Agency, and other government agencies which shall extend
full cooperation and assistance in the establishment and development of the
relocation sites. Whenever applicable as determined by the NHA, the LGUs
concerned shall provided and administer the relocation sites.
In case the land is occupied by squatters, the Court shall issue the
necessary "Writ of Demolition" for the purpose of dismantling any and all
structures found within the property acquired for the ROW. The
Implementing Agency shall take into account and diligently observe the
procedure provided for in Sections 28 and 29 of Republic Act No. 7279
(Urban Development and Housing Act of 1991).
The Department of the Interior and Local Government as well as
the Philippine National Police shall extend full cooperation and assistance to
the Implementing Agency concerned in the peaceful and orderly taking of
the land and removal of structures therein, subject of the expropriation
proceedings.
SECTION 18. Effectivity. These IRR shall take effect after fifteen
(15) days following the publication thereof in at least two newspapers of
general circulation.
Issued this 12th day of February, in the Year of Our Lord, Two
Thousand and One.
COMMITTEE FOR THE IRR OF RA 8974
(SGD.) PANTALEON D. ALVAREZ (SGD.) JOSE ISIDRO N. CAMACHO
Secretary, Department of Secretary, Department of Energy
Transportation and Communications Member
Member
(SGD.) HERNANDO B. PEREZ (SGD.) HILARIO DE PEDRO
Secretary, Department of Justice President, League of Provinces
Member of the Philippines
Member
(SGD.) ALIPIO FERNANDEZ (SGD.) JINGGOY ESTRADA
President, League of Cities President, League of Municipalities
of the Philippines of the Philippines
Member Member
(SGD.) SIMEON A. DATUMANONG
Secretary, Department of Public Works and Highways
Chairperson
Published in Today on June 26, 2001 and July 2, 2001.
||| ( [2001])
SECOND DIVISION
[G.R. No. 179691. December 4, 2013.]
PHILIPPINE BANK OF COMMUNICATIONS, petitioner,

vs. MARY ANN O. YEUNG, respondent.
DECISION
BRION, J p:
We resolve the petition for review on certiorari, 1 filed by the Philippine Bank of
Communications (petitioner), to assail the decision 2 dated August 9, 2006 and the
resolution 3 dated August 2, 2007 of the Court of Appeals (CA) in CA-G.R. SP.
No. 82725. The CA decision reversed and set aside the orders dated November
10, 2003, 4 January 20, 2004, 5 and February 23, 2004 of the Regional Trial Court
(RTC), Davao City, Branch 16, in other Case No. 212-03 granting the issuance of a
writ of possession.
The Factual Antecedents

In order to secure a loan of P1,650,000.00 Mary Ann O. Yeung (respondent),
represented by her attorney-in-fact, Mrs. Le Tio Yeung, executed on December
12, 1994 a Real Estate Mortgage over a property located in Davao City in favor of
the petitioner. The mortgaged property was covered by Transfer Certificate of
Title (TCT) No. T-187433, registered in the respondent's name. On May 2, 1996,
the parties agreed to increase the amount of the loan to P1,950,000.00 as
evidenced by an Amended Real Estate Mortgage.
After the respondent defaulted in her obligation, the petitioner initiated a

petition for extrajudicial foreclosure of the mortgage, pursuant to Act No. 3135,
as amended. 6 The mortgaged property was consequently foreclosed and sold at
public auction for the sum of P2,594,750.00 to the petitioner which emerged as
the highest bidder. aEcSIH
A provisional certificate of sale was issued by the sheriff and the sale was
registered with the Register of Deeds. When the respondent failed to redeem the
mortgage within the one year redemption period, the petitioner consolidated its
ownership over the property, resulting to the cancellation of TCT No. T-187433
and to the issuance of TCT No. T-362374 in its name.
On September 15, 2003, the petitioner filed with the RTC an ex parte petition for
the issuance of a writ of possession, docketed as Other Case No. 212-03.
On November 10, 2003, the RTC granted the petition. The respondent thereafter
filed a motion for recall and/or revocation alleging that the writ of possession
should not have been issued by the RTC because the petitioner failed to remit the
surplus from the proceeds of the sale. When the motion was denied, the
respondent filed a motion for reconsideration (MR) which the RTC likewise
denied. Hence, the respondent brought the matter to the CA on certiorari.
In its August 9, 2006 decision, 7 the CA granted the petition and ruled that the
RTC gravely abused its discretion when it ordered the issuance of a writ of
possession. It found that the P2,594,750.00 bid price far exceeded the
P1,950,000.00 mortgage obligation. Relying on the Court's pronouncement in
Sulit v. Court of Appeals, 8 the CA ruled that the petitioner's failure to remit the
surplus from the proceeds of the foreclosure sale (equivalent to 33% of the
mortgage debt) was a valid ground to defer the issuance of a writ of possession
for reasons of equity. It reversed the RTC orders and ordered the petitioner to
remit the excess from the proceeds of the foreclosure sale to the respondent.
TSHEIc
The petitioner received a copy of the August 9, 2006 CA decision on September 1,

2006. 9 Hence, it had up to September 16, 2006 to file an MR.
On September 13, 2006, the petitioner filed an urgent motion for extension of
time to file an MR, citing lack of material time due to change of counsel as its
ground. It contended that in light of its counsel's withdrawal from the case on
September 11, 2006, or during the reglementary period of filing an MR, it had to
engage the services of another lawyer who required an additional time to
thoroughly study the case. On September 23, 2006, or seven days from the expiry
of the reglementary period to file an MR, the petitioner, through its new counsel,
filed an MR. 10
On March 7, 2007, the CA denied the petitioner's motion for extension of time to
file an MR. The petitioner filed an MR dated April 10, 2007, 11 which the CA
similarly denied. 12 The petitioner thereafter filed a petition for review on
certiorari before this Court to assail the August 9, 2006 decision 13 and the August
2, 2007 resolution 14 of the CA. ASHICc
The Petition
The petitioner insists that the CA erred when it reversed the RTC's decision. It
argues that the Sulit case on which the CA's decision was based, is not analogous
to the present case. It submits that unlike Sulit (where the mortgagor still had an
opportunity to redeem the property at the time of the filing of the petition for the
issuance of a writ of possession), the respondent had failed to redeem the
property within the one year redemption period, thus allowing the petitioner to
consolidate its ownership over the property. It also insists that there was no
excess or surplus from the proceeds of the foreclosure sale because the
respondent's obligation covered the interests, the penalties, the attorney's fees
and the foreclosure expenses.
In these lights, the petitioner maintains that the equitable circumstances found by
the Court in Sulit do not obtain in the present case and the issuance of a writ of
possession, being a ministerial duty of the courts, should be granted.
The petitioner lastly submits that the respondent is guilty of forum shopping
because of her failure to disclose to the Court the pendency of a civil case for
nullity of mortgage and foreclosure sale. aACHDS
The Case for the Respondent

The respondent maintains that the August 9, 2006 CA decision assailed in this
petition had been rendered final and executory by the petitioner's failure to
seasonably file an MR within the reglementary period. She submits that having
attained finality, the decision can no longer be modified or reviewed by this
Court and the petition should thus be dismissed.
The Issues
The petitioner raises the following issues:
I.Whether circumstances exist in this case to warrant the

liberal application of the rules on the reglementary
period of filing appeals or MRs;
II.Whether the case of Sulit is applicable to this case;
III.Whether the petitioner is liable for any excess or surplus

from the proceeds of the sale; and
IV.Whether the respondent is guilty of forum shopping.
Our Ruling
We find the petition impressed with merit. SEHACI
a.Procedural Question Raised

At the outset, we note that the petitioner's MR of the CA decision was filed out of
time. Nevertheless, in accordance with the liberality that pervades the Rules of
Court, and in the interest of justice under the peculiar circumstances of this case,
we opt to take another look at the petitioner's reason for the late MR and thus
consider the MR before the CA to be properly filed.
The general rule is that the failure of the petitioner to timely file an MR within the
15-day reglementary period fixed by law renders the decision or resolution final
and executory. 15 The same rule applies in appeals. The filing and the perfection
of an appeal in the manner and within the period prescribed by law are not only
mandatory but also jurisdictional, and the failure to perfect an appeal has the
effect of rendering the judgment final and executory. 16
Consistent with this principle is the rule that no motion for extension of time to
file an MR shall be allowed. The filing of a motion for extension of time does not,
by itself, interrupt the period fixed by law for the perfection of an appeal. A
movant, upon filing of a motion, has no right to assume that it would be granted
and should verify its status with the court; otherwise, he runs the risk of losing
his right to appeal in the event the court subsequently denies his motion and the
period of appeal had expired. cETDIA
This rule however, is not absolute. In exceptional and meritorious cases, the
Court has applied a liberal approach and relaxed the rigid rules of technical
procedure.
In Republic v. Court of Appeals, 17 we allowed the perfection of the appeal of the

Republic, despite the delay of six days, in order to prevent a gross miscarriage of
justice. In that case, the Court considered the fact that the Republic stands to lose
hundreds of hectares of land already titled in its name.
In Ramos v. Bagasao, 18 we permitted the delay of four days in the filing of a

notice of appeal because the appellant's counsel of record was already dead at
the time the trial court's decision was served.
In Olacao v. National Labor Relations Commission, 19 we also allowed the belated

appeal of the appellant because of the injustice that would result if the appeal
would be dismissed. We found that the subject matter in issue in that case had
already been settled with finality in another case and the eventual dismissal of
the appeal would have had the effect of ordering the appellant to make
reparation to the appellee twice.
In Siguenza v. Court of Appeals, 20 we gave due course to the appeal and decided
the case on the merits inasmuch as, on its face, it appeared to be impressed with
merit. cCTIaS
Also in Barnes v. Padilla, 21 we allowed the liberal construction of the Rules of

Court and suspended the rule that the filing of a motion for extension of time to
file an MR does not toll the period of appeal, to serve substantial justice. We
ruled that the suspension of the rules was not entirely attributable to the
petitioner and the allowance of the petition would not in any way prejudice the
respondents.
The reasons that the Court may consider in applying a liberal construction of the
procedural rules were reiterated in Sanchez v. Court of Appeals, 22 to wit:
Aside from matters of life, liberty, honor or property which

would warrant the suspension of the Rules of the most
mandatory character and an examination and review by the
appellate court of the lower court's findings of fact, the other
elements that should be considered are the following: (a) the
existence of special or compelling circumstances, (b) the
merits of the case, (c) a cause not entirely attributable to the
fault or negligence of the party favored by the suspension of
the rules, (d) a lack of any showing that the review sought is
merely frivolous and dilatory, and (e) the other party will
not be unjustly prejudiced thereby. THEcAS
Moreover, the Court has the discretion to suspend its rules when the
circumstances of the case warrant. In Aguam v. Court of Appeals, 23 we held:
The court has discretion to dismiss or not to dismiss an

appellant's appeal. It is a power conferred on the court,
not a duty. The discretion must be a sound one, to be
exercised in accordance with the tenets of justice and fair
play, having in mind the circumstances obtaining in each
case. . . . Litigations must be decided on their merits and
not on technicality. . . . It is a far better and more prudent
course of action for the court to excuse a technical lapse
and afford the parties a review of the case on appeal to
attain the ends of justice rather than dispose of the case
on technicality and cause a grave injustice to the parties,
giving a false impression of speedy disposal of cases
while actually resulting in more delay, if not a
miscarriage of justice.
In the present case, we find the delay of 7 days, due to the withdrawal of the
petitioner's counsel during the reglementary period of filing an MR, excusable in
light of the merits of the case. Records show that the petitioner immediately
engaged the services of a new lawyer to replace its former counsel and petitioned
the CA to extend the period of filing an MR due to lack of material time to
review the case. There is no showing that the withdrawal of its counsel was a
contrived reason or an orchestrated act to delay the proceedings; the failure to
file an MR within the reglementary period of 15 days was also not entirely the
petitioner's fault, as it was not in control of its former counsel's acts. TaISDA
Moreover, after a review of the contentions and the submissions of the parties,
we agree that suspension of the technical rules of procedure is warranted in this
case in view of the CA's erroneous application of legal principles and the
substantial merits of the case. If the petition would be dismissed on technical
grounds and without due consideration of its merits, the registered owner of the
property shall, in effect, be barred from taking possession, thus allowing the
absurd and unfair situation where the owner cannot exercise its right of
ownership. This, the Court should not allow. In order to prevent the resulting
inequity that might arise from the outright denial of this recourse that is, the
virtual affirmance of the writ's denial to the detriment of the petitioner's right of
ownership we give due course to this petition despite the late filing of the
petitioner's MR before the CA.
b.On the Issuance of a Writ of Possession
We have consistently held that the purchaser can demand possession of the
property even during the redemption period for as long as he files an ex parte
motion under oath and post a bond in accordance with Section 7 of Act No. 3135,
as amended. 24 Upon filing of the motion and the approval of the bond, the law
also directs the court in express terms to issue the order for a writ of possession.
SECIcT
When the redemption period has expired and title over the property has been
consolidated in the purchaser's name, a writ of possession can be demanded as a
matter of right. The writ of possession shall be issued as a matter of course even
without the filing and approval of a bond after consolidation of ownership and
the issuance of a new TCT in the name of the purchaser. As explained in Edralin
v. Philippine Veterans Bank, 25 the duty of the trial court to grant a writ of
possession in these instances is also ministerial, and the court may not exercise
discretion or judgment:
Consequently, the purchaser, who has a right to possession

after the expiration of the redemption period, becomes the
absolute owner of the property when no redemption is
made. In this regard, the bond is no longer needed. The
purchaser can demand possession at any time following the
consolidation of ownership in his name and the issuance to
him of a new TCT. After consolidation of title in the
purchaser's name for failure of the mortgagor to redeem the
property, the purchaser's right to possession ripens into the
absolute right of a confirmed owner. At that point, the
issuance of a writ of possession, upon proper application
and proof of title becomes merely a ministerial function.
Effectively, the court cannot exercise its discretion. 26
It is not disputed that the respondent failed to exercise her right of redemption
within one year from the time of the registration of the sale. There is also no
question that the property's title had already been transferred to the petitioner.
As the actual owner of the property, it is not only necessary, but also just, to
allow the petitioner to take possession of the property it owns. It is illogical if the
person already owning the property will be barred from possessing it, in the
absence of compelling and legitimate reasons to deny him possession. 27 Thus,
we feel that the issuance of a writ of possession is in order.
c.On the Exemption under Sulit v. Court of Appeals
In setting aside the questioned RTC orders granting the petitioner a writ of
possession, the CA relied on the Court's ruling in Sulit v. Court of Appeals 28
where we held that the failure of the mortgagee to return to the mortgagor the
surplus proceeds of the foreclosure sale carves out an exception to the general
rule that a writ of possession should issue as a matter of course. IDCHTE
To have a better grasp of the reasons for the Court's ruling in the said case, below
is a brief summary and analysis of Sulit.
c.1Summary of Sulit v. CA
The case stemmed from the extra-judicial foreclosure conducted by the notary
public where Sulit (creditor-mortgagee) emerged as the highest bidder for the
amount of P7,000,000.00. It appears that Sulit failed to deliver the sale price's
surplus equivalent to at least 40% of the mortgage debt to the notary public.
Instead, he credited it to the satisfaction of the P4,000,000.00 debt. During
redemption period, he petitioned for the issuance of a writ of possession which
the trial court granted. From the order of the court, the debtor-mortgagor filed a
petition for certiorari with the CA. The CA granted the writ of certiorari and
directed Sulit to remit to the debtor the excess amount of his bid price. EHSAaD
When the case reached this Court, we considered Sulit's failure to deliver the
surplus proceeds of the foreclosure sale an exception to the general rule that it is
ministerial upon the court to issue a writ of possession even during the period of
redemption upon the filing of a bond. We found that such failure was a sufficient
justification for the non-issuance of the writ. We also ruled that equitable
considerations demanded the deferment of the issuance of the writ as it would be
highly unfair for the mortgagor, who as a redemptioner might choose to redeem
the foreclosed property, to pay the equivalent amount of the bid clearly in excess
of the total mortgage debt. We said:
The general rule that mere inadequacy of price is not
sufficient to set aside a foreclosure sale is based on the
theory that the lesser the price the easier it will be for the
owner to effect the redemption. The same thing cannot be
said where the amount of the bid is in excess of the total
mortgage debt. The reason is that in case the mortgagor
decides to exercise his right of redemption, Section 30 of
Rule 39 provides that the redemption price should be
equivalent to the amount of the purchase price, plus one
[percent] monthly interest up to the time of the
redemption, together with the amount of any assessments
or taxes which the purchaser may have paid thereon after
purchase, and interest on such last-named amount at the
same rate.
Applying this provision to the present case would be highly

iniquitous if the amount required for redemption is based on
P7,000,000.00, because that would mean exacting payment at
a price unjustifiably higher than the real amount of the
mortgage obligation. We need not elucidate on the obvious.
Simply put, such a construction will undeniably be
prejudicial to the substantive rights of private respondent
and it could even effectively prevent her from exercising
the right of redemption." 29
The said ruling cannot be applied in the present case. A proper appreciation and
analysis of Sulit show that it cannot be cited in the present case because the
factual milieu obtaining therein are not analogous or similar to those involved in
the case before us. AaDSEC
c.2Comparative Analysis of Sulit and the Present Case
As correctly noted by the petitioner, the one year redemption period in Sulit has
not yet expired when the purchaser petitioned the trial court for the issuance of a
writ of possession. In the present case, the redemption period has already
expired and the title over the property had already been consolidated in the
petitioner's name. In Sulit, the inequity the court perceived to justify the
deferment of the issuance of a writ of possession was present because the
mortgagor, who at that time still had the right to exercise his right of redemption,
was prevented from doing so. No such inequity appears in this case inasmuch as
the mortgagor no longer has a right of redemption. In Sulit, the policy of the law
to aid the redemptioner can still be upheld. The policy is no longer relevant in
the present case since the mortgagee herself, allowed the redemption period to
lapse without exercising her right.
We emphasize that for the Sulit exception to apply, the evil sought to be
prevented must be present and the reason behind the exception should clearly
exist. It should not be carelessly applied in cases where the reasons that justified
it do not appear, more so where the factual milieu is different. As discussed
above, the Sulit reasons and circumstances are not present here. The resulting
injustice that we tried to avoid in Sulit does not exist. In the absence of any
justification for the exception, the general rule should apply.
d.On the Issue of Surplus
The petitioner contends that there was no excess or surplus that needs to be
returned to the respondent because her other outstanding obligations and those
of her attorney-in-fact were paid out of the proceeds. HIaSDc
The relevant provision, Section 4 of Rule 68 of the Rules of Civil Procedure,

mandates that:
Section 4.Disposition of proceeds of sale. The amount

realized from the foreclosure sale of the mortgaged property
shall, after deducting the costs of the sale, be paid to the
person foreclosing the mortgage, and when there shall be
any balance or residue, after paying off the mortgage debt
due, the same shall be paid to junior encumbrancers in the
order of their priority, to be ascertained by the court, or if
there be no such encumbrancers or there be a balance or
residue after payment to them, then to the mortgagor or his
duly authorized agent, or to the person entitled to it.
[emphases and underscores ours]
Thus, in the absence of any evidence showing that the mortgage also covers the
other obligations of the mortgagor, the proceeds from the sale should not be
applied to them. HAEDIS
In the present case, while the petitioner claims that it was not obliged to pay any
surplus because the balance from the proceeds was applied to the respondent's
other obligations and to those of her attorney-in-fact, it failed, however, to show
any supporting evidence showing that the mortgage extended to those
obligations. The petitioner, as mortgagee/purchaser cannot just simply apply the
proceeds of the sale in its favor and deduct from the balance the respondent's
outstanding obligations not secured by the mortgage. Understood from this
perspective, no reason exists to depart from the CA's ruling that the balance or
excess, after deducting the mortgage debt of P1,950,000.00 plus the stipulated
interest and the expenses of the foreclosure sale, must be returned to the
respondent.
e.On the Issue of Forum Shopping
The petitioner's argument that the respondent is guilty of forum shopping by not
disclosing the pendency of the case for nullity of foreclosure sale deserves scant
consideration. Forum shopping is committed by a party who, having received an
adverse judgment in one forum, seeks another opinion in another court, other
than by appeal or the special civil action of certiorari. It is the institution of two or
more suits in different courts, either simultaneously or successively, in order to
ask the courts to rule on the same or related causes and/or to grant the same or
substantially the same reliefs. 30
The test for determining whether a party has violated the rule against forum
shopping is whether in the two (or more) cases, there is identity of parties, rights,
causes of action, and reliefs sought, or whether the elements of litis pendentia are
present. It is also material to determine whether a final judgment in one case,
regardless of which party is successful, will amount to res judicata in the other. 31
AHaDSI
The motion for recall and to revoke the order for a writ of possession filed by the
respondent before the trial court and the civil case for nullity of foreclosure sale
are poles apart. This is also true with the petition for certiorari before the CA and
the nullity case. Thus, even if the writ of possession is cancelled or revoked, as
what happened in this case, the respondent will not be prevented from pursuing
the nullity of the foreclosure sale, since the ruling of the court in the former does
not amount to res judicata in the latter. Similarly, the filing of the petition for
certiorari will not affect the pending civil case for nullity because the two actions
may proceed independently and without prejudice to the outcome of each case.
Furthermore, there is no identity in the issues, causes of action and reliefs sought
between the two cases. The issues in the two cases are totally different, as well as
the reliefs prayed for by the respondent. In the motion, the respondent prays for
the cancellation of the writ of possession, while in the civil case for nullity, the
cancellation of the foreclosure sale itself. The same thing can be said of a petition
for certiorari where the respondent seeks to nullify the proceedings in the trial
court on the ground of grave abuse of discretion and the nullity of the
foreclosure sale. We, therefore, rule that no forum shopping has been committed
by the respondent. SEIaHT
WHEREFORE, the petition is GRANTED. The August 9, 2006 decision and the
August 2, 2007 resolution of the Court of Appeals in CA-G.R. SP. No. 82725 are
MODIFIED by ordering the Regional Trial Court of Davao City, Branch 16, to
issue the corresponding writ of possession. The Court of Appeals' order to the
Philippine Bank of Communications to remit to Mary Ann O. Yeung the balance
or excess of the proceeds of the foreclosure sale, after deducting the mortgage
debt of P1,950,000.00 plus the stipulated interest and the expenses of the
foreclosure sale, is hereby AFFIRMED.
SO ORDERED.
||| (Philippine Bank of Communications v. Yeung, G.R. No. 179691, December 04,
2013)
SECOND DIVISION
[G.R. No. 119247. February 17, 1997.]
CESAR SULIT, petitioner, vs. COURT OF APPEALS and

ILUMINADA CAYCO, respondents.
Jesus M. Bautista for petitioner
Benjamin A. Opea for private respondent.
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; MORTGAGE; INTEREST;

LEGAL RATE OF 12% PER ANNUM ON DUE AND DEMANDABLE LOAN IN
THE ABSENCE OF STIPULATION. It is elementary that in the absence of a
stipulation as to interest, the loan due will now earn interest at the legal rate of
12% per annum. LLjur
2. REMEDIAL LAW; EVIDENCE; PRESUMPTIONS THAT EVIDENCE

WILLFULLY SUPPRESSED IS ADVERSE IF PRODUCED; APPLIED IN CASE
AT BAR. It baffles this Court why petitioner has continually failed up to the
present to submit documentary evidence of the alleged expenses of the
foreclosure sale, and this in spite of the express requirement therefor in the
certificate of sale issued by the notary public for the purpose of computing the
actual amount payable by the mortgagor or redemptioner in the event of
redemption. It may thus be safely presumed that such evidence having been
willfully suppressed, it would be adverse if produced.
3. CIVIL LAW; OBLIGATIONS AND CONTRACTS; MORTGAGE;

FORECLOSURE SALE; ISSUANCE OF WRIT OF POSSESSION, MINISTERIAL.
The governing law thus explicitly authorizes the purchaser in a foreclosure
sale to apply for a writ of possession during the redemption period by filing an
ex parte motion under oath for that purpose in the corresponding registration or
cadastral proceeding in the case of property with Torrens title. Upon the filing of
such motion and the approval of the corresponding bond, the law also in express
terms directs the court to issue the order for a writ of possession. No discretion
appears to be left to the court. Any question regarding the regularity and validity
of the sale, as well as the consequent cancellation of the writ, is to be determined
in a subsequent proceeding as outlined in Section 8 of Act 3135, and it cannot be
raised as a justification for opposing the issuance of the writ of possession since,
under the Act, the proceeding for this is ex parte. Such recourse is available to a
mortgagee, who effects the extrajudicial foreclosure of the mortgage, even before
the expiration of the period of redemption provided by law and the Rules of
Court.
4. ID.; ID.; ID.; ID.; ID.; EXCEPTION. The rule is however, not without
exception. Under Section 35, Rule 39 of the Rules of Court, which is made
applicable to the extrajudicial foreclosure of real estate mortgages by Section 6 of
Act 3135, the possession of the mortgaged property may be awarded to a
purchaser in the extrajudicial foreclosure "unless a third party is actually holding
the property adversely to the judgment debtor."
5. ID.; ID.; ID.; ID.; ID.; ID.; WHERE FORECLOSED PROPERTY WAS SOLD 40%
IN EXCESS OF THE MORTGAGE DEBT. The case at bar is quite the reverse,
in the sense that instead of an inadequacy in price, there is due in favor of private
respondent, as mortgagor, a surplus from the proceeds of the sale equivalent to
approximately 40% of the total mortgage debt, which excess is indisputably a
substantial amount. Nevertheless, it is our considered opinion, and we so hold,
that equitable considerations demand that a writ of possession should also not
issue in this case.
6. ID.; ID.; ID.; ID.; APPLICATION OF PROCEEDS TO MORTGAGOR'S

OBLIGATION, AN ACT OF PAYMENT; MORTGAGEE, CONSIDERED
TRUSTEE OF THE BALANCE. In forced sales low prices are generally offered
and the mere inadequacy of the price obtained at the sheriff's sale, unless
shocking to the conscience, has been held insufficient to set aside a sale. This is
because no disadvantage is caused to the mortgagor. On the contrary, a
mortgagor stands to gain with a reduced price because he possesses the right of
redemption. When there is the right to redeem, inadequacy of price becomes
immaterial since the judgment debtor may reacquire the property or sell his right
to redeem, and thus recover the loss he claims to have suffered by reason of the
price obtained at the auction sale. The application of the proceeds from the sale
of the mortgaged property to the mortgagor's obligation is an act of payment, not
payment by dation; hence, it is the mortgagee's duty to return any surplus in the
selling price to the mortgagor. Perforce, a mortgagee who exercises the power of
sale contained in a mortgage is considered a custodian of the fund, and, being
bound to apply it properly, is liable to the persons entitled thereto if he fails to do
so. And even though the mortgagee is not strictly considered a trustee in a
purely equitable sense, but as far as concerns the unconsumed balance, the
mortgagee is deemed a trustee for the mortgagor or owner of the equity of
redemption.
7. ID.; ID.; ID.; ID.; MERE INADEQUACY OF PRICE, NOT SUFFICIENT TO SET
ASIDE FORECLOSURE SALE; REASON. The general rule that mere
inadequacy of price is not sufficient to set aside a foreclosure sale is based on the
theory that the lesser the price the easier it will be for the owner to effect the
redemption. The same thing cannot be said where the amount of the bid is in
excess of the total mortgage debt. The reason is that in case the mortgagor
decides to exercise his right of redemption, Section 30 of Rule 39 provides that
the redemption price should be equivalent to the amount of the purchase price,
plus one per cent monthly interest up to the time of the redemption, together
with the amount of any assessments or taxes which the purchaser may have paid
thereon after purchase, and interest on such last-named amount at the same rate.
LibLex
8. ID.; ID.; ID.; RIGHT OF REDEMPTION, LIBERALLY CONSTRUED. Where

the redemptioner chooses to exercise his right of redemption, it is the policy of
the law to aid rather than to defeat his right. It stands to reason, therefore, that
redemption should be looked upon with favor and where no injury will follow, a
liberal construction will be given to our redemption laws, specifically on the
exercise of the right to redeem. Conformably hereto, and taking into
consideration the facts obtaining in this case, it is more in keeping with the spirit
of the rules, particularly Section 30 of Rule 39, that we adopt such interpretation
as may be favorable to the private respondent.
9. ID.; ID.; ID.; FORECLOSURE SALE; MORTGAGEE ACCOUNTABLE FOR

PROCEEDS OF SALE EVEN IF MADE ON CREDIT. In case of a surplus in
the purchase price, however, there is jurisprudence to the effect that while the
mortgagee ordinarily is liable only for such surplus as actually comes into his
hands, but he sells on credit instead of for cash, he must still account for the
proceeds as if the price were paid in cash, and in an action against the mortgagee
to recover the surplus, the latter cannot raise the defense that no actual cash was
received. We cannot simply ignore the importance of surplus proceeds because
by their very nature, surplus money arising from a sale of land under a decree of
foreclosure stands in the place of the land itself with respect to liens thereon or
vested rights therein. They are constructively, at least, real property and belong
to the mortgagor or his assigns. Inevitably, the right of a mortgagor to the
surplus proceeds is a substantial right which must prevail over rules of
technicality. Since it has never been denied that the bid price greatly exceeded
the mortgage debt, petitioner cannot be allowed to unjustly enrich himself at the
expense of private respondent.
10. ID.; ID.; ID.; FORECLOSURE SALE; SURPLUS MONEY; APPLIED TO LIEN
ACCORDING TO THEIR PRIORITY. Surplus money, in case of a foreclosure
sale, gains much significance where there are junior encumbrancers on the
mortgaged property. Jurisprudence has it that when there are several liens upon
the premises, the surplus money must be applied to their discharge in the order
of their priority. A junior mortgagee may have his rights protected by an
appropriate decree as to the application of the surplus, if there be any, after
satisfying the prior mortgage. His lien on the land is transferred to the surplus
fund. And a senior mortgagee, realizing more than the amount of his debt on a
foreclosure sale, is regarded as a trustee for the benefit of junior encumbrancers.
11. REMEDIAL LAW; EVIDENCE; CREDIBILITY; FINDINGS OF FACTS OF

THE LOWER COURTS, GENERALLY BINDING AND CONCLUSIVE ON
APPEAL. A question of non-compliance with the notice and publication
requirements of an extrajudicial foreclosure sale is a factual issue and the
resolution thereof by the lower courts is binding and conclusive upon this Court,
absent any showing of grave abuse of discretion. In the case at bar, both the trial
court and respondent Court of Appeals have found that the sale was conducted
in accordance with law. No compelling reason exists in this case to justify a
rejection of their findings or a reversal of their conclusions.
12. ID.; ACTIONS; MOTION TO SET ASIDE FORECLOSURE SALE AND TO

DEFER ISSUANCE OF WRIT OF POSSESSION WHERE EX-PARTE PETITION
FOR ISSUANCE OF SAID WRIT WAS PENDING, TREATED AS
SUBSTANTIAL COMPLIANCE WITH SECTION 112 OF THE LAND
REGISTRATION ACT. There is likewise no merit in the argument that if
private respondent had wanted to question the validity of the sale, she should
have filed a petition to set the same aside and to cancel the writ of possession.
These, it is argued, should have been disposed of in accordance with the
summary procedure laid down in Section 112 of the Land Registration Act,
provided the petition is filed not later than thirty days after the purchaser was
given possession of the land. Considering, however, that private respondent has
filed a motion to set aside the sale and to defer the issuance of a writ of
possession before the court where the ex parte petition for issuance of such writ
was then pending, we deem the same to be substantial compliance with the
statutory prescription.
13. CIVIL LAW; OBLIGATIONS AND CONTRACTS; MORTGAGE;

FORECLOSURE SALE; REMEDY OF MORTGAGOR AGAINST MORTGAGEE
RETAINING MORE OF THE PROCEEDS OF SALE. If the mortgagee is
retaining more of the proceeds of the sale than he is entitled to, this fact alone
will not affect the validity of the sale but simply gives the mortgagor a cause of
action to recover such surplus. This is likewise in harmony with the decisional
rule that in suing for the return of the surplus proceeds. the mortgagor is deemed
to have affirmed the validity of the sale since nothing is due if no valid sale has
been made. In the early case of Caparas vs. Yatco, etc., et al., it was also held that
where the mortgagee has been ordered by the court to return the surplus to the
mortgagor or the person entitled thereto, and the former fails to do so and
flagrantly disobeys the order, the court can cite the mortgagee for contempt and
mete out the corresponding penalty under Section 3(b) of the former Rule 64
(now Rule 71) of the Rules of Court. prLL
DECISION
REGALADO, J p:
The primary issue posed before the Court, in this appeal by certiorari from a
decision 1 of the Court of Appeals, is whether or not the mortgagee or purchaser
in an extrajudicial foreclosure sale is entitled to the issuance of a writ of
possession over the mortgaged property despite his failure to pay the surplus
proceeds of the sale to the mortgagor or the person entitled thereto. Secondarily,
it calls for a resolution of the further consequences of such non-payment of the
full amount for which the property was sold to him pursuant to his bid.
The material facts, as found by respondent court, are not disputed:
"It appears from the record that on 9 June 1992 petitioner

(herein private respondent) Iluminada Cayco executed a Real
Estate Mortgage (REM) over Lot 2630 which is located in
Caloocan City and covered by TCT No. (23211) 11591 in
favor of private respondent (herein petitioner) Cesar Sulit, to
secure a loan of P4 Million. Upon petitioner's failure to pay
said loan within the stipulated period, private respondent
resorted to extrajudicial foreclosure of the mortgage as
authorized in the contract. Hence, in a public auction
conducted by Notary Public Felizardo M. Mercado on 28
September 1993 the lot was sold to the mortgagee, herein
private respondent, who submitted a winning bid of P7
Million. As stated in the Certificate of Sale executed by the
notary public (Annex B, petition), the mortgaged property
was sold at public auction to satisfy the mortgage
indebtedness of P4 Million. The Certificate further states as
follows:
IT IS FURTHER CERTIFIED, that the

aforementioned highest bidder/buyer, CESAR
SULIT, being the petitioner/mortgagee thereupon
did not pay to the undersigned Notary Public of
Kalookan City the said sum of SEVEN MILLION
PESOS (P7,000,000.00), Philippine Currency, the
sale price of the above-described real estate
property together with all improvements existing
thereon, which amount was properly credited to
the PARTIAL satisfaction of the mortgage debt
mentioned in the said real estate mortgage, plus
interests, attorney's fees and all other incidental
expenses of foreclosure and sale (par. 2, Annex B,
petition).
On 13 December 1993 private respondent petitioned the

Regional Trial Court of Kalookan City for the issuance of a
writ of possession in his favor. The petition was docketed as
LRC Case No. C-3462 and assigned to Branch 131, presided
over by public respondent.
On 17 January 1994 respondent Judge issued a decision

(should have been denominated as order), the dispositive
part of which reads:
WHEREFORE, finding the subject petition to be

meritorious, the same is hereby GRANTED. As
prayed for, let a Writ of Possession be issued in
favor of herein petitioner, Cesar Sulit, upon his
posting of an indemnity bond in the amount of One
Hundred Twenty Thousand (P120,000.00) Pesos
(Annex C, petition).
On 28 March 1994 petitioner filed a Motion to have the

auction sale of the mortgaged property set aside and to defer
the issuance of the writ of possession. She invited the
attention of the court a quo to some procedural infirmities in
the said proceeding and further questioned the sufficiency of
the amount of bond. In the same Motion petitioner prayed as
an alternative relief that private respondent be directed to
pay the sum of P3 Million which represents the balance of
his winning bid of P7 Million less the mortgage
indebtedness of P4 Million (Annex D, petition). This Motion
was opposed by private respondent who contended that the
issuance of a writ of possession upon his filing of a bond was
a ministerial duty on the part of respondent Judge (Annex
E), to which Opposition petitioner submitted a Reply (Annex
F, petition).
On 11 May 1994 respondent Judge denied petitioner's

Motion and directed the issuance of a writ of possession and
its immediate enforcement by deputy sheriff Danilo
Norberte (Annex G, petition)." 2 (Emphasis words supplied
for clarity).
From the aforesaid orders of the court a quo, herein private respondent
Iluminada Cayco filed on May 26, 1994 a petition for certiorari with preliminary
injunction and/or temporary restraining order before respondent Court of
Appeals, which immediately issued a status quo order restraining the respondent
judge therein from implementing his order of January 17, 1994 and the writ of
possession issued pursuant thereto. Subsequently, respondent court rendered
judgment on November 11, 1994, as follows:
"IN JUDGMENT, We grant the writ of certiorari and the

disputed order of 17 January 1994 which precipitately
directed the issuance of a writ of possession in favor of
private respondent and the subsequent order of 11 May 1994
which denied petitioner's Motion for Reconsideration are
hereby SET ASIDE.
Accordingly, private respondent is ordered to pay unto

petitioner, through the notary public, the balance or excess
of his bid of P7 Million after deducting therefrom the sum of
P4,365.280 which represents the mortgage debt and interest
up to the date of the auction sale (September 23, 1993), as
well as expenses of foreclosure based on receipts which must
be presented to the notary public.
In the event that private respondent fails or refuses to pay

such excess or balance, then the auction sale of 28 September
1993 is deemed CANCELLED and private respondent may
foreclose the mortgage anew either in a judicial or
extrajudicial proceeding as stipulated in the mortgage
contract."
Corollary to the principal issue earlier stated, petitioner asserts that respondent
Court of Appeals gravely erred when it failed to appreciate and consider the
supposed legal significance of the bouncing checks which private respondent
issued and delivered to petitioner as payment for the agreed or stipulated
interest on the mortgage obligation. He likewise avers that a motion for
reconsideration or an appeal, and not certiorari, is the proper remedy available to
herein private respondent from an order denying her Motion to defer issuance of
the writ of possession. Moreover, it is claimed that any question regarding the
propriety of the sale and the issuance of the writ of possession must be threshed
out in a summary proceeding provided for in Section 8 of Act 3135.
There is no merit in petitioner's contention that the dishonored checks

amounting to a total of P1,250,000.00, allegedly representing interest of 5% per
month from June 9, 1992 to December 9, 1992, were correctly considered by the
trial court as the written agreement between the parties. Instead, we find the
explanation of respondent court in rejecting such postulate, on the basis of
Article 1956 of the Civil Code, 3 to be more logical and plausible, to wit:
"It is noteworthy that the Deed of Real Estate Mortgage

executed by the parties on 9 June 1992 (Annex A, Petition)
does not contain any stipulation for payment of interest.
Private respondent who maintains that he had an agreement
with petitioner for the payment of 5% monthly interest did
not produce any other writing or instrument embodying
such a stipulation on interest. It appears then that if any such
agreement was reached by the parties, it was merely a verbal
one which does not conform to the aforequoted statutory
provision. Certainly, the dishonored checks claimed to have
been issued by petitioner in payment of interest could not
have been the written stipulation contemplated in Article
1956 of the Code. Consequently, in the absence of a written
stipulation for the imposition of interest on the loan obtained
by petitioner, private respondent's assessment thereof has no
legal basis." 4
It is elementary that in the absence of a stipulation as to interest, the loan due

will now earn interest at the legal rate of 12% per annum 5 which, according to
respondent court, is equivalent to P365,280.00 computed from December 10,
1992, after private respondent's obligation became due, until September 23, 1993,
the date of the auction sale. It is this amount which should further be deducted
from the purchase price of P7,000,000.00, together with any other expenses
incurred in connection with the sale, such as the posting and publication of
notices, notarial and documentary fees and assessments or taxes due on the
disputed property. cdtai
It baffles this Court, therefore, why petitioner has continually failed up to the
present to submit documentary evidence of the alleged expenses of the
foreclosure sale, and this in spite of the express requirement therefor in the
certificate of sale 6 issued by the notary public for the purpose of computing the
actual amount payable by the mortgagor or redemptioner in the event of
redemption. It may thus be safely presumed that such evidence having been
willfully suppressed, it would be adverse if produced. 7
Coming now to the main issue in this case, petitioner argues that it is ministerial
upon the court to issue a writ of possession after the foreclosure sale and during
the period of redemption, invoking in support thereof Sections 7 and 8 of Act
3135 which conjointly provide:
"Sec. 7. In any sale made under the provisions of this Act, the
purchaser may petition the Court of First Instance of the
province or place where the property or any part thereof is
situated, to give him possession thereof during the
redemption period, furnishing bond in an amount
equivalent to the use of the property for a period of twelve
months, to indemnify the debtor in case it be shown that the
sale was made without violating the mortgage or without
complying with the requirements of this Act. Such petition
shall be made under oath and filed in form of an ex parte
motion in the registration or cadastral proceedings if the
property is registered, or in special proceedings in the case
of property registered under the Mortgage Law or under
section one hundred and ninety-four of the Administrative
Code, or of any other real property encumbered with a
mortgage duly registered in the office of any register of
deeds in accordance with any existing law, and in each case
the clerk of the court shall, upon the filing of such petition,
collect the fees specified in paragraph eleven of section one
hundred and fourteen of Act Numbered Twenty-eight
hundred and sixty-six, and the court shall, upon approval of
the bond, order that a writ of possession issue, addressed to
the sheriff of the province in which the property is situated,
who shall execute said order immediately.
"Sec. 8. The debtor may, in the proceedings in which

possession was requested, but not later than thirty days after
the purchaser was given possession, petition that the sale be
set aside and the writ of possession cancelled, specifying the
damages suffered by him, because the mortgage was not
violated or the sale was not made in accordance with the
provisions hereof, and the court shall take cognizance of this
petition in accordance with the summary procedure
provided for in section one hundred and twelve of Act
Number Four hundred and ninety-six; and if it finds the
complaint of the debtor justified, it shall dispose in his favor
of all or part of the bond furnished by the person who
obtained possession. Either of the parties may appeal from
the order of the judge in accordance with section fourteen of
Act Numbered Four hundred and ninety-six; but the order
of possession shall continue in effect during the pendency of
the appeal."
The governing law thus explicitly authorizes the purchaser in a foreclosure sale
to apply for a writ of possession during the redemption period by filing an ex
parte motion under oath for that purpose in the corresponding registration or
cadastral proceeding in the case of property with Torrens title. Upon the filing of
such motion and the approval of the corresponding bond, the law also in express
terms directs the court to issue the order for a writ of possession.
No discretion appears to be left to the court. Any question regarding the

regularity and validity of the sale, as well as the consequent cancellation of the
writ, is to be determined in a subsequent proceeding as outlined in Section 8, and
it cannot be raised as a justification for opposing the issuance of the writ of
possession since, under the Act, the proceeding for this is ex parte. 8 Such
recourse is available to a mortgagee, who effects the extrajudicial foreclosure of
the mortgage, even before the expiration of the period of redemption provided
by law and the Rules of Court. 9
The rule is, however, not without exception. Under Section 35, Rule 39 of the
Rules of Court, which is made applicable to the extrajudicial foreclosure of real
estate mortgages by Section 6 of Act 3135, the possession of the mortgaged
property may be awarded to a purchaser in the extrajudicial foreclosure "unless a
third party is actually holding the property adversely to the judgment debtor." 10
Thus, in the case of Barican, et al. vs. Intermediate Appellate Court, et al., 11 this
Court took into account the circumstances that long before the mortgagee bank
had sold the disputed property to the respondent therein, it was no longer the
judgment debtor who was in possession but the petitioner spouses who had
assumed the mortgage, and that there was a pending civil case involving the
rights of third parties. Hence, it was ruled therein that under the circumstances,
the obligation of a court to issue a writ of possession in favor of the purchaser in
a foreclosure of mortgage case ceases to be ministerial.
Now, in forced sales low prices are generally offered and the mere inadequacy of
the price obtained at the sheriff's sale, unless shocking to the conscience, has been
held insufficient to set aside a sale. This is because no disadvantage is caused to
the mortgagor. On the contrary, a mortgagor stands to gain with a reduced price
because he possesses the right of redemption. When there is the right to redeem,
inadequacy of price becomes immaterial since the judgment debtor may
reacquire the property or sell his right to redeem, and thus recover the loss he
claims to have suffered by reason of the price obtained at the auction sale. 12
However, also by way of an exception, in Cometa, et al. vs. Intermediate Appellate

Court, et al. 13 where the properties in question were found to have been sold at
an unusually lower price than their true value, that is, properties worth at least
P500,000.00 were sold for only P57,396.85, this Court, taking into consideration
the factual milieu obtaining therein as well as the peculiar circumstances
attendant thereto, decided to withhold the issuance of the writ of possession on
the ground that it could work injustice because the petitioner might not be
entitled to the same.
The case at bar is quite the reverse, in the sense that instead of an inadequacy in
price, there is due in favor of private respondent, as mortgagor, a surplus from
the proceeds of the sale equivalent to approximately 40% of the total mortgage
debt, which excess is indisputably a substantial amount. Nevertheless, it is our
considered opinion, and we so hold, that equitable considerations demand that a
writ of possession should also not issue in this case.
Rule 68 of the Rules of Court provides:
Sec. 4. Disposition of proceeds of sale. The money realized

from the sale of mortgaged property under the regulations
hereinbefore prescribed shall, after deducting the costs of the
sale, be paid to the person foreclosing the mortgage, and
when there shall be any balance or residue, after paying off
such mortgage or other encumbrances, the same shall be
paid to the junior encumbrancers in the order of their
priority, to be ascertained by the court, or if there be no such
encumbrancers or there be a balance or residue after
payment of such encumbrancers, then to the mortgagor or
his agent, or to the person entitled to it."
The application of the proceeds from the sale of the mortgaged property to the
mortgagor's obligation is an act of payment, not payment by dation; hence, it is
the mortgagee's duty to return any surplus in the selling price to the mortgagor.
14 Perforce, a mortgagee who exercises the power of sale contained in a
mortgage is considered a custodian of the fund, and, being bound to apply it
properly, is liable to the persons entitled thereto if he fails to do so. And even
though the mortgagee is not strictly considered a trustee in a purely equitable
sense, but as far as concerns the unconsumed balance, the mortgagee is deemed a
trustee for the mortgagor or owner of the equity of redemption. 15
Commenting on the theory that a mortgagee, when he sells under a power,
cannot be considered otherwise than as a trustee, the vice-chancellor in Robertson
vs. Norris (1 Giff. 421) observed: "That expression is to be understood in this
sense: that with the power being given to enable him to recover the mortgage
money, the court requires that he shall exercise the power of sale in a provident
way, with a due regard to the rights and interests of the mortgagor in the surplus
money to be produced by the sale." 16
The general rule that mere inadequacy of price is not sufficient to set aside a
foreclosure sale is based on the theory that the lesser the price the easier it will be
for the owner to effect the redemption. 17 The same thing cannot be said where
the amount of the bid is in excess of the total mortgage debt. The reason is that in
case the mortgagor decides to exercise his right of redemption. Section 30 of Rule
39 provides that the redemption price should be equivalent to the amount of the
purchase price, plus one percent monthly interest up to the time of the
redemption, 18 together with the amount of any assessments or taxes which the
purchaser may have paid thereon after purchase, and interest on such last-
named amount at the same rate. 19
Applying this provision to the present case would be highly iniquitous if the
amount required for redemption is based on P7,000,000.00, because that would
mean exacting payment at a price unjustifiably higher than the real amount of
the mortgage obligation. We need not elucidate on the obvious. Simply put, such
a construction will undeniably be prejudicial to the substantive rights of private
respondent and it could even effectively prevent her from exercising the right of
redemption.
Where the redemptioner chooses to exercise his right of redemption, it is the

policy of the law to aid rather than to defeat his right. It stands to reason,
therefore, that redemption should be looked upon with favor and where no
injury will follow, a liberal construction will be given to our redemption laws,
specifically on the exercise of the right to redeem. Conformably hereto, and
taking into consideration the facts obtaining in this case, it is more in keeping
with the spirit of the rules, particularly Section 30 of Rule 39, that we adopt such
interpretation as may be favorable to the private respondent.
Admittedly, no payment was made by herein petitioner, as the highest bidder, to

the notary public who conducted the extrajudicial foreclosure sale. We are not
unmindful of the rule that it is not necessary for the mortgagee to pay cash to the
sheriff or, in this case, the notary public who conducted the sale. It would
obviously serve no purpose for the sheriff or the notary public to go through the
idle ceremony of receiving the money and paying it back to the creditor, under
the truism that the lawmaking body did not contemplate such a pointless
application of the law in requiring that the creditor must bid under the same
conditions as any other bidder. 20 It bears stressing that the rule holds true only
where the amount of the bid represents the total amount of the mortgage debt.
In case of a surplus in the purchase price, however, there is jurisprudence to the

effect that while the mortgagee ordinarily is liable only for such surplus as
actually comes into his hands, but he sells on credit instead of for cash, he must
still account for the proceeds as if the price were paid in cash, and in an action
against the mortgagee to recover the surplus, the latter cannot raise the defense
that no actual cash was received. 21
We cannot simply ignore the importance of surplus proceeds because by their

very nature, surplus money arising from a sale of land under a decree of
foreclosure stands in the place of the land itself with respect to liens thereon or
vested rights therein. They are constructively, at least, real property and belong
to the mortgagor or his assigns. 22 Inevitably, the right of a mortgagor to the
surplus proceeds is a substantial right which must prevail over rules of
technicality.
Surplus money, in case of a foreclosure sale, gains much significance where there
are junior encumbrancers on the mortgaged property. Jurisprudence has it that
when there are several liens upon the premises, the surplus money must be
applied to their discharge in the order of their priority. 23 A junior mortgagee
may have his rights protected by an appropriate decree as to the application of
the surplus, if there be any, after satisfying the prior mortgage. His lien on the
land is transferred to the surplus fund. 24 And a senior mortgagee, realizing
more than the amount of his debt on a foreclosure sale, is regarded as a trustee
for the benefit of junior encumbrancers. 25
Upon the strength of the foregoing considerations, we cannot countenance the

apparent paltriness that petitioner persistently accords the right of private
respondent over the surplus proceeds. It must be emphasized that petitioner
failed to present the receipts or any other proof of the alleged costs or expenses
incurred by him in the foreclosure sale. Even the trial court failed or refused to
resolve this issue, notwithstanding the fact that this was one of the grounds
raised in the motion filed by private respondent before it to set aside the sale.
Since it has never been denied that the bid price greatly exceeded the mortgage
debt, petitioner cannot be allowed to unjustly enrich himself at the expense of
private respondent.
As regards the issue concerning the alleged defect in the publication of the notice
of the sale, suffice it to state for purposes of this discussion that a question of
non-compliance with the notice and publication requirements of an extrajudicial
foreclosure sale is a factual issue and the resolution thereof by the lower courts is
binding and conclusive upon this Court, 26 absent any showing of grave abuse of
discretion. In the case at bar, both the trial court and respondent Court of
Appeals have found that the sale was conducted in accordance with law. No
compelling reason exists in this case to justify a rejection of their findings or a
reversal of their conclusions.
There is likewise no merit in the argument that if private respondent had wanted
to question the validity of the sale, she should have filed a petition to set the
same aside and to cancel the writ of possession. These, it is argued, should have
been disposed of in accordance with the summary procedure laid down in
Section 112 of the Land Registration Act, provided the petition is filed not later
than thirty days after the purchaser was given possession of the land.
Considering, however, that private respondent has filed a motion to set aside the
sale and to defer the issuance of a writ of possession before the court where the
ex parte petition for issuance of such writ was then pending, we deem the same to
be substantial compliance with the statutory prescription.
We, however, take exception to and reject the last paragraph in the dispositive
portion at the questioned decision of respondent court, which we repeat:
"In the event that private respondent fails or refuses to pay

such excess or balance, then the auction sale of 28 September
1993 is deemed CANCELLED and private respondent (
petitioner herein) may foreclose the mortgage anew either in a
judicial or extrajudicial proceeding as stipulated in the
mortgage contract."
for lack of statutory and jurisprudential bases. The quoted phrase "as
stipulated in the mortgage contract" does not, of course, envision such
contingency or warrant the suggested alternative procedure.
Section 4 of Rule 64, hereinbefore quoted, merely provides that where there is a
balance or residue after payment of the mortgage, the same shall be paid to the
mortgagor. While the expedient course desired by respondent court is
commendable, there is nothing in the cited provision from which it can be
inferred that a violation thereof will have the effect of nullifying the sale. The
better rule is that if the mortgagee is retaining more of the proceeds of the sale
than he is entitled to, this fact alone will not affect the validity of the sale but
simply gives the mortgagor a cause of action to recover such surplus. 27 This is
likewise in harmony with the decisional rule that in suing for the return of the
surplus proceeds, the mortgagor is deemed to have affirmed the validity of the
sale since nothing is due if no valid sale has been made. 28
In the early case of Caparas vs. Yatco, etc., et al., 29 it was also held that where the
mortgagee has been ordered by the court to return the surplus to the mortgagor
or the person entitled thereto, and the former fails to do so and flagrantly
disobeys the order, the court can cite the mortgagee for contempt and mete out
the corresponding penalty under Section 3(b) of the former Rule 64 (now Rule
71) of the Rules of Court.
WHEREFORE, the questioned decision of the Court of Appeals is MODIFIED by

deleting. the last paragraph of its fallo, but its disposition of this case in all other
respects is hereby AFFIRMED.
SO ORDERED.
||| (Sulit v. Court of Appeals, G.R. No. 119247, February 17, 1997)
SECOND DIVISION
[G.R. No. 171206. September 23, 2013.]
HEIRS OF THE LATE SPOUSES FLAVIANO

MAGLASANG and SALUD ADAZA-MAGLASANG,
namely, OSCAR A. MAGLASANG, EDGAR A.
MAGLASANG, CONCEPCION CHONA A.
MAGLASANG, GLENDA A. MAGLASANG-ARNAIZ,
LERMA A. MAGLASANG, FELMA A. MAGLASANG, FE
DORIS A. MAGLASANG, LEOLINO A. MAGLASANG,
MARGIE LEILA A. MAGLASANG, MA. MILALIE A.
MAGLASANG, SALUD A. MAGLASANG, and MA.
FLASALIE A. MAGLASANG, REPRESENTING THE
ESTATES OF THEIR AFORE-NAMED DECEASED
PARENTS, petitioners, vs. MANILA BANKING
CORPORATION, now substituted by FIRST SOVEREIGN
ASSET MANAGEMENT [SPV-AMC], INC. [FSAMI],
respondent.
DECISION
PERLAS-BERNABE, J p:
Assailed in this petition for review on certiorari 1 are the Decision 2 dated July 20,
2005 and Resolution 3 dated January 4, 2006 of the Court of Appeals (CA) in CA-
G.R. CV No. 50410 which dismissed petitioners' appeal and affirmed the
Decision 4 dated April 6, 1987 of the Regional Trial Court of Ormoc City, Branch
12 (RTC) directing petitioners to jointly and severally pay respondent Manila
Banking Corporation the amount of P434,742.36, with applicable interests,
representing the deficiency of the former's total loan obligation to the latter after
the extra-judicial foreclosure of the real estate mortgage subject of this case,
including attorney's fees and costs of suit.
The Facts
On June 16, 1975, spouses Flaviano and Salud Maglasang (Sps. Maglasang)
obtained a credit line from respondent 5 in the amount of P350,000.00 which was
secured by a real estate mortgage 6 executed over seven of their properties 7
located in Ormoc City and the Municipality of Kananga, Province of Leyte. 8
They availed of their credit line by securing loans in the amounts of P209,790.50
and P139,805.83 on October 24, 1975 and March 15, 1976, respectively, 9 both of
which becoming due and demandable within a period of one year. Further, the
parties agreed that the said loans would earn interest at 12% per annum (p.a.)
and an additional 4% penalty would be charged upon default. 10 CAHTIS
After Flaviano Maglasang (Flaviano) died intestate on February 14, 1977, his
widow Salud Maglasang (Salud) and their surviving children, herein petitioners
Oscar (Oscar), Concepcion Chona, Lerma, Felma, Fe Doris, Leolino, Margie Leila,
Ma. Milalie, Salud and Ma. Flasalie, all surnamed Maglasang, and Glenda
Maglasang-Arnaiz, appointed 11 their brother petitioner Edgar Maglasang
(Edgar) as their attorney-in-fact. 12 Thus, on March 30, 1977, Edgar filed a
verified petition for letters of administration of the intestate estate of Flaviano
before the then Court of First Instance of Leyte, Ormoc City, Branch 5 (probate
court), docketed as Sp. Proc. No. 1604-0. 13 On August 9, 1977, the probate court
issued an Order 14 granting the petition, thereby appointing Edgar as the
administrator 15 of Flaviano's estate. cITAaD
In view of the issuance of letters of administration, the probate court, on August

30, 1977, issued a Notice to Creditors 16 for the filing of money claims against
Flaviano's estate. Accordingly, as one of the creditors of Flaviano, respondent
notified 17 the probate court of its claim in the amount of P382,753.19 as of
October 11, 1978, exclusive of interests and charges.
During the pendency of the intestate proceedings, Edgar and Oscar were able to
obtain several loans from respondent, secured by promissory notes 18 which
they signed.
In an Order 19 dated December 14, 1978 (December 14, 1978 Order), the probate
court terminated the proceedings with the surviving heirs executing an extra-
judicial partition of the properties of Flaviano's estate. The loan obligations owed
by the estate to respondent, however, remained unsatisfied due to respondent's
certification that Flaviano's account was undergoing a restructuring.
Nonetheless, the probate court expressly recognized the rights of respondent
under the mortgage and promissory notes executed by the Sps. Maglasang,
specifically, its "right to foreclose the same within the statutory period." 20
In this light, respondent proceeded to extra-judicially foreclose the mortgage

covering the Sps. Maglasang's properties and emerged as the highest bidder at
the public auction for the amount of P350,000.00. 21 There, however, remained a
deficiency on Sps. Maglasang's obligation to respondent. Thus, on June 24, 1981,
respondent filed a suit to recover the deficiency amount of P250,601.05 as of May
31, 1981 against the estate of Flaviano, his widow Salud and petitioners, docketed
as Civil Case No. 1998-0. 22 AHSEaD
The RTC Ruling and Subsequent Proceedings

After trial on the merits, the RTC (formerly, the probate court) 23 rendered a
Decision 24 on April 6, 1987 directing the petitioners to pay respondent, jointly
and severally, the amount of P434,742.36 with interest at the rate of 12% p.a., plus
a 4% penalty charge, reckoned from September 5, 1984 until fully paid. 25 The
RTC found that it was shown, by a preponderance of evidence, that petitioners,
after the extra-judicial foreclosure of all the properties mortgaged, still have an
outstanding obligation in the amount and as of the date as above-stated. The
RTC also found in order the payment of interests and penalty charges as above-
mentioned as well as attorney's fees equivalent to 10% of the outstanding
obligation. 26
Dissatisfied, petitioners elevated the case to the CA on appeal, contending, 27

inter alia, that the remedies available to respondent under Section 7, Rule 86 of
the Rules of Court (Rules) are alternative and exclusive, such that the election of
one operates as a waiver or abandonment of the others. Thus, when respondent
filed its claim against the estate of Flaviano in the proceedings before the probate
court, it effectively abandoned its right to foreclose on the mortgage. Moreover,
even on the assumption that it has not so waived its right to foreclose, it is
nonetheless barred from filing any claim for any deficiency amount.
During the pendency of the appeal, Flaviano's widow, Salud, passed away on
July 25, 1997. 28 DISHEA
The CA Ruling
In a Decision 29 dated July 20, 2005, the CA denied the petitioners' appeal and
affirmed the RTC's Decision. At the outset, it pointed out that the probate court
erred when it, through the December 14, 1978 Order, closed and terminated the
proceedings in Sp. Proc. No. 1604-0 without first satisfying the claims of the
creditors of the estate in particular, respondent in violation of Section 1,
Rule 90 of the Rules. 30 As a consequence, respondent was not able to collect
from the petitioners and thereby was left with the option of foreclosing the real
estate mortgage. 31 Further, the CA held that Section 7, Rule 86 of the Rules does
not apply to the present case since the same does not involve a mortgage made
by the administrator over any property belonging to the estate of the decedent.
32 According to the CA, what should apply is Act No. 3135 33 which entitles
respondent to claim the deficiency amount after the extra-judicial foreclosure of
the real estate mortgage of Sps. Maglasang's properties. 34
Petitioners' motion for reconsideration was subsequently denied in a Resolution

35 dated January 4, 2006. Hence, the present recourse.
The Issue Before the Court

The essential issue in this case is whether or not the CA erred in affirming the
RTC's award of the deficiency amount in favor of respondent.
Petitioners assert 36 that it is not Act No. 3135 but Section 7, Rule 86 of the Rules
which applies in this case. The latter provision provides alternative and exclusive
remedies for the satisfaction of respondent's claim against the estate of Flaviano.
37 Corollarily, having filed its claim against the estate during the intestate
proceedings, petitioners argue that respondent had effectively waived the
remedy of foreclosure and, even assuming that it still had the right to do so, it
was precluded from filing a suit for the recovery of the deficiency obligation. 38
AEIHaS
Likewise, petitioners maintain that the extra-judicial foreclosure of the subject

properties was null and void, not having been conducted in the capital of the
Province of Leyte in violation of the stipulations in the real estate mortgage
contract. 39 They likewise deny any personal liability for the loans taken by their
deceased parents. 40
The Court's Ruling

Claims against deceased persons should be filed during the settlement

proceedings of their estate. 41 Such proceedings are primarily governed by
special rules found under Rules 73 to 90 of the Rules, although rules governing
ordinary actions may, as far as practicable, apply suppletorily. 42 Among these
special rules, Section 7, Rule 86 of the Rules (Section 7, Rule 86) provides the rule
in dealing with secured claims against the estate:
SEC. 7. Mortgage debt due from estate. A creditor holding a

claim against the deceased secured by a mortgage or other
collateral security, may abandon the security and prosecute
his claim in the manner provided in this rule, and share in
the general distribution of the assets of the estate; or he may
foreclose his mortgage or realize upon his security, by action
in court, making the executor or administrator a party
defendant, and if there is a judgment for a deficiency, after
the sale of the mortgaged premises, or the property pledged,
in the foreclosure or other proceeding to realize upon the
security, he may claim his deficiency judgment in the
manner provided in the preceding section; or he may rely
upon his mortgage or other security alone, and foreclose the
same at any time within the period of the statute of
limitations, and in that event he shall not be admitted as a
creditor, and shall receive no share in the distribution of the
other assets of the estate; but nothing herein contained shall
prohibit the executor or administrator from redeeming the
property mortgaged or pledged, by paying the debt for
which it is held as security, under the direction of the court,
if the court shall adjudged it to be for the best interest of the
estate that such redemption shall be made. (Emphasis and
underscoring supplied) DTEAHI
As the foregoing generally speaks of "[a] creditor holding a claim against the
deceased secured by a mortgage or other collateral security" as above-
highlighted, it may be reasonably concluded that the aforementioned section
covers all secured claims, whether by mortgage or any other form of collateral,
which a creditor may enforce against the estate of the deceased debtor. On the
contrary, nowhere from its language can it be fairly deducible that the said
section would as the CA interpreted narrowly apply only to mortgages
made by the administrator over any property belonging to the estate of the
decedent. To note, mortgages of estate property executed by the administrator,
are also governed by Rule 89 of the Rules, captioned as "Sales, Mortgages, and
Other Encumbrances of Property of Decedent."
In this accord, it bears to stress that the CA's reliance on Philippine National Bank
v. CA 43 (PNB) was misplaced as the said case did not, in any manner, limit the
scope of Section 7, Rule 86. It only stated that the aforesaid section equally
applies to cases where the administrator mortgages the property of the estate to
secure the loan he obtained. 44 Clearly, the pronouncement was a ruling of
inclusion and not one which created a distinction. It cannot, therefore, be
doubted that it is Section 7, Rule 86 which remains applicable in dealing with a
creditor's claim against the mortgaged property of the deceased debtor, as in this
case, as well as mortgages made by the administrator, as that in the PNB case.
Jurisprudence breaks down the rule under Section 7, Rule 86 and explains that
the secured creditor has three remedies/options that he may alternatively adopt
for the satisfaction of his indebtedness. In particular, he may choose to: (a) waive
the mortgage and claim the entire debt from the estate of the mortgagor as an
ordinary claim; (b) foreclose the mortgage judicially and prove the deficiency as
an ordinary claim; and (c) rely on the mortgage exclusively, or other security and
foreclose the same before it is barred by prescription, without the right to file a
claim for any deficiency. 45 It must, however, be emphasized that these remedies
are distinct, independent and mutually exclusive from each other; thus, the
election of one effectively bars the exercise of the others. With respect to real
properties, the Court in Bank of America v. American Realty Corporation 46
pronounced: cDTACE
In our jurisdiction, the remedies available to the mortgage

creditor are deemed alternative and not cumulative.
Notably, an election of one remedy operates as a waiver of
the other. For this purpose, a remedy is deemed chosen
upon the filing of the suit for collection or upon the filing of
the complaint in an action for foreclosure of mortgage,
pursuant to the provision of Rule 68 of the 1997 Rules of
Civil Procedure. As to extrajudicial foreclosure, such remedy
is deemed elected by the mortgage creditor upon filing of
the petition not with any court of justice but with the Office
of the Sheriff of the province where the sale is to be made, in
accordance with the provisions of Act No. 3135, as amended
by Act No. 4118. 47 (Emphasis supplied) CTHDcE
Anent the third remedy, it must be mentioned that the same includes the option
of extra-judicially foreclosing the mortgage under Act No. 3135, as availed of by
respondent in this case. However, the plain result of adopting the last mode of
foreclosure is that the creditor waives his right to recover any deficiency from the
estate. 48 These precepts were discussed in the PNB case, citing Perez v. Philippine
National Bank 49 which overturned the earlier Pasno v. Ravina ruling: 50
Case law now holds that this rule grants to the mortgagee
three distinct, independent and mutually exclusive remedies
that can be alternatively pursued by the mortgage creditor
for the satisfaction of his credit in case the mortgagor dies,
among them:
(1) to waive the mortgage and claim the

entire debt from the estate of the
mortgagor as an ordinary claim;
(2) to foreclose the mortgage judicially

and prove any deficiency as an ordinary
claim; and
(3) to rely on the mortgage exclusively,

foreclosing the same at any time before
it is barred by prescription without right
to file a claim for any deficiency.
In Perez v. Philippine National Bank, reversing Pasno vs.

Ravina, we held: ACSaHc
The ruling in Pasno v. Ravina not having been

reiterated in any other case, we have carefully
reexamined the same, and after mature deliberation
have reached the conclusion that the dissenting
opinion is more in conformity with reason and law.
Of the three alternative courses that section 7, Rule
87 (now Rule 86), offers the mortgage creditor, to
wit, (1) to waive the mortgage and claim the entire
debt from the estate of the mortgagor as an
ordinary claim; (2) foreclose the mortgage judicially
and prove any deficiency as an ordinary claim; and
(3) to rely on the mortgage exclusively, foreclosing
the same at any time before it is barred by
prescription, without right to file a claim for any
deficiency, the majority opinion in Pasno v. Ravina, in
requiring a judicial foreclosure, virtually wipes out
the third alternative conceded by the Rules to the
mortgage creditor, and which would precisely
include extra-judicial foreclosures by contrast with
the second alternative.
The plain result of adopting the last mode of foreclosure is

that the creditor waives his right to recover any deficiency
from the estate. Following the Perez ruling that the third
mode includes extrajudicial foreclosure sales, the result of
extrajudicial foreclosure is that the creditor waives any
further deficiency claim. . . . . 51 (Emphases and
underscoring supplied; italics in the original) THIECD
To obviate any confusion, the Court observes that the operation of Act No. 3135
does not entirely discount the application of Section 7, Rule 86, or vice-versa.
Rather, the two complement each other within their respective spheres of
operation. On the one hand, Section 7, Rule 86 lays down the options for the
secured creditor to claim against the estate and, according to jurisprudence, the
availment of the third option bars him from claiming any deficiency amount. On
the other hand, after the third option is chosen, the procedure governing the
manner in which the extra-judicial foreclosure should proceed would still be
governed by the provisions of Act No. 3135. Simply put, Section 7, Rule 86
governs the parameters and the extent to which a claim may be advanced against
the estate, whereas Act No. 3135 sets out the specific procedure to be followed
when the creditor subsequently chooses the third option specifically, that of
extra-judicially foreclosing real property belonging to the estate. The application
of the procedure under Act No. 3135 must be concordant with Section 7, Rule 86
as the latter is a special rule applicable to claims against the estate, and at the
same time, since Section 7, Rule 86 does not detail the procedure for extra-
judicial foreclosures, the formalities governing the manner of availing of the
third option such as the place where the application for extra-judicial
foreclosure is filed, the requirements of publication and posting and the place of
sale must be governed by Act No. 3135.
In this case, respondent sought to extra-judicially foreclose the mortgage of the

properties previously belonging to Sps. Maglasang (and now, their estates) and,
therefore, availed of the third option. Lest it be misunderstood, it did not exercise
the first option of directly filing a claim against the estate, as petitioners assert,
since it merely notified 52 the probate court of the outstanding amount of its
claim against the estate of Flaviano and that it was currently restructuring the
account. 53 Thus, having unequivocally opted to exercise the third option of
extra-judicial foreclosure under Section 7, Rule 86, respondent is now precluded
from filing a suit to recover any deficiency amount as earlier discussed. cIADaC
As a final point, petitioners maintain that the extra-judicial foreclosure of the

subject properties was null and void since the same was conducted in violation
of the stipulation in the real estate mortgage contract stating that the auction sale
should be held in the capital of the province where the properties are located, i.e.,
the Province of Leyte.
The Court disagrees.
As may be gleaned from the records, the stipulation under the real estate
mortgage 54 executed by Sps. Maglasang which fixed the place of the foreclosure
sale at Tacloban City lacks words of exclusivity which would bar any other
acceptable fora wherein the said sale may be conducted, to wit:
It is hereby agreed that in case of foreclosure of this

mortgage under Act 3135, the auction sale shall be held at
the capital of the province if the property is within the
territorial jurisdiction of the province concerned, or shall be
held in the city if the property is within the territorial
jurisdiction of the city concerned; . . . . 55
Case law states that absent such qualifying or restrictive words to indicate the
exclusivity of the agreed forum, the stipulated place should only be as an
additional, not a limiting venue. 56 As a consequence, the stipulated venue and
that provided under Act No. 3135 can be applied alternatively.
In particular, Section 2 of Act No. 3135 allows the foreclosure sale to be done
within the province where the property to be sold is situated, viz.:
SEC. 2. Said sale cannot be made legally outside of the province

which the property sold is situated; and in case the place
within said province in which the sale is to be made is
subject to stipulation, such sale shall be made in said place
or in the municipal building of the municipality in which the
property or part thereof is situated. (Italics supplied) DAEcIS
In this regard, since the auction sale was conducted in Ormoc City, which is
within the territorial jurisdiction of the Province of Leyte, then the Court finds
sufficient compliance with the above-cited requirement.
All told, finding that the extra-judicial foreclosure subject of this case was
properly conducted in accordance with the formalities of Act No. 3135, the Court
upholds the same as a valid exercise of respondent's third option under Section
7, Rule 86. To reiterate, respondent cannot, however, file any suit to recover any
deficiency amount since it effectively waived its right thereto when it chose to
avail of extra-judicial foreclosure as jurisprudence instructs. ADCTac
WHEREFORE, the petition is PARTLY GRANTED. The complaint for the

recovery of the deficiency amount after extra-judicial foreclosure filed by
respondent Manila Banking Corporation is hereby DISMISSED. The extra-
judicial foreclosure of the mortgaged properties, however, stands.
SO ORDERED.
||| (Heirs of the Late Sps. Magsalang v. Manila Banking Corp., G.R. No. 171206,
September 23, 2013)
FIRST DIVISION
[G.R. No. 168523. March 9, 2011.]
SPOUSES FERNANDO and ANGELINA EDRALIN,

petitioners, vs. PHILIPPINE VETERANS BANK, respondent.
DECISION
DEL CASTILLO, J p:
The right to possess a property follows the right of ownership; consequently, it

would be illogical to hold that a person having ownership of a parcel of land is
barred from seeking possession thereof.
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court, 1 assailing the Decision 2 dated June 10, 2005 of the Court of Appeals (CA)
in CA-G.R. SP No. 89248. The dispositive portion of the assailed Decision reads:
WHEREFORE, premises considered, the present petition is

hereby GIVEN DUE COURSE and the writ prayed for
accordingly GRANTED. The assailed Orders dated
November 8, 2004 and January 28, 2005 dismissing the ex-
parte petition for issuance of writ of possession and denying
petitioner's motion for reconsideration, respectively, are
hereby ANNULLED and SET ASIDE. Respondent Judge is
hereby DIRECTED to issue the writ of possession prayed for
by the petitioner Philippine Veterans Bank over the subject
property covered by TCT No. 78332 of the Registry of Deeds
for Paraaque City, Metro Manila.
SO ORDERED. 3
Factual Antecedents
Respondent Philippine Veterans Bank (Veterans Bank) is a commercial banking
institution created under Republic Act (RA) No. 3518, 4 as amended by RA No.
7169. 5
On February 5, 1976, Veterans Bank granted petitioner spouses Fernando and

Angelina Edralin (Edralins) a loan in the amount of Two Hundred Seventy
Thousand Pesos (P270,000.00). As security thereof, petitioners executed a Real
Estate Mortgage (REM) 6 in favor of Veterans Bank over a real property situated
in the Municipality of Paraaque and registered in the name of petitioner
Fernando Edralin. The mortgaged property is more particularly described in
Transfer Certificate of Title (TCT) No. 204889. The REM was registered with the
Registry of Deeds of the Province of Rizal. 7 The REM and its subsequent
amendments 8 were all duly annotated at the back of TCT No. 204889. 9
The Edralins failed to pay their obligation to Veterans Bank. Thus, on June 28,
1983, Veterans Bank filed a Petition for Extrajudicial Foreclosure 10 of the REM with
the Office of the Clerk of Court and Ex-Officio Sheriff of Rizal. EDATSC
In due course, the foreclosure sale was held on September 8, 1983, in which the
Ex-Officio Sheriff of Rizal sold the mortgaged property at public auction.
Veterans Bank emerged as the highest bidder at the said foreclosure sale and was
issued the corresponding Certificate of Sale. 11 The said Certificate of Sale was
registered with the Registry of Deeds of the Province of Rizal and annotated at
the back of TCT No. 204889 under Entry No. 83-62953/T-No. 43153-A on October
25, 1983. 12
Upon the Edralins' failure to redeem the property during the one-year period
provided under Act No. 3135, Veterans Bank acquired absolute ownership of the
subject property. Consequently, Veterans Bank caused the consolidation of
ownership of the subject property in its name on January 19, 1994. 13 The
Register of Deeds of Paraaque, Metro Manila cancelled TCT No. 204889 under
the name of Fernando Edralin and replaced it with a new transfer certificate of
title, TCT No. 78332, 14 in the name of Veterans Bank on February 3, 1994.
Despite the foregoing, the Edralins failed to vacate and surrender possession of
the subject property to Veterans Bank. Thus, on May 24, 1996, Veterans Bank
filed an Ex-Parte Petition for the Issuance of a Writ of Possession, docketed as Land
Registration Case (LRC) No. 06-060 before Branch 274 of the Regional Trial Court
(RTC) of Paraaque City. The same, however, was dismissed for Veterans Bank's
failure to prosecute. 15
On July 29, 2003, Veterans Bank again filed an Ex-Parte Petition for Issuance of Writ
of Possession, 16 this time docketed as Land Registration Case No. 03-0121, before
the RTC of Paraaque City. Veterans Bank divulged in its Certification against
Forum-Shopping 17 that the earlier case, LRC No. 96-060, involving the same
subject matter and parties, was dismissed.
The Edralins moved to dismiss 18 the petition on the ground that the dismissal of
LRC No. 96-060 constituted res judicata.

The trial court denied the motion to dismiss explaining that the ground of failure
to present evidence is not a determination of the merits of the case hence does
not constitute res judicata on the petition for issuance of a writ of possession. 19
Nevertheless, the trial court found no merit in the Veterans Bank's application
and dismissed the same in its Order dated November 8, 2004. 20 The trial court
explained that, under paragraph (d) of the REM, the Veterans Bank agreed to
take possession of the Edralins' property without any judicial intervention. The
court held that granting the writ of possession to the Veterans Bank will violate
the contractual agreement of the parties. Paragraph (d) reads:
(d) Effective upon the breach of any condition of this

mortgage and in addition to the remedies herein stipulated,
the Mortgagee is hereby likewise appointed attorney-in-fact
of the Mortgagor with full powers and authority, with the
use of force, if necessary to take actual possession of the
mortgaged property, without the necessity of any judicial
order or any permission, or power, to collect rents, to eject
tenants, to lease or sell the mortgaged property or any part
thereof, at a private sale without previous notice or
advertisement of any kind and execute the corresponding
bills of sale, lease or other agreement that may be deemed
convenient, to make repairs or improvements on the
mortgaged property and pay for the same and perform any
other act which the Mortgagee may deem convenient for the
proper administration of the mortgaged property. The
payment of any expenses advanced by the Mortgagee in
connection with the purposes indicated herein is also
guaranteed by this Mortgage and such amount advanced
shall bear interest at the rate of 12% per annum. Any amount
received from sale, disposal or administration above-
mentioned may be applied to the payment of the repairs,
improvements, taxes and any other incidental expenses and
obligations and also the payment of the original
indebtedness and interest thereof. The power herein granted
shall not be revoked during the life of this mortgage, and all
acts that may be executed by the Mortgagee by virtue of said
power are hereby ratified. In addition to the foregoing, the
Mortgagor also hereby agrees, that the Auditor General shall
withhold any money due or which may become due the
Mortgagor or debtor from the Government or from any of its
instrumentalities, except those exempted by law from
attachment or execution, and apply the same in settlement of
any and all amount due to the Mortgagee; 21
The trial court held that, assuming the contract allowed for the issuance of a writ
of possession, Veterans Bank's right to seek possession had already prescribed.
Without citing authority and adequate explanation, the court held that Veterans
Bank had only 10 years from February 24, 1983 to seek possession of the
property. EAHcCT
Veterans Bank moved for the reconsideration 22 of the adverse decision. It

directed the court's attention to paragraph (c) of the real estate mortgage, which
expressly granted the mortgagee the right to avail itself of the remedy of
extrajudicial foreclosure in case of the mortgagor's default. Paragraph (c) reads:
(c) If at any time the Mortgagor shall fail or refuse to pay the
obligations herein secured, or any of the amortizations of
such indebtedness when due, or to comply with any of the
conditions and stipulations herein agreed, or shall, during
the time this mortgage is in force, institute insolvency
proceedings or be involuntarily declared insolvent, or shall
use the proceeds of this loan for purposes other than those
specified herein, or if this mortgage cannot be recorded in
the corresponding Registry of Deeds, then all the obligations
of the Mortgagor secured by this Mortgage and all the
amortization thereof shall immediately become due, payable
and defaulted, and the Mortgagee may immediately
foreclose this mortgage judicially in accordance with the
Rules of Court, or extra-judicially in accordance with Act
No. 3135, as amended, and under Act 2612, as amended. For
the purpose of extra-judicial foreclosure the Mortgagor
hereby appoints the Mortgagee his attorney-in-fact to sell the
property mortgaged under Act No. 3135, as amended, to
sign all documents and perform any act requisite and
necessary to accomplish said purpose and to appoint its
substitutes as such attorney-in-fact with the same powers as
above specified. . . . 23
The motion for reconsideration was set for hearing on January 28, 2005. Due to a
conflict of schedule, Veterans Bank's counsel moved 24 to reset the hearing on its
motion. In apparent denial of the motion to reset, the trial court proceeded to
deny Veterans Bank's motion for reconsideration in the Order dated January 28,
2005. 25 The trial court reiterated that paragraph (d) of the REM allowed
Veterans Bank to take immediate possession of the property without need of a
judicial order. It would be redundant for the court to issue a writ of possession in
its favor.
This prompted Veterans Bank to file a Petition for Mandamus with Prayer for
Issuance of a Preliminary Mandatory Injunction 26 before the CA.
First among its arguments, Veterans Bank maintained that it was the trial court's
ministerial duty 27 to grant a writ of possession to the mortgagee who has
consolidated and registered the property in its name.
Veterans Bank then assailed the trial court's holding that its right to a writ of
possession had already prescribed. Respondent maintained that the writ can be
issued at any time after the mortgagor failed to redeem the foreclosed property.
28
Lastly, Veterans Bank argued that, contrary to the trial court's finding, it did not
contract away its right to an extrajudicial foreclosure under Act No. 3135, as
amended, by the inclusion of paragraph (d) in the REM. Veterans Bank pointed
out that, as evidenced by paragraph (c) of the REM, it expressly reserved the
right to avail of the remedies under Act No. 3135. 29
Ruling of the Court of Appeals 30

The appellate court ruled in favor of Veterans Bank.
It held that the contractual provision in paragraph (d) to immediately take

possession of the mortgaged property without need of judicial intervention is
distinct from the right to avail of extrajudicial foreclosure under Section 7 of Act
No. 3135, which was expressly reserved by Veterans Bank in paragraph (c) of the
REM. The fact that the two paragraphs do not negate each other is evidenced by
the qualifying phrase "in addition to the remedies herein stipulated" found in
paragraph (c).
Having availed itself of the remedy of extrajudicial foreclosure, Veterans Bank,

as the highest bidder, has the right to a writ of possession. This right may be
availed of any time after the buyer consolidates ownership. In fact, the issuance
of the writ of possession is a ministerial function, the right to which cannot be
enjoined or stayed, even by an action for annulment of the mortgage or the
foreclosure sale itself.
The trial court's ruling that Veterans Bank's right to possess has prescribed is
likewise erroneous. As already stated, Veterans Bank's right to possess the
property is not based on their contract but on Act No. 3135. TDcEaH
Since the issuance of a writ of possession is a ministerial act of the trial judge,
mandamus lies to compel the performance of the said duty.
Petitioners immediately filed this petition for review.
Issues
Petitioners submit the following issues for our consideration:
1. Whether mandamus was resorted to as a substitute for a

lost appeal
2. Whether mandamus is the proper remedy to seek a review

of the final orders of the trial court
3. Whether the consolidation of ownership of the

extrajudicially foreclosed property through a Deed of Sale is
in accordance with law
4. Whether the issuance of a writ of possession under Act

[No.] 3135 is subject to the statute of limitations 31
Our Ruling
Propriety of the Remedy of Mandamus
Petitioners argue that Veterans Bank availed itself of the remedy of mandamus as
a substitute for a lost appeal. 32 Petitioners narrate the relevant dates that
allegedly show the belatedness and impropriety of the petition for mandamus.
Veterans Bank received the Order dated November 8, 2004 on November 18,
2004, thus it had until December 3, 2004 to file a motion for reconsideration. Since
December 3, 2004 was declared a non-working holiday, Veterans Bank filed its
motion for reconsideration on the next working day, December 6, 2004. With the
said dates, it had only one day left from receipt of the January 28, 2005 Order, or
until February 10, 2005, to file an appeal (citing Section 2, Rule 22) of the Rules of
Court. Since Veterans Bank did not file an appeal on the following day, it had
lost its right to appeal and the assailed orders allegedly attained finality.
Respondent counters that the issuance of a writ of possession is not an ordinary

action for which the rules on appeal apply. The writ being a mere motion or an
order of execution, appeal is not the proper remedy to question the trial court's
ruling. In fact, Section 1, Rule 41 of the Rules of Court provides that no appeal
may be taken from an order of execution, but Rule 65 special civil actions are
available. 33 Given that the issuance of the writ of possession is a ministerial act
of the judge, respondent maintains that a petition for mandamus is the proper
remedy.
Respondent adds that, even if appeal were available, the same is not the plain,
speedy and adequate remedy to compel the performance of the ministerial act. 34
Respondent maintains that Section 3 of Rule 65 recognizes that the remedy of
mandamus is available in conjunction with an appeal. The qualifying phrase "and
there is no appeal [available]," which appears in certiorari and prohibition
petitions, is conspicuously missing for petitions for mandamus.
We rule that mandamus is a proper remedy to compel the issuance of a writ of

possession. The purpose of mandamus is to compel the performance of a
ministerial duty. A ministerial act is "one which an officer or tribunal performs in
a given state of facts, in a prescribed manner, in obedience to the mandate of
legal authority, without regard to or the exercise of his own judgment upon the
propriety or impropriety of the act done." 35
The issuance of a writ of possession is outlined in Section 7 of Act No. 3135, as

amended by Act No. 4118, which provides:
SEC. 7. In any sale made under the provisions of this Act,

the purchaser may petition the Court of First Instance of
the province or place where the property or any part
thereof is situated, to give him possession thereof during the
complying with the requirements of [this] Act. Such petition
motion . . . and the court shall, upon approval of the bond,
order that a writ of possession issue, addressed to the
sheriff of the province in which the property is situated, who
shall execute said order immediately.
During the period of redemption, the mortgagee is entitled to a writ of

possession upon depositing the approved bond. When the redemption
period expires without the mortgagor exercising his right of redemption, the
mortgagor is deemed to have lost all interest over the foreclosed property,
and the purchaser acquires absolute ownership of the property. The
purchaser's right is aptly described thus: ESacHC
purchaser can demand possession at any time following
the consolidation of ownership in his name and the
issuance to him of a new TCT. After consolidation of title in
the purchaser's name for failure of the mortgagor to redeem
the property, the purchaser's right to possession ripens into
the absolute right of a confirmed owner. At that point, the
Effectively, the court cannot exercise its discretion.
Therefore, the issuance by the RTC of a writ of possession in

favor of the respondent in this case is proper. We have
consistently held that the duty of the trial court to grant a
writ of possession in such instances is ministerial, and the
court may not exercise discretion or judgment . . . 36
With the consolidated title, the purchaser becomes entitled to a writ of

possession and the trial court has the ministerial duty to issue such writ of
possession. 37 Thus, "the remedy of mandamus lies to compel the
performance of [this] ministerial duty." 38
Does the charter of Veterans Bank prohibit extrajudicial foreclosures?
Petitioners then assail Veterans Bank's power to extrajudicially foreclose on
mortgages. They maintain that the legislature intended to limit Veterans Bank to
judicial foreclosures only, 39 citing Section 18 of the Veterans Bank's charter, RA
No. 3518, which provides:
Section 18. Right of redemption of property foreclosed. The

mortgagor shall have the right, within one year after the sale
of the real estate as a result of the foreclosure of a mortgage,
to redeem the property by paying the amount fixed by the
court in the order of execution, with interest thereon at the
rate specified in the mortgage, and all the costs and other
judicial expenses incurred by the Bank by reason of the
execution and sale, and for the custody of said property.
Respondent counters that the inclusion of the phrase "fixed by the Court" in
Section 18 of RA No. 3518 does not necessarily mean that only judicial
foreclosures are available to Veterans Bank. Moreover, resort to an extrajudicial
foreclosure was voluntarily entered into by the contracting parties in their REM.
40
There is no merit in petitioners' contention.
The aforequoted Section 18 grants to mortgagors of Veterans Bank the right to

redeem their judicially foreclosed properties. This provision had to be included
because in judicial foreclosures, mortgagors generally do not have the right of
redemption unless there is an express grant by law. 41
But, contrary to petitioners' averments, there is nothing in Section 18 which can

be interpreted to mean that Veterans Bank is limited to judicial foreclosures only,
or that it cannot avail itself of the benefits provided under Act No. 3135, 42 as
amended, allowing extrajudicial foreclosures.
Moreover, the availability of extra-judicial foreclosure to a mortgagee depends

upon the agreement of the contracting parties. Section 1 of Act No. 3135 provides:
DAETcC
Section 1. When a sale is made under a special power

inserted in or attached to any real-estate mortgage hereafter
made as security for the payment of money or the fulfillment
of any other obligation, the provisions of the following
sections shall govern as to the manner in which the sale
and redemption shall be effected, whether or not provision
for the same is made in the power. (Emphasis supplied.)
In the case at bar, paragraph (c) of the parties' REM granted Veterans Bank
the special power as attorney-in-fact of the petitioners to perform all acts
necessary for the purpose of extrajudicial foreclosure under Act No. 3135.
Thus, there is no obstacle preventing Veterans Bank from availing itself of
the remedy of extrajudicial foreclosure.
Was the consolidation of title done in accordance with law?

Petitioners argue that Veterans Bank is not entitled to a writ of
possession because it failed to properly consolidate its title over the subject
property. 43 They maintain that the Deed of Sale executed by the Veterans
Bank in the bank's own favor during the consolidation of title constitutes a
pactum commissorium, which is prohibited under Article 2088 of the Civil
Code. 44
Respondent contends that petitioners never questioned the validity of the
foreclosure proceedings or the auction sale. The failure to do so resulted in the
ripening of the consolidation of ownership. 45
There is no merit in petitioners' argument.
Pactum commissorium is "a stipulation empowering the creditor to appropriate the

thing given as guaranty for the fulfillment of the obligation in the event the
obligor fails to live up to his undertakings, without further formality, such as
foreclosure proceedings, and a public sale." 46 "The elements of pactum
commissorium, which enable the mortgagee to acquire ownership of the
mortgaged property without the need of any foreclosure proceedings, are: (1) there
should be a property mortgaged by way of security for the payment of the
principal obligation, and (2) there should be a stipulation for automatic
appropriation by the creditor of the thing mortgaged in case of non-payment of
the principal obligation within the stipulated period." 47
The second element is missing to characterize the Deed of Sale as a form of

pactum commissorium. Veterans Bank did not, upon the petitioners' default,
automatically acquire or appropriate the mortgaged property for itself. On the
contrary, the Veterans Bank resorted to extrajudicial foreclosure and was issued
a Certificate of Sale by the sheriff as proof of its purchase of the subject property
during the foreclosure sale. That Veterans Bank went through all the stages of
extrajudicial foreclosure indicates that there was no pactum commissorium.
Does the right to a writ of possession prescribe?

Petitioners assail the CA's ruling that the issuance of a writ of possession does
not prescribe. 48 They maintain that Articles 1139, 49 1149, 50 and 1150 51 of the
Civil Code regarding prescriptive periods cover all kinds of action, which
necessarily include the issuance of a writ of possession. Petitioners posit that, for
purposes of the latter, it is the five-year prescriptive period provided in Article
1149 of the Civil Code which applies because Act No. 3135 itself did not provide
for its prescriptive period. Thus, Veterans Bank had only five years from
September 12, 1983, the date when the Certificate of Sale was issued in its favor,
to move for the issuance of a writ of possession. 52
Respondent argues that jurisprudence has consistently held that a registered

owner of the land, such as the buyer in an auction sale, is entitled to a writ of
possession at any time after the consolidation of ownership. 53 ACSaHc
We cannot accept petitioners' contention. We have held before that the

purchaser's right "to request for the issuance of the writ of possession of the land
never prescribes." 54 "The right to possess a property merely follows the right of
ownership," 55 and it would be illogical to hold that a person having ownership
of a parcel of land is barred from seeking possession thereof. In Calacala v.
Republic of the Philippines, 56 the Republic was the highest bidder in the public
auction but failed for a long period of time to execute an Affidavit of
Consolidation and to seek a writ of possession. Calacala insisted that, by such
inaction, the Republic's right over the land had prescribed, been abandoned or
waived. The Court's language in rejecting Calacala's theory is illuminating:
[T]he Republic's failure to execute the acts referred to by the

petitioners within ten (10) years from the registration of the
Certificate of Sale cannot, in any way, operate to restore
whatever rights petitioners' predecessors-in-interest had
over the same. For sure, petitioners have yet to cite any
provision of law or rule of jurisprudence, and we are not
aware of any, to the effect that the failure of a buyer in a
foreclosure sale to secure a Certificate of Final Sale, execute
an Affidavit of Consolidation of Ownership and obtain a
writ of possession over the property thus acquired, within
ten (10) years from the registration of the Certificate of Sale
will operate to bring ownership back to him whose property
has been previously foreclosed and sold. . . .
xxx xxx xxx
Moreover, with the rule that the expiration of the 1-year

redemption period forecloses the obligors' right to redeem
and that the sale thereby becomes absolute, the issuance
thereafter of a final deed of sale is at best a mere formality
and mere confirmation of the title that is already vested in
the purchaser. . . . 57
Moreover, the provisions cited by petitioners refer to prescription of actions. An

action is "defined as an ordinary suit in a court of justice, by which one party
prosecutes another for the enforcement or protection of a right, or the prevention
or redress of a wrong." 58 On the other hand "[a] petition for the issuance of the
writ, under Section 7 of Act No. 3135, as amended, is not an ordinary action filed in
court, by which one party 'sues another for the enforcement or protection of a
right, or prevention or redress of a wrong.' It is in the nature of an ex parte motion
[in] which the court hears only one side. It is taken or granted at the instance and
for the benefit of one party, and without notice to or consent by any party
adversely affected. Accordingly, upon the filing of a proper motion by the
purchaser in a foreclosure sale, and the approval of the corresponding bond, the
writ of possession issues as a matter of course and the trial court has no
discretion on this matter." 59
WHEREFORE, premises considered, the Petition is DENIED for lack of merit.

The CA Decision dated June 10, 2005 in CA-G.R. SP No. 89248 is AFFIRMED.
||| (Spouses Edralin v. Philippine Veterans Bank, G.R. No. 168523, March 09, 2011)
FIRST DIVISION
[G.R. No. 168523. March 9, 2011.]
SPOUSES FERNANDO and ANGELINA EDRALIN,

petitioners, vs. PHILIPPINE VETERANS BANK, respondent.
DECISION
DEL CASTILLO, J p:
The right to possess a property follows the right of ownership; consequently, it

would be illogical to hold that a person having ownership of a parcel of land is
barred from seeking possession thereof.
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court, 1 assailing the Decision 2 dated June 10, 2005 of the Court of Appeals (CA)
in CA-G.R. SP No. 89248. The dispositive portion of the assailed Decision reads:
WHEREFORE, premises considered, the present petition is
hereby GIVEN DUE COURSE and the writ prayed for
accordingly GRANTED. The assailed Orders dated
November 8, 2004 and January 28, 2005 dismissing the ex-
parte petition for issuance of writ of possession and denying
petitioner's motion for reconsideration, respectively, are
hereby ANNULLED and SET ASIDE. Respondent Judge is
hereby DIRECTED to issue the writ of possession prayed for
by the petitioner Philippine Veterans Bank over the subject
property covered by TCT No. 78332 of the Registry of Deeds
for Paraaque City, Metro Manila.
SO ORDERED. 3
Factual Antecedents
Respondent Philippine Veterans Bank (Veterans Bank) is a commercial banking
institution created under Republic Act (RA) No. 3518, 4 as amended by RA No.
7169. 5
On February 5, 1976, Veterans Bank granted petitioner spouses Fernando and

Angelina Edralin (Edralins) a loan in the amount of Two Hundred Seventy
Thousand Pesos (P270,000.00). As security thereof, petitioners executed a Real
Estate Mortgage (REM) 6 in favor of Veterans Bank over a real property situated
in the Municipality of Paraaque and registered in the name of petitioner
Fernando Edralin. The mortgaged property is more particularly described in
Transfer Certificate of Title (TCT) No. 204889. The REM was registered with the
Registry of Deeds of the Province of Rizal. 7 The REM and its subsequent
amendments 8 were all duly annotated at the back of TCT No. 204889. 9
The Edralins failed to pay their obligation to Veterans Bank. Thus, on June 28,
1983, Veterans Bank filed a Petition for Extrajudicial Foreclosure 10 of the REM with
the Office of the Clerk of Court and Ex-Officio Sheriff of Rizal. EDATSC
In due course, the foreclosure sale was held on September 8, 1983, in which the
Ex-Officio Sheriff of Rizal sold the mortgaged property at public auction.
Veterans Bank emerged as the highest bidder at the said foreclosure sale and was
issued the corresponding Certificate of Sale. 11 The said Certificate of Sale was
registered with the Registry of Deeds of the Province of Rizal and annotated at
the back of TCT No. 204889 under Entry No. 83-62953/T-No. 43153-A on October
25, 1983. 12
Upon the Edralins' failure to redeem the property during the one-year period
provided under Act No. 3135, Veterans Bank acquired absolute ownership of the
subject property. Consequently, Veterans Bank caused the consolidation of
ownership of the subject property in its name on January 19, 1994. 13 The
Register of Deeds of Paraaque, Metro Manila cancelled TCT No. 204889 under
the name of Fernando Edralin and replaced it with a new transfer certificate of
title, TCT No. 78332, 14 in the name of Veterans Bank on February 3, 1994.
Despite the foregoing, the Edralins failed to vacate and surrender possession of
the subject property to Veterans Bank. Thus, on May 24, 1996, Veterans Bank
filed an Ex-Parte Petition for the Issuance of a Writ of Possession, docketed as Land
Registration Case (LRC) No. 06-060 before Branch 274 of the Regional Trial Court
(RTC) of Paraaque City. The same, however, was dismissed for Veterans Bank's
failure to prosecute. 15
On July 29, 2003, Veterans Bank again filed an Ex-Parte Petition for Issuance of Writ
of Possession, 16 this time docketed as Land Registration Case No. 03-0121, before
the RTC of Paraaque City. Veterans Bank divulged in its Certification against
Forum-Shopping 17 that the earlier case, LRC No. 96-060, involving the same
subject matter and parties, was dismissed.
The Edralins moved to dismiss 18 the petition on the ground that the dismissal of
LRC No. 96-060 constituted res judicata.

The trial court denied the motion to dismiss explaining that the ground of failure
to present evidence is not a determination of the merits of the case hence does
not constitute res judicata on the petition for issuance of a writ of possession. 19
Nevertheless, the trial court found no merit in the Veterans Bank's application
and dismissed the same in its Order dated November 8, 2004. 20 The trial court
explained that, under paragraph (d) of the REM, the Veterans Bank agreed to
take possession of the Edralins' property without any judicial intervention. The
court held that granting the writ of possession to the Veterans Bank will violate
the contractual agreement of the parties. Paragraph (d) reads:
(d) Effective upon the breach of any condition of this

mortgage and in addition to the remedies herein stipulated,
the Mortgagee is hereby likewise appointed attorney-in-fact
of the Mortgagor with full powers and authority, with the
use of force, if necessary to take actual possession of the
mortgaged property, without the necessity of any judicial
order or any permission, or power, to collect rents, to eject
tenants, to lease or sell the mortgaged property or any part
thereof, at a private sale without previous notice or
advertisement of any kind and execute the corresponding
bills of sale, lease or other agreement that may be deemed
convenient, to make repairs or improvements on the
mortgaged property and pay for the same and perform any
other act which the Mortgagee may deem convenient for the
proper administration of the mortgaged property. The
payment of any expenses advanced by the Mortgagee in
connection with the purposes indicated herein is also
guaranteed by this Mortgage and such amount advanced
shall bear interest at the rate of 12% per annum. Any amount
received from sale, disposal or administration above-
mentioned may be applied to the payment of the repairs,
improvements, taxes and any other incidental expenses and
obligations and also the payment of the original
indebtedness and interest thereof. The power herein granted
shall not be revoked during the life of this mortgage, and all
acts that may be executed by the Mortgagee by virtue of said
power are hereby ratified. In addition to the foregoing, the
Mortgagor also hereby agrees, that the Auditor General shall
withhold any money due or which may become due the
Mortgagor or debtor from the Government or from any of its
instrumentalities, except those exempted by law from
attachment or execution, and apply the same in settlement of
any and all amount due to the Mortgagee; 21
The trial court held that, assuming the contract allowed for the issuance of a writ
of possession, Veterans Bank's right to seek possession had already prescribed.
Without citing authority and adequate explanation, the court held that Veterans
Bank had only 10 years from February 24, 1983 to seek possession of the
property. EAHcCT
Veterans Bank moved for the reconsideration 22 of the adverse decision. It

directed the court's attention to paragraph (c) of the real estate mortgage, which
expressly granted the mortgagee the right to avail itself of the remedy of
extrajudicial foreclosure in case of the mortgagor's default. Paragraph (c) reads:
(c) If at any time the Mortgagor shall fail or refuse to pay the
obligations herein secured, or any of the amortizations of
such indebtedness when due, or to comply with any of the
conditions and stipulations herein agreed, or shall, during
the time this mortgage is in force, institute insolvency
proceedings or be involuntarily declared insolvent, or shall
use the proceeds of this loan for purposes other than those
specified herein, or if this mortgage cannot be recorded in
the corresponding Registry of Deeds, then all the obligations
of the Mortgagor secured by this Mortgage and all the
amortization thereof shall immediately become due, payable
and defaulted, and the Mortgagee may immediately
foreclose this mortgage judicially in accordance with the
Rules of Court, or extra-judicially in accordance with Act
No. 3135, as amended, and under Act 2612, as amended. For
the purpose of extra-judicial foreclosure the Mortgagor
hereby appoints the Mortgagee his attorney-in-fact to sell the
property mortgaged under Act No. 3135, as amended, to
sign all documents and perform any act requisite and
necessary to accomplish said purpose and to appoint its
substitutes as such attorney-in-fact with the same powers as
above specified. . . . 23
The motion for reconsideration was set for hearing on January 28, 2005. Due to a
conflict of schedule, Veterans Bank's counsel moved 24 to reset the hearing on its
motion. In apparent denial of the motion to reset, the trial court proceeded to
deny Veterans Bank's motion for reconsideration in the Order dated January 28,
2005. 25 The trial court reiterated that paragraph (d) of the REM allowed
Veterans Bank to take immediate possession of the property without need of a
judicial order. It would be redundant for the court to issue a writ of possession in
its favor.
This prompted Veterans Bank to file a Petition for Mandamus with Prayer for
Issuance of a Preliminary Mandatory Injunction 26 before the CA.
First among its arguments, Veterans Bank maintained that it was the trial court's
ministerial duty 27 to grant a writ of possession to the mortgagee who has
consolidated and registered the property in its name.
Veterans Bank then assailed the trial court's holding that its right to a writ of
possession had already prescribed. Respondent maintained that the writ can be
issued at any time after the mortgagor failed to redeem the foreclosed property.
28
Lastly, Veterans Bank argued that, contrary to the trial court's finding, it did not
contract away its right to an extrajudicial foreclosure under Act No. 3135, as
amended, by the inclusion of paragraph (d) in the REM. Veterans Bank pointed
out that, as evidenced by paragraph (c) of the REM, it expressly reserved the
right to avail of the remedies under Act No. 3135. 29
Ruling of the Court of Appeals 30

The appellate court ruled in favor of Veterans Bank.
It held that the contractual provision in paragraph (d) to immediately take

possession of the mortgaged property without need of judicial intervention is
distinct from the right to avail of extrajudicial foreclosure under Section 7 of Act
No. 3135, which was expressly reserved by Veterans Bank in paragraph (c) of the
REM. The fact that the two paragraphs do not negate each other is evidenced by
the qualifying phrase "in addition to the remedies herein stipulated" found in
paragraph (c).
Having availed itself of the remedy of extrajudicial foreclosure, Veterans Bank,

as the highest bidder, has the right to a writ of possession. This right may be
availed of any time after the buyer consolidates ownership. In fact, the issuance
of the writ of possession is a ministerial function, the right to which cannot be
enjoined or stayed, even by an action for annulment of the mortgage or the
foreclosure sale itself.
The trial court's ruling that Veterans Bank's right to possess has prescribed is
likewise erroneous. As already stated, Veterans Bank's right to possess the
property is not based on their contract but on Act No. 3135. TDcEaH
Since the issuance of a writ of possession is a ministerial act of the trial judge,
mandamus lies to compel the performance of the said duty.
Petitioners immediately filed this petition for review.
Issues
Petitioners submit the following issues for our consideration:
1. Whether mandamus was resorted to as a substitute for a

lost appeal
2. Whether mandamus is the proper remedy to seek a review

of the final orders of the trial court
3. Whether the consolidation of ownership of the

extrajudicially foreclosed property through a Deed of Sale is
in accordance with law
4. Whether the issuance of a writ of possession under Act

[No.] 3135 is subject to the statute of limitations 31
Our Ruling
Propriety of the Remedy of Mandamus
Petitioners argue that Veterans Bank availed itself of the remedy of mandamus as
a substitute for a lost appeal. 32 Petitioners narrate the relevant dates that
allegedly show the belatedness and impropriety of the petition for mandamus.
Veterans Bank received the Order dated November 8, 2004 on November 18,
2004, thus it had until December 3, 2004 to file a motion for reconsideration. Since
December 3, 2004 was declared a non-working holiday, Veterans Bank filed its
motion for reconsideration on the next working day, December 6, 2004. With the
said dates, it had only one day left from receipt of the January 28, 2005 Order, or
until February 10, 2005, to file an appeal (citing Section 2, Rule 22) of the Rules of
Court. Since Veterans Bank did not file an appeal on the following day, it had
lost its right to appeal and the assailed orders allegedly attained finality.
Respondent counters that the issuance of a writ of possession is not an ordinary

action for which the rules on appeal apply. The writ being a mere motion or an
order of execution, appeal is not the proper remedy to question the trial court's
ruling. In fact, Section 1, Rule 41 of the Rules of Court provides that no appeal
may be taken from an order of execution, but Rule 65 special civil actions are
available. 33 Given that the issuance of the writ of possession is a ministerial act
of the judge, respondent maintains that a petition for mandamus is the proper
remedy.
Respondent adds that, even if appeal were available, the same is not the plain,
speedy and adequate remedy to compel the performance of the ministerial act. 34
Respondent maintains that Section 3 of Rule 65 recognizes that the remedy of
mandamus is available in conjunction with an appeal. The qualifying phrase "and
there is no appeal [available]," which appears in certiorari and prohibition
petitions, is conspicuously missing for petitions for mandamus.
We rule that mandamus is a proper remedy to compel the issuance of a writ of

possession. The purpose of mandamus is to compel the performance of a
ministerial duty. A ministerial act is "one which an officer or tribunal performs in
a given state of facts, in a prescribed manner, in obedience to the mandate of
legal authority, without regard to or the exercise of his own judgment upon the
propriety or impropriety of the act done." 35
The issuance of a writ of possession is outlined in Section 7 of Act No. 3135, as

amended by Act No. 4118, which provides:
SEC. 7. In any sale made under the provisions of this Act,

the purchaser may petition the Court of First Instance of
the province or place where the property or any part
thereof is situated, to give him possession thereof during the
complying with the requirements of [this] Act. Such petition
motion . . . and the court shall, upon approval of the bond,
order that a writ of possession issue, addressed to the
sheriff of the province in which the property is situated, who
shall execute said order immediately.
During the period of redemption, the mortgagee is entitled to a writ of

possession upon depositing the approved bond. When the redemption
period expires without the mortgagor exercising his right of redemption, the
mortgagor is deemed to have lost all interest over the foreclosed property,
and the purchaser acquires absolute ownership of the property. The
purchaser's right is aptly described thus: ESacHC
purchaser can demand possession at any time following
the consolidation of ownership in his name and the
issuance to him of a new TCT. After consolidation of title in
the purchaser's name for failure of the mortgagor to redeem
the property, the purchaser's right to possession ripens into
the absolute right of a confirmed owner. At that point, the
Effectively, the court cannot exercise its discretion.
Therefore, the issuance by the RTC of a writ of possession in

favor of the respondent in this case is proper. We have
consistently held that the duty of the trial court to grant a
writ of possession in such instances is ministerial, and the
court may not exercise discretion or judgment . . . 36
With the consolidated title, the purchaser becomes entitled to a writ of

possession and the trial court has the ministerial duty to issue such writ of
possession. 37 Thus, "the remedy of mandamus lies to compel the
performance of [this] ministerial duty." 38
Does the charter of Veterans Bank prohibit extrajudicial foreclosures?
Petitioners then assail Veterans Bank's power to extrajudicially foreclose on
mortgages. They maintain that the legislature intended to limit Veterans Bank to
judicial foreclosures only, 39 citing Section 18 of the Veterans Bank's charter, RA
No. 3518, which provides:
Section 18. Right of redemption of property foreclosed. The

mortgagor shall have the right, within one year after the sale
of the real estate as a result of the foreclosure of a mortgage,
to redeem the property by paying the amount fixed by the
court in the order of execution, with interest thereon at the
rate specified in the mortgage, and all the costs and other
judicial expenses incurred by the Bank by reason of the
execution and sale, and for the custody of said property.
Respondent counters that the inclusion of the phrase "fixed by the Court" in
Section 18 of RA No. 3518 does not necessarily mean that only judicial
foreclosures are available to Veterans Bank. Moreover, resort to an extrajudicial
foreclosure was voluntarily entered into by the contracting parties in their REM.
40
There is no merit in petitioners' contention.
The aforequoted Section 18 grants to mortgagors of Veterans Bank the right to

redeem their judicially foreclosed properties. This provision had to be included
because in judicial foreclosures, mortgagors generally do not have the right of
redemption unless there is an express grant by law. 41
But, contrary to petitioners' averments, there is nothing in Section 18 which can

be interpreted to mean that Veterans Bank is limited to judicial foreclosures only,
or that it cannot avail itself of the benefits provided under Act No. 3135, 42 as
amended, allowing extrajudicial foreclosures.
Moreover, the availability of extra-judicial foreclosure to a mortgagee depends

upon the agreement of the contracting parties. Section 1 of Act No. 3135 provides:
DAETcC
Section 1. When a sale is made under a special power

inserted in or attached to any real-estate mortgage hereafter
made as security for the payment of money or the fulfillment
of any other obligation, the provisions of the following
sections shall govern as to the manner in which the sale
and redemption shall be effected, whether or not provision
for the same is made in the power. (Emphasis supplied.)
In the case at bar, paragraph (c) of the parties' REM granted Veterans Bank
the special power as attorney-in-fact of the petitioners to perform all acts
necessary for the purpose of extrajudicial foreclosure under Act No. 3135.
Thus, there is no obstacle preventing Veterans Bank from availing itself of
the remedy of extrajudicial foreclosure.
Was the consolidation of title done in accordance with law?

Petitioners argue that Veterans Bank is not entitled to a writ of
possession because it failed to properly consolidate its title over the subject
property. 43 They maintain that the Deed of Sale executed by the Veterans
Bank in the bank's own favor during the consolidation of title constitutes a
pactum commissorium, which is prohibited under Article 2088 of the Civil
Code. 44
Respondent contends that petitioners never questioned the validity of the
foreclosure proceedings or the auction sale. The failure to do so resulted in the
ripening of the consolidation of ownership. 45
There is no merit in petitioners' argument.
Pactum commissorium is "a stipulation empowering the creditor to appropriate the

thing given as guaranty for the fulfillment of the obligation in the event the
obligor fails to live up to his undertakings, without further formality, such as
foreclosure proceedings, and a public sale." 46 "The elements of pactum
commissorium, which enable the mortgagee to acquire ownership of the
mortgaged property without the need of any foreclosure proceedings, are: (1) there
should be a property mortgaged by way of security for the payment of the
principal obligation, and (2) there should be a stipulation for automatic
appropriation by the creditor of the thing mortgaged in case of non-payment of
the principal obligation within the stipulated period." 47
The second element is missing to characterize the Deed of Sale as a form of

pactum commissorium. Veterans Bank did not, upon the petitioners' default,
automatically acquire or appropriate the mortgaged property for itself. On the
contrary, the Veterans Bank resorted to extrajudicial foreclosure and was issued
a Certificate of Sale by the sheriff as proof of its purchase of the subject property
during the foreclosure sale. That Veterans Bank went through all the stages of
extrajudicial foreclosure indicates that there was no pactum commissorium.
Does the right to a writ of possession prescribe?

Petitioners assail the CA's ruling that the issuance of a writ of possession does
not prescribe. 48 They maintain that Articles 1139, 49 1149, 50 and 1150 51 of the
Civil Code regarding prescriptive periods cover all kinds of action, which
necessarily include the issuance of a writ of possession. Petitioners posit that, for
purposes of the latter, it is the five-year prescriptive period provided in Article
1149 of the Civil Code which applies because Act No. 3135 itself did not provide
for its prescriptive period. Thus, Veterans Bank had only five years from
September 12, 1983, the date when the Certificate of Sale was issued in its favor,
to move for the issuance of a writ of possession. 52
Respondent argues that jurisprudence has consistently held that a registered

owner of the land, such as the buyer in an auction sale, is entitled to a writ of
possession at any time after the consolidation of ownership. 53 ACSaHc
We cannot accept petitioners' contention. We have held before that the
purchaser's right "to request for the issuance of the writ of possession of the land
never prescribes." 54 "The right to possess a property merely follows the right of
ownership," 55 and it would be illogical to hold that a person having ownership
of a parcel of land is barred from seeking possession thereof. In Calacala v.
Republic of the Philippines, 56 the Republic was the highest bidder in the public
auction but failed for a long period of time to execute an Affidavit of
Consolidation and to seek a writ of possession. Calacala insisted that, by such
inaction, the Republic's right over the land had prescribed, been abandoned or
waived. The Court's language in rejecting Calacala's theory is illuminating:
[T]he Republic's failure to execute the acts referred to by the

petitioners within ten (10) years from the registration of the
Certificate of Sale cannot, in any way, operate to restore
whatever rights petitioners' predecessors-in-interest had
over the same. For sure, petitioners have yet to cite any
provision of law or rule of jurisprudence, and we are not
aware of any, to the effect that the failure of a buyer in a
foreclosure sale to secure a Certificate of Final Sale, execute
an Affidavit of Consolidation of Ownership and obtain a
writ of possession over the property thus acquired, within
ten (10) years from the registration of the Certificate of Sale
will operate to bring ownership back to him whose property
has been previously foreclosed and sold. . . .
xxx xxx xxx
Moreover, with the rule that the expiration of the 1-year

redemption period forecloses the obligors' right to redeem
and that the sale thereby becomes absolute, the issuance
thereafter of a final deed of sale is at best a mere formality
and mere confirmation of the title that is already vested in
the purchaser. . . . 57
Moreover, the provisions cited by petitioners refer to prescription of actions. An

action is "defined as an ordinary suit in a court of justice, by which one party
prosecutes another for the enforcement or protection of a right, or the prevention
or redress of a wrong." 58 On the other hand "[a] petition for the issuance of the
writ, under Section 7 of Act No. 3135, as amended, is not an ordinary action filed in
court, by which one party 'sues another for the enforcement or protection of a
right, or prevention or redress of a wrong.' It is in the nature of an ex parte motion
[in] which the court hears only one side. It is taken or granted at the instance and
for the benefit of one party, and without notice to or consent by any party
adversely affected. Accordingly, upon the filing of a proper motion by the
purchaser in a foreclosure sale, and the approval of the corresponding bond, the
writ of possession issues as a matter of course and the trial court has no
discretion on this matter." 59
WHEREFORE, premises considered, the Petition is DENIED for lack of merit.

The CA Decision dated June 10, 2005 in CA-G.R. SP No. 89248 is AFFIRMED.
SO ORDERED.
||| (Spouses Edralin v. Philippine Veterans Bank, G.R. No. 168523, March 09, 2011)
THIRD DIVISION
[G.R. No. 137792. August 12, 2003.]
SPOUSES RICARDO ROSALES and ERLINDA SIBUG,

petitioners, vs. SPOUSES ALFONSO and LOURDES SUBA,
THE CITY SHERIFF OF MANILA, respondents.
Bayani G. Diwa for petitioners.
David B. Agoncillo for respondents.
SYNOPSIS
After the petitioners-judgment debtors failed to pay the judgment debt, the trial
court issued a writ of execution ordering the sale of the property subject of
litigation for the satisfaction of the judgment. The property was sold at public
auction and the respondents were the highest bidders. The trial court issued an
order confirming the sale of the property to the respondents and subsequently
granted respondent's prayer for a writ of possession. The petitioners filed a
motion for reconsideration of the trial court's orders, but were denied. The CA
dismissed their petition for certiorari for lack of merit, holding that there is no
right of redemption in case of judicial foreclosure of mortgage. Hence, this
petition for review.
In denying the petition, thereby affirming the CA decision on appeal, the

Supreme Court ruled that since the parties' transaction is an equitable mortgage
and the trial court ordered its foreclosure, execution of judgment is governed by
Sections 2 and 3, Rule 68 of the 1997 Rules of Civil Procedure, as amended. There
is no right of redemption in case of a judicial foreclosure of a mortgage. The only
exemption is when the mortgagee is the Phil. National Bank or a bank or a
banking institution. Since the mortgagee in this case is not one of those
mentioned, no right of redemption exists in favor of petitioners. They merely
have an equity of redemption which is their right, as mortgagor, to extinguish
the mortgage and retain ownership of the property by paying the secured debt
prior to the confirmation of the foreclosure sale. Petitioners, in this case, failed to
exercise this equity of redemption.
SYLLABUS
REMEDIAL LAW; CIVIL PROCEDURE; EXECUTION OF JUDGMENT; NO

RIGHT OF REDEMPTION IN A JUDICIAL FORECLOSURE OF MORTGAGE;
EXEMPTION; CASE AT BAR. Since the parties' transaction is an equitable
mortgage and that the trial court ordered its foreclosure, execution of judgment
is governed by Sections 2 and 3, Rule 68 of the 1997 Rules of Civil Procedure, as
amended . . . Clearly, as a general rule, there is no right of redemption in a
judicial foreclosure of mortgage. The only exemption is when the mortgagee is
the Philippine National Bank or a bank or a banking institution. Since the
mortgagee in this case is not one of those mentioned, no right of redemption
exists in favor of petitioners. They merely have an equity of redemption, which,
to reiterate, is simply their right, as mortgagor, to extinguish the mortgage and
retain ownership of the property by paying the secured debt prior to the
confirmation of the foreclosure sale. However, instead of exercising this equity of
redemption, petitioners chose to delay the proceedings by filing several
manifestations with the trial court. Thus, they only have themselves to blame for
the consequent loss of their property.
DECISION
Challenged in the instant petition for review on certiorari are the Resolutions 1
dated November 25, 1998 and February 26, 1999 of the Court of Appeals
dismissing the petition for certiorari in CA G.R. SP No. 49634, "Spouses Ricardo
Rosales and Erlinda Sibug vs. Alfonso and Lourdes Suba."
On June 13, 1997, the Regional Trial Court, Branch 13, Manila rendered a
Decision 2 in Civil Cases Nos. 94-72303 and 94-72379, the dispositive portion of
which reads:
"WHEREFORE, judgment is rendered:
(1) Declaring the Deed of Sale of Exhibit D, G and I, affecting

the property in question, as an equitable mortgage;
(2) Declaring the parties Erlinda Sibug and Ricardo Rosales,
within 90 days from finality of this Decision, to deposit with
the Clerk of Court, for payment to the parties Felicisimo
Macaspac and Elena Jiao, the sum of P65,000.00, with
interest at nine (9) percent per annum from September 30,
1982 until payment is made, plus the sum of P219.76 as
reimbursement for real estate taxes;
(3) Directing the parties Felicisimo Macaspac and Elena Jiao,

upon the deposit on their behalf of the amounts specified in
the foregoing paragraph, to execute a deed of reconveyance
of the property in question to Erlinda Sibug, married to
Ricardo Rosales, and the Register of Deeds of Manila shall
cancel Transfer Certificate of Title No. 150540 in the name of
the Macaspacs (Exh. E) and issue new title in the name of
Sibug;
(4) For non-compliance by Sibug and Rosales of the directive

in paragraph (2) of this dispositive portion, let the property
be sold in accordance with the Rules of Court for the release
of the mortgage debt and the issuance of title to the
purchaser.
"SO ORDERED." 3
The decision became final and executory. Spouses Ricardo and Erlinda Rosales,
judgment debtors and herein petitioners, failed to comply with paragraph 2
quoted above, i.e., to deposit with the Clerk of Court, within 90 days from finality
of the Decision, P65,000.00, etc., to be paid to Felicisimo Macaspac and Elena Jiao.
This prompted Macaspac, as judgment creditor, to file with the trial court a
motion for execution.
Petitioners opposed the motion for being premature, asserting that the decision
has not yet attained finality. On March 5, 1998, they filed a manifestation and
motion informing the court of their difficulty in paying Macaspac as there is no
correct computation of the judgment debt.
On February 23, 1998, Macaspac filed a supplemental motion for execution

stating that the amount due him is P243,864.08.
Petitioners failed to pay the amount. On March 25, 1998, the trial court issued a
writ of execution ordering the sale of the property subject of litigation for the
satisfaction of the judgment.
On May 15, 1998, an auction sale of the property was held wherein petitioners
participated. However, the property was sold for P285,000.00 to spouses Alfonso
and Lourdes Suba, herein respondents, being the highest bidders. On July 15,
1998, the trial court issued an order confirming the sale of the property and
directing the sheriff to issue a final deed of sale in their favor.
On July 28, 1998, Macaspac filed a motion praying for the release to him of the
amount of P176,176.06 from the proceeds of the auction sale, prompting
petitioners to file a motion praying that an independent certified public
accountant be appointed to settle the exact amount due to movant Macaspac.
Meanwhile, on August 3, 1998, the Register of Deeds of Manila issued a new

Transfer Certificate of Title over the subject property in the names of
respondents.
On August 18, 1998, respondents filed with the trial court a motion for a writ of
possession, contending that the confirmation of the sale "effectively cut off
petitioners' equity of redemption." Petitioners on the other hand, filed a motion
for reconsideration of the order dated July 15, 1998 confirming the sale of the
property to respondents.
On October 19, 1998, the trial court, acting upon both motions, issued an order
(1) granting respondents' prayer for a writ of possession and (2) denying
petitioners' motion for reconsideration. The trial court ruled that petitioners have
no right to redeem the property since the case is for judicial foreclosure of
mortgage under Rule 68 of the 1997 Rules of Civil Procedure, as amended.
Hence, respondents, as purchasers of the property, are entitled to its possession
as a matter of right.
Forthwith, petitioners filed with the Court of Appeals a petition for certiorari,
docketed as CA-G.R. SP No. 49634, alleging that the trial court committed grave
abuse of discretion amounting to lack or excess of jurisdiction in issuing a writ of
possession to respondents and in denying their motion for reconsideration of the
order dated July 15, 1998 confirming the sale of the property to said respondents.
On November 25, 1998, the CA dismissed outright the petition for lack of merit,
holding that there is no right of redemption in case of judicial foreclosure of mortgage.
Petitioners' motion for reconsideration was also denied.
Hence this petition.
In the main, petitioners fault the Appellate Court in applying the rules on judicial
foreclosure of mortgage. They contend that their loan with Macaspac is
unsecured, hence, its payment entails an execution of judgment for money under
Section 9 in relation to Section 25, Rule 39 of the 1997 Rules of Civil Procedure, as
amended, 4 allowing the judgment debtor one (1) year from the date of
registration of the certificate of sale within which to redeem the foreclosed
property.
Respondents, upon the other hand, insist that petitioners are actually questioning
the decision of the trial court dated June 13, 1997 which has long become final
and executory; and that the latter have no right to redeem a mortgaged property
which has been judicially foreclosed.
Petitioners' contention lacks merit. The decision of the trial court, which is final
and executory, declared the transaction between petitioners and Macaspac an
equitable mortgage. In Matanguihan vs. Court of Appeals, 5 this Court defined an
equitable mortgage as "one which although lacking in some formality, or form or
words, or other requisites demanded by a statute, nevertheless reveals the
intention of the parties to charge real property as security for a debt, and
contains nothing impossible or contrary to law." An equitable mortgage is not
different from a real estate mortgage, and the lien created thereby ought not to be
defeated by requiring compliance with the formalities necessary to the validity of
a voluntary real estate mortgage. 6 Since the parties' transaction is an equitable
mortgage and that the trial court ordered its foreclosure, execution of judgment
is governed by Sections 2 and 3, Rule 68 of the 1997 Rules of Civil Procedure, as
amended, quoted as follows:
SEC. 2. Judgment on foreclosure for payment or sale. If upon

the trial in such action the court shall find the facts set forth
in the complaint to be true, it shall ascertain the amount due
to the plaintiff upon the mortgage debt or obligation,
including interest and other charges as approved by the
court, and costs, and shall render judgment for the sum so found
due and order that the same be paid to the court or to the judgment
obligee within a period of not less that ninety (90) days nor more
than one hundred twenty (120) days from the entry of judgment,
and that in default of such payment the property shall be sold at
public auction to satisfy the judgment.
SEC. 3. Sale of mortgaged property, effect. When the defendant,

after being directed to do so as provided in the next
preceding section, fails to pay the amount of the judgment
within the period specified therein, the court, upon motion, shall
order the property to be sold in the manner and under the
provisions of Rule 39 and other regulations governing sales
of real estate under execution. Such sale shall not effect the
rights of persons holding prior encumbrances upon the
property or a part thereof, and when confirmed by an order
of the court, also upon motion, it shall operate to divest the
rights in the property of all the parties to the action and to vest
their rights in the purchaser, subject to such rights of redemption
as may be allowed by law.
xxx xxx xxx."
In Huerta Alba Resort, Inc. vs. Court of Appeals, 7 we held that the right of
redemption is not recognized in a judicial foreclosure, thus:
"The right of redemption in relation to a mortgage-understood in

the sense of a prerogative to re-acquire mortgaged property after
registration of the foreclosure sale-exists only in the case of the
extrajudicial foreclosure of the mortgage. No such right is
recognized in a judicial foreclosure except only where the
mortgagee is the Philippine National bank or a bank or a banking
institution.
"Where a mortgage is foreclosed extrajudicially, Act 3135

grants to the mortgagor the right of redemption within one
(1) year from the registration of the sheriff's certificate of
foreclosure sale.
"Where the foreclosure is judicially effected, however, no

equivalent right of redemption exists. The law declares that
a judicial foreclosure sale, 'when confirmed by an order of
the court, . . . shall operate to divest the rights of all the
parties to the action and to vest their rights in the
purchaser, subject to such rights of redemption as may be
allowed by law.' Such rights exceptionally 'allowed by law'
(i.e., even after the confirmation by an order of the court) are
those granted by the charter of the Philippine National Bank
(Act Nos. 2747 and 2938), and the General Banking Act (R.A.
337). These laws confer on the mortgagor, his successors in
interest or any judgment creditor of the mortgagor, the right
to redeem the property sold on foreclosureafter
confirmation by the court of the foreclosure salewhich right
may be exercised within a period of one (1) year, counted
from the date of registration of the certificate of sale in the
Registry of Property.
"But, to repeat, no such right of redemption exists in case of

judicial foreclosure of a mortgage if the mortgagee is not the PNB
or a bank or banking institution. In such a case, the foreclosure
sale, 'when confirmed by an order of the court, . . . shall operate to
divest the rights of all the parties to the action and to vest their
rights in the purchaser.' There then exists only what is known as
the equity of redemption. This is simply the right of the
defendant mortgagor to extinguish the mortgage and retain
ownership of the property by paying the secured debt within
the 90-day period after the judgment becomes final, in
accordance with Rule 68, or even after the foreclosure sale but
prior to its confirmation.
xxx xxx xxx
"This is the mortgagor's equity (not right) of redemption

which, as above stated, may be exercised by him even beyond the
90-day period 'from the date of service of the order,' and even after
the foreclosure sale itself, provided it be before the order of
confirmation of the sale. After such order of confirmation, no
redemption can be effected any longer." (Italics supplied)
Clearly, as a general rule, there is no right of redemption in a judicial foreclosure

of mortgage. The only exemption is when the mortgagee is the Philippine
National Bank or a bank or a banking institution. Since the mortgagee in this case
is not one of those mentioned, no right of redemption exists in favor of
petitioners. They merely have an equity of redemption, which, to reiterate, is
simply their right, as mortgagor, to extinguish the mortgage and retain
ownership of the property by paying the secured debt prior to the confirmation
of the foreclosure sale. However, instead of exercising this equity of redemption,
petitioners chose to delay the proceedings by filing several manifestations with
the trial court. Thus, they only have themselves to blame for the consequent loss
of their property.
WHEREFORE, the petition is DENIED. The Resolutions of the Court of Appeals

dated November 25, 1998 and February 26, 1999 in CA G.R. SP No. 49634 are
AFFIRMED.
||| (Spouses Rosales v. Spouses Suba, G.R. No. 137792, August 12, 2003)
SECOND DIVISION
[G.R. No. 138292. April 10, 2002.]
KOREA EXCHANGE BANK, petitioner, vs. FILKOR

BUSINESS INTEGRATED, INC., KIM EUNG JOE, and
LEE HAN SANG, respondents.
Romulo Mabanta Buenaventura Sayoc & Delos Angeles for petitioner.
Donardo R. Paglinawan for private respondents.

SYNOPSIS
Respondent Filkor Business Integrated, Inc. (Filkor) incurred

several obligations in the form of cash and letters of credit from herein
petitioner Korean Exchange Bank. In order to secure payment of all its
obligations, Filkor executed a real estate mortgage of the improvements
constructed on a lot which it was leasing from the Cavite Export Processing
Zone Authority. Respondents Kim Eung Joe and Lee Han Sang also
executed continuing suretyship binding them jointly and severally with
Filkor to pay the latter's obligations to petitioner. As the respondents failed
to make good on their obligations, petitioner filed a civil case with the
Regional Trial Court of Cavite and moved for summary judgment. The trial
court granted the motion, then rendered judgment in favor of the petitioner.
The trial court, however, failed to order that the property of Filkor be
foreclosed and sold at public auction in the event that Filkor fails to pay its
obligations. Petitioner filed a motion for partial reconsideration of the trial
court's order, praying that the relief of foreclosure and sale at public auction
be granted. The trial court denied the motion and ruled that the petitioner
deemed to have abandoned its lien on the property mortgaged when it
opted to file an action for collection of a sum of money. Hence, this appeal
before the Supreme Court.
The Supreme Court granted the petition. According to the Court,
the allegations in the petitioner's complaint and its prayer that the
mortgaged property be foreclosed and sold at public auction indicated that
petitioner's action was one for foreclosure of real estate mortgage. Thus, the
trial court erred in concluding that petitioner has abandoned its mortgage
lien on Filkor property, and that what it had filed was an action for
collection of a sum of money. The Court modified the decision to include
that the mortgaged property of Filkor be ordered foreclosed and sold at
public auction in the event of respondent's failure to pay its obligations
within a certain period.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; PLEADINGS; ALLEGATIONS IN THE

COMPLAINT AND THE CHARACTER OF THE RELIEF SOUGHT
DETERMINE THE NATURE OF AN ACTION; APPLICATION IN CASE AT
BAR. Petitioner's allegations in its complaint, and its prayer that the
mortgaged property be foreclosed and sold at public auction, indicate that
petitioner's action was one for foreclosure of real estate mortgage. We have
consistently ruled that what determines the nature of an action, as well as which
court or body has jurisdiction over it, are the allegations of the complaint and the
character of the relief sought. In addition, we find no indication whatsoever that
petitioner had waived its rights under the real estate mortgage executed in its
favor. Thus, the trial court erred in concluding that petitioner had abandoned its
mortgage lien on Filkor's property, and that what it had filed was an action for
collection of a sum of money. Petitioner's action being one for foreclosure of real
estate mortgage, it was incumbent upon the trial court to order that the
mortgaged property be foreclosed and sold at public auction in the event that
respondent Filkor fails to pay its outstanding obligations. This is pursuant to
Section 2 of Rule 68 of the 1997 Rules of Civil Procedure. ETaHCD
2. ID.; APPEAL; APPEAL TO THE SUPREME COURT; PURE QUESTION OF

LAW AS A GROUND, PRESENT IN CASE AT BAR. On the propriety of the
present appeal, we note that what petitioner impugns is the determination by the
trial court of the nature of action filed by petitioner, based on the allegations in
the complaint. Such a determination as to the correctness of the conclusions
drawn from the pleadings undoubtedly involves a question of law. As the
present appeal involves a question of law, petitioner appropriately filed it with
this Court, pursuant to Section 1 of Rule 45 of the 1997 Rules of Civil Procedure,
which provides: SECTION 1. Filing of petition with Supreme Court. A party
desiring to appeal by certiorari from a judgment or final order or resolution of the
Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts
whenever authorized by law, may file with the Supreme Court a verified petition
for review on certiorari. The petition shall raise only questions of law which must be
distinctly set forth. There is no dispute with respect to the fact that when an appeal
raises only pure questions of law, this Court has jurisdiction to entertain the
same.
DECISION
QUISUMBING, J p:
This petition assails the order 1 dated April 16, 1999 of the Regional Trial Court
of Cavite City, Branch 88, in Civil Case No. N-6689. Said order denied
petitioner's partial motion for reconsideration of the trial court's order 2 dated
March 12, 1999 whereby respondents were ordered to pay petitioner various
sums of U.S. dollars as payment of the former's various loans with interest but
omitted to state that the property mortgaged as security for said loans be
foreclosed and sold at public auction in case respondents fail to pay their
obligations to petitioner ninety days from entry of judgment.
The facts are summarized from the findings of the trial court.
On January 9, 1997, respondent Filkor Business Integrated, Inc. (Filkor),
borrowed US$140,000 from petitioner Korea Exchange Bank, payable on July 9,
1997. Of this amount, only US$40,000 was paid by Filkor. 3
In addition, Filkor executed nine trust receipts in favor of petitioner, from June
26, 1997 to September 11, 1997. However, Filkor failed to turn over to petitioner
the proceeds from the sale of the goods, or the goods themselves as required by
the trust receipts in case Filkor could not sell them. 4
In the period from June 9, 1997 to October 1, 1997, Filkor also negotiated to
petitioner the proceeds of seventeen letters of credit issued by the Republic Bank
of New York and the Banque Leumi France, S.A. to pay for goods which Filkor
sold to Segerman International, Inc. and Davyco, S.A. When petitioner tried to
collect the proceeds of the letters of credit by presenting the bills of exchange
drawn to collect the proceeds, they were dishonored because of discrepancies. 5
Prior to all the foregoing, in order to secure payment of all its obligations, Filkor
executed a Real Estate Mortgage on February 9, 1996. It mortgaged to petitioner
the improvements belonging to it constructed on the lot it was leasing at the
Cavite Export Processing Zone Authority. 6 Respondents Kim Eung Joe and Lee
Han Sang also executed Continuing Suretyships binding themselves jointly and
severally with respondent Filkor to pay for the latter's obligations to petitioner. 7
As respondents failed to make good on their obligations, petitioner filed Civil

Case No. N-6689 in the Regional Trial Court of Cavite City, docketed as "Korea
Exchange Bank vs. Filkor Business Integrated, Inc." In its complaint, petitioner
prayed that (a) it be paid by respondents under its twenty-seven causes of action;
(b) the property mortgaged be foreclosed and sold at public auction in case
respondents failed to pay petitioner within ninety days from entry of judgment;
and (c) other reliefs just and equitable be granted. 8
Petitioner moved for summary judgment pursuant to Section 1, Rule 35 of the

1997 Rules of Civil Procedure. On March 12, 1999, the trial court rendered its
order granting petitioner's motion, reasoning as follows:
xxx xxx xxx

It appears that the only reason defendants deny all the
material allegations in the complaint is because the
documents attached thereto are mere photocopies and not
the originals thereof. Section 7, Rule 8 of the Rules of Court
allows copies of documents to be attached to the pleading as
an exhibit. Defendants are, therefore, deemed to have
admitted the genuineness and due execution of all
actionable documents attached to the complaint inasmuch as
they were not specifically denied, pursuant to Section 8 of
the Rule 8 of the Rules of Court.
In the case at bar, there is clearly no substantial triable issue,

hence, the motion for summary judgment filed by plaintiff is
proper.
A summary of judgment is one granted by the court upon

motion by a party for an expeditious settlement of the case,
there appearing from the pleadings, depositions, admissions
and affidavits that there are no important questions or issues
of fact involved (except as to the amount of damages) and
that, therefore, the moving party is entitled to a judgment as
a matter of law (Sections 1, 2, 3, Rule 35, 1997 Rules of Civil
Procedure).
The court having taken into account the pleadings of the

parties as well as the affidavits attached to the motion for
summary judgment and having found that there is indeed
no genuine issue as to any material fact and that plaintiff is
entitled to a summary of judgment as a matter of law,
hereby renders judgment for the plaintiff and against the
defendants, ordering said defendants jointly and severally to
pay plaintiff, as follows . . . 9
The trial court then rendered judgment in favor of petitioner, granting its prayers
under all its twenty-seven causes of action. It, however, failed to order that the
property mortgaged by respondent Filkor be foreclosed and sold at public
auction in the event that Filkor fails to pay its obligations to petitioner.
Petitioner filed a motion for partial reconsideration of the trial court's order,
praying that the aforesaid relief of foreclosure and sale at public auction be
granted. In an order dated April 16, 1999, the trial court denied petitioner's
motion, ruling as follows:
Plaintiff, in opting to file a civil action for the collection of

defendants obligations, has abandoned its mortgage lien on
the property subject of the real estate mortgage.
The issue has already been resolved in Danao vs. Court of

Appeals, 154 SCRA 446, citing Manila Trading and Supply Co.
vs. Co Kim, et al., 71 Phil. 448, where the Supreme Court
ruled that:
The rule is now settled that a mortgage creditor

may elect to waive his security and bring, instead,
an ordinary action to recover the indebtedness with
the right to execute a judgment thereon on all the
properties of the debtor including the subject
matter of the mortgage, subject to the qualification
that if he fails in the remedy by him elected, he
cannot pursue further the remedy he has waived.
SHaATC
WHEREFORE, the Partial Motion for Reconsideration filed

by the plaintiff of the Court's Order dated March 12, 1999 is
hereby denied for lack of merit.
SO ORDERED. 10
Hence, the present petition, where petitioner ascribes the following error to the
trial court.
THE REGIONAL TRIAL COURT OF CAVITE CITY ERRED

IN RULING THAT PETITIONER HAD ABANDONED THE
REAL ESTATE MORTGAGE IN ITS FAVOR, BECAUSE IT
FILED A SIMPLE COLLECTION CASE. 11
The resultant issue is whether or not petitioner's complaint before the trial court
was an action for foreclosure of a real estate mortgage, or an action for collection
of a sum of money. In addition, we must also determine if the present appeal
was correctly lodged before us rather than with the Court of Appeals.
In petitioner's complaint before the trial court, Paragraph 183 thereof alleges:
183. To secure payment of the obligations of defendant

Corporation under the First to the Twenty-Seventh Cause of
Action, on February 9, 1996, defendant Corporation
executed a Real Estate Mortgage by virtue of which it
mortgaged to plaintiff the improvements standing on Block
13, Lot 1, Cavite Export Processing Zone, Rosario, Cavite,
belonging to defendant Corporation covered by Tax
Declaration No. 5906-1 and consisting of a one-story
building called warehouse and spooling area, the
guardhouse, the cutting/sewing area building and the
packing area building. (A copy of the Real Estate Mortgage
is attached hereto as Annex "SS" and made an integral part
hereof.) 12
This allegation satisfies in part the requirements of Section 1, Rule 68 of the 1997
Rules of Civil Procedure on foreclosure of real estate mortgage, which provides:
SECTION 1. Complaint in action for foreclosure. In an action
for the foreclosure of a mortgage or other encumbrance
upon real estate, the complaint shall set forth the date and
due execution of the mortgage; its assignments, if any; the
names and residences of the mortgagor and the mortgagee; a
description of the mortgaged property; a statement of the
date of the note or other documentary evidence of the
obligation secured by the mortgage, the amount claimed to
be unpaid thereon; and the names and residences of all
persons having or claiming an interest in the property
subordinate in right to that of the holder of the mortgage, all
of whom shall be made defendants in the action.
In Paragraph 183 above, the date and due execution of the real estate mortgage
are alleged. The properties mortgaged are stated and described therein as well.
In addition, the names and residences of respondent Filkor, as mortgagor, and of
petitioner, as mortgagee, are alleged in paragraphs 1 and 2 of the complaint. 13
The dates of the obligations secured by the mortgage and the amounts unpaid
thereon are alleged in petitioner's first to twenty-seventh causes of action. 14
Moreover, the very prayer of the complaint before the trial court reads as
follows:
WHEREFORE, it is respectfully prayed that judgment be

rendered:
xxx xxx xxx
2. Ordering that the property mortgaged be foreclosed and

sold at public auction in case defendants fail to pay plaintiff
within ninety (90) days from entry of judgment.
xxx xxx xxx 15
Petitioner's allegations in its complaint, and its prayer that the mortgaged
property be foreclosed and sold at public auction, indicate that petitioner's action
was one for foreclosure of real estate mortgage. We have consistently ruled that
what determines the nature of an action, as well as which court or body has
jurisdiction over it, are the allegations of the complaint and the character of the
relief sought. 16 In addition, we find no indication whatsoever that petitioner
had waived its rights under the real estate mortgage executed in its favor. Thus,
the trial court erred in concluding that petitioner had abandoned its mortgage
lien on Filkor's property, and that what it had filed was an action for collection of
a sum of money.
Petitioner's action being one for foreclosure of real estate mortgage, it was
incumbent upon the trial court to order that the mortgaged property be
foreclosed and sold at public auction in the event that respondent Filkor fails to
pay its outstanding obligations. This is pursuant to Section 2 of Rule 68 of the
1997 Rules of Civil Procedure, which provides:
SEC. 2. Judgment on foreclosure for payment or sale. - If upon

the trial in such action the court shall find the facts set forth
including interest and other charges as approved by the
court, and costs, and shall render judgment for the sum so found
due and order that the same be paid to the court or to the judgment
obligee within a period of not less than ninety (90) days nor more
than one hundred twenty (120) days from entry of judgment, and
that in default of such payment the property shall be sold at public
auction to satisfy the judgment. (Italics supplied.)
Accordingly, the dispositive portion of the decision of the trial court dated March
12, 1999, must be modified to comply with the provisions of Section 2 of Rule 68
of the 1997 Rules of Civil Procedure. This modification is subject to any appeal
filed by respondents of said decision.
On the propriety of the present appeal, we note that what petitioner impugns is
the determination by the trial court of the nature of action filed by petitioner,
based on the allegations in the complaint. Such a determination as to the
correctness of the conclusions drawn from the pleadings undoubtedly involves a
question of law. 17 As the present appeal involves a question of law, petitioner
appropriately filed it with this Court, pursuant to Section 1 of Rule 45 of the 1997
Rules of Civil Procedure, which provides:
SECTION 1. Filing of petition with Supreme Court. A party

desiring to appeal by certiorari from a judgment or final
order or resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or other courts
whenever authorized by law, may file with the Supreme
Court a verified petition for review on certiorari. The petition
shall raise only questions of law which must be distinctly set forth.
(Italics supplied).
There is no dispute with respect to the fact that when an appeal raises only pure
questions of law, this Court has jurisdiction to entertain the same. 18
WHEREFORE, the petition is GRANTED. The Order dated March 12, 1999, of the
Regional Trial Court of Cavite City, Branch 88, in Civil Case No. N-6689 is
hereby MODIFIED, to state that the mortgaged property of respondent Filkor be
ordered foreclosed and sold at public auction in the event said respondent fails
to pay its obligations to petitioner within ninety (90) days from entry of
judgment.
No pronouncement as to costs. DASCIc
||| (Korea Exchange Bank v. Filkor Business Integrated, Inc., G.R. No. 138292, April
10, 2002)
FIRST DIVISION
[G.R. No. 102696. * July 12, 2001.]
ALBERTO LOOYUKO, JUAN C. UY and ATTY.

VICTORIA CUYOS, petitioner, vs. COURT OF APPEALS,
F.G.U. INSURANCE CORPORATION and ANTONIO
GUTANG, HEIRS and SUCCESSORS-IN-INTEREST,
respondents.
[G.R. No. 102716. * July 12, 2001.]
FGU INSURANCE CORPORATION, petitioner, vs. COURT

OF APPEALS, ANTONIO J. GUTANG, JOSE V.
GUTANG, ALBERTO LOOYUKO, JUAN C. UY,
VICTORIA ALCANTARA CUYOS and JUDGE WILLIAM
H. BAYHON, respondent.
[G.R. No. 108257. * July 12, 2001.]
SCHUBERT TANUNLIONG, petitioner, vs. COURT OF

APPEALS, ANTONIA GUTANG, DAVID GUTANG,
ELIZABETH GUTANG-LEDESMA, ATTY. RAMON A.
GONZALES, ATTY. VICTORIA S. ALCANTARA CUYOS
and JUDGE RICARDO MOLINA, respondents.
[G.R. No. 120954. * July 12, 2001.]
SCHUBERT TANUNLIONG, petitioner, vs. COURT OF

APPEALS, and ANTONIA J. GUTANG, respondents.
Jacinto Jimenez for petitioner in G.R. No. 102716 and respondent FGU in G.R. No.
102696.
Ng Law Firm for petitioner Tanunliong.
Victoria S. Alcantara-Cuyos for petitioner in G.R. No. 102696 & respondent in

108257.
Zambrano & Associates for petitioner in G.R. No. 120954.
Ramon Gonzalez for private respondent Gutang.
SYNOPSIS
In 1976, spouses Mendoza mortgaged their house and lot covered by TCT No.
1702 in favor of FGU. Later, FGU filed an action against the spouses and
obtained a favorable decision therein. The mortgaged property was then sold to
FGU in the public bidding and in 1989, the RTC ordered the issuance of a new
TCT in favor of FGU. Before the new TCT could be issued, however, spouses
Gutang, and Looyuko, Uy and Cuyos, filed separate motions for intervention.
The RTC allowed the motions and the Court of Appeals affirmed the same. Here
in issue is the validity of said motion for intervention. DSHTaC
The Court ruled in the negative. Section 2, Rule 12 of the Rules of Court requires
that a motion for intervention should be made "before or during a trial,"
meaning, "any time before rendition of judgment." Here, the motions for
intervention were filed after judgment had already been rendered, after the same
was already final and executory. Further, the requirement under Section 1, Rule
68 of the Rules on the joinder of persons claiming interest subordinate to the
mortgage sought to be foreclosed is not mandatory but merely directory; that
failure to comply therewith will not invalidate the foreclosure proceedings. The
effect is that the decree entered in the foreclosure proceeding would not deprive
the subordinate lien holder of his right of redemption.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; INTERVENTION; PERIOD;

ANYTIME "BEFORE" RENDITION OF JUDGMENT. Then Section 2, Rule 12
of the Rules of Court, the law prevailing at the time, read as follows: Intervention.
A person may, before or during a trial be permitted by the court, in its
discretion, to intervene in an action, if he has legal interest in the matter in litigation,
or in the success of either of the parties, or an interest against both, or when he is so
situated as to be adversely affected by a distribution or other disposition of property in the
custody of the court or of an officer thereof. None of the grounds underscored above
are present to warrant their intervention. Accordingly, we assume for purposes
of discussion that the action was indeed for the foreclosure of the mortgage over
the subject property. The rule also requires that a motion for intervention should
be made "before or during a trial." Because of varying interpretations of the
phrase, the present Rules have clarified that the motion should be filed "any time
before rendition of judgment." In the present case, the motions for intervention
were filed after judgment had already been rendered, indeed when the case was
already final and executory. Certainly, intervention can no longer be allowed in a
case already terminated by final judgment. Intervention is merely collateral or
accessory or ancillary to the principal action, and not an independent
proceeding; it is an interlocutory proceeding dependent on or subsidiary to the
case between the original parties. Where the main action ceases to exist, there is
no pending proceeding wherein the intervention may be based.
2. ID.; ID.; ID.; ID.; WHEN ALLOWED AFTER RENDITION OF JUDGMENT;

EXCEPTIONAL CASES WHERE INTERVENORS ARE INDISPENSABLE
PARTIES. In exceptional cases, the Court has allowed intervention
notwithstanding the rendition of judgment by the trial court. In Director of Lands
vs. Court of Appeals, intervention was allowed even when the petition for review
of the assailed judgment was already submitted for decision in the Supreme
Court. Recently in Mago vs. Court of Appeals, the Court granted intervention
despite the case having become final and executory. It must be noted, however,
that in both these cases, the intervenors were indispensable parties. aDIHTE
3. ID.; SPECIAL PROCEEDINGS; FORECLOSURE OF MORTGAGE; PARTIES;

SUBORDINATE LIEN HOLDER; EFFECT OF NON-JOINDER. Section 1, Rule
68 of the Rules of Court requires all persons having or claiming an interest in the
premises subordinate in right to that of the holder of the mortgage be made
defendants in the action for foreclosure. The requirement for joinder of the
person claiming an interest subordinate to the mortgage sought to be foreclosed,
however, is not mandatory in character but merely directory, in the sense that
failure to comply therewith will not invalidate the foreclosure proceedings. A
subordinate lien holder is a proper, even a necessary, but not an indispensable,
party to a foreclosure proceeding. Appropriate relief could be granted by the
court to the mortgagee in the foreclosure proceeding, without affecting the rights
of the subordinate lien holders. The effect of the failure on the part of the
mortgagee to make the subordinate lien holder a defendant is that the decree
entered in the foreclosure proceeding would not deprive the subordinate lien
holder of his right of redemption. A decree of foreclosure in a suit to which the
holders of a second lien are not parties leaves the equity of redemption in favor
of such lien holders unforeclosed and unaffected. Subordinate lien holders
acquire only a lien upon the equity of redemption vested in the mortgagor, and
their rights are strictly subordinate to the superior lien of the mortgagee.
Accordingly, an execution creditor who levies his execution upon property that
the judgment debtor has mortgaged to another can sell at most only the equity of
redemption belonging to the mortgagor. As it is the equity of redemption that
the subordinate lien holders had acquired by the levy on execution and that was
sold in the public auction, this equity, not the property itself, was what the
purchasers, who incidentally are the subordinate lien holders themselves, bought
at the execution sale. The failure of the mortgagee to join the subordinate lien
holders as defendants in the foreclosure suit, therefore, did not have the effect of
nullifying the foreclosure proceeding, but kept alive the equity of redemption
acquired by the purchasers in their respective execution sales. Such equity of
redemption does not constitute a bar to the registration of the property in the
name of the mortgagee. Registration may be granted in the name of the
mortgagee but subject to the subordinate lien holders' equity of redemption,
which should be exercised within ninety (90) days from the date the decision
becomes final. This registration is merely a necessary consequence of the execution
of the final deed of sale in the foreclosure proceedings. CSHEca
DECISION
KAPUNAN, J p:
Disputed in these consolidated cases is a house and lot located in Mandaluyong,

Rizal (now Mandaluyong City), formerly covered by Transfer Certificate of Title
(TCT) No. 1702, and previously owned by the Spouses Tomas and Linda
Mendoza. Bitterly contesting the property are the spouses' various creditors as
well as the creditors' alleged assignee.
One set of creditors includes Albert Looyuko and Jose Uy. Their lawyer, Atty.
Victoria Cuyos, has also annotated her attorney's lien over the property. Antonia
Gutang and her children David and Elizabeth, who have substituted their father,
1 comprise another set. Both sets of creditors rest their claim upon separate levies
on execution and their supposed purchase of the property at public auction.
A more detailed background that gave rise to Looyuko et al.'s and the Gutangs'
claims over the properly is set forth below. Thereafter, a recital of the antecedents
that gave rise to the consolidated petitions, including the claims of another
creditor, FGU Insurance Corporation, as well as Schubert Tanuliong, who
purports to be Looyuko et al.'s and the Gutangs' assignee, follows.
Civil Case No. 82-5792, RTC Manila (Looyuko and Uy vs. Spouses Mendoza) 2
On April 22, 1977, Albert Looyuko and Jose Uy, through their counsel, Atty.
Victoria Cuyos, filed a complaint against the Spouses Mendoza before the
Regional Trial Court (RTC) of Manila. The Manila RTC issued a writ of
preliminary attachment over the property and a notice of levy on attachment
bearing the date April 22, 1977 was annotated at the back of the TCT No. 1702.
Evidently, Looyuko and Uy prevailed in that action. On February 12, 1986, the
Manila RTC issued a writ of execution and the properly was sold at public
auction with Looyuko and Uy as the highest bidders.
On June 30, 1995, the Register of Deeds of Mandaluyong issued a new TCT over
the property, TCT No. 10107, in the name of Looyuko and Uy. The TCT bears the
date February 6, 1992, the date of inscription of the final deed of sale in favor of
Looyuko and Uy.
Civil Case No. 13122, RTC Iloilo (Antonia Gutang vs. Tomas Mendoza)
LRC Case No. R-3613, RTC Rizal
Antonia Gutang filed a complaint for a sum of money with damages against
Tomas Mendoza with the RTC of Iloilo (Civil Case No. 13122). Judgment was
rendered in favor of Antonia Gutang and the decision later became final and
executory. On July 1, 1981, Antonia Gutang caused to be annotated on the same
TCT No. 1702 a notice of levy on execution. On June 8, 1984, the property was
sold at public auction to Antonia Gutang. The Deputy Sheriff executed a final
deed of sale on November 5, 1985.
Antonia Gutang, by virtue of the certificate of sale, filed with the RTC of Rizal a
petition for the cancellation of TCT No. 1702 and the issuance of a new title in her
name. The case was docketed as LRC Case No. R-3613. On June 15, 1987, the
Rizal RTC issued an order granting the petition. Consequently, TCT No. 1702
was cancelled and TCT No. 242 in the name of Antonia Gutang, married to Jose
Gutang, was issued on December 23, 1987. The issuance of TCT No. 242, as will
be seen later, spawned other cases.
Civil Case No. 82-9760, RTC Manila (FGU vs. Spouses Mendoza)
CA-G.R. No. 23849, 7th Division, Court of Appeals (FGU vs. Judge Bayhon and
Spouses Gutang)
G.R. No. 102696, Supreme Court (Looyuko et al. vs. Court of Appeals, FGU, et al.)
G.R. No. 102716, Supreme Court (FGU vs. Court of Appeals, Spouses Gutang, et al.)
On December 2, 1976, spouses Tomas and Linta Mendoza executed a mortgage
over the subject property in favor of FGU Insurance Corporation. The mortgage
was registered with the Register of Deeds of Pasig, Rizal on December 3, 1976.
As the spouses failed to satisfy the obligation secured by the mortgage, FGU on
June 1, 1982 filed an action (Civil Case No. 82-9760) with the RTC of Manila
against said spouses. The latter filed an Answer but failed to appear during the
pre-trial. Consequently, the Spouses Mendoza were declared as in default and
evidence were received ex-parte.
On January 22, 1988, the Manila RTC rendered a decision in favor of FGU, thus:
WHEREFORE, judgment is hereby rendered in favor of

plaintiff and against defendants, ordering the latter, jointly
and severally, to pay the plaintiff the following:
1. The amount of P368,785.80 with interest at 12%

per annum compounded monthly from May 5, 1982
until the same is fully paid;
2. The amount of P22,501.60 with interest at 12%

per annum compounded monthly from December
7, 1977 until the same is fully paid;
3. P5,000.00 as attorney's fees;
4. The costs of suit.
SO ORDERED. 3
FGU filed a motion for partial reconsideration, pointing out that the action was
not for a sum of money but for foreclosure of mortgage. It prayed that in
accordance with Section 2, Rule 68 of the Rules of Court, "the decision be
amended by ordering the sale of the property mortgaged in case defendant
should not satisfy the judgment in favor of plaintiff within ninety (90) days from
notice of decision."
On May 19, 1988, the RTC issued an Order granting FGU's

motion:
Acting on the partial motion for reconsideration of the

Decision rendered by the Court on January 22, 1988 and
finding the same to be meritorious, the same is hereby
granted.
Accordingly, the first paragraph and the dispositive portion

of said Decision are hereby ordered amended to read as
follows:
"This is an action for foreclosure of real estate mortgage filed by

plaintiff, FGU Insurance Corporation against Spouses Tomas
Mendoza and Linda A. Mendoza, filed way back on June 1,
1982."
"WHEREFORE, judgment is hereby rendered in favor of
plaintiff and against the defendants, ordering the latter,
jointly and severally, to pay the plaintiff the following: 1.
The amount of 368,785.80 with interest at 12% per annum
compounded monthly from May 5, 1982 until the same is
fully paid; 2. The amount of P22,501.60 with interest at 12%
per annum compounded monthly from December 7, 1977
until the same is fully paid; 3. P5,000.00 as attorney's fees; 4.
the costs of suit. Should defendants fails to pay said amounts
within 90 days from receipt of the Decision dated Jan. 22, 1988,
the mortgaged property described in par. 6 of the complaint shall
be sold in the manner and under the regulations governing sales of
real estate under execution. The proceeds of the sale, after
deducting the cost of the sale shall be applied to the judgment and
any balance shall be turned over to the defendants or their agent."
SO ORDERED. 4
No appeal was taken from the above Order and the same subsequently became
final and executory.
On September 14, 1988, the Manila RTC issued a writ of execution. On November
24, 1988, the deputy sheriff in a public bidding sold the parcel of land covered by
TCT 1702 to FGU, the higher bidder. A certificate of sale was thereafter issued in
FGU's favor, which was confirmed by the RTC on March 2, 1989. On August 23,
1989, the RTC issued an order for the cancellation of TCT No. 242 and the
issuance of a new TCT in FGU's name. HaEcAC
Before the new TCT could be issued, however, the Spouses Gutang filed a
motion for intervention and to set aside the judgment of the RTC, alleging that
they are the new registered owners of the property. In an Order dated February
9, 1990, the RTC allowed the motion for intervention, holding that the failure of
FGU to implead the Spouses in the action for foreclosure deprived the latter of
due process. The RTC thus set aside its Decision and all order issued subsequent
and related thereto.
WHEREFORE, the motion to intervene filed by the Spouses

Gutang is granted and the decision on May 19, 1988 is
reconsidered set aside together with all orders subsequent
and related thereto. 5
On October 11, 1990, Looyuko et al. filed a motion for intervention, which the
RTC granted in its Order dated October 18, 1990.
In an Order dated November 16, 1990, the RTC denied FGU's motion for the
reconsideration of the order setting aside its decision.
FGU filed a petition for certiorari, prohibition and mandamus in the Court of
Appeals, arguing that the trial court committed grave abuse of discretion in
granting the Spouses Gutang's motion for intervention since the RTC decision, as
amended, was already final and executory.
On March 13, 1991, the Court of Appeals received an Urgent Motion by Juan Uy,
Alberto Looyuko and their counsel, Atty. Cuyos, praying for leave to file a
motion for intervention. They alleged that they were attachment creditors of the
spouses Tomas and Linda Mendoza whose property covered by TCT No. 1702
was attached as per entry No. 11728 duly inscribed on April 22, 1977 and
subsequently carried over to TCT No. 242 in the name of the Spouses Gutang. On
April 26, 1991, the court issued a resolution allowing Looyuko et al's motion for
intervention.
In a Decision dated August 12, 1991, the Court of Appeals rendered its Decision,
WHEREFORE, the petition for certiorari, mandamus and

prohibition is hereby (1) GRANTED insofar as that portion
of the Order of February 9, 1990 is concerned reconsidering
and setting aside the money judgment is concerned, which
judgment [is] final and executory, and in the process of
satisfaction, should be maintained and remains as such; and
(2) DISMISSING insofar as that portion of the same Order
allowing the private respondents to intervene is concerned.
SO ORDERED. 6
The Court of Appeals ruled that the action before the RTC was not actually an
action for foreclosure but one for collection of a sum of money. The court also
affirmed the order of the RTC allowing intervention, thus:
The Court, both from the factual, procedural and substantive

points, finds that respondent court had just and valid
reasons to allow the private respondents to intervene in the
case. Had it denied the intervention, the execution in
satisfaction of the money judgment against the judgment
debtors, would be violative of section 15 of Rule 30, that
should be "on all the property, real and personal, . . . of the
judgment debtor . . ." when, in the case, the ownership of the
parcel of land, covered by TCT 45066 is claimed by private
respondents as well as movants-intervenors. Finally, even if
it is considered, as petitioner claims, petitioner should have
impleaded in its action "all persons having or claiming an
interest in the (mortgage) premises subordinate in right to
that of the holder of the mortgage, all of whom shall be made
defendants in the action" (sec. 1, Rule 68, Rules of Court) and
without their inclusion there can be no final determination in
the action. Petitioner did not include private respondents as
well as movants-intervenors, both of whom hold liens on the
same property. Even under this aspect, respondent court
should not be faulted for allowing private respondents to
intervene, considering its reason that "what (is) sought to be
safeguarded (s) . . . the provision of Rule 68 of the Rules of
Court." And while the time to intervene, under section 2, of
Rule 12, is before or during a trial, . . ., in its discretion . . .",
or even on the day when the case is submitted for decision
(Falcasantos vs. Falcasantos, L-4627, May 13, 1952), or at any
time before the rendition of final judgment (Lichauco vs.
C.A., ET AL., L-23642, Mar. 13, 1975), in Director of Lands vs.
C.A., et al. (L-45168, Sept. 25, 1979), intervention was
permitted pending appeal "in order to avoid injustice" which
must have impelled the respondent court to allow the
intervention.
Be that as it may, insofar as the default judgment dated

January 27, 1988, ordering the defendants spouses Mendoza,
jointly and severally, to pay petitioner the judgment debt,
interest, attorney's fees and costs, and which money
judgment was restated in the Order dated May 19, 1988,
since that judgment had already become final and executory
and in the process of execution, what cropped up in the
interim on the question of whether or not the money
judgment can be enforced against the parcel of land covered
by TCT 450666, it appearing that petitioner, private
respondents and herein movants-intervenors are all having
and claiming interest in that property, a question which has
no relevance and would not affect the correctness of the
money judgment, the respondent court had no reason to
reconsider and set aside the judgment which had already
become final and executory, can no longer be altered,
amended, reconsidered, set aside. Nothing more can be tone
therewith. The court which rendered it has no more
authority to modify or revoke it, except for its execution,
otherwise, there would be not end to the litigation. Hence,
the money judgment should be maintained and set at rest as
and all that remains to be done in connection therewith is to
have the same properly executed against the judgment
debtors. 7
On August 16, 1991, the Court of Appeals noted a motion for leave to intervene
by Schubert Tanunliong.
Subsequently, FGU and Looyuko et al. filed their respective motions for
reconsideration. On October 31, 1991 the Court of Appeals issued a resolution
denying both motions for reconsideration.
Looyuko et al. thus filed a petition for certiorari, prohibition and mandamus
before this Court, contending in the main that the failure of FGU to implead
them as defendants in Civil Case No. 82-9760 deprived them of due process.
Consequently, the entire proceedings conducted before the RTC should have
been declared void. The case was docketed herein as G.R. No. 102696.
FGU, for its part, filed a petition for review on certiorari with this Court, which
was docketed as G.R. No. 102716. FGU contends that the Court of Appeals erred
in characterizing Civil Case No. 82-9760 as an action for a sum of money, and not
one for foreclosure of mortgage, and in allowing the intervention of the Spouses
Gutang and Looyuko et al. in the proceedings before the trial court.
LRC Case No. R-4212, RTC Rizal (Gutang vs. Register of Deeds, et al.)
LRC Case No. R-4643, RTC Rizal (Gutang et al. vs. Looyuko et al.)
CA-G.R. SP No. 36825, 9th Division, Court of Appeals (Gutang vs. Judge Trampe,
Tanunliong)
G.R. No. 120954, Supreme Court (Tanunliong vs. Court of Appeals, Gutang)
On November 28, 1989, Antonia Gutang filed with the RTC of Rizal an Amended
Petition under Section 108 of Presidential Decree No. 1529 for the cancellation of
TCT No. 242 in the name of the Spouses Gutang and the issuance of a new one in
the name of Antonia Gutang and her children David and Elizabeth. The
cancellation of the TCT was sought on the grounds that the husband, Jose
Gutang, had already died, and that the property covered by the TCT was
paraphernal. The case was entitled "Antonia Gutang versus Register of Deed,
Galvanizers Marketing Inc., Victoria Alcantara Cuyos, Alberto Looyuko and Juan
Uy, LRC Case No. R-4212."
On August 29, 1991, Schubert Tanunliong, the alleged assignee of FGU and
Looyuko et al., filed a motion for leave to intervene, attaching his opposition to
the amended petition.
On June 1, 1992, Antonia Gutang and her children filed another petition with the
Rizal RTC against Cuyos, Looyuko and Uy praying for the cancellation of certain
entries annotated in TCT No. 242. The case was docketed as LRC Case No. 4643.
On July 12, 1993, the RTC ordered the setting of the cases for hearing and for
compliance with jurisdictional requirements. On October 11, 1993, the court
issued an order allowing the intervention of Tanunliong. The Gutangs moved for
a reconsideration of both orders. On July 19, 1994, the court issued an Omnibus
Order in LRC Case Nos. 4214 and 4643, the dispositive portion of which reads:
"WHEREFORE, in view of all the foregoing, the Petitioners

two (2) Motions for reconsideration dated August 30, 1993
and October 27, 1993; and Respondents' Motion for
Reconsideration dated November 3, 1993 and the Opposition
and Motion to Dismiss dated June 23, 1991, are all DENIED
for lack of merit.
On the other hand, movant Intervenor's Motion for Leave to

Intervene with Opposition dated August 29, 1991 is Granted.
In the meantime, let a notice of hearing be issued setting

these cases for hearing in accordance with the provisions of
P.D. 1529.
Let copies of the same be furnished the parties in this case,

thru their counsels, the Register of Deeds of Mandaluyong,
Metro Manila; the Office of the Solicitor General; and
Intervenor Schubert Tanunliong, thru his counsel Atty.
Nelson Ng." 8
On March 6, 1995, the court issued another order in both LRC cases, thus:
Accordingly, let the questioned Omnibus Order dated July

19, 1994 stand, and the Branch Clerk of Court is directed to
issue the notice of initial hearing in [this] case with notice to
the Office of Solicitor General, the Registry of Deed of the
City of Mandaluyong, herein respondents and intervenor
Ng, pursuant to Section 108 of the Presidential Decree No.
1529. 9
Yet another order was subsequently issued by the RTC in LRC Case No. 4212,
FURTHERMORE, let a copy of this order and the petition be

furnished the Solicitor General, Makati, Metro Manila. 10
Antonia Gutang went to the Court of Appeals and questioned, among others, the
allowance of the intervention by Tanunliong (CA-G.R. SP No. 36825). In a
Decision dated June 30, 1995, the Court of Appeals, through the Special Ninth
Division, set aside and declared void the Orders of the Land Registration Court
insofar as they allowed the intervention of Tanunliong.
Tanunliong now challenges the decision of the Court of Appeals in G.R. No.
120954. He submits that the decision in LRC Case No. R-3613, which issued TCT
No. 242 in the name of the Spouses Gutang is void, citing specific grounds
therefor. Accordingly, intervention should have been allowed on the principle
that a void judgment can be attacked either directly or collaterally.
Civil Case No. 61209, Pasig RTC (Tanunliong vs. Gutang et al.)
CA-G.R. SP NO. 27972, 4th Division, Court of Appeals (Gutang et al. vs. Judge
Molina and Tanunliong)
G.R. No. 108257, Supreme Court (Tanunliong vs. Court of Appeals, Gutang et al.)
Schubert Tanunliong claims that on December 19, 1985, the Spouses Mendoza
sold the subject house and lot to him. Subsequently, on January 9, 1986, Alberto
Looyuko and John Uy, the plaintiffs in Civil Case No. 82-5792, allegedly assigned
to Tanunliong their rights and interests over the property. The validity of the
assignment, however, is refuted by Looyuko, et al. 11 On January 29, 1987, FGU,
the plaintiff in Civil Case No. 82-9760 likewise assigned all its rights and interest
over said property to Tanunliong. The assignment is not denied by FGU.
On August 23, 1991, Tanunliong filed before the RTC of Pasig a complaint for the
cancellation of title, accounting and issuance of a writ of preliminary injunction
against Antonia Gutang, David Gutang, Elizabeth Gutang Ledesma, Atty.
Ramon Gonzales (the counsel for the Gutangs), and Atty. Victoria Cuyos. The
case was docketed as Civil Case No. 61209. Tanunliong alleged, among others,
that Antonia Gutang obtained the Order in LRC Case No. R-3613, canceling TCT
No. 1702 and ordering the issuance of TCT No. 242 in favor of the Gutangs,
through fraud and misrepresentation and without notice to FGU. Consequently,
said Order was void.
The defendants filed a motion to dismiss Tanunliong's complaint on the ground

that the RTC had no jurisdiction over the case, the complaint in reality being an
action for the annulment of the Order of the Pasig RTC in LRC Case No. R-3613.
The RTC denied said motion but the Court of Appeals, upon a petition for
certiorari and prohibition by the Gutangs and Gonzales, ruled otherwise. The
appellate court held that Tanunliong's action, though denominated as one for
cancellation of title, accounting and for issuance of preliminary injunction is, in
truth, a case for annulment of judgment. The dispositive portion of the Decision,
dated December 16, 1992, reads:
WHEREFORE, the Petition for Certiorari and Prohibition,
with Temporary Restraining Order, is hereby GRANTED.
The Order of the RTC-Pasig, Branch 152, dated May 14, 1992,
in Civil Case No. 61209, is SET ASIDE, for being null and
void. The RTC-Pasig, Branch 152, is ENJOINED from
proceeding with Civil Case No. 61209 and is ORDERED to
dismiss said case, for lack of jurisdiction. ITAaCc
Tanunliong thus assails the ruling of the Court of Appeals in G.R. No. 108257,
maintaining, in essence, that the action for cancellation of title, accounting and
issuance of a writ of preliminary injunction is proper.
The Court finds the principal issue raised in G.R. Nos. 102696 and 102716
dispositive of the consolidated petitions. Was the motion for intervention filed by
the Spouses Gutang and Looyuko et al. in Civil Case No. 82-9760 proper
considering that the case was already final and executory?
We do not deem it necessary to address the issue of whether the complaint filed
by FGU against the Spouses Mendoza was an action for foreclosure of mortgage
or one for a sum of money. Clearly, if it were the latter, the Gutangs and
Looyuko et al. would have no right to intervene therein since the action for sum
of money, i.e., damages, would have arisen from the contract secured by
mortgage, to which they are not parties. Then Section 2, Rule 12 of the Rules of
Court, the law prevailing at the time, read as follows:
Intervention. A person may, before or during a trial be

permitted by the court, in its discretion, to intervene in an
action, if he has legal interest in the matter in litigation, or in the
success of either of the parties, or an interest against both, or when
he is so situated as to be adversely affected by a distribution or
other disposition of property in the custody of the court or of an
officer thereof. [Emphasis supplied.]
None of the grounds underscored above are present to warrant their

intervention. Accordingly, we assume for purposes of discussion that the
action was indeed for the foreclosure of the mortgage over the subject
property.
The rule stated above also requires that a motion for intervention should be
made "before or during a trial" Because of varying interpretations of the phrase,
the present Rules have clarified that the motion should be filed "any time before
rendition of judgment. 13
1. The former rule as to when intervention may be allowed

was expressed in Sec. 2, Rule 12 as "before or during a trial,"
and this ambiguity also gave rise to indecisive doctrines.
Thus, inceptively it was held that a motion for leave to
intervene may be filed "before or during a trial" even on the
day when the case is submitted for decision (Falcasantos vs.
Falcasantos, L-4627, May 13, 1952) as long as it will not
unduly delay the disposition of the case. The term "trial" was
used in its restricted sense, i.e., the period for the
introduction for intervention was filed after the case had
already been submitted for decision, the denial thereof is
proper (Vigan Electric Light Co., Inc. vs. Arciaga, L-29207 and
L-29222, July 31, 1974). However, it has also been held that
intervention may be allowed at any time before the rendition
of final judgment (Linchauco vs. CA, et al., L-23842, Mar. 13,
1975). Further, in the exceptional case of Director of Lands vs.
CA, et al. (L-45168, Sept. 25, 1979), the Supreme Court
permitted intervention in a case pending before it on appeal
in order to avoid injustice and in consideration of the
number of parties who may be affected by the dispute
involving overlapping of numerous land titles.
2. The uncertainty in these ruling has been eliminated by the

present Sec. 2 of this amended Rule which permits the filing
of the motion to intervene at any time before the rendition of
the judgment in the case, in line with the doctrine in Lichauco
above cited. The justification advanced for this is that before
judgment is rendered, the court, for good cause shown, may
still allow the introduction of additional evidence and that is
still within a liberal interpretation of the period for trial.
Also, since no judgment has yet been rendered, the matter
subject of the intervention may still be readily resolved and
integrated in the judgment disposing of all claims in the
case, and would not require an overall reassessment of said
claims as would be the case if the judgment had already
been rendered. 14
In the present case, the motions for intervention were filed after judgment had
already been rendered, indeed when the case was already final and executory.
Certainly, intervention can no longer be allowed in a case already terminated by
final judgment. 15
Intervention is merely collateral or accessory or ancillary to the principal action,

and not an independent proceeding; it is an interlocutory proceeding dependent
on or subsidiary to the case between the original parties. 16 Where the main
action ceases to exist, there is no pending proceeding wherein the intervention
may be based. 17 Here, there is no more pending principal action wherein the
Spouses Gutang and Looyuko et al. may intervene.
A decision was already rendered therein and no appeal

having been taken therefrom, the judgment in that main case
is now final and executory. Intervention is legally possible
only "before or during a trial," hence a motion for
intervention filed after trial and, a fortiori, when the case
has already been submitted, when judgment has been
rendered, or worse, when judgment is already final and
executory should be denied. 18
In exceptional cases, the Court has allowed intervention notwithstanding the

rendition of judgment by the trial court. In Director of Lands vs. Court of Appeals,
19 intervention was allowed even when the petition for review of the assailed
judgment was already submitted for decision in the Supreme Court. Recently in
Mago vs. Court of Appeals, 20 the Court granted intervention despite the case
having become final and executory.
Admittedly, petitioners' motion for intervention was filed on

2 August 1988 after the amended order of 30 March 1988 had
already become final.
xxx xxx xxx
It must be noted however that petitioners were unaware of

the proceedings in Civil Case No. Q-52319. Aside from the
obvious fact that they were never impleaded, they were also
lulled into believing that all was well. After all, there was a
previous agreement or "Kasunduan ng Paghahati ng Lote"
which private respondent Asis executed in their favor on 23
May 1980 or before the disputed lot was awarded to Asis by
the NHA. In that agreement private respondent voluntarily
agreed to divide the awarded lot into two (2)-on-half () to
be retained by him, and the other one-half () to belong to
petitioners. It can be seen from this that private respondent
acted in bad faith when he accepted the award erroneously
made to him by NHA knowing fully well that a perfected
agreement had been forged earlier between him and
petitioners. As a matter of record, the NHA even
acknowledged its mistake.
xxx xxx xxx
These matters should have been taken into account by the

courts a quo for being of utmost importance in ruling on
petitioners' motion for intervention. The permissive tenor of
the provision on intervention shows the intention of the
Rules to give to the court the full measure of discretion in
permitting or disallowing the same. But needless to say, this
discretion should be exercised judiciously and only after
consideration of all the circumstances obtaining in the case.
But it is apparent that the courts a quo only considered the

technicalities of the rules on the intervention and of the
petition for relief from judgment. The denial of their motion
to intervene arising from the strict application of the rule
was an injustice to petitioners whose substantial interest in
the subject property cannot be disputed. It must be stressed
that the trial court granted private respondent's petition for
prohibition with injunction without petitioners being
impleaded, in total disregard of their right to be heard, when
on the face of the resolution of the Community Relations and
Information Office (CRIO) sought to be enjoined, petitioners
were the ones directly to be affected. We need not belabor
the point that petitioners are indeed indispensable parties
with such an interest in the controversy or subject matter
that a final adjudication cannot be made in their absence
without affecting, nay injuring, such interest.
In Director of Lands vs. Court of Appeals where the motions for

intervention were filed when the case had already reached
this Court, it was declared:
It is quite clear and patent that the motions for

intervention filed by the movants at this stage of
the proceedings where trial had already been
concluded . . . and on appeal . . . the same was
affirmed by the Court of Appeals and the instant
petition for certiorari to review said judgment is
already submitted for decision by the Supreme
Court, are obviously and manifestly late, beyond
the period prescribed under . . . Section 2, Rule 12
of the Rules of Court.
But Rule 12 of the Rules of Court, like all other

Rules therein promulgated, is simply a rule of
procedure, the whole purpose and object of which
is to make the powers of the Court fully and
completely available for justice. The purpose of
procedure is not to thwart justice. Its proper aim is
to facilitate the application of justice to the rival
claims of contending parties. It was created not to
hinder and delay but to facilitate and promote the
administration of justice. It does not constitute the
thing itself which courts are always striving to
secure to litigants. It is designed as the means best
adopted to obtain that thing. In other words, it is a
means to an end.
In Tahanan Development Corp. v. Court of Appeals this Court

allowed intervention almost at the end of the proceedings.
Accordingly, there should be no quibbling, much less
hesitation or circumvention, on the part of subordinate and
inferior courts to abide and conform to the rule enunciated
by the Supreme Court.
It must be noted, however, that in both these cases, the intervenors were
indispensable parties. 21 This is not so in the case at bar.
Section 1, Rule 68 of the Rules of Court requires all persons having or claiming
an interest in the premises subordinate in right to that of the holder of the
mortgage be made defendants in the action for foreclosure. The requirement for
joinder of the person claiming an interest subordinate to the mortgage sought to
be foreclosed, however, is not mandatory in character but merely directory, in
the sense that failure to comply therewith will not invalidate the foreclosure
proceedings. 22
A subordinate lien holder is a proper, even a necessary, but not an indispensable,

party to a foreclosure proceeding. Approximate relief could be granted by the
court to the mortgagee in the foreclosure proceeding, without affecting the rights
of the subordinate lien holders. The effect of the failure on the part of the
mortgagee to make the subordinate lien holder a defendant is that the decree
entered in the foreclosure proceeding would not deprive the subordinate lien
holder of his right of redemption. A decree of foreclosure in a suit to which the
holders of a second lien are not parties leaves the equity of redemption in favor
of such lien holders unforeclosed and unaffected. 23
The Spouses Gutang make a lot of needless hair-splitting by arguing that cases
applying the above principles are not on all fours with the one at bar. They
persistently cling to the notion that as purchasers in the execution sale, they
stepped into the shoes of the Spouses Gutang and have become, in legal
contemplation, the mortgagors of the property. Consequently, their intervention
should be allowed.
This contention is utterly devoid of merit. Subordinate lien holders like the
Spouses Gutang and Looyuko et al. acquire only a lien upon the equity of
redemption vested in the mortgagor, and their rights are strictly subordinate to
the superior lien of the mortgagee. 24 This principle is reiterated in Top Rate
International Services, Inc. vs. Intermediate Appellate Court, 25 where the Court cited
a host of precedents in support of its decision:
As we have ruled in Northern Motors, Inc. v. Coquia, (66

SCRA 415, 420):
"To levy upon the mortgagor's incorporeal right or

equity of redemption, it was not necessary for the
sheriff to have taken physical possession of the
mortgaged taxicabs. . . . Levying upon the property
itself is distinguishable from levying on the judgment
debtor's interest in it (McCullough & Co. v. Taylor,
25 Phil. 110, 115)"
Likewise, in the case of Blouse Potenciano, v. Mariano, (96

SCRA 463, 469), we ruled:
"Quirino's interest in the mortgaged lots is merely an

equity of redemption, an intangible or incorporeal
right (Sun Life Assurance Co. of Canada v.
Gonzales Diez, 52 Phil. 271; Santiago v. Dionisio, 92
Phil. 495; Northern Motors Inc. v. Coquia, 66 SCRA
415).
"That interest could be levied upon by means of

writ of execution issued by the Manila Court as had
been done in the case of property encumbered by a
chattel mortgage (Levy Hermanos, Inc. v. Ramirez
and Casimiro, 60 Phil. 978, 982; McCullough & Co.
v. Taylor, 25 Phil. 110). ["]
It is, therefore, error on the part of the petitioner to say that

since private respondents' lien is only a total of P343,227.40.
they cannot be entitled to the equity of redemption because
the exercise of such right would require the payment of an
amount which cannot be less than P40,000,000.00.
When herein private respondents prayed for the attachment
of the properties to secure their respective claims against
Consolidated Mines, Inc., the properties had already been
mortgaged to the consortium of twelve banks to secure an
obligation of US$62,062,720.66. Thus, like subsequent
mortgages, the respondents' liens on such properties became
inferior to that of the banks, which claims in the event of
foreclosure proceedings, must first be satisfied. The
appellate court, therefore, was correct in holding that in
reality, what was attached by the respondents was merely
Consolidated Mines' right or equity of redemption. Thus, in
the case of Alpha Insurance and Surety Co., Inc. v. Reyes (106
SCRA 274, 278), we ruled: ITcCSA
"Deciding the legal question before Us, even if the

DBP were just an ordinary first mortgagee without
any preferential liens under Republic Act No. 85 or
Commonwealth Act 459, the statutes mentioned in
the Associated Insurance case relied upon by the
trial court, it would be unquestionable that nothing
may be done to favor plaintiff-appellant, a mere
second mortgage, until after the obligations of the
debtors-appellees with the first mortgagee have
been fulfilled, satisfied and settled. In law, strictly
speaking, what was mortgaged by the Reyeses to Alpha
was no more than their equity of redemption.
We, therefore, hold that the appellate court did not commit
any error in ruling that there was no over-levy on the
disputed properties. What was actually attached by
respondents was Consolidated Mines' right or equity of
redemption, an incorporeal or intangible right, the value of
which can neither be quantified nor equated with the actual
value of the properties upon which it may be exercised.
[Emphasis supplied.]
Accordingly, an execution creditor who levies his execution upon property

that the judgment debtor has mortgaged to another can sell at most only the
equity of redemption belonging to the mortgagor. 26 As it is the equity of
redemption that the subordinate lien holders had acquired by the levy on
execution and that was sold in the public auction, this equity, not the
property itself, was what the purchasers, who incidentally are the
subordinate lien holders themselves, bought at the execution sale.
The failure of the mortgagee to join the subordinate lien holders as defendants in
the foreclosure suit, therefore, did not have the effect of nullifying the foreclosure
proceeding; but kept alive the equity of redemption acquired by the purchasers
in their respective execution sales. 27 If there be any more quibbling on the rights
of Looyuko et al. and the Gutangs over the property and their right to intervene
in the proceedings, Limpin vs. Intermediate Appellate Court sums up all the
principles enunciated above and should lay the matter to rest:
Section 2, Rule 68 provides that
". . . If upon the trial . . . the court shall find the facts set forth
including interest and costs, and shall render judgment to be
paid into court within a period of not less than ninety (90)
days from the date of the service of such order, and that in default
of such payment the property be sold to realize the mortgage
debt and costs."
This is the mortgagor's equity (not right) of redemption which,

as above stated, may be exercised by him even beyond the
90-day period "from the date of service of the order," and
even after the foreclosure sale itself, provided it be before the
order of confirmation of the sale. After such order of
confirmation, no redemption can be effected any longer.
It is this same equity of redemption that is conferred by law on the

mortgagor's successors-in-interest, or third persons acquiring
right over the mortgaged property subsequent, and therefore
subordinate to the mortgagee's lien [e.g., by second mortgage or
subsequent attachment or judgment]. If these subsequent or junior
lien-holders be not joined in the foreclosure action, the judgment in
the mortgagor's favor is ineffective as to them, of course. In that
case, they retain what is known as the "unforeclosed equity of
redemption," and a separate foreclosure proceeding should be
brought to require them to redeem from the first mortgagee, or the
party acquiring title to the mortgaged property at the foreclosure
sale, within 90 days, [the period fixed in Section 2, Rule 68 for the
mortgagor himself to redeem], under penalty of losing that
prerogative to redeem. . . . [Emphasis supplied.]
Such equity of redemption does not constitute a bar to the registration of the
property in the name of the mortgagee. Registration may be granted in the name
of the mortgagee but subject to the subordinate lien holders' equity of
redemption, which should be exercised within ninety (90) days from the date the
decision becomes final. 28 This registration is merely a necessary consequence of
the execution of the final deed of sale in the foreclosure proceedings.
Consequently, there is no merit in Looyuko et al.'s contention that the Manila
RTC, which was not acting as a land jurisdiction court, had no authority to order
the cancellation of TCT No. 242. For the same reason, neither does the
submission of the Gutangs that the foreclosure proceedings was a collateral
attack on their TCT deserve any credence.
Accordingly, the petition for review (G.R. No. 102716) of the mortgagee FGU,
who was the first to register its encumbrance, must be granted. Conversely, the
petition for certiorari, prohibition and mandamus (G.R. No. 102696) filed by
Looyuko et. al. must be dismissed.
In view of the foregoing ruling, the resolution of G.R. Nos. 108257 and 120954 is
no longer necessary. G.R. No. 108257 stems from a complaint by Tanunliong for,
among others, the cancellation of TCT No. 242 in the name of the Spouses
Gutang. G.R. No. 120954 involves the propriety of Tanunliong's intervention in
the land registration cases instituted by Antonia Gutang for the cancellation of
TCT No. 242 and certain annotations in said TCT. The above ruling has rendered
moot the proceedings from which these cases (G.R. Nos. 108257 and 120954)
arose.
WHEREFORE:
(1) The petition in G.R. No. 102696 is DISMISSED.
(2) The petition in G.R. No. 102716 is GRANTED.
(3) The petition in G.R. No. 108257 is DENIED.
(4) The petition in G.R. No. 120954 is DENIED.
The Register of Deeds is ordered to cancel TCT No. 10107 in the names of Jose
Looyuko and John Uy and to issue a new one in the name of FGU Insurance
Corporation, subject to the equity of redemption of Jose Looyuko and John Uy,
and Antonia Gutang, respectively. The equity of redemption of Jose Looyuko
and John Uy should be exercised within ninety (90) days from the date this
decision becomes final.
SO ORDERED. DAEIHT
||| (Looyuko v. Court of Appeals, G.R. Nos. 102696, 102716, 108257, 120954, July 12,
2001)
FIRST DIVISION
[G.R. No. 135219. January 17, 2002.]

PHILIPPINE NATIONAL BANK, petitioner, vs. THE
COURT OF APPEALS and ERNESTO AUSTRIA and
LORETO Q. QUINTANA, respondents.
Carao Noblejas & Associates for petitioner.
Luz & Advincula for private respondents.
SYNOPSIS
Spouses Godofredo and Wilma Monsod obtained a loan in the amount of

P120,000.00 from petitioner Philippine National Bank (PNB). To secure their loan,
the Monsods mortgaged to PNB a parcel of land located within the Monte Villa
de Monsod Subdivision in Paraaque, Rizal. Due to the spouses Monsods' failure
to pay their loan obligation, PNB extrajudicially foreclosed the mortgage. At the
auction sale of the subject real property, PNB was declared the highest bidder.
Seven years after the expiration of the redemption period, PNB filed an "Ex-Parte
Petition for the Issuance of Writ of Possession" with Branch 60 of the Regional
Trial Court of Makati. The trial court granted PNB's petition and a writ of
possession was thereafter issued. Private respondents Ernesto and Loreto
Quintana Austria, however, filed a "Motion for Intervention and to Recall and/or
Stop the Enforcement of the Writ of Possession." The Austrias alleged that they
are the actual occupants of the subject lot, which they purportedly bought from
the Monsods as early as 1974. The Austrias maintained that the issuance of the
possessory writ ex parte was improper, since it will deprive the of their property
without due process. The trial court denied the Austrias' motion for intervention
but ruled that: "any writ of possession that may be issued in this case, is declared
unenforceable against the MOVANTS ERNESTO AUSTRIA and the HEIRS OF
LORETO AUSTRIA, until the Court declares otherwise." PNB filed a motion for
reconsideration, which was denied. A petition for certiorari under Rule 65 of the
Rules of Court was filed by PNB before the Court of Appeals. The Court of
Appeals dismissed the petition, stating that there was no prima facie showing of
grave abuse of discretion on the part of respondent Judge in issuing his assailed
Order. Hence, the present petition. Petitioner PNB submitted that since it is the
registered owner of the property, it is entitled to a writ of possession as a matter
of right. The bank insisted that it could rely on the title of the registered land
which does not have any annotation of respondents' supposed rights. On the
other hand, respondents asserted that the trial court correctly held that the writ
of possession can only be implemented against the debtor/mortgagor and his
successors-in-interest. Since respondents acquired their rights as owners of the
property by virtue of a sale made to them by the Monsods prior to the bank's
mortgage lien, respondents can not be dispossessed therefrom without due
notice and hearing, through the simple expedient of an ex-parte possessory writ.
The Supreme Court upheld the contention of private respondents. According to

the Court, they can not be ejected from the property simply by means of an ex-
parte writ of possession. Under Art. 433 of the Civil Code, one who claims to be
the owner of a property possessed by another must bring the appropriate judicial
action for its physical recovery. The term "judicial process" could mean no less
than an ejectment suit or reivindicatory action, in which the ownership claims of
the contending parties may be properly heard and adjudicated. An ex-parte
petition for issuance of a possessory writ under Section 7 of Act No. 3135 is not,
strictly speaking, a "judicial process" as contemplated by law. Even if the same
may be considered a judicial proceeding for the enforcement of one's right of
possession as purchaser in a foreclosure sale, it is not an ordinary suit filed in
court, by which one party "sues another for the enforcement or protection of a
right, or the prevention or redress of a wrong." In the case at bar, petitioner PNB
admitted that as early as 1990, it was aware that the subject lot was occupied by
the Austrias. Yet, instead of bringing an action in court for the ejectment of
respondents, it chose to simply file an ex-parte petition for a writ of possession
pursuant to its alleged right as purchaser in the extra-judicial foreclosure sale.
The Court said that it cannot sanction the said procedural shortcut because to
enforce the writ against an unwitting third party possessor, who took no part in
the foreclosure proceedings, would be tantamount to the taking of real property
without the benefit of proper judicial intervention.
SYLLABUS
1. CIVIL LAW; EXTRAJUDICIAL FORECLOSURE OF MORTGAGE;

OBLIGATION OF A COURT TO ISSUE AN EX-PARTE WRIT OF POSSESSION
IN FAVOR OF A PURCHASER IN AN EXTRAJUDICIAL FORECLOSURE SALE
CEASES TO BE MINISTERIAL ONCE IT APPEARS THAT THERE IS A THIRD
PARTY IN POSSESSION OF THE PROPERTY CLAIMING A RIGHT ADVERSE
TO THAT OF THE DEBTOR/CREDITOR. Under applicable laws and
jurisprudence, respondents can not be ejected from the property by means of an
ex-parte writ of possession. The operative provision under Act No. 3135, as
amended, is Section 6, which states: In all cases in which an extrajudicial sale is
made under the special power hereinbefore referred to, the debtor, his successors
in interest or any person having a lien on the property subsequent to the
mortgage or deed of trust under which the property is sold, may redeem the
same at any time within the term of one year from and after the date of the sale;
and such redemption shall be governed by the provisions of section four hundred and
sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so
far as these are not inconsistent with the provisions of this Act. Despite the
evolutionary development of our procedural laws throughout the years, the
pertinent rule in the Code of Civil Procedure remains practically unchanged.
Particularly, Rule 39, Section 33, second paragraph, which relates to the right of
possession of a purchaser of property in an extrajudicial foreclosure sale: Sec. 33.
. . . Upon the expiration of the right of redemption, the purchaser or
redemptioner shall be substituted to and acquire all the rights, title, interest and
claim of the judgment obligor to the property at the time of levy. The possession of
the property shall be given to the purchaser or last redemptioner by the same officer
unless a third party is actually holding the property adversely to the judgment obligor.
(Italics ours) Thus, in Barican v. Intermediate Appellate Court, we held that the
obligation of a court to issue an ex-parte writ of possession in favor of the
purchaser in an extrajudicial foreclosure sale ceases to be ministerial once it
appears that there is a third party in possession of the property who is claiming a
right adverse to that of the debtor/mortgagor. The same principle was inversely
applied in a more recent case, where we ruled that a writ of possession may be
issued in an extrajudicial foreclosure of real estate mortgage, only if the debtor is
in possession and no third party had intervened. Although the factual nuances of
this case may slightly differ from the aforecited cases, the availing circumstances
are undeniably similar a party in possession of the foreclosed property is
asserting a right adverse to the debtor/mortgagor and is a stranger to the
foreclosure proceedings in which the ex-parte writ of possession was applied for.
DSAICa
2. ID.; ID.; ONE WHO CLAIMS TO BE THE OWNER OF A PROPERTY

POSSESSED BY ANOTHER MUST BRING THE APPROPRIATE JUDICIAL
ACTION FOR RECOVERY; AN EX-PARTE PETITION FOR ISSUANCE OF A
POSSESSORY WRIT UNDER SECTION 7 OF Act No. 3135 IS NOT, STRICTLY
SPEAKING, A "JUDICIAL PROCESS" AS CONTEMPLATED BY THE LAW.
Under Article 433 of the Civil Code, one who claims to be the owner of a
property possessed by another must bring the appropriate judicial action for its
physical recovery. The term "judicial process" could mean no less than an
ejectment suit or reivindicatory action, in which the ownership claims of the
contending parties may be properly heard and adjudicated. An ex-parte petition
for issuance of a possessory writ under Section 7 of Act No. 3135 is not, strictly
speaking, a "judicial process" as contemplated above. Even if the same may be
considered a judicial proceeding for the enforcement of one's right of possession
as purchaser in a foreclosure sale, it is not an ordinary suit filed in court, by
which one party "sues another for the enforcement or protection of a right, or the
prevention or redress of a wrong." It should be emphasized that an ex-parte
petition for issuance of a writ of possession is a non-litigious proceeding
authorized in an extrajudicial foreclosure of mortgage pursuant to Act 3135, as
amended. Unlike a judicial foreclosure of real estate mortgage under Rule 68 of
the Rules of Court, any property brought within the ambit of the act is foreclosed
by the filing of a petition, not with any court of justice, but with the office of the
sheriff of the province where the sale is to be made. As such, a third person in
possession of an extrajudicially foreclosed realty, who claims a right superior to
that of the original mortgagor, will have no opportunity to be heard on his claim
in a proceeding of this nature. It stands to reason, therefore, that such third
person may not be dispossessed on the strength, of a mere ex- parte possessory
writ, since to do so would be tantamount to his summary ejectment, in violation
of the basic tenets of due process. Besides, as earlier stressed, Article 433 of the
Civil Code, cited above, requires nothing less than an action for ejectment to be
brought even by the true owner. After all, the actual possessor of a property
enjoys a legal presumption of just title in his favor, which must be overcome by
the party claiming otherwise.
3. ID.; ID.; TRIAL COURT WAS WITHOUT AUTHORITY TO GRANT THE

SUBJECT EX-PARTE WRIT OF POSSESSION; CASE AT BAR. In the case at
bar, petitioner PNB admitted that as early as 1990, it was aware that the subject
lot was occupied by the Austrias. Yet, instead of bringing an action in court for
the ejectment of respondents, it chose to simply file an ex-parte petition for a writ
of possession pursuant to its alleged right as purchaser in the extra-judicial
foreclosure sale. We cannot sanction this procedural shortcut. To enforce the writ
against an unwitting third party possessor, who took no part in the foreclosure
proceedings, would be tantamount to the taking of real property without the
benefit of proper judicial intervention. Consequently, it was not a ministerial
duty of the trial court under Act No. 3135 to issue a writ of possession for the
ouster of respondents from the lot subject of this instant case. The trial court was
without authority to grant the ex-parte writ, since petitioner PNB's right of
possession under said Act could be rightfully recognized only against the
Monsods and the latter's successors-in-interest, but not against respondents who
assert a right adverse to the Monsods. Hence, the trial court cannot be precluded
from correcting itself by refusing to enforce the writs it had previously issued. Its
lack of authority to direct issuance of the writs against respondents assured that
its earlier orders would never attain finality in the first place. In the same vein,
respondents are not obliged to prove their ownership of the foreclosed lot in the
ex-parte proceedings conducted below. The trial court has no jurisdiction to
determine who between the parties is entitled to ownership and possession of
the foreclosed lot.
DECISION
Before us is a petition for review under Rule 45 of the Rules of Court, seeking a
reversal of the Court of Appeals' resolution in CA-G.R. SP No. 48660 dated
August 25, 1998, which affirmed the order of the Regional Trial Court of Makati,
Branch 60 in LRC Case No. M-2635.
Sometime during the late 70's, the spouses Godofredo and Wilma Monsod
obtained a loan in the amount of P120,000.00 from petitioner Philippine National
Bank (PNB). To secure their loan, the Monsods mortgaged to PNB a parcel of
land covered by TCT No. S-84843, located within the Monte Villa de Monsod
Subdivision in Paraaque, Rizal.
Due to Monsod's failure to pay their loan obligation, PNB extrajudicially

foreclosed the mortgage. At the auction sale of the subject real property, PNB
was declared the highest bidder. On December 21, 1981, a certificate of sale was
issued in favor of PNB, and was registered on July 11, 1984. 1
Upon expiration of the redemption period on July 12, 1985, ownership of the
property was consolidated in PNB. Thereafter, TCT No. S-84843 was cancelled
and TCT No. 99480 was issued in PNB's name. 2
On June 23, 1992, PNB filed an "Ex-Parte Petition for the Issuance of Writ of
Possession" with Branch 60 of the Regional Trial Court of Makati City, docketed
as LRC Case No. M-2635. Pursuant to the provisions of Act No. 3135, as
amended, the trial court conducted an ex-parte hearing. PNB's representative
testified that the foreclosed property is occupied by one Ernesto Austria.
According to PNB, Mr. Austria was invited by the bank to a conference to
discuss the ownership of the foreclosed lot, however, he did not honor the bank's
invitation. 3
On August 28, 1992, the trial court granted PNB's petition and a writ of
possession was issued on October 26, 1992. 4
On December 11, 1992, respondents Ernesto and Loreto Quintana Austria filed a
"Motion for Intervention and to Recall and/or Stop the Enforcement of the Writ
of Possession." The Austrias alleged that they are the actual occupants of the
subject lot, which they purportedly bought from the Monsods as early as 1974.
They claimed that the foreclosed property was enclosed within a concrete fence
and formed part of their family compound. PNB allegedly knew of this fact even
before it granted the loan to the Monsods, because the bank's credit investigators
were advised of the same when they inspected the property in the summer of
1976. Consequently, the Austrias maintained that the issuance of the possessory
writ ex parte was improper, since it will deprive them of their property without
due process. 5
Due to the Austrias' refusal to vacate the premises, the sheriff failed to enforce
the challenged writ.
On July 27, 1993, on motion of PNB, the trial court issued an alias writ of
possession. Again, the writ was not implemented. 6
On September 17, 1993, the sheriff sought to enforce the first alias writ of
possession for the second time. The Austrias filed a "Second Motion for
Intervention" seeking to restrain the enforcement of the writ of possession issued
on October 26, 1992. 7 PNB then filed an "Urgent Ex-Parte Motion for Issuance of
Break Open Order" 8 and, subsequently, an Opposition to the Austrias' Second
Motion for Intervention. 9
On January 31, 1994, the trial court denied the Austrias' second motion and
granted PNB's "Motion for Issuance of Break Open Order." The trial court ruled
that the Austrias can no longer be permitted to intervene in the case during said
stage of the proceedings and that the remedy of the Austrias was to file an
ordinary civil action to assert their claim of ownership over the property. 10
In the meantime, the first alias writ of possession lapsed. PNB thus filed an "Ex-
Parte Motion for Issuance of Second Alias Writ of Possession,'' 11 and on
November 29, 1994, a second alias writ was issued. 12
Unfazed, the Austrias filed an Omnibus Motion on January 25, 1995, seeking a
recall of the second alias writ and a reconsideration of the trial court's order
denying their motion to intervene. 13 Meanwhile, the second alias writ had
likewise expired.
PNB filed a "Manifestation and Motion for Issuance of Third Alias Writ of
Possession," which the trial court granted anew in an order dated October 10,
1995. 14
However, on December 12, 1995, the Austrias again filed a motion to set aside
the trial court's order dated October 10, 1995 and to recall the third alias writ. 15
Consequent to the filing of this fourth motion, the sheriff again failed to
implement the third alias writ, which also lapsed. Thus, on February 15, 1996,
PNB filed another "Motion for Issuance of a Fourth Alias Writ,'' 16 which was
granted on March 26, 1996.
The trial court, after hearing the Austrias' fourth motion, issued an order on
October 4, 1996, denying the same, on the ground that the issuance of a
possessory writ for a property sold at public auction pursuant to an extra-judicial
foreclosure proceeding was a ministerial duty on its part. The Austrias failed to
establish any legal ground for recalling the writs, even as they claimed a superior
right to the subject property. 17
On February 19, 1997, the fourth alias writ was issued by the trial court. The writ
was partially implemented with the posting of PNB security guards within the
premises of the foreclosed lot. 18
On April 17, 1997, the Austrias, for the fifth time, filed a motion to stop the
enforcement of the fourth alias writ and to set aside all prior writs issued by the
trial court. 19
In the meantime, the Austrias filed before the Regional Trial Court of Paraaque,
an action for cancellation of PNB's title to the property, docketed as Civil Case
No. 97-0184. 20
On October 28, 1997, the trial court denied the Austrias' fifth motion but ruled
that: "any writ of possession that may be issued in this case, is declared
unenforceable against the MOVANTS ERNESTO AUSTRIA and the HEIRS OF
LORETO AUSTRIA, until the Court declares otherwise." 21
PNB filed a motion for reconsideration, which was denied on May 20, 1998. 22 A
petition for certiorari under Rule 65 of the Rules of Court was filed by PNB before
the Court of Appeals. However, the Court of Appeals dismissed the petition,
stating:
There is no prima facie showing of grave abuse of discretion

on the part of respondent Judge in issuing his assailed Order
which the Court finds to be in accord with law, the pertinent
rules and jurisprudence cited therein.
Hence, PNB filed the instant petition, contending that:
THE COURT OF APPEALS COMMITTED A SERIOUS

ERROR BY SIMPLY ADOPTING THE FINDINGS OF THE
TRIAL COURT THAT WRIT OF POSSESSION CANNOT BE
ENFORCED AGAINST RESPONDENT AUSTRIA. SAID
FINDINGS ARE UNPROVEN AND UNSUPPORTED BY
EVIDENCE.
II
THE COURT OF APPEALS COMMITTED SERIOUS

MISAPPREHENSION OF FACTS IN:
A) SUPPORTING THE JURISPRUDENCE CITED BY THE

TRIAL COURT IN THE OCTOBER 28, 1997 ORDER. THE
RULINGS DO NOT JUSTIFY THE NON-ENFORCEMENT
OF THE WRIT OF POSSESSION AGAINST
RESPONDENTS. RESPONDENTS WERE GIVEN THE
OPPORTUNITY TO BE HEARD BUT NO EVIDENCE WAS
PRESENTED TO SUPPORT THEIR CLAIM;
B) NOT GIVING DUE CONSIDERATION TO THE FACT

THAT PNB HAS THE LEGAL RIGHT TO POSSESS THE
PROPERTY AS ITS REGISTERED OWNER;
C) LOSING SIGHT OF THE FACT THAT THE TRIAL

COURT BELATEDLY ISSUED THE OCTOBER 28, 1997
ORDER DIRECTING THAT THE WRIT OF POSSESSION
CANNOT BE ENFORCED AGAINST THE RESPONDENTS.
THE TRIAL COURT HAD EARLIER ISSUED FOUR (4)
POSSESSORY WRITS ALL OF WHICH WERE DIRECTED
AGAINST RESPONDENTS AUSTRIA & QUINTANA. 23
The basic issue to be resolved in this case is whether or not an ex-parte writ of
possession issued pursuant to Act No. 3135, as amended, can be enforced against
a third person who is in actual possession of the foreclosed property and who is
not in privity with the debtor/mortgagor. 24
Petitioner PNB maintains that the trial court's order was based on the unproven
allegation that respondents had purchased the property from the Monsods
before the latter mortgaged it to PNB. According to petitioner PNB, respondents
did not adduce any proof to support their claim of ownership, even as they were
repeatedly given the opportunity to do so during the hearings on the numerous
motions filed by respondents themselves.
Petitioner PNB also submits that since it is the registered owner of the property,
it is entitled to a writ of possession as a matter of right. The bank insists that it
could rely on the title of the registered land which does not have any annotation
of respondents' supposed rights.
Petitioner PNB likewise avers that the trial court could not now belatedly refuse
to enforce the writ of possession against respondents. The trial court had already
issued a total of four possessory writs directing the ouster of all occupants of the
lot, including respondents herein.
On the other hand, respondents assert that the trial court correctly held that the
writ of possession can only be implemented against the debtor/mortgagor and
his successors-in-interest. Since respondents acquired their rights as owners of
the property by virtue of a sale made to them by the Monsods prior to the bank's
mortgage lien, respondents can not be dispossessed therefrom without due
notice and hearing, through the simple expedient of an ex-parte possessory writ.
We agree with respondents. Under applicable laws and jurisprudence, they can
not be ejected from the property by means of an ex-parte writ of possession.
The operative provision under Act No. 3135, as amended, 25 is Section 6, which
states:
Sec. 6. Redemption. In all cases in which an extrajudicial

sale is made under the special power herein before referred
to, the debtor, his successors in interest or any person having
a lien on the property subsequent to the mortgage or deed of
trust under which the property is sold, may redeem the
same at any time within the term of one year from and after
the date of the sale; and such redemption shall be governed by
the provisions of section four hundred and sixty-four to four
hundred and sixty-six, inclusive, of the Code of Civil Procedure, in
so far as these are not inconsistent with the provisions of this Act.
(Italics ours)
Despite the evolutionary development of our procedural laws throughout the

years, the pertinent rule in the Code of Civil Procedure 26 remains practically
unchanged. Particularly, Rule 39, Section 33, second paragraph, which relates to
the right of possession of a purchaser of property in an extrajudicial foreclosure
sale:
Sec. 33. . . .
Upon the expiration of the right of redemption, the

purchaser or redemptioner shall be substituted to and
acquire all the rights, title, interest and claim of the judgment
obligor to the property at the time of levy. The possession of
the property shall be given to the purchaser or last redemptioner by
the same officer unless a third party is actually holding the
property adversely to the judgment obligor. (Italics ours)
Thus, in Barican v. Intermediate Appellate Court, 27 we held that the obligation of a

court to issue an ex-parte writ of possession in favor of the purchaser in an
extrajudicial foreclosure sale ceases to be ministerial once it appears that there is
a third party in possession of the property who is claiming a right adverse to that
of the debtor/mortgagor. The same principle was inversely applied in a more
recent case, 28 where we ruled that a writ of possession may be issued in an
extrajudicial foreclosure of real estate mortgage, only if the debtor is in
possession and no third party had intervened. Although the factual nuances of
this case may slightly differ from the aforecited cases, the availing circumstances
are undeniably similar a party in possession of the foreclosed property is
asserting a right adverse to the debtor/mortgagor and is a stranger to the
foreclosure proceedings in which the ex-parte writ of possession was applied for.
It should be stressed that the foregoing doctrinal pronouncements are not

without support in substantive law. Notably, the Civil Code protects the actual
possessor of a property, to wit:
Art. 433. Actual possession under claim of ownership raises

a disputable presumption of ownership. The true owner
must resort to judicial process for the recovery of the
property.
Under the aforequoted provision, one who claims to be the owner of a property
possessed by another must bring the appropriate judicial action for its physical
recovery. The term "judicial process" could mean no less than an ejectment suit
or reivindicatory action, in which the ownership claims of the contending parties
may be properly heard and adjudicated.
An ex-parte petition for issuance of a possessory writ under Section 7 of Act No.
3135 is not, strictly speaking, a "judicial process" as contemplated above. Even if
the same may be considered a judicial proceeding for the enforcement of one's
right of possession as purchaser in a foreclosure sale, it is not an ordinary suit
filed in court, by which one party "sues another for the enforcement or protection
of a right, or the prevention or redress of a wrong." 29
It should be emphasized that an ex-parte petition for issuance of a writ of

possession is a non-litigious proceeding authorized in an extrajudicial
foreclosure of mortgage pursuant to Act 3135, as amended. Unlike a judicial
foreclosure of real estate mortgage under Rule 68 of the Rules of Court, any
property brought within the ambit of the act is foreclosed by the filing of a
petition, not with any court of justice, but with the office of the sheriff of the
province where the sale is to be made. 30
As such, a third person in possession of an extrajudicially foreclosed realty, who

claims a right superior to that of the original mortgagor, will have no
opportunity to be heard on his claim in a proceeding of this nature. It stands to
reason, therefore, that such third person may not be dispossessed on the strength
of a mere ex-parte possessory writ, since to do so would be tantamount to his
summary ejectment, in violation of the basic tenets of due process.
Besides, as earlier stressed, Article 433 of the Civil Code, cited above, requires
nothing less than an action for ejectment to be brought even by the true owner.
After all, the actual possessor of a property enjoys a legal presumption of just
title in his favor, 31 which must be overcome by the party claiming otherwise.
In the case at bar, petitioner PNB admitted that as early as 1990, it was aware that
the subject lot was occupied by the Austrias. Yet, instead of bringing an action in
court for the ejectment of respondents, it chose to simply file an ex-parte petition
for a writ of possession pursuant to its alleged right as purchaser in the
extrajudicial foreclosure sale. We cannot sanction this procedural shortcut. To
enforce the writ against an unwitting third party possessor, who took no part in
the foreclosure proceedings, would be tantamount to the taking of real property
without the benefit of proper judicial intervention.
Consequently, it was not a ministerial duty of the trial court under Act No. 3135
to issue a writ of possession for the ouster of respondents from the lot subject of
this instant case. The trial court was without authority to grant the ex-parte writ,
since petitioner PNB's right of possession under said Act could be rightfully
recognized only against the Monsods and the latter's successors-in-interest, but
not against respondents who assert a right adverse to the Monsods. Hence, the
trial court cannot be precluded from correcting itself by refusing to enforce the
writs it had previously issued. Its lack of authority to direct issuance of the writs
against respondents assured that its earlier orders would never attain finality in
the first place.
In the same vein, respondents are not obliged to prove their ownership of the
foreclosed lot in the ex-parte proceedings conducted below. The trial court has no
jurisdiction to determine who between the parties is entitled to ownership and
possession of the foreclosed lot.
Likewise, registration of the lot in petitioner PNB's name does not automatically
entitle the latter to possession thereof. As discussed earlier, petitioner PNB must
resort to the appropriate judicial process for recovery of the property and cannot
simply invoke its title in an ex-parte proceeding to justify the ouster of
respondents.
WHEREFORE, the instant petition is DENIED and the resolution of the Court of
Appeals in CA G.R. SP No. 48660 is AFFIRMED.
SO ORDERED.
||| (PNB v. Court of Appeals, G.R. No. 135219, January 17, 2002)
THIRD DIVISION
[G.R. No. 171827. September 17, 2008.]
TERESITA MONZON, petitioner, vs. SPS. JAMES &

MARIA ROSA NIEVES RELOVA and SPS. BIENVENIDO
& EUFRACIA PEREZ, respondents.
ADDIO PROPERTIES, INC., intervenor.
DECISION
CHICO-NAZARIO, J p:
This is a Petition for Review on Certiorari assailing the Decision 1 of the Court of
Appeals dated 27 September 2005 and its Resolution dated 7 March 2006 in CA-
G.R. CV No. 83507 affirming the Decision of the Regional Trial Court (RTC) of
Tagaytay City, Branch 18.
The factual and procedural antecedents of this case are as follows:
On 18 October 2000, the spouses James and Maria Rosa Nieves Relova and the
spouses Bienvenido and Eufracia Perez, respondents before this Court, filed
against Atty. Ana Liza Luna, Clerk of Court of Branch 18 of the RTC of Tagaytay
City, and herein petitioner Teresita Monzon an initiatory pleading captioned as a
Petition for Injunction. The case, which was filed before the same Branch 18 of
the RTC of Tagaytay City, was docketed as Civil Case No. TG-2069. STADIH
In their Petition for Injunction, respondents alleged that on 28 December 1998,

Monzon executed a promissory note in favor of the spouses Perez for the amount
of P600,000.00, with interest of five percent per month, payable on or before 28
December 1999. This was secured by a 300-square meter lot in Barangay
Kaybagal, Tagaytay City. Denominated as Lot No. 2A, this lot is a portion of Psu-
232001, covered by Tax Declaration No. 98-008-1793. On 31 December 1998,
Monzon executed a Deed of Absolute Sale over the said parcel of land in favor of
the spouses Perez.
Respondents also claim in their Petition for Injunction that on 29 March 1999,
Monzon executed another promissory note, this time in favor of the spouses
Relova for the amount of P200,000.00 with interest of five percent per month
payable on or before 31 December 1999. This loan was secured by a 200 square
meter lot, denominated as Lot No. 2B, another portion of the aforementioned
Psu-232001 covered by Tax Declaration No. 98-008-1793. On 27 December 1999,
Monzon executed a Deed of Conditional Sale over said parcel of land in favor of
the spouses Relova. EITcaD
On 23 October 1999, the Coastal Lending Corporation extrajudicially foreclosed

the entire 9,967-square meter property covered by Psu-232001, including the
portions mortgaged and subsequently sold to respondents. According to the
Petition for Injunction, Monzon was indebted to the Coastal Lending
Corporation in the total amount of P3,398,832.35. The winning bidder in the
extrajudicial foreclosure, Addio Properties Inc., paid the amount of P5,001,127.00,
thus leaving a P1,602,393.65 residue. According to respondents, this residue
amount, which is in the custody of Atty. Luna as Branch Clerk of Court, should
be turned over to them pursuant to Section 4, Rule 68 of the Revised Rules of
Civil Procedure. Thus, respondents pray in their Petition for Injunction for a
judgment (1) finding Monzon liable to the spouses Perez in the amount of
P1,215,000.00 and to the spouses Relova in the amount of P385,000.00; (2)
ordering Atty. Luna to deliver said amounts to respondents; and (3) restraining
Atty. Luna from delivering any amount to Monzon pending such delivery in
number (2).
Monzon, in her Answer, claimed that the Petition for Injunction should be
dismissed for failure to state a cause of action.
Monzon likewise claimed that respondents could no longer ask for the
enforcement of the two promissory notes because she had already performed her
obligation to them by dacion en pago as evidenced by the Deed of Conditional Sale
and the Deed of Absolute Sale. She claimed that petitioners could still claim the
portions sold to them if they would only file the proper civil cases. As regards
the fund in the custody of Atty. Luna, respondents cannot acquire the same
without a writ of preliminary attachment or a writ of garnishment in accordance
with the provisions of Rule 57 and Section 9 (c), Rule 39 of the Revised Rules of
Civil Procedure.
On 5 December 2001, the RTC, citing the absence of petitioner and her counsel on
said hearing date despite due notice, granted an oral Motion by the respondents
by issuing an Order allowing the ex parte presentation of evidence by
respondents. 2 aTICAc
On 1 April 2002, the RTC rendered a Decision in favor of respondents. The

pertinent portions of the Decision are as follows:
That [petitioner] Teresita Monzon owes [herein respondents]

certain sums of money is indisputable. Even [Monzon] have
admitted to this in her Answer. [Respondents] therefore are
given every right to get back and collect whatever amount
they gave [Monzon] together with the stipulated rate of
interest.
Likewise, it has been established that [petitioner] Teresita

Monzon has the amount of P1,602,393.65 in the possession of
the Clerk of Court, Atty. Ana Liza M. Luna. This amount, as
is heretofore stated, represented the balance of the
foreclosure sale of [Monzon's] properties.
By way of this petition, [respondents] would want to get

said amount so that the same can be applied as full payment
of [petitioner's] obligation. That the amount should be
divided between the [respondents] in the amount they have
agreed between themselves; [respondent] spouses Relova to
receive the amount of P400,000.00, while the spouses Perez
shall get the rest. cSEAHa
WHEREFORE, judgment is hereby rendered ordering the . . .

Clerk of Court, Atty. Ana Liza M. Luna, to deliver unto
[herein respondents] the amount of P1,602,393.65 plus
whatever interest she may received if and when the said
amount has been deposited in any banking institution. 3
The Decision also mentioned that the Order allowing the ex parte presentation of
evidence by respondents was due to the continuous and incessant absences of
petitioner and counsel. 4
On 25 April 2002, Monzon filed a Notice of Appeal, which was approved by the
trial court. Monzon claims that the RTC gravely erred in rendering its Decision
immediately after respondents presented their evidence ex parte without giving
her a chance to present her evidence, thereby violating her right to due process of
law.
On 14 June 2002, Addio Properties, Inc. filed before the trial court a Motion for
Intervention, which was granted by the same court on 12 July 2002.
On 27 September 2005, the Court of Appeals rendered the assailed Decision

dismissing the appeal. According to the Court of Appeals, Monzon showed tepid
interest in having the case resolved with dispatch. She, thus, cannot now
complain that she was denied due process when she was given ample
opportunity to defend and assert her interests in the case. The Court of Appeals
reminded Monzon that the essence of due process is reasonable opportunity to
be heard and submit evidence in support of one's defense. What the law
proscribes is lack of opportunity to be heard. Monzon's Motion for
Reconsideration was denied in a Resolution dated 7 March 2006.
On 27 March 2006, Monzon filed the instant Petition for Review on Certiorari
under Rule 45 of the Rules of Court.
Monzon claims anew that it was a violation of her right to due process of law for
the RTC to render its Decision immediately after respondents presented their
evidence ex parte without giving her a chance to present her evidence. Monzon
stresses that she was never declared in default by the trial court. The trial court
should have, thus, set the case for hearing for the reception of the evidence of the
defense. She claims that she never waived her right to present evidence.
Monzon argues that had she been given the opportunity to present her evidence,
she would have proven that (1) respondents' Exhibit A (mortgage of land to the
spouses Relova) had been novated by respondent's Exhibit B (sale of the
mortgage land to the spouses Relova); (2) respondents' Exhibit C (mortgage of
land to the spouses Perez) had been novated by respondent's Exhibit B (sale of
the mortgage land to the spouses Perez); and (3) having executed Exhibits "B"
and "D", Monzon no longer had any obligation towards respondents. TaDCEc
The Order by the trial court which allowed respondents to present their evidence
ex parte states:
In view of the absence of [Monzon] as well as her counsel

despite due notice, as prayed for by counsel for by
[respondents herein], let the reception of [respondent's]
evidence in this case be held ex-parte before a commissioner
who is the clerk of court of this Court, with orders upon her
to submit her report immediately upon completion thereof. 5
It can be seen that despite the fact that Monzon was not declared in default by
the RTC, the RTC nevertheless applied the effects of a default order upon
petitioner under Section 3, Rule 9 of the Rules of Court:
SEC. 3. Default; declaration of. If the defending party fails

to answer within the time allowed therefor, the court shall,
upon motion of the claiming party with notice to the
defending party, and proof of such failure, declare the
defending party in default. Thereupon, the court shall
proceed to render judgment granting the claimant such
relief as his pleading may warrant, unless the court in its
discretion requires the claimant to submit evidence. Such
reception of evidence may be delegated to the clerk of
court.
(a) Effect of order of default. A party in default shall be

entitled to notice of subsequent proceedings but not to
take part in the trial.
In his book on remedial law, former Justice Florenz D. Regalado writes that
failure to appear in hearings is not a ground for the declaration of a defendant in
default:
Failure to file a responsive pleading within the reglementary
period, and not failure to appear at the hearing, is the sole
ground for an order of default (Rosario, et al. vs. Alonzo, et al.,
L-17320, June 29, 1963), except the failure to appear at a pre-
trial conference wherein the effects of a default on the part
of the defendant are followed, that is, the plaintiff shall be
allowed to present evidence ex parte and a judgment based
thereon may be rendered against the defendant (Section 5,
Rule 18). 6 Also, a default judgment may be rendered, even
if the defendant had filed his answer, under the
circumstance in Sec. 3(c), Rule 29. 7
Hence, according to Justice Regalado, the effects of default are followed only in
three instances: (1) when there is an actual default for failure to file a responsive
pleading; (2) failure to appear in the pre-trial conference; and (3) refusal to
comply with modes of discovery under the circumstance in Sec. 3 (c), Rule 29.
THEDcS
In Philippine National Bank v. De Leon, 8 we held:
We have in the past admonished trial judges against issuing

precipitate orders of default as these have the effect of
denying a litigant the chance to be heard, and increase the
burden of needless litigations in the appellate courts where
time is needed for more important or complicated cases.
While there are instances when a party may be properly
defaulted, these should be the exception rather than the
rule, and should be allowed only in clear cases of obstinate
refusal or inordinate neglect to comply with the orders of
the court (Leyte vs. Cusi, Jr., 152 SCRA 496; Tropical Homes,
Inc. vs. Hon. Villaluz, et al., G.R. No. L-40628, February 24,
1989).
It is even worse when the court issues an order not denominated as an order of
default, but provides for the application of effects of default. Such amounts to the
circumvention of the rigid requirements of a default order, to wit: (1) the court
must have validly acquired jurisdiction over the person of the defendant either
by service of summons or voluntary appearance; (2) the defendant failed to file
his answer within the time allowed therefor; and (3) there must be a motion to
declare the defendant in default with notice to the latter. 9 In the case at bar,
petitioner had not failed to file her answer. Neither was notice sent to petitioner
that she would be defaulted, or that the effects of default shall be imposed upon
her. "Mere non-appearance of defendants at an ordinary hearing and to adduce
evidence does not constitute default, when they have already filed their answer
to the complaint within the reglementary period. It is error to default a defendant
after the answer had already been filed. It should be borne in mind that the
policy of the law is to have every litigant's case tried on the merits as much as
possible; it is for this reason that judgments by default are frowned upon". 10
Does this mean that defendants can get away with failing to attend hearings
despite due notice? No, it will not. We agree with petitioner that such failure to
attend, when committed during hearing dates for the presentation of the
complainant's evidence, would amount to the waiver of such defendant's right to
object to the evidence presented during such hearing, and to cross-examine the
witnesses presented therein. However, it would not amount to a waiver of the
defendant's right to present evidence during the trial dates scheduled for the
reception of evidence for the defense. It would be an entirely different issue if the
failure to attend of the defendant was on a hearing date set for the presentation
of the evidence of the defense, but such did not occur in the case at bar. IcHTED
In view of the foregoing, we are, therefore, inclined to remand the case to the
trial court for reception of evidence for the defense. Before we do so, however,
we need to point out that the trial court had committed another error which we
should address to put the remand in its proper perspective. We refer to
Monzon's argument as early as the Answer stage that respondents' Petition for
Injunction had failed to state a cause of action.
Section 4, Rule 68 of the Rules of Court, which is the basis of respondent's alleged
cause of action entitling them to the residue of the amount paid in the foreclosure
sale, provides as follows:
SEC. 4. Disposition of proceeds of sale. The amount realized

from the foreclosure sale of the mortgaged property shall,
after deducting the costs of the sale, be paid to the person
foreclosing the mortgage, and when there shall be any
balance or residue, after paying off the mortgage debt due,
the same shall be paid to junior encumbrancers in the
order of their priority, to be ascertained by the court, or if
there be no such encumbrancers or there be a balance or
residue after payment to them, then to the mortgagor or his
duly authorized agent, or to the person entitled to it.
However, Rule 68 governs the judicial foreclosure of mortgages. Extra-judicial

foreclosure of mortgages, which was what transpired in the case at bar, is
governed by Act No. 3135, 11 as amended by Act No. 4118, 12 Section 6 of
Republic Act No. 7353, Section 18 of Republic Act No. 7906, and Section 47 of
Republic Act No. 8791. A.M. No. 99-10-05-0, issued on 14 December 1999,
provides for the procedure to be observed in the conduct of an extrajudicial
foreclosure sale. Thus, we clarified the different types of sales in Supena v. dela
Rosa, 13 to wit:
Any judge, worthy of the robe he dons, or any lawyer, for

that matter, worth his salt, ought to know that different laws
apply to different kinds of sales under our jurisdiction. We
have three different types of sales, namely: an ordinary
execution sale, a judicial foreclosure sale, and an
extrajudicial foreclosure sale. An ordinary execution sale is
governed by the pertinent provisions of Rule 39 of the Rules
of Court on Execution, Satisfaction and Effect of Judgments.
Rule 68 of the Rules, captioned Foreclosure of Mortgage,
governs judicial foreclosure sales. On the other hand, Act
No. 3135, as amended by Act No. 4118, otherwise known as
"An Act to Regulate the Sale of Property under Special
Powers Inserted in or Annexed to Real Estate Mortgages",
applies in cases of extrajudicial foreclosure sales of real
estate mortgages. aTIAES
Unlike Rule 68, which governs judicial foreclosure sales, neither Act No. 3135 as
amended, nor A.M. No. 99-10-05-0 grants to junior encumbrancers the right to
receive the balance of the purchase price. The only right given to second
mortgagees in said issuances is the right to redeem the foreclosed property
pursuant to Section 6 of Act No. 3135, as amended by Act No. 4118, which
provides:
Sec. 6. Redemption. In all cases in which an extrajudicial

sale is made under the special power hereinbefore referred
to, the debtor, his successors in interest or any judicial
creditor or judgment creditor of said debtor, or any person
having a lien on the property subsequent to the mortgage
or deed of trust under which the property is sold, may
redeem the same at any time within the term of one year
from and after the date of the sale; and such redemption
shall be governed by the provisions of sections four hundred
and sixty-four to four hundred and sixty-six, 14 inclusive, of
the Code of Civil Procedure, in so far as these are not
inconsistent with this Act.
Even if, for the sake of argument, Rule 68 is to be applied to extrajudicial

foreclosure of mortgages, such right can only be given to second mortgagees
who are made parties to the (judicial) foreclosure. While a second mortgagee is a
proper and in a sense even a necessary party to a proceeding to foreclose a first
mortgage on real property, he is not an indispensable party, because a valid
decree may be made, as between the mortgagor and the first mortgagee, without
regard to the second mortgage; but the consequence of a failure to make the
second mortgagee a party to the proceeding is that the lien of the second
mortgagee on the equity of redemption is not affected by the decree of
foreclosure. 15
A cause of action is the act or omission by which a party violates the right of
another. 16 A cause of action exists if the following elements are present: (1) a
right in favor of the plaintiff by whatever means and under whatever law it
arises or is created; (2) an obligation on the part of the named defendant to
respect or not to violate such right; and (3) an act or omission on the part of such
defendant violative of the right of plaintiff or constituting a breach of the
obligation of defendant to the plaintiff for which the latter may maintain an
action for recovery of damages. 17 In view of the foregoing discussions, we find
that respondents do not have a cause of action against Atty. Ana Liza Luna for
the delivery of the subject amounts on the basis of Section 4, Rule 68 of the Rules
of Court, for the reason that the foregoing Rule does not apply to extrajudicial
foreclosure of mortgages. aSTAIH
In Katon v. Palanca, Jr., 18 we held that where prescription, lack of jurisdiction or

failure to state a cause of action clearly appears from the complaint filed with the
trial court, the action may be dismissed motu proprio, even if the case has been
elevated for review on different grounds. However, while the case should indeed
be dismissed insofar as Atty. Luna is concerned, the same is not necessarily true
with respect to Monzon. Other than respondents' prayer that the amount due to
respondents be delivered by Atty. Luna to them, they also pray for a judgment
declaring Monzon liable for such amounts. Said prayer, as argued by Monzon
herself, may constitute a cause of action for collection of sum of money against
Monzon.
The rule is now settled that a mortgage creditor may elect to waive his security
and bring, instead, an ordinary action to recover the indebtedness with the right
to execute a judgment thereon on all the properties of the debtor including the
subject matter of the mortgage, subject to the qualification that if he fails in the
remedy elected by him, he cannot pursue further the remedy he has waived. 19
However, due to the fact that construing respondents' Petition for Injunction to
be one for a collection of sum of money would entail a waiver by the respondents
of the mortgage executed over the subject properties, we should proceed with
caution before making such construction. We, therefore, resolve that upon the
remand of this case to the trial court, respondents should be ordered to manifest
whether the Petition for Injunction should be treated as a complaint for the
collection of a sum of money.
If respondents answer in the affirmative, then the case shall proceed with the
presentation of the evidence for the defense. If Monzon would be successful in
proving her defense of dacion en pago, there would, in effect, be a double sale of
the mortgaged properties: the same properties were sold to both respondents
and to herein intervenor Addio Properties, Inc. If, pursuant to the rules on
double sales, respondents are entitled to the properties, their remedy is to file the
proper action to recover possession. If, pursuant to said rules, Addio Properties,
Inc. is entitled to the properties, respondents' remedy is to file an action for
damages against Monzon.
If respondents answer in the negative, the case shall be dismissed, without

prejudice to the exercise of respondents' rights as mortgage creditors. If
respondents' mortgage contract was executed before the execution of the
mortgage contract with Addio Properties, Inc., respondents would be the first
mortgagors. Pursuant to Article 2126 20 of the Civil Code, they would be entitled
to foreclose the property as against any subsequent possessor thereof. If
respondents' mortgage contract was executed after the execution of the mortgage
contract with Addio Properties, Inc., respondents would be the second
mortgagors. As such, they are entitled to a right of redemption pursuant to
Section 6 of Act No. 3135, as amended by Act No. 4118.
WHEREFORE, the Decision of the Court of Appeals dated 27 September 2005

and its Resolution dated 7 March 2006 are REVERSED and SET ASIDE. The
Petition for Injunction in Civil Case No. TG-2069 is hereby ordered DISMISSED
insofar as Atty. Ana Liza Luna is concerned. The Petition for Injunction in Civil
Case No. TG-2069, insofar as petitioner Teresita Monzon is concerned, is ordered
REMANDED to the Regional Trial Court of Tagaytay City for further
proceedings. Upon such remand, the Regional Trial Court of Tagaytay City shall
issue an Order to respondents, the spouses James and Maria Rosa Nieves Relova
and the spouses Bienvenido and Eufracia Perez, to manifest whether the Petition
for Injunction should be treated as a complaint for the collection of a sum of
money. TSIEAD
If respondents answer in the affirmative, the Regional Trial Court shall set the
case for hearing for the presentation of the evidence for the defense. If
respondents answer in the negative, the case shall be dismissed, without
prejudice to the exercise of respondents' rights as mortgage creditors. No costs.
SO
||| (Monzon v. Spouses Relova, G.R. No. 171827, September 17, 2008)
THIRD DIVISION
[G.R. No. 192383. December 4, 2013.]
ISABELO C. DELA CRUZ, petitioner, vs. LUCILA C. DELA

CRUZ, respondent.
DECISION
ABAD, J p:
This case deals with the right of a person to whom an immovable property has
been unconditionally given to demand its partition.
The Facts and the Case

Petitioner Isabelo C. Dela Cruz (Isabelo) claimed that in 1975 he and his sisters,
respondent Lucila C. Dela Cruz (Lucila) and Cornelia C. Dela Cruz (Cornelia),
bought on installment a 240-square meter land in Las Pias from Gatchalian
Realty, Inc. Isabelo and Cornelia paid the down payment and religiously paid the
monthly amortizations. 1 On the following year, Isabelo constructed a residential
house on the subject lot. 2
Because of Lucila's plea for the siblings to help their cousin, Corazon L.
Victoriano (Corazon), who was in financial distress, Isabelo agreed to have the
lot they bought used as collateral for the loan that Corazon planned to secure
from the Philippine Veterans Bank. To make this possible, Lucila paid the
P8,000.00 that they still owed Gatchalian Realty, Inc. On January 18, 1979 the
Register of Deeds issued Transfer Certificate of Title (TCT) S-80735 in Lucila's
name 3 and this was mortgaged for Corazon's benefit.
But, since Corazon failed to pay her loan, the bank foreclosed on the property on
March 1, 1989 for P286,000.00. Lucila redeemed it on March 27, 1992. 4 ACcEHI
On October 7, 2002 Lucila executed an affidavit of waiver 5 relinquishing all her

share, interest, and participation to half of the lot to Isabelo and the other half to
her niece, Emelinda C. Dela Cruz (Emelinda). On even date, Isabelo and
Emelinda executed a Kasunduan 6 acknowledging their respective rights in the
property.
Claiming ownership of half of the subject property by virtue of Lucila's affidavit

of waiver, on August 22, 2005 Isabelo filed an action for partition before the
Regional Trial Court (RTC) of Las Pias City in SCA 05-0008, seeking the
segregation of his portion of the land and the issuance of the corresponding title
in his name.
But Lucila countered that the property, including the house built on it, belonged
to her since she paid for the same out of her income as pawnshop general
manager and from selling jewelry. 7 She claimed that her affidavit of waiver did
not cede ownership of half of the property to Isabelo since the affidavit made
clear that her waiver would take effect only if the problems that beset their
family were resolved. Since this condition had not been met, she had every right
to revoke that waiver as in fact she did so on September 24, 2004 in the Kasulatan
ng Pagpawalang Bisa ng "Affidavit Waiver." 8
On February 7, 2008 the RTC rendered a Decision 9 denying Isabelo's complaint

for lack of merit. It also ordered him to pay Lucila P50,000.00 as attorney's fees
and to bear the costs of suit. 10 The RTC ruled that Lucila's ownership was
evidenced by the tax declaration, the real property tax payment order, and the
title to the land in her name. Isabelo's testimony on cross-examination
conclusively also showed that Lucila owned the property. 11 Isabelo's contention
that it was he and Cornelia who paid for the monthly amortization of the
property cannot be believed since Cornelia herself testified that Lucila paid for
all the amortizations on the land. 12 AaIDCS
Further, the RTC held that Lucila's affidavit of waiver did not confer title over
the property on Isabelo considering that, absent an annotation on TCT S-80735,
the waiver cannot ripen into an adverse claim. More importantly, Lucila already
cancelled the waiver through the Kasulatan that she subsequently executed. 13
The RTC was also unconvinced that the house belonged to Isabelo. It noted that
the receipts for the construction materials and survey plan that he presented did
not prove ownership. Recovery of property, not partition was the proper
remedy.
Isabelo appealed to the Court of Appeals (CA) in CA-G.R. CV 90797. On

December 18, 2009 the latter court rendered a Decision 14 affirming the RTC
ruling that Isabelo failed to established his right to half of the subject property as
would entitle him to have the same partitioned. But the CA deleted the award of
attorney's fees and costs for failure of Lucila to justify her claims and for the
RTC's failure to state in its decision the rationale for the awards. Isabelo moved
for reconsideration but the CA denied it. 15
Issue Presented
The sole issue presented in this case is whether or not the CA erred in failing to
rule that Lucila's cession of half of the property to Isabelo through waiver did not
have the effect of making him part owner of the property with a right to demand
partition. CSIHDA
Ruling of the Court

In partition, the court must first determine the existence of co-ownership. The
action will not lie if the plaintiff has no proprietary interest in the subject
property. Indeed, the rules 16 require him to set forth in his complaint the nature
and extent of his title to the property. It would be premature to order partition
until the question of ownership is first definitely resolved. 17
At bottom, the question is: did Lucila's affidavit of waiver ceding to Isabelo half
of the subject property conveys to him a right of ownership over that half? The
CA agreed with the RTC that Lucila's affidavit of waiver did not vest any
property right to Isabelo since the condition she set in that affidavit had not been
fulfilled. This then gave Lucila the right in the meantime to rescind the waiver,
something that she eventually did.
But, contrary to the position that the CA and the RTC had taken, Lucila's waiver
was absolute and contained no precondition. The pertinent portion of the
affidavit of waiver reads:
That to put everything in proper order, I hereby waive all

my share, interest and participation in so far as it refer to the
one half portion (120 SQ. M.) of the above-parcel of land,
with and in favor of my brother ISABELO C. DELA CRUZ,
of legal age, married, Filipino and residing at Las Pias City,
and the other half portion (120 SQ. M.) in favor of my niece,
EMELINDA C. DELA CRUZ, also of legal age, single,
Filipino and residing at Sto. Rosario Hagonoy, Bulacan;
xxx xxx xxx 18
Evidently, Lucila would not have used the terms "to put everything in proper
order, I hereby waive. . ." if her intent was to set a precondition to her waiver
covering the property, half to Isabelo and half to Emelinda. If that were her
intention, she could have stated, "subject to the condition that everything is put
in proper order, I hereby waive. . ." or something to that effect.
When she instead said, "That to put everything in proper order, I hereby waive
my share, interest and participation" in the two halves of the subject property in
favor of Isabelo and Emelinda, Lucila merely disclosed what motivated her in
ceding the property to them. She wanted to put everything in proper order, thus
she was driven to make the waiver in their favor. SIEHcA
Lucila did not say, "to put everything in proper order, I promise to waive my
right" to the property, which is a future undertaking, one that is demandable
only when everything is put in proper order. But she instead said, "to put
everything in proper order, I hereby waive" etc. The phrase "hereby waive"
means that Lucila was, by executing the affidavit, already waiving her right to
the property, irreversibly divesting herself of her existing right to the same. After
he and his co-owner Emelinda accepted the donation, Isabelo became the owner
of half of the subject property having the right to demand its partition.
WHEREFORE, the Court:
1. GRANTS the petition;
2. SETS ASIDE the Decision dated December 18, 2009 and Resolution dated May
25, 2010 of the Court of Appeals in CA-G.R. CV 90797 as well as the Decision
dated February 7, 2008 of the Regional Trial Court of Las Pias in SCA 05-0008;
3. ORDERS the partition of the subject property between petitioner Isabelo C.

Dela Cruz and Emelinda C. Dela Cruz;
4. ORDERS the remand of the records of SCA 05-0008 to the Regional Trial
Court of Las Pias; and
5. DIRECTS the latter court to proceed with the partition proceedings in the case
in accordance with Section 2, Rule 69 of the Rules of Civil Procedure. HcDaAI
SO ORDERED.
||| (Dela Cruz v. Dela Cruz, G.R. No. 192383, December 04, 2013)
THIRD DIVISION
[G.R. No. 210252. June 16, 2014.]
VILMA QUINTOS, represented by her Attorney-in-Fact

FIDEL I. QUINTOS, JR.; FLORENCIA I. DANCEL,
represented by her Attorney-in-Fact FLOVY I. DANCEL;
and CATALINO L. IBARRA, petitioners, vs. PELAGIA I.
NICOLAS, NOLI L. IBARRA, SANTIAGO L. IBARRA,
PEDRO L. IBARRA, DAVID L. IBARRA, GILBERTO L.
IBARRA, HEIRS OF AUGUSTO L. IBARRA, namely
CONCHITA R. IBARRA, APOLONIO IBARRA, and
NARCISO IBARRA, and the spouses RECTO
CANDELARIO and ROSEMARIE CANDELARIO,
respondents.
DECISION
VELASCO, JR., J p:
The Case
Before the Court is a Petition for Review on Certiorari filed under Rule 45
challenging the Decision 1 and Resolution 2 of the Court of Appeals (CA) in CA-
G.R. CV No. 98919 dated July 8, 2013 and November 22, 2013, respectively. The
challenged rulings affirmed the May 7, 2012 Decision 3 of the Regional Trial
Court (RTC), Branch 68 in Camiling, Tarlac that petitioners and respondents are
co-owners of the subject property, which should be partitioned as per the
subdivision plan submitted by respondent spouses Recto and Rosemarie
Candelario.
The Facts
As culled from the records, the facts of the case are as follows:
Petitioners Vilma Quintos, Florencia Dancel, and Catalino Ibarra, and

respondents Pelagia Nicolas, Noli Ibarra, Santiago Ibarra, Pedro Ibarra, David
Ibarra, Gilberto Ibarra, and the late Augusto Ibarra are siblings. Their parents,
Bienvenido and Escolastica Ibarra, were the owners of the subject property, a 281
sq.m. parcel of land situated along Quezon Ave., Poblacion C, Camiling, Tarlac,
covered by Transfer Certificate Title (TCT) No. 318717.
By 1999, both Bienvenido and Escolastica had already passed away, leaving to
their ten (10) children ownership over the subject property. Subsequently,
sometime in 2002, respondent siblings brought an action for partition against
petitioners. The case was docketed as Civil Case No. 02-52 and was raffled to the
RTC, Branch 68, Camiling, Tarlac. However, in an Order 4 dated March 22, 2004,
the trial court dismissed the case disposing as follows:
For failure of the parties, as well as their counsels, to appear

despite due notice, this case is hereby DISMISSED.
SO ORDERED.
As neither set of parties appealed, the ruling of the trial court became final, as
evidenced by a Certificate of Finality 5 it eventually issued on August 22, 2008.
Having failed to secure a favorable decision for partition, respondent siblings

instead resorted to executing a Deed of Adjudication 6 on September 21, 2004 to
transfer the property in favor of the ten (10) siblings. As a result, TCT No. 318717
was canceled and in lieu thereof, TCT No. 390484 was issued in its place by the
Registry of Deeds of Tarlac in the names of the ten (10) heirs of the Ibarra
spouses. ScCDET
Subsequently, respondent siblings sold their 7/10 undivided share over the
property in favor of their co-respondents, the spouses Recto and Rosemarie
Candelario. By virtue of a Deed of Absolute Sale 7 dated April 17, 2007 executed
in favor of the spouses Candelario and an Agreement of Subdivision 8
purportedly executed by them and petitioners, TCT No. 390484 was partially
canceled and TCT No. 434304 was issued in the name of the Candelarios,
covering the 7/10 portion.
On June 1, 2009, petitioners filed a complaint for Quieting of Title and Damages
against respondents wherein they alleged that during their parents' lifetime, the
couple distributed their real and personal properties in favor of their ten (10)
children. Upon distribution, petitioners alleged that they received the subject
property and the house constructed thereon as their share. They likewise averred
that they have been in adverse, open, continuous, and uninterrupted possession
of the property for over four (4) decades and are, thus, entitled to equitable title
thereto. They also deny any participation in the execution of the aforementioned
Deed of Adjudication dated September 21, 2004 and the Agreement of
Subdivision.
Respondents countered that petitioners' cause of action was already barred by

estoppel when sometime in 2006, one of petitioners offered to buy the 7/10
undivided share of the respondent siblings. They point out that this is an
admission on the part of petitioners that the property is not entirely theirs. In
addition, they claimed that Bienvenido and Escolastica Ibarra mortgaged the
property but because of financial constraints, respondent spouses Candelario
had to redeem the property in their behalf. Not having been repaid by
Bienvenido and Escolastica, the Candelarios accepted from their co-respondents
their share in the subject property as payment. Lastly, respondents sought, by
way of counterclaim, the partition of the property.
Docketed as Civil Case No. 09-15 of the RTC of Camiling, Tarlac, the quieting of
title case was eventually raffled to Branch 68 of the court, the same trial court
that dismissed Civil Case No. 02-52. During pre-trial, respondents, or defendants
a quo, admitted having filed an action for partition, that petitioners did not
participate in the Deed of Adjudication that served as the basis for the issuance
of TCT No. 390484, and that the Agreement of Subdivision that led to the
issuance of TCT No. 434304 in favor of respondent spouses Candelario was
falsified. 9
Despite the admissions of respondents, however, the RTC, through its May 27,
2012 Decision, dismissed petitioners' complaint. The court did not find merit in
petitioners' asseverations that they have acquired title over the property through
acquisitive prescription and noted that there was no document evidencing that
their parents bequeathed to them the subject property. Finding that respondent
siblings were entitled to their respective shares in the property as descendants of
Bienvenido and Escolastica Ibarra and as co-heirs of petitioners, the subsequent
transfer of their interest in favor of respondent spouses Candelario was then
upheld by the trial court. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the above-entitled case

is hereby Dismissed.
Also, defendants-spouses Rosemarie Candelario and Recto

Candelario are hereby declared as the absolute owners of the
7/10 portion of the subject lot.
Likewise, the court hereby orders the partition of the subject

lots between the herein plaintiffs and the defendants-
spouses Candelarios.
SO ORDERED. THaCAI
Aggrieved, petitioners appealed the trial court's Decision to the CA, pleading the
same allegations they averred in their underlying complaint for quieting of title.
However, they added that the partition should no longer be allowed since it is
already barred by res judicata, respondent siblings having already filed a case for
partition that was dismissed with finality, as admitted by respondents
themselves during pre-trial.
On July 8, 2013, the CA issued the assailed Decision denying the appeal. The fallo
reads:
WHEREFORE, premises considered, the Decision dated

May 7, 2012 of the Regional Trial Court of Camiling, Tarlac,
Branch 68, in Civil Case No. 09-15, is hereby AFFIRMED.
SO ORDERED.
Similar to the trial court, the court a quo found no evidence on record to support
petitioners' claim that the subject property was specifically bequeathed by
Bienvenido and Escolastica Ibarra in their favor as their share in their parents'
estate. It also did not consider petitioners' possession of the property as one that
is in the concept of an owner. Ultimately, the appellate court upheld the finding
that petitioners and respondent spouses Candelario co-own the property, 30-70
in favor of the respondent spouses.
As regards the issue of partition, the CA added:
. . . Since it was conceded that the subject lot is now co-

owned by the plaintiffs-appellants, (with 3/10 undivided
interest) and defendants-appellees Spouses Candelarios
(with 7/10 undivided interest) and considering that
plaintiffs-appellants had already constructed a 3-storey
building at the back portion of the property, then partition,
in accordance with the subdivision plan (records, p. 378)
undertaken by defendants-appellants [sic] spouses, is in
order. 10
On November 22, 2013, petitioners' Motion for Reconsideration was denied.

Hence, the instant petition.
Issues
In the present petition, the following errors were raised:
I. THE COURT OF APPEALS MANIFESTLY

OVERLOOKED RELEVANT AND UNDISPUTED FACTS
WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY
PETITIONERS' CLAIM OF EQUITABLE TITLE.
II. THE COURT OF APPEALS ERRED WHEN IT

AFFIRMED THE ORDER OF PARTITION DESPITE THE
FACT THAT THE COUNTERCLAIM FOR PARTITION,
BASED ON THE DEED OF ABSOLUTE SALE EXECUTED
IN 2007, IS BARRED BY LACHES.
III. THE COURT OF APPEALS RENDERED A

SUBSTANTIALLY FLAWED JUDGMENT WHEN IT
NEGLECTED TO RULE ON PETITIONERS' CONTENTION
THAT THE COUNTERCLAIM FOR PARTITION IS ALSO
BARRED BY PRIOR JUDGMENT, DESPITE ITS HAVING
BEEN SPECIFICALLY ASSIGNED AS ERROR AND
PROPERLY ARGUED IN THEIR BRIEF, AND WHICH, IF
PROPERLY CONSIDERED, WOULD JUSTIFY THE
DISMISSAL OF THE COUNTERCLAIM.
IV. THE COURT OF APPEALS ERRED WHEN IT

ORDERED PARTITION IN ACCORDANCE WITH THE
SUBDIVISION PLAN MENTIONED IN ITS DECISION, IN
CONTRAVENTION OF THE PROCEDURE ESTABLISHED
IN RULE 69 OF THE RULES OF CIVIL PROCEDURE. 11
To simplify, the pertinent issues in this case are as follows: ISCTcH
1. Whether or not the petitioners were able to prove ownership over the
property;
2. Whether or not the respondents' counterclaim for partition is already barred

by laches or res judicata; and
3. Whether or not the CA was correct in approving the subdivision agreement as
basis for the partition of the property.
The Court's Ruling

The petition is meritorious in part.
Petitioners were not able to prove equitable title or ownership over the
property
Quieting of title is a common law remedy for the removal of any cloud, doubt, or
uncertainty affecting title to real property. 12 For an action to quiet title to
prosper, two indispensable requisites must concur, namely: (1) the plaintiff or
complainant has a legal or equitable title to or interest in the real property subject
of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be
casting cloud on the title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or efficacy. 13 In the case at bar, the
CA correctly observed that petitioners' cause of action must necessarily fail
mainly in view of the absence of the first requisite.
At the outset, it must be emphasized that the determination of whether or not

petitioners sufficiently proved their claim of ownership or equitable title is
substantially a factual issue that is generally improper for Us to delve into.
Section 1, Rule 45 of the Rules of Court explicitly states that the petition for
review on certiorari "shall raise only questions of law, which must be distinctly
set forth." In appeals by certiorari, therefore, only questions of law may be raised,
because this Court is not a trier of facts and does not normally undertake the re-
examination of the evidence presented by the contending parties during the trial.
14 Although there are exceptions 15 to this general rule as eloquently enunciated
in jurisprudence, none of the circumstances calling for their application obtains
in the case at bar. Thus, We are constrained to respect and uphold the findings of
fact arrived at by both the RTC and the CA.
In any event, a perusal of the records would readily show that petitioners, as
aptly observed by the courts below, indeed, failed to substantiate their claim.
Their alleged open, continuous, exclusive, and uninterrupted possession of the
subject property is belied by the fact that respondent siblings, in 2005, entered
into a Contract of Lease with the Avico Lending Investor Co. over the subject lot
without any objection from the petitioners. 16 Petitioners' inability to offer
evidence tending to prove that Bienvenido and Escolastica Ibarra transferred the
ownership over the property in favor of petitioners is likewise fatal to the latter's
claim. On the contrary, on May 28, 1998, Escolastica Ibarra executed a Deed of
Sale covering half of the subject property in favor of all her 10 children, not in
favor of petitioners alone. 17
The cardinal rule is that bare allegation of title does not suffice. The burden of
proof is on the plaintiff to establish his or her case by preponderance of evidence.
18 Regrettably, petitioners, as such plaintiff, in this case failed to discharge the
said burden imposed upon them in proving legal or equitable title over the
parcel of land in issue. As such, there is no reason to disturb the finding of the
RTC that all 10 siblings inherited the subject property from Bienvenido and
Escolastica Ibarra, and after the respondent siblings sold their aliquot share to the
spouses Candelario, petitioners and respondent spouses became co-owners of
the same.
The counterclaim for partition is not barred by prior judgment

This brings us to the issue of partition as raised by respondents in their
counterclaim. In their answer to the counterclaim, petitioners countered that the
action for partition has already been barred by res judicata.
The doctrine of res judicata provides that the judgment in a first case is final as to
the claim or demand in controversy, between the parties and those privy with
them, not only as to every matter which was offered and received to sustain or
defeat the claim or demand, but as to any other admissible matter which must
have been offered for that purpose and all matters that could have been
adjudged in that case. 19 It precludes parties from relitigating issues actually
litigated and determined by a prior and final judgment. 20 As held in Yusingco v.
Ong Hing Lian: 21
It is a rule pervading every well-regulated system of

jurisprudence, and is put upon two grounds embodied in
various maxims of the common law; the one, public policy
and necessity, which makes it to the interest of the state that
there should be an end to litigation republicae ut sit, finis
litium; the other, the hardship on the individual that he
should be vexed twice for the same cause nemo debet bis
vexari et eadem causa. A contrary doctrine would subject the
public peace and quiet to the will and neglect of individuals
and prefer the gratitude identification of a litigious
disposition on the part of suitors to the preservation of the
public tranquility and happiness. 22 AICDSa
The rationale for this principle is that a party should not be vexed twice
concerning the same cause. Indeed, res judicata is a fundamental concept in the
organization of every jural society, for not only does it ward off endless
litigation, it ensures the stability of judgment and guards against inconsistent
decisions on the same set of facts. 23
There is res judicata when the following requisites are present: (1) the formal
judgment or order must be final; (2) it must be a judgment or order on the merits,
that is, it was rendered after a consideration of the evidence or stipulations
submitted by the parties at the trial of the case; (3) it must have been rendered by
a court having jurisdiction over the subject matter and the parties; and (4) there
must be, between the first and second actions, identity of parties, of subject
matter and of cause of action. 24
In the case at bar, respondent siblings admit that they filed an action for partition
docketed as Civil Case No. 02-52, which the RTC dismissed through an Order
dated March 22, 2004 for the failure of the parties to attend the scheduled
hearings. Respondents likewise admitted that since they no longer appealed the
dismissal, the ruling attained finality. Moreover, it cannot be disputed that the
subject property in Civil Case No. 02-52 and in the present controversy are one
and the same, and that in both cases, respondents raise the same action for
partition. And lastly, although respondent spouses Candelario were not party-
litigants in the earlier case for partition, there is identity of parties not only when
the parties in the case are the same, but also between those in privity with them,
such as between their successors-in-interest. 25
With all the other elements present, what is left to be determined now is whether
or not the dismissal of Civil case No. 02-52 operated as a dismissal on the merits
that would complete the requirements of res judicata.
In advancing their claim, petitioners cite Rule 17, Sec. 3 of the Rules of Court, to
wit:
Section 3. Dismissal due to fault of plaintiff. If, for no

justifiable cause, the plaintiff fails to appear on the date of
the presentation of his evidence in chief on the complaint, or
to prosecute his action for an unreasonable length of time, or
to comply with these Rules or any order of the court, the
complaint may be dismissed upon motion of the defendant
or upon the court's own motion, without prejudice to the
right of the defendant to prosecute his counterclaim in the
same or in a separate action. This dismissal shall have the
effect of an adjudication upon the merits, unless otherwise
declared by the court.
The afore-quoted provision enumerates the instances when a complaint may be

dismissed due to the plaintiff's fault: (1) if he fails to appear on the date for the
presentation of his evidence in chief on the complaint; (2) if he fails to prosecute
his action for an unreasonable length of time; or (3) if he fails to comply with the
Rules or any order of the court. The dismissal of a case for failure to prosecute
has the effect of adjudication on the merits, and is necessarily understood to be
with prejudice to the filing of another action, unless otherwise provided in the
order of dismissal. Stated differently, the general rule is that dismissal of a case
for failure to prosecute is to be regarded as an adjudication on the merits and
with prejudice to the filing of another action, and the only exception is when the
order of dismissal expressly contains a qualification that the dismissal is without
prejudice. 26 In the case at bar, petitioners claim that the Order does not in any
language say that the dismissal is without prejudice and, thus, the requirement
that the dismissal be on the merits is present.
Truly, We have had the occasion to rule that dismissal with prejudice under the
above-cited rule amply satisfies one of the elements of res judicata. 27 It is, thus,
understandable why petitioners would allege res judicata to bolster their claim.
However, dismissal with prejudice under Rule 17, Sec. 3 of the Rules of Court
cannot defeat the right of a co-owner to ask for partition at any time, provided
that there is no actual adjudication of ownership of shares yet.
Pertinent hereto is Article 494 of the Civil Code, which reads:
Article 494. No co-owner shall be obliged to remain in the

co-ownership. Each co-owner may demand at any time the
partition of the thing owned in common, insofar as his
share is concerned.
Nevertheless, an agreement to keep the thing undivided for

a certain period of time, not exceeding ten years, shall be
valid. This term may be extended by a new agreement.
EaICAD
A donor or testator may prohibit partition for a period

which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by

law.
No prescription shall run in favor of a co-owner or co-heir

against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership. (emphasis supplied)
From the above-quoted provision, it can be gleaned that the law generally does
not favor the retention of co-ownership as a property relation, and is interested
instead in ascertaining the co-owners' specific shares so as to prevent the
allocation of portions to remain perpetually in limbo. Thus, the law provides that
each co-owner may demand at any time the partition of the thing owned in
common.
Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to
co-owners under Art. 494 of the Civil Code, the latter must prevail. To construe
otherwise would diminish the substantive right of a co-owner through the
promulgation of procedural rules. Such a construction is not sanctioned by the
principle, which is too well settled to require citation, that a substantive law
cannot be amended by a procedural rule. 28 This further finds support in Art.
496 of the New Civil Code, viz.:
Article 496. Partition may be made by agreement between

the parties or by judicial proceedings. Partition shall be
governed by the Rules of Court insofar as they are
consistent with this Code.
Thus, for the Rules to be consistent with statutory provisions, We hold that Art.
494, as cited, is an exception to Rule 17, Sec. 3 of the Rules of Court to the effect
that even if the order of dismissal for failure to prosecute is silent on whether or
not it is with prejudice, it shall be deemed to be without prejudice.
This is not to say, however, that the action for partition will never be barred by
res judicata. There can still be res judicata in partition cases concerning the same
parties and the same subject matter once the respective shares of the co-owners
have been determined with finality by a competent court with jurisdiction or if
the court determines that partition is improper for co-ownership does not or no
longer exists.
So it was that in Rizal v. Naredo, 29 We ruled in the following wise:
Article 484 of the New Civil Code provides that there is co-
ownership whenever the ownership of an undivided thing
or right belongs to different persons. Thus, on the one hand,
a co-owner of an undivided parcel of land is an owner of the
whole, and over the whole he exercises the right of
dominion, but he is at the same time the owner of a portion
which is truly abstract. On the other hand, there is no co-
ownership when the different portions owned by different
people are already concretely determined and separately
identifiable, even if not yet technically described.
Pursuant to Article 494 of the Civil Code, no co-owner is

obliged to remain in the co-ownership, and his proper
remedy is an action for partition under Rule 69 of the Rules
of Court, which he may bring at anytime in so far as his
share is concerned. Article 1079 of the Civil Code defines
partition as the separation, division and assignment of a
thing held in common among those to whom it may belong.
It has been held that the fact that the agreement of partition
lacks the technical description of the parties' respective
portions or that the subject property was then still embraced
by the same certificate of title could not legally prevent a
partition, where the different portions allotted to each were
determined and became separately identifiable.
The partition of Lot No. 252 was the result of the approved
Compromise Agreement in Civil Case No. 36-C, which was
immediately final and executory. Absent any showing that
said Compromise Agreement was vitiated by fraud, mistake
or duress, the court cannot set aside a judgment based on
compromise. It is axiomatic that a compromise agreement
once approved by the court settles the rights of the parties
and has the force of res judicata. It cannot be disturbed except
on the ground of vice of consent or forgery.
Of equal significance is the fact that the compromise

judgment in Civil Case No. 36-C settled as well the question
of which specific portions of Lot No. 252 accrued to the
parties separately as their proportionate shares therein.
Through their subdivision survey plan, marked as Annex
"A" of the Compromise Agreement and made an integral
part thereof, the parties segregated and separately assigned
to themselves distinct portions of Lot No. 252. The partition
was immediately executory, having been accomplished and
completed on December 1, 1971 when judgment was
rendered approving the same. The CA was correct when it
stated that no co-ownership exist when the different
portions owned by different people are already concretely
determined and separately identifiable, even if not yet
technically described. (emphasis supplied)
In the quoted case, We have held that res judicata applied because after the
parties executed a compromise agreement that was duly approved by the court,
the different portions of the owners have already been ascertained. Thus, there
was no longer a co-ownership and there was nothing left to partition. This is in
contrast with the case at bar wherein the co-ownership, as determined by the
trial court, is still subsisting 30-70 in favor of respondent spouses Candelario.
Consequently, there is no legal bar preventing herein respondents from praying
for the partition of the property through counterclaim. DSAEIT
The counterclaim for partition is not barred by laches

We now proceed to petitioners' second line of attack. According to petitioners,
the claim for partition is already barred by laches since by 1999, both Bienvenido
and Escolastica Ibarra had already died and yet the respondent siblings only
belatedly filed the action for partition, Civil Case No. 02-52, in 2002. And since
laches has allegedly already set in against respondent siblings, so too should
respondent spouses Candelario be barred from claiming the same for they could
not have acquired a better right than their predecessors-in-interest.
The argument fails to persuade.
Laches is the failure or neglect, for an unreasonable and unexplained length of

time, to do that which by the exercise of due diligence could or should have
been done earlier. It is the negligence or omission to assert a right within a
reasonable period, warranting the presumption that the party entitled to assert it
has either abandoned or declined to assert it. 30 The principle is a creation of
equity which, as such, is applied not really to penalize neglect or sleeping upon
one's right, but rather to avoid recognizing a right when to do so would result in
a clearly inequitable situation. As an equitable defense, laches does not concern
itself with the character of the petitioners' title, but only with whether or not by
reason of the respondents' long inaction or inexcusable neglect, they should be
barred from asserting this claim at all, because to allow them to do so would be
inequitable and unjust to petitioners. 31
As correctly appreciated by the lower courts, respondents cannot be said to have

neglected to assert their right over the subject property. They cannot be
considered to have abandoned their right given that they filed an action for
partition sometime in 2002, even though it was later dismissed. Furthermore, the
fact that respondent siblings entered into a Contract of Lease with Avico Lending
Investor Co. over the subject property is evidence that they are exercising rights
of ownership over the same.
The CA erred in approving the Agreement for Subdivision

There is merit, however, in petitioners' contention that the CA erred in
approving the proposal for partition submitted by respondent spouses. Art. 496,
as earlier cited, provides that partition shall either be by agreement of the parties
or in accordance with the Rules of Court. In this case, the Agreement of
Subdivision allegedly executed by respondent spouses Candelario and
petitioners cannot serve as basis for partition, for, as stated in the pre-trial order,
herein respondents admitted that the agreement was a falsity and that petitioners
never took part in preparing the same. The "agreement" was crafted without any
consultation whatsoever or any attempt to arrive at mutually acceptable terms
with petitioners. It, therefore, lacked the essential requisite of consent. Thus, to
approve the agreement in spite of this fact would be tantamount to allowing
respondent spouses to divide unilaterally the property among the co-owners
based on their own whims and caprices. Such a result could not be
countenanced.
To rectify this with dispatch, the case must be remanded to the court of origin,
which shall proceed to partition the property in accordance with the procedure
outlined in Rule 69 of the Rules of Court.
WHEREFORE, premises considered, the petition is hereby PARTLY

GRANTED. The assailed Decision and Resolution of the Court of Appeals in
CA-G.R. CV No. 98919 dated July 8, 2013 and November 22, 2013, respectively,
are hereby AFFIRMED with MODIFICATION. The case is hereby
REMANDED to the RTC, Branch 68 in Camiling, Tarlac for purposes of
partitioning the subject property in accordance with Rule 69 of the Rules of
Court.
SO ORDERED.
Peralta, Villarama, Jr., * Mendoza and Leonen, JJ., concur.
||| (Quintos v. Nicolas, G.R. No. 210252, June 16, 2014)
THIRD DIVISION
[G.R. No. 176598. July 9, 2014.]
PETRONIO CLIDORO, DIONISIO CLIDORO, LOLITA

CLIDORO, CALIXTO CARDANO, JR., LOURDES
CLIDORO-LARIN, MATEO CLIDORO and MARLIZA
CLIDORO-DE UNA, petitioners, vs. AUGUSTO
JALMANZAR, GREGORIO CLIDORO, JR., SENECA
CLIDORO-CIOCSON, MONSERAT CLIDORO-QUIDAY,
CELESTIAL CLIDORO-BINASA, APOLLO CLIDORO,
ROSALIE CLIDORO-CATOLICO, SOPHIE CLIDORO,
and JOSE CLIDORO, JR., respondents.
DECISION
PERALTA, J p:
This deals with the Petition for Review on Certiorari under Rule 45 of the Rules of
Court praying that the Decision 1 of the Court of Appeals (CA), dated October
17, 2006, and its Resolution 2 dated February 6, 2007, denying herein petitioner's
motion for reconsideration of the Decision, be reversed and set aside.
The antecedent facts, as set forth in the CA Decision, are undisputed, to wit:
The instant appeal stemmed from a complaint, docketed as
Civil Case No. T-2275 for revival of judgment filed by
Rizalina Clidoro, et al. against Onofre Clidoro, et al., praying
that the Decision dated November 13, 1995 of the Court of
Appeals (CA) in CA-G.R. CV No. 19831, which affirmed
with modification the RTC Decision dated March 10, 1988 in
Civil Case No. T-98 for partition, be revived and that the
corresponding writ of execution be issued. The dispositive
portion of the CA Decision reads:
The estate of the late Mateo Clidoro, excepting that

described in paragraph (i) of the Complaint, is
hereby ordered partitioned in the following
manner: IETCAS
1. One-fifth portion to the Plaintiffs-

Appellees, by right of representation to
the hereditary share of Gregorio
Clidoro, Sr.;
2. One-fifth portion to Defendant-

Appellant Antonio Clidoro or his legal
heirs;
3. One-fifth portion to Appellant

Josaphat Clidoro;
4. One-fifth portion to Appellant Aida

Clidoro;
5. One-tenth portion to Gregoria

Clidoro, as her legitime in the hereditary
share of Onofre Clidoro; and
6. One-tenth portion to Catalino Morate,

as successor-in-interest to the legitime of
Consorcia Clidoro.
SO ORDERED.
On September 3, 2003, defendants-appellees except Gregoria

Clidoro-Palanca, moved to dismiss the said complaint on the
following grounds: "1.) The petition, not being brought up
against the real parties-in-interest, is dismissible for lack of
cause of action; 2.) The substitution of the parties defendant
is improper and is not in accordance with the rules; 3.) Even
if the decision is ordered revived, the same cannot be
executed since the legal requirements of Rule 69, Section 3 of
the 1997 Rules of Civil Procedure has not been complied
with; and 4.) The Judgment of the Honorable Court ordering
partition is merely interlocutory as it leaves something more
to be done to complete the disposition of the case." DSETcC
After the filing of plaintiffs-appellants'

Comment/Opposition to the Motion to Dismiss, defendants-
appellees' Reply, plaintiffs-appellants' Rejoinder and
defendants-interested parties' Sur-Rejoinder, the RTC issued
the assailed Order dated December 8, 2003 dismissing the
instant complaint for lack of cause of action, the pertinent
"xxx xxx xxx
The complaint shows that most of the parties-

plaintiffs, parties-defendants and interested parties
are already deceased and have no more natural or
material existence. This is contrary to the provision
of the Rules (Sec. 1, Rule 3, 1997 Rules of Civil
Procedure). They could no longer be considered as
the real parties-in-interest. Besides, pursuant to Sec.
3, Rule 3 (1997 Rules of Civil Procedure), where the
action is allowed to be prosecuted or defended by a
representative or someone acting in fiduciary
capacity, the beneficiary shall be included in the
title of the case. In the instant case the beneficiaries
are already deceased persons. Also, the Complaint
states that they were the original parties in Civil
Case No. T-98 for Partition, but this is not so
(paragraph 2). Some of the parties are actually not
parties to the original case, but representing the
original parties who are indicated as deceased.
From the foregoing, the Court finds the instant

complaint to be flawed in form and substance. The
suit is not brought by the real parties-in-interest,
thus a motion to dismiss on the ground that the
complaint states no cause of action is proper
(Section 1(g), Rule 16). DHcEAa
WHEREFORE, the instant complaint is ordered

DISMISSED for lack of cause of action.
SO ORDERED."
Plaintiffs-appellants moved for reconsideration of the

foregoing Order with prayer to admit the attached Amended
Complaint impleading the additional heirs of the interested
party Josaphat Clidoro and the original plaintiffs Rizalina
Clidoro-Jalmanzar, Cleneo Clidoro and Aristoteles Clidoro.
The same was, however, denied in the second assailed order.
...3
Respondents then appealed to the CA, and on October 17, 2006, the CA
promulgated its Decision reversing and setting aside the Orders of the RTC, and
remanding the case to the RTC for further proceedings. Petitioners' motion for
reconsideration of the Decision was denied perResolution dated February 6, 2007.
Hence, the present petition where the following issues are raised:
A. THE HONORABLE COURT OF APPEALS FAILED TO

CONSIDER THAT THERE WAS NO PROPER
SUBSTITUTION OF PARTIES IN THE INSTANT
ACTION FOR REVIVAL OF JUDGMENT.
B. THE HONORABLE COURT OF APPEALS ERRED IN

CONSIDERING THE RESPONDENTS AS WELL AS THE
PETITIONERS AS THE REAL PARTIES-IN-INTEREST.
C. THE HONORABLE COURT OF APPEALS ERRED IN

RULING THAT AMENDMENT TO PLEADINGS WAS
PROPERLY MADE AND IS APPLICABLE TO THE
INSTANT ACTION.
D. THE HONORABLE COURT OF APPEALS ERRED IN

RULING THAT THERE WAS MERE MISJOINDER OF
PARTIES IN THE INSTANT ACTION. 4
The petition deserves scant consideration.
Reduced to its essence, the pivotal issue here is whether the complaint for revival
of judgment may be dismissed for lack of cause of action as it was not brought by
or against the real parties-in-interest.
First of all, the Court emphasizes that lack of cause of action is not enumerated
under Rule 16 of the Rules of Court as one of the grounds for the dismissal of a
complaint. As explained in Vitangcol v. New Vista Properties, Inc., 5 to wit:
Lack of cause of action is, however, not a ground for a

dismissal of the complaint through a motion to dismiss
under Rule 16 of the Rules of Court, for the determination
of a lack of cause of action can only be made during and/or
after trial. What is dismissible via that mode is failure of the
complaint to state a cause of action. Sec. 1(g) of Rule 16 of
the Rules of Court provides that a motion may be made on
the ground "that the pleading asserting the claim states no
cause of action."
The rule is that in a motion to dismiss, a defendant

hypothetically admits the truth of the material allegations
of the ultimate facts contained in the plaintiff's complaint.
When a motion to dismiss is grounded on the failure to
state a cause of action, a ruling thereon should, as rule, be
based only on the facts alleged in the complaint. . . .
xxx xxx xxx
In a motion to dismiss for failure to state a cause of action,

the focus is on the sufficiency, not the veracity, of the
material allegations. The test of sufficiency of facts alleged
in the complaint constituting a cause of action lies on
whether or not the court, admitting the facts alleged, could
render a valid verdict in accordance with the prayer of the
complaint. . . . 6
Again, in Manaloto v. Veloso III, 7 the Court reiterated as follows:
When the ground for dismissal is that the complaint states

no cause of action, such fact can be determined only from
the facts alleged in the complaint and from no other, and
the court cannot consider other matters aliunde. The test,
therefore, is whether, assuming the allegations of fact in the
complaint to be true, a valid judgment could be rendered in
accordance with the prayer stated therein. 8 ASHEca
In this case, it was alleged in the complaint for revival of judgment that the
parties therein were also the parties in the action for partition. Applying the
foregoing test of hypothetically admitting this allegation in the complaint,
and not looking into the veracity of the same, it would then appear that the
complaint sufficiently stated a cause of action as the plaintiffs in the
complaint for revival of judgment (hereinafter respondents), as the
prevailing parties in the action for partition, had a right to seek enforcement
of the decision in the partition case.
It should be borne in mind that the action for revival of judgment is a totally
separate and distinct case from the original Civil Case No. T-98 for Partition. As
explained in Saligumba v. Palanog, 9 to wit:
An action for revival of judgment is no more than a

procedural means of securing the execution of a previous
judgment which has become dormant after the passage of
five years without it being executed upon motion of the
prevailing party. It is not intended to re-open any issue
affecting the merits of the judgment debtor's case nor the
propriety or correctness of the first judgment. An action for
revival of judgment is a new and independent action,
different and distinct from either the recovery of property
case or the reconstitution case [in this case, the original
action for partition], wherein the cause of action is the
decision itself and not the merits of the action upon which
the judgment sought to be enforced is rendered. . . . 10
With the foregoing in mind, it is understandable that there would be

instances where the parties in the original case and in the subsequent action
for revival of judgment would not be exactly the same. The mere fact that
the names appearing as parties in the complaint for revival of judgment are
different from the names of the parties in the original case would not
necessarily mean that they are not the real parties-in-interest. What is
important is that, as provided in Section 1, Rule 3 of the Rules of Court, they
are "the party who stands to be benefited or injured by the judgment in the
suit, or the party entitled to the avails of the suit." Definitely, as the
prevailing parties in the previous case for partition, the plaintiffs in the case
for revival of judgment would be benefited by the enforcement of the
decision in the partition case.
Moreover, it would appear that petitioners are mistaken in alleging that
respondents are not the real parties-in-interest. The complaint for revival of
judgment impleaded the following parties:
PLAINTIFFS
1. Rizalina Clidoro (deceased) 1. Onofr

rep. herein by Augusto Jalmanzar by Gr
(daug
2. Gregorio Clidoro, Jr. 2. Anton

herein
3. Urbana Costales (deceased) 3. Carme

by Ca
4. Cleneo Clidoro (deceased) 4. Dionis
5. Seneca Clidoro Ciocson 5. Lourd
6. Monserrat Clidoro 6. Lolita
7. Celestial Clidoro 7. Mateo
8. Aristoteles Clidoro (deceased) INTERESTED
9. Apollo Clidoro 1. Aida C
10. Rosalie Clidoro 2. Josaph

herein
11. Sophie Clidoro
12. Jose Clidoro, Jr.
On the other hand, the parties to the original case for partition are named as
follows:
PLAINTIFFS
1. Rizalina Clidoro 1. Onofre C
2. Gregorio Clidoro, Jr. 2. Antonio
3. Sofia Cerdena
4. Urbana Costales 1. Aida Cli
5. Cleneo Seneca 2. Josaphat
6. Monserrat Clidoro
7. Celestial Clidoro
8. Aristoteles Clidoro
9. Apollo Clidoro
10. Rosalie Clidoro

11. Sophie Clidoro
12. Jose Clidoro, Jr.
A comparison of the foregoing would show that almost all of the plaintiffs in the
original case for partition, in whose favor the court adjudged certain shares in the
estate of deceased Mateo Clidoro, are also the plaintiffs in the action for revival
of judgment. Meanwhile, the defendants impleaded in the action for revival are
allegedly the representatives of the defendants in the original case, and this
appears to hold water, as Gregoria Clidoro-Palanca, named as the representative
of defendant Onofre Clidoro in the complaint for revival of judgment, was also
mentioned and awarded a portion of the estate in the judgment in the original
partition case. In fact, the trial court itself stated in its Order 11 of dismissal dated
December 8, 2003, that "[s]ome of the parties are actually not parties to the
original case, but representing the original parties who are indicated as
deceased."
In Basbas v. Sayson, 12 the Court pointed out that even just one of the co-owners,
by himself alone, can bring an action for the recovery of the co-owned property,
even through an action for revival of judgment, because the enforcement of the
judgment would result in such recovery of property. Thus, as in Basbas, it is not
necessary in this case that all of the parties, in whose favor the case for partition
was adjudged, be made plaintiffs to the action for revival of judgment. Any
which one of said prevailing parties, who had an interest in the enforcement of
the decision, may file the complaint for revival of judgment, even just by himself.
Verily, the trial court erred in dismissing the complaint for revival of judgment
on the ground of lack of, or failure to state a cause of action. The allegations in
the complaint, regarding the parties' interest in having the decision in the
partition case executed or implemented, sufficiently state a cause of action. The
question of whether respondents were the real parties-in-interest who had the
right to seek execution of the final and executory judgment in the partition case
should have been threshed out in a full-blown trial.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals,

dated October 17, 2006, and its Resolution dated February 6, 2007 in CA-G.R. No.
82209, are hereby AFFIRMED in toto.
SO ORDERED.
Velasco, Jr., Villarama, Jr., *Mendoza and Leonen, JJ., concur.

||| (Clidoro v. Jalmanzar, G.R. No. 176598, July 09, 2014)
FIRST DIVISION
[G.R. No. 172660. August 24, 2011.]
EUGENIO BASBAS, TEOFILO ARAS, RUFINO ARAS,

GERVACIO BASBAS, ISMAEL ARAS, EUGENIO ARAS,
SIMFRONIO ARAS, FELICIANO ARAS, ROSITA ARAS,
EUGENIO BASBAS, JR. and SPOUSES PABLITO
BASARTE and MARCELINA BASBAS BASARTE,
petitioners, vs. BEATA SAYSON and ROBERTO SAYSON,
JR., respondents.
DECISION
DEL CASTILLO, J p:
Petitioners seek to prevent the revival of a judgment rendered in favor of the

respondents more than two decades back.
This Petition for Review on Certiorari assails the February 17, 2004 Decision 1 of
the Court of Appeals (CA) in CA-G.R. CV No. 72385 which denied the appeal
filed before it and affirmed in toto the May 21, 2001 Order 2 of the Regional Trial
Court of Ormoc City, Branch 35. Also assailed is the April 19, 2006 Resolution 3
denying the Motion for Reconsideration thereto.
Factual Antecedents
On September 2, 1976, respondent Beata Sayson (Beata) and her husband
Roberto Sayson, Sr. (Roberto, Sr.) filed a Petition for Registration of an
agricultural land located in Cagbatang, Balagtas, Matag-ob, Leyte docketed as
Land Registration Case No. 0-177. The said application was opposed by the
Republic of the Philippines and herein petitioners Eugenio Basbas (Eugenio, Sr.),
Teofilo Aras (Teofilo) and Rufino Aras (Rufino). On March 22, 1979, the Court of
First Instance (CFI) of Leyte, Branch V (Ormoc City) rendered a Decision
adjudicating to the spouses Sayson said agricultural land and approving its
registration under their names. 4 cADaIH
The oppositors filed their appeal to the CA docketed as CA-G.R. No. 66541. In a
Decision 5 dated July 24, 1985, the appellate court affirmed in toto the Decision of
the CFI. This CA Decision became final and executory on August 21, 1985 6 and,
accordingly, a Writ of Possession was issued on November 21, 1985, which was
never implemented.
The following year or on September 17, 1986, Original Certificate of Title (OCT)
No. 2496 7 was issued to the spouses Sayson pursuant to the March 22, 1979 CFI
Decision. An Alias Writ of Possession was issued on April 6, 1989 but this could
also not be implemented in view of the refusal of Eugenio, Sr. and his son
Eugenio Basbas, Jr. (Eugenio, Jr.). Claiming that the land they occupied is not the
same land subject of the CFI Decision, 8 they demanded that a relocation survey
be conducted. Hence, a relocation survey was conducted by order of the
Regional Trial Court (RTC), Branch 12, Ormoc City. 9
In an Order 10 dated September 13, 1989, the RTC approved the Commissioner's
Report 11 on the relocation survey and ordered the original oppositors,
petitioners Eugenio, Sr., Teofilo and Rufino, as well as their co-petitioners herein
Gervacio Basbas (Gervacio), Ismael Aras (Ismael), Eugenio Aras (Eugenio),
Simfronio Aras (Simfronio), Feliciano Aras (Feliciano), Rosita Aras (Rosita) and
Eugenio, Jr. to vacate the subject property, viz.:
[R]espondents are directed to vacate the portion of Lot No. 1,

Psu-08-000235 covered by OCT No. 2496 and subject of the
final decree of registration which, [up to the] present, said
respondents are still possessing pursuant to the final and
executory judgment of the Court of Appeals and as
particularly defined in the Commissioner's report submitted
on August 3, 1989 . . . .
Respondents are reminded that under Rule 71 of the New

Rules of Court, failure on their part to so obey this order
may make them liable for contempt of this Court.
SO ORDERED. 12
Gervacio, Ismael, Eugenio, Simfronio, Feliciano, Rosita and Eugenio, Jr.,

although not oppositors in CA-G.R. No. 66541, were likewise ordered to vacate
the property in view of the following pronouncement in the RTC's September 13,
1989 Order:
It appearing from the records that respondents Eugenio

Basbas, Teofilo Aras, Gervacio Basbas, Rufino Aras, Ismael
Aras, Eugenio Aras, Simfronio Aras, Feliciano Aras, Rosita
Aras and Eugenio Basbas[,] Jr. are parties to the present
case, they having been the principal oppositors to the
petition filed by the applicants as shown in the records,
pages 34, 35 and 36, Vol. 1 . . . 13 (Emphasis supplied.)
This September 13, 1989 Order was, however, not implemented within the five-
year period from the time it became final. 14 Hence, respondent Beata and her
son Roberto Sayson, Jr. (Roberto, Jr.), as successor-in-interest of the late Roberto,
Sr., filed on August 18, 1995 a Complaint for Revival of Judgment 15 before the
RTC of Ormoc City, Branch 12, 16 docketed as Civil Case No. 3312-0. Impleaded
as defendants were Eugenio, Sr., Teofilo, Rufino, Gervacio, Ismael, Eugenio,
Simfronio, Feliciano, Rosita, and Eugenio, Jr. Petitioner-spouses Pablito Basarte
and Marcelina Basbas-Sabarte 17 (spouses Basarte), who, although not identified
in the September 13, 1989 Order as principal oppositors in the land registration
case, were likewise impleaded as defendants since they also allegedly harvested,
processed, and sold the coconuts found in the subject property.
Upon receipt of summons, Gervacio, Rufino, Ismael, Eugenio, Feliciano, Rosita

and Eugenio, Jr. filed a Motion to Dismiss 18 on the ground that the Complaint
states no cause of action. This was, however, denied 19 so the same set of
petitioners, except for Feliciano, filed an Answer with Counterclaim. 20
In their Answer with counterclaim, said petitioners admitted the allegations in

paragraphs 4, 5, 6, 7, 8, 9, 10, 11 and 12 of respondents' Complaint which state
that: DIcSHE
xxx xxx xxx
4.On March 22, 1979, the Honorable Judge Numeriano

Estenzo rendered a decision in the above-mentioned Land
Registration [c]ase in favor of the petitioners . . . and against
the oppositors, the dispositive portion of said decision reads:
'WHEREFORE, decision is hereby rendered . . .

[and] the land described under Plan PSU-08-000235
dated September 10, 1973 of Geodetic Engineer
Nestorio Encenzo already APPROVED by the
Acting Regional Director on June 27, 1974 is hereby
adjudicated and registered in the names of the
Spouses ROBERTO SAYSON and BEATA O.
SAYSON, of legal ages, Filipinos, spouses and
residents of Campokpok, Tabango, Leyte,
Philippines and as soon as this decision becomes
final, let a decree of registration be issued by the
Land Registration Commission.
SO ORDERED.' (. . .)
5.From the above decision the oppositors (defendants

herein) appealed;
6.On July 24, 1985, the Honorable Court of Appeals rendered

its decision, the dispositive portion [of which] reads:
'WHEREFORE, PREMISES CONSIDERED, finding

no merit in this appeal the decision appealed from
is hereby AFFIRMED in toto.
SO ORDERED.'
and the said decision has become final and executory on

August 21, 1985 per Entry of Judgment issued by the Court
of Appeals . . . .
7.That consequently, on September 17, 1986 an Original

Certificate of Title No. N-2496 was issued in the names of
Roberto Sayson and Beata O. Sayson, pursuant to Decree
No. N-191615, by the Register of Deeds for the Province of
Leyte;
8.That on motion, the Honorable Court, on November 21,

1985, issued a Writ of Possession which for some reason or
[another] was not satisfied, so that the Honorable Court, on
April 7, 1989 acting on an ex-parte motion dated April 6,
1989 directed the issuance of an Alias Writ of Possession;
9.That the Deputy Sheriff of this Court, Mr. Placid[o] Cayco

tendered the Alias Writ of Possession to the oppositors,
particularly to Mr. Eugenio Basbas, Sr. and Eugenio Basbas,
Jr. who, as the Deputy Sheriff stated in his Progress Report
dated May 18, 1989 'did not believe and obey the CFI
Decision and the decision of the Court of Appeals' and '. . .
[t]hey demanded a relocation survey to determine the exact
location of applicants' (complainant[s] herein) property
described in the alias writ of possession.' . . .;
10.That on June 16, 1989, the Honorable Court, acting on the

Progress Report of Deputy Sheriff Placido Cayco, issued an
Order on even date appointing Geodetic Engineer Jose A.
Tahil as Court Commissioner specifically 'to relocate Lot No.
1, Plan Psu-08-000235, LRC No. 0-177, Land Reg. Record No.
N51830 . . .' This Order was dictated in open court in the
presence of Mr. Eugenio Basbas, Sr. and Eugenio Basbas, Jr.
who had both objected to the Writ of Possession, and their
counsel Atty. Evargisto Escalon, and Attorney Demetrio D.
Sarit, counsel for the applicants. . . .
11.That pursuant to the [O]rder dated June 16, 1989 . . . the

Court assigned Commissioner, Engr. Jose A. Tahil,
submitted his report stating that 'the job assigned to the
commissioner was already fully and peacefully
accomplished; that his 'findings [show] that all points are
existing and intact on the field except . . . corner 3 of said lot .
. . which at present [is] already defined and indicated on the
ground.' The commissioner also attached a Sketch Plan of
the land to his report. . . .
12.That, finally, the Honorable Court, on September 13, 1989

issued an Order approving the Commissioner's Report and
further stated:
[R]espondents (defendants herein) are directed to

vacate the portion of Lot No. 1, Psu-08-000235
covered by OCT No. 2496 and subject of final
decree of registration which, until [the] present,
said respondents are still possessing, pursuant to
the final and executory judgment of the Court of
Appeals and as particularly [defined] in the
Commissioner's Report submitted on August 3,
1989 . . .
Respondents are reminded that under Rule 71 of

the New Rules of Court, failure on their part to so
obey this Order may make them liable for contempt
of this Court. 21
However, petitioners admitted but denied in part:
1)paragraphs 2 and 3, insofar as they alleged that they were all oppositors to the
land registration case when only Eugenio, Sr., Teofilo and Rufino were the
oppositors therein; and
2)paragraph 14, with respect to the allegation on the retirement of the Deputy
Sheriff and the heart condition of the Clerk of Court, for lack of sufficient
knowledge and information sufficient to form a belief thereon.
On the other hand, they specifically denied:
1)paragraph 13, on the ground that they have the right of ownership and/or
possession over the subject property; and
2)paragraph 15, on the ground that the property they are cultivating is owned by
them, hence, respondents cannot suffer losses and damages.
Paragraphs 2, 3, 13, 14 and 15 alluded to in the foregoing are as follows:
2.All the defendants named above are . . . of legal age and

are residents of Balagtas, Matag-ob, Leyte where they may
be served summons and other court processes; while
defendant-spouses Pablito Basarte and Marcelina Basbas
Basarte were not named as among the oppositors in the land
registration case whose decision is herein sought to be
revived, said spouses are nonetheless participating in the
harvest, processing and sale of the coconuts with the other
defendants named above; HTCaAD
3.Plaintiffs Beata Sayson and her late husband, Roberto

Sayson are petitioners in Land Registration Case No. 0-177
for the registration of a parcel of agricultural land situated in
Barrio Balagtas, Matag-ob, Leyte, filed on September 2, 1976
with the then Court of First Instance of Leyte, Branch V,
Ormoc City. The above-named defendants, namely: Eugenio
Basbas, Teofilo Aras, Gervacio Basbas, Rufino Aras, Ismael
Aras, Eugenio Aras, Simfronio Aras, Feliciano Aras, Rosita
Aras and Eugenio Basbas, Jr. were oppositors to the
application; 22
xxx xxx xxx
13.That despite this admonition in the [September 13, 1989]

[O]rder that they could be cited for contempt of Court, the
respondents, defendants herein, had continuously defied the
same and this notwithstanding the fact that it was upon their
own demands and insistence that a relocation survey be
made on the premises subject of this case before they would
obey the alias writ of possession . . . and that the finding[s]
of the Court[-]appointed Commissioner Engr. Jose A. Tahil
show that the oppositors-respondents did [encroach] on the
land of plaintiffs herein;
14.That this [September 13, 1989] Order however was not

implemented thru a Writ of Execution within the five-year
period from the time the Order became final because of the
retirement of Deputy Sheriff Placido Cayco and by reason
also of the fact that the then Clerk of Court, Atty.
Constantino A. Trias, Jr. who was also the ex-officio
Provincial Sheriff was not physically fit to hike thru the
mountains and hills of Brgy. Balagtas where the property
and the defendants therein reside due to his heart condition;
15.That despite their knowledge of the Court['s] [September

13, 1989] Order, the same [having been] dictated in open
court, the respondents had continued to occupy the land of
the plaintiffs and for more than five (5) years since this
Order for them to vacate the land in question was issued,
they had harvested the coconuts growing thereon and such
other produce of the land herein involved. And until the
decision of the Court of Appeals is executed, plaintiff will
continue to suffer losses and damages by reason of
defendants' unlawful occupation and possession and their
continued harvesting of the produce of this land of the
herein plaintiffs. 23
By way of special and affirmative defenses, said petitioners contended that the
Order sought to be revived is not the "judgment" contemplated under Section 6,
Rule 39 of the Rules of Court, hence the action for revival of judgment is
improper. Also, except for Rufino, petitioners averred that they cannot be made
parties to the complaint for revival of judgment as they were not parties to the
land registration case. They thus believed that the September 13, 1989 Order
sought to be revived is not binding upon them and hence, the complaint states
no cause of action with respect to them. As to the counterclaim, petitioners
prayed that respondents pay them moral and exemplary damages, attorney's
fees and litigation expenses.
Pre-trial conference was thereafter set 24 but since not all petitioners were served
with summons, this was reset and alias summons was issued and served upon
Simfronio and the spouses Basarte. 25 Upon receipt of summons, Simfronio
adopted the Answer with Counterclaim of Gervacio, Rufino, Ismael, Eugenio,
Feliciano, Rosita and Eugenio, Jr. 26 while the spouses Basarte filed a Motion to
Dismiss 27 on the ground of lack of cause of action. As said motion was also
denied, 28 the spouses Basarte later filed a Manifestation 29 that they were also
adopting the Answer with Counterclaim filed by Gervacio and the others.
During the pre-trial conference on July 14, 1999, the RTC issued an Order 30
which provides in part, viz.:
In today's pre-trial conference, manifestations and counter-

manifestations were exchanged. All the parties and their
counsels are present. . . . [P]laintiffs' counsel presented a
Special Power of Attorney by Beata Sayson but the Court
observed that same was not duly acknowledged before the
Philippine Consulate or Embassy in Canada. However,
this matter is not so important[.] [W]hen the Court tried to
dig and discuss with the parties on their real positions, it
turned out that the plaintiffs are seeking revival of the
previous final judgment, the original parties of which
were Eugenio Basbas, Teofilo Aras and Rufino Aras.
Eugenio and Teofilo are all dead, leaving Rufino Aras
alive. It is quite complicated considering that in this
action, the plaintiffs relied on the Order of this Court
penned by the previous judge dated September 13, 1989
which was made after or consequent to the final judgment
aforementioned, wherein the names of the other
defendants were mentioned in the body thereof. After
considering the merits of the various contentions, the
Court is of the view that the complaint had to limit itself to
the names of the original parties appearing in the original
judgment now being sought for revival. The interest of the
plaintiffs in seeking implementation or execution of the
judgment sought to be revived which would involve the
other defendants can be taken when the judgment shall have
been revived. CHaDIT
In this connection therefore and as part of the matters to be

made part in the pre-trial conference, in the exercise of the
authority granted to it by law, this Court directs the
plaintiffs to make the necessary amendment and/or to
submit a manifestation first to this Court on the point
above raised regarding amendment of the designation of
the parties having in mind the objection of the defendants
who manifested that should there be an amendment, this
counter-claim shall be disregarded since they were brought
in unnecessarily in this kind of action.
Plaintiffs therefore are given a period of ten (10) days from

today within which to submit the requisite manifestation
furnishing copy thereof to the defendant who upon receipt
shall also be given a period of ten (10) days within which
this Court will make the necessary resolution before
allowing any amendment.
Hold the pre-trial conference in abeyance.
SO ORDERED. 31 (Emphasis supplied.)
In their Manifestation with Prayer, 32 respondents informed the RTC about the
death of Eugenio, Sr. and Teofilo who were oppositors in the land registration
case and the substitution by their heirs, namely, Gervacio, Marcelina Basbas
Basarte, 33 and Eugenio, Jr. for Eugenio, Sr. and Ismael, Vicente, Ligaya Aras
(Ligaya), Rosendo Aras (Rosendo) and Daina Aras (Daina) for Teofilo.
Respondents prayed that their manifestation be considered for the purpose of
determining the proper parties to the case. Despite petitioners' Counter-
Manifestation, 34 the RTC issued the following Order 35 on May 15, 1999:
The Manifestation of plaintiffs and the Counter-

Manifestation of defendants having already been submitted
and duly noted, the Court hereby directs that henceforth in
the denomination of this case, the names of the original
parties, Eugenio Basbas and Teofilo Aras (in Land
Registration Case No. 0-177) shall still remain to be so stated
as defendants for purposes of the present case but with
additional names of their respective heirs to be included and
stated immediately after each name as heirs in substitution,
namely: for Eugenio Basbas 1) Gervacio Basbas, 2)
Marcelina Basbas Basarte, and 3) Eugenio Basbas, Jr.; and for
Teofilo Aras 1) Ismael Aras, 2) Vicente Aras, 3) Ligaya
Aras, 4) Rosendo Aras, and 5) Daina Aras.
Since from the records, only Gervacio Basbas, Eugenio

Basbas, Jr. and Ismael Aras were duly served with
summons, the Branch Clerk of Court is hereby directed to
serve summons on the other heirs, namely: Marcelina Basbas
Basarte, Vicente Aras, Ligaya Aras, Rosendo Aras, and
Daina Aras.
xxx xxx xxx 36
After summons were served, Vicente, Rosendo, Ligaya and Daina were,
however, declared in default for not filing any responsive pleading. 37 On
February 2, 2001, the RTC issued a Pre-Trial Order 38 where the controverted
stipulations and issues to be tried, among others, were enumerated as follows:
Controverted Stipulations:
1.That defendants are not enjoying the produce of the land

because there are period[s] wherein the fruits were
subject of theft and the same is now pending at the
Municipal Trial Court of Matag-ob;
2.That [even] before the start of the original case, the original
defendants referring to the late Eugenio Basbas, Sr.
and Teofilo Aras, [and] Rufino Aras were
occupying the property and they were succeeded
by the respective heirs of the deceased Eugenio
Basbas, Sr. and Teofilo Aras [sic];
3.That plaintiff Teofilo Aras, Sr. has a daughter named

Fedeliza Aras;
Issues
1.Whether . . . the plaintiffs are entitled to revival of

judgment in the earlier [land registration] case;
2.Whether . . . the defendants except for defendant Rufino

Aras are the proper parties in the present action;
3.Whether . . . the complaint states a cause of action;
4.Whether . . . defendants are entitled to their counterclaim,

and; TIDHCc
5.Whether judgment on the pleadings is allowed or is

tenable. 39
Respondents subsequently filed an Omnibus Motion for Judgment on the

Pleadings and/or Summary Judgment. 40 They contended that since petitioners'
Answer failed to tender an issue, they having expressly admitted the material
allegations in the complaint, particularly paragraphs 4 to 12, a judgment on the
pleadings or summary judgment is proper.
Petitioners filed an Opposition Re: Omnibus Motion for Judgment on the

Pleadings and/or Summary Judgment and Memorandum Re: Failure of Plaintiff
Beata Sayson to Appear in the Pre-trial Conference. 41 They argued that the case
cannot be decided based on the pleadings nor through summary judgment
considering that the controverted stipulations and issues defined in the Pre-Trial
Order must be proven by evidence. In addition, they questioned the Special
Power of Attorney (SPA) executed by Beata in Canada empowering her son
Roberto, Jr. to appear on her behalf in the pre-trial conference. They argued that
since said SPA has not been authenticated by a Philippine Consulate official, it is
not sufficient authorization and hence, Beata cannot be considered to have
attended the pre-trial conference. The case must, therefore, be dismissed insofar
as she is concerned.

In resolving respondents' Omnibus Motion for Judgment on the Pleadings
and/or Summary Judgment, the RTC found that petitioners' Answer does not
essentially tender an issue since the material allegations of the Complaint were
admitted. Hence, said court issued an Order 42 dated May 21, 2001, the
dispositive portion of which reads:
Wherefore, finding merit in the motion, judgment is hereby

rendered for and in favor of the plaintiffs and against the
defendants ordering the revival of the decision of the Court
of Appeals promulgated on July 24, 1985 affirming the
decree of registration of this Court in the decision of the
Land Registration Case No. 0-177 dated March 22, 1979, and
of the final Order of this Court dated September 13, 1989 and
upon finality of this Order, ordering the issuance of Writ of
Possession for the lot made subject of the decision. Without
pronouncement as to costs.
SO ORDERED. 43
Petitioners thus filed a Notice of Appeal 44 which was approved in an Order

dated June 06, 2001. 45

Finding no merit in the appeal, the CA denied the same in a Decision 46 dated
February 17, 2004. It noted that petitioners' Answer admitted almost all of the
allegations in respondents' complaint. Hence, the RTC committed no reversible
error when it granted respondents' Motion for Judgment on the Pleadings
and/or Summary Judgment. The appellate court likewise found untenable the
issue as regards the failure of the complaint to state a cause of action. To the
appellate court, petitioners' refusal to vacate the subject property despite the final
and executory Decision of the CA in the land registration case and the September
13, 1989 Order of the RTC for them to vacate the same, clearly support
respondents' cause of action against them. Also contrary to petitioners' posture,
the September 13, 1989 Order is a final order as it finally disposed of the
controversy between the parties in the land registration case. The CA likewise
found the SPA executed by Beata in favor of Roberto, Jr. as valid, hence, she was
duly represented during the pre-trial conference. The dispositive portion of said
CA Decision reads:

DENIED. The May 21, 2001 Decision of the Regional Trial
Court of Ormoc City, Branch 35 is AFFIRMED.
SO ORDERED. 47
Their Motion for Reconsideration 48 having been denied in a Resolution 49 dated

April 19, 2006, petitioners are now before this Court through the present Petition
for Review on Certiorari. CAaDTH
Issues
Petitioners impute upon the CA the following errors:
1.The Honorable Court of Appeals clearly committed serious

errors of law in its decision and Resolution dated February
17, 2004 and April 19, 2006 when it affirmed the Order of the
Regional Trial Court dated May 21, 2001 and declared that
no reversible error was committed by the Regional Trial
Court of Ormoc City in granting respondents' motion for
judgment on the pleadings and/or summary judgment;

errors of law in its Decision and Resolution dated February
17, 2004 and April 19, 2006 when it affirmed the Order of the
Regional Trial Court of Ormoc City dated May 21, 2001 and
declared that petitioners' argument that respondents'
complaint failed to state a cause of action has no merit.

errors of law when it affirmed the Order of the Regional
Trial Court of Ormoc City which ordered the revival of the
Judgment of this Court of Appeals in CA-G.R. No. 66541
entitled Beata Sayson and Roberto Sayson vs. Eugenio Basbas, et
al., despite the fact that this was not the judgment sought to
be revived in Civil Case No. 3312-0;

errors of law in ruling that the duly notarized Special Power
of Attorney in favor of Roberto Sayson[,] Jr. is valid and the
latter is authorized to represent his mother, Beata Sayson[,]
which is contrary to the ruling in the case of ANGELITA
LOPEZ, represented by PRISCILLA L. TY vs. COURT OF
APPEALS, REGIONAL TRIAL COURT OF QUEZON CITY .
. . (G.R. No. 77008, December 29, 1987). 50
The Parties' Arguments

Petitioners insist that a judgment on the pleadings or a summary judgment is not
proper in this case since the controverted stipulations and the first three issues
enumerated in the pre-trial order involve facts which must be threshed out
during trial. They also claim that the Complaint for Revival of Judgment states
no cause of action because the September 13, 1989 Order which it sought to
revive is not the "judgment" contemplated under Section 6, Rule 39 of the Rules
of Court and, therefore, cannot be the subject of such an action. Moreover, they
argue that the CA Decision in the land registration case should not have been
revived as same was not prayed for in the Complaint for Revival of Judgment.
Lastly, petitioners assail the SPA which authorized Roberto, Jr. to represent his
mother, Beata, during the pre-trial conference, it not having been authenticated
by a Philippine consulate officer in Canada where it was executed. Citing Lopez v.
Court of Appeals, 51 they contend that said document cannot be admitted in
evidence and hence, Beata was not duly represented during said pre-trial
conference. The case, therefore, should have been dismissed insofar as she is
concerned.
For their part, respondents point out that the RTC's basis in granting the Motion
for Judgment on the Pleadings and/or Summary Judgment was petitioners'
admission of practically all the material allegations in the complaint. They aver
that Section 1, Rule 34 of the Rules of Court clearly provides that where an
answer fails to tender an issue or otherwise admits the material allegations of the
adverse party's pleading, the court may, on motion of that party, direct judgment
on the pleadings. Also, the test for a motion for summary judgment is whether
the pleadings, affidavits or exhibits in support of the motion are sufficient to
overcome the opposing papers and to justify a finding as a matter of law that
there is no defense to the action or the claim is clearly meritorious. And since, as
found by the CA, petitioners' Answer did not tender an issue and that there is no
defense to the action, the grant of the Motion for Judgment on the Pleadings
and/or Summary Judgment was appropriate. Respondents likewise contend that
if their prayer in the Complaint is taken in its proper context, it can be deduced
that what they were really seeking is the implementation of the CA Decision
dated July 24, 1985 and the orders ancillary thereto. With respect to the SPA, they
submit that the law does not require that a power of attorney be notarized.
Moreover, Section 4, Rule 18 of the Rules of Court simply requires that a
representative appear fully authorized "in writing". It does not specify a
particular form of authority.
Our Ruling
There is no merit in the petition.
I.The instant case is proper for the rendition of a summary judgment.

Petitioners principally assail the CA's affirmance of the RTC's Order granting
respondents' Motion for Judgment on the Pleadings and/or Summary Judgment.
In Tan v. De la Vega, 52 citing Narra Integrated Corporation v. Court of Appeals, 53

the court distinguished summary judgment from judgment on the pleadings,
viz.:
The existence or appearance of ostensible issues in the

pleadings, on the one hand, and their sham or fictitious
character, on the other, are what distinguish a proper case
for summary judgment from one for a judgment on the
pleadings. In a proper case for judgment on the pleadings,
there is no ostensible issue at all because of the failure of the
defending party's answer to raise an issue. On the other
hand, in the case of a summary judgment, issues apparently
exist i.e., facts are asserted in the complaint regarding
which there is as yet no admission, disavowal or
qualification; or specific denials or affirmative defenses are
in truth set out in the answer but the issues thus arising
from the pleadings are sham, fictitious or not genuine, as
shown by affidavits, depositions, or admissions. . . . .
TCaEAD
Simply stated, what distinguishes a judgment on the pleadings from a summary

judgment is the presence of issues in the Answer to the Complaint. When the
Answer fails to tender any issue, that is, if it does not deny the material
allegations in the complaint or admits said material allegations of the adverse
party's pleadings by admitting the truthfulness thereof and/or omitting to deal
with them at all, a judgment on the pleadings is appropriate. 54 On the other
hand, when the Answer specifically denies the material averments of the
complaint or asserts affirmative defenses, or in other words raises an issue, a
summary judgment is proper provided that the issue raised is not genuine. "A
'genuine issue' means an issue of fact which calls for the presentation of
evidence, as distinguished from an issue which is fictitious or contrived or which
does not constitute a genuine issue for trial." 55
a)Judgment on the pleadings is not proper because petitioners' Answer tendered

issues.
In this case, we note that while petitioners' Answer to respondents' Complaint
practically admitted all the material allegations therein, it nevertheless asserts the
affirmative defenses that the action for revival of judgment is not the proper
action and that petitioners are not the proper parties. As issues obviously arise
from these affirmative defenses, a judgment on the pleadings is clearly improper
in this case.
However, before we consider this case appropriate for the rendition of summary
judgment, an examination of the issues raised, that is, whether they are genuine
issues or not, should first be made.
b)The issues raised are not genuine issues, hence rendition of summary judgment
is proper.
To resolve the issues of whether a revival of judgment is the proper action and
whether respondents are the proper parties thereto, the RTC merely needed to
examine the following: 1) the RTC Order dated September 13, 1989, to determine
whether same is a judgment or final order contemplated under Section 6, Rule 39
of the Rules of Court; and, 2) the pleadings of the parties and pertinent portions
of the records 56 showing, among others, who among the respondents were
oppositors to the land registration case, the heirs of such oppositors and the
present occupants of the property. Plainly, these issues could be readily resolved
based on the facts established by the pleadings. A full-blown trial on these issues
will only entail waste of time and resources as they are clearly not genuine issues
requiring presentation of evidence.
Petitioners aver that the RTC should not have granted respondents' Motion for
Judgment on the Pleadings and/or Summary Judgment because of the
controverted stipulations and the first three issues enumerated in the Pre-trial
Order, which, according to them, require the presentation of evidence. These
stipulations and issues, however, when examined, basically boil down to
questions relating to the propriety of the action resorted to by respondents,
which is revival of judgment, and to the proper parties thereto the same
questions which we have earlier declared as not constituting genuine issues.
In sum, this Court holds that the instant case is proper for the rendition of a
summary judgment, hence, the CA committed no error in affirming the May 21,
2001 Order of the RTC granting respondents' Motion for Judgment on the
Pleadings and/or Summary Judgment.
II.The Complaint states a cause of action.

Petitioners contend that the complaint states no cause of action since the
September 13, 1989 Order sought to be revived is not the judgment contemplated
under Section 6, Rule 39 of the Rules of Court. They also aver that the RTC erred
when it ordered the revival not only of the September 13, 1989 Order but also of
the July 24, 1985 CA Decision, when what was prayed for in the complaint was
only the revival of the former.
This Court, however, agrees with respondents that these matters have already
been sufficiently addressed by the RTC in its Order of May 9, 1997 57 and we
quote with approval, viz.:
The body of the Complaint as well as the prayer mentioned

about the executory decision of the Court of Appeals
promulgated on July 24, 1985 that had to be finally
implemented. So it appears to this Court that the Complaint
does not alone invoke or use as subject thereof the Order of
this Court which would implement the decision or judgment
regarding the land in question. The Rules of Court referring
to the execution of judgment, particularly Rule 39, Sec. 6,
provides a mechanism by which the judgment that had not
been enforced within five (5) years from the date of its entry
or from the date the said judgment has become final and
executory could be enforced. In fact, the rule states: ". . .
judgment may be enforced by action."
So in this Complaint, what is sought is the enforcement of a

judgment and the Order of this Court dated September 13,
1989 is part of the process to enforce that judgment. To the
mind of the Court, therefore, the Complaint sufficiently
states a cause of action. 58
III.Any perceived defect in the SPA would not serve to bar the case from
proceeding.
Anent the SPA, we find that given the particular circumstances in the case at bar,
an SPA is not even necessary such that its efficacy or the lack of it would not in
any way preclude the case from proceeding. This is because upon Roberto, Sr.'s
death, Roberto, Jr., in succession of his father, became a co-owner of the subject
property together with his mother, Beata. As a co-owner, he may, by himself
alone, bring an action for the recovery of the co-owned property pursuant to the
well-settled principle that "in a co-ownership, co-owners may bring actions for
the recovery of co-owned property without the necessity of joining all the other
co-owners as co-plaintiffs because the suit is presumed to have been filed for the
benefit of his co-owners." 59 STaAcC
While we note that the present action for revival of judgment is not an action for
recovery, the September 13, 1989 Order sought to be revived herein ordered the
petitioners, among others, to vacate the subject property pursuant to the final
and executory judgment of the CA affirming the CFI's adjudication of the same
in favor of respondents. This Order was issued after the failure to enforce the
writ of execution and alias writ of execution due to petitioner's refusal to vacate
the property. To this Court's mind, respondent's purpose in instituting the
present action is not only to have the CA Decision in the land registration case
finally implemented but ultimately, to recover possession thereof from
petitioners. This action is therefore one which Roberto, Jr., as co-owner, can bring
and prosecute alone, on his own behalf and on behalf of his co-owner, Beata.
Hence, a dismissal of the case with respect to Beata pursuant to Sec. 5, 60 Rule 18
of the Rules of Court will be futile as the case could nevertheless be continued by
Roberto, Jr. in behalf of the two of them.
WHEREFORE, the Petition of Review on Certiorari is DENIED and the assailed

Decision of the Court of Appeals dated February 17, 2004 and Resolution dated
April 19, 2006 in CA-G.R. CV No. 72385 are AFFIRMED.
||| (Basbas v. Sayson, G.R. No. 172660, August 24, 2011)
FIRST DIVISION
[G.R. No. 187677. April 17, 2013.]
REPUBLIC OF THE PHILIPPINES, represented by the

DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS
(DPWH), petitioner, vs. HON. ROSA SAMSON-TATAD, as
Presiding Judge of the Regional Trial Court, Branch 105,
Quezon City, and SPOUSES WILLIAM AND REBECCA
GENATO, respondents.
DECISION
SERENO, C.J p:
This is an appeal via a Petition for Review on Certiorari 1 dated 19 June 2009
assailing the Decision 2 and Resolution 3 of the Court of Appeals (CA) in C.A.
G.R. SP No. 93227 which affirmed the Orders 4 of the Regional Trial Court (RTC),
Branch 105, Quezon City in Civil Case No. Q-01-44595. The RTC barred
petitioner from presenting evidence to prove its claim of ownership over the
subject property, as the presentation thereof would constitute a collateral attack
on private respondents' title.
The antecedent facts are as follows:
On 13 July 2001, petitioner Republic of the Philippines, represented by the

Department of Public Works and Highways (DPWH), filed a Complaint against
several defendants, including private respondents, for the expropriation of
several parcels of land affected by the construction of the EDSA-Quezon Avenue
Flyover. 5 Private respondents, Spouses William and Rebecca Genato, are the
registered owners of a piece of land ("subject property") covered by Transfer
Certificate of Title (TCT) No. RT-11603 (383648) 6 and having an area of 460
square meters.
During the pendency of the proceedings, petitioner received a letter dated 14

June 2002 from Engr. Patrick B. Gatan, Project Manager IV of the DPWH-NCR,
reporting that the subject property was "government land and that the transfer
certificate of title of the said claimant [respondent] . . . is of dubious origin and of
fabrication as it encroached or overlapped on a government property." 7 As a
result, petitioner filed an Amended Complaint on 24 June 2002, 8 seeking to limit
the coverage of the proceedings to an area conforming to the findings of the
DPWH:
4.To accomplish said project, which is to be undertaken by

the Department of Public Works and Highways [DPWH], it
is necessary and urgent for plaintiff to acquire in fee simple
portions of the following parcels of land belonging to,
occupied, possessed, and/or the ownership of which are
being claimed by the defendants, to wit:
xxx xxx xxx
[c]Defendants William O. Genato and Rebecca G.

Genato.
xxx xxx xxx
5.The portion of the above properties that are affected by the

project and shaded green in the sketch plan hereto attached
and made integral part hereof as Annex E, consisting of an
area of: . . . [c] 460 square meters of the aforedescribed
property registered in the name of defendants spouses
William and Rebecca Genato; . . . . (Emphasis in the original)
On 18 July 2002, petitioner filed a Manifestation and Motion 9 to have the subject
property "declared or considered of uncertain ownership or subject to conflicting
claims."
In an Order dated 10 December 2002, 10 the RTC admitted petitioner's Amended

Complaint, deferred the release to respondents the amount of eighteen million
four hundred thousand pesos (P18,400,000) deposited in the bank, equivalent to
the current zonal valuation of the land, and declared the property as the subject
of conflicting claims.
While petitioner was presenting evidence to show that the subject property
actually belonged to the Government, private respondents interposed objections
saying that petitioner was barred from presenting the evidence, as it constituted
a collateral attack on the validity of their TCT No. RT-11603 (383648). The RTC
then required the parties to submit their respective Memoranda.
Upon receipt of the Memoranda, the trial court issued on 12 July 2005 an Order
11 as follows:
WHEREFORE, premises considered, the Court finds that the

issue of the validity of the TCT No. 11603 (383648) can only
be raised in an action expressly instituted for that purpose
and not in this instant proceeding. Accordingly, plaintiff is
barred from presenting evidence as they [sic] constitute
collateral attack on the validity of the title to the subject lot in
violation of Sec. 48 of P.D. 1529.
On 4 August 2005, petitioner seasonably filed a Motion for Reconsideration, 12

but the motion was denied by the RTC in an Order dated 17 November 2005. 13
On 4 January 2006, private respondents filed a Motion for the payment of just
compensation amounting to twenty million seven hundred thousand pesos
(P20,700,000) and for the release of eighteen million four hundred thousand
pesos (P18,400,000) deposited in the Land Bank-South Harbor Branch as partial
payment. 14 This Motion remains pending in the RTC to date.
On 9 February 2006, petitioner filed with the CA a Petition for Certiorari with
Prayer for the Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction. 15
The appellate court ruled that since the subject property was covered by a
Torrens title, Presidential Decree No. 1529, or the Property Registration Decree
(P.D. 1529), necessarily finds significance. Thus, it held that the RTC rightly
applied Sec. 48. Accordingly, the CA issued its 29 September 2008 Decision, 16
WHEREFORE, the Petition for Certiorari is DISMISSED.

The prayer for the issuance of a Writ of Preliminary
Injunction is accordingly DENIED.
On 29 October 2008, petitioner filed a Motion for Reconsideration, 17 but the

motion was also denied in a Resolution dated 27 April 2009. 18
Hence, the instant Petition.
A Comment 19 on the Petition was filed by private respondents on 1 September

2009, and a Reply 20 thereto by petitioner on 27 January 2010.
ISSUE
From the foregoing, the sole issue submitted for resolution before this Court is
whether petitioner may be barred from presenting evidence to assail the validity
of respondents' title under TCT No. RT-11603 (383648).
THE COURT'S RULING

Petitioner argues that under Section 9, Rule 67 of the Rules of Court, if the
ownership of a property to be expropriated is uncertain, the court in the same
expropriation proceeding is also given authority to make a proper adjudication
of the matter. Section 9 of Rule 67 reads:
SECTION 9.Uncertain Ownership. Conflicting Claims. If the

ownership of the property taken is uncertain, or there are
conflicting claims to any part thereof, the court may order
any sum or sums awarded as compensation for the property
to be paid to the clerk of the court for the benefit of the
persons adjudged in the same proceeding to be entitled
thereto. But the judgment shall require the payment of the
sum or sums awarded to either the defendant or the clerk
before the plaintiff can enter upon the property, or retain it
for the public use or purpose if entry has already been made.
This view is allegedly supported by Republic v. Court of First Instance of Pampanga,

presided formerly by Judge L. Pasicolan 21 (Republic) in which the trial court hearing
the expropriation proceeding was also allowed to resolve the issue of ownership.
Petitioner further argues that the original Complaint was amended "precisely to
reflect the fact that herein private respondents, albeit ostensibly appearing as
registered owners, are to be considered as mere claimants of one of the
properties subject of the expropriation." This is the reason why the RTC issued
an Order declaring the property subject of conflicting claims.
Moreover, this being an in rem proceeding, "plaintiff Republic of the Philippines

seeks the relief, both in the original and amended complaints, to transfer to
plaintiff the titles to said parcels of land together with their improvements free
from all liens and encumbrances. For this particular purpose, the expropriation
suit is essentially a direct proceeding." 22
Private respondents, on the other hand, invoke Section 48 of P.D. 1529, viz.:
SECTION 48.Certificate Not Subject to Collateral Attack. A

certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or cancelled except in a direct
proceeding in accordance with law.
It is their contention that by allowing petitioner to present adversarial evidence,

the court is in effect allowing respondents' Torrens title to be collaterally attacked
an action prohibited by P.D. 1529.
We rule that petitioner may be allowed to present evidence to assert its

ownership over the subject property, but for the sole purpose of determining
who is entitled to just compensation.
I
Proper interpretation of Section 9, Rule 67
Proceeding from the principle of jus regalia, the right to eminent domain has
always been considered as a fundamental state power that is inseparable from
sovereignty. 23 It is described as the State's inherent power that need not be
granted even by the Constitution, 24 and as the government's right to
appropriate, in the nature of compulsory sale to the State, private property for
public use or purpose. 25
Expropriation, or the exercise of the State's right to eminent domain, is

proscribed by the restraints of public use and just compensation. 26 It is
governed by Rule 67 of the Rules of Court, which presents procedural guidelines
for the court to ensure that due process is observed and just compensation
rightly paid to the private owners.
Indeed, this Court first had the occasion to interpret Section 9, Rule 67 in the case
of Republic. In addressing the issue of "whether or not the court that hears the
expropriation case has also jurisdiction to determine, in the same proceeding, the
issue of ownership of the land sought to be condemned," the Court answered in
the affirmative:
The sole issue in this case, i.e., whether or not the court that
hears the expropriation case has also jurisdiction to
determine, in the same proceeding, the issue of ownership of
the land sought to be condemned, must be resolved in the
affirmative. That the court is empowered to entertain the
conflicting claims of ownership of the condemned or sought
to be condemned property and adjudge the rightful owner
thereof, in the same expropriation case, is evident from
Section 9 of the Revised Rule 69, which provides:
SEC. 9.Uncertain ownership. Conflicting claims. If

clerk of court for the benefit of the persons adjudged
in the same proceeding to be entitled thereto. But the
sums awarded to either the defendant or the clerk
already been made.
In fact, the existence of doubt or obscurity in the title of the

person or persons claiming ownership of the properties to be
expropriated would not preclude the commencement of the
action nor prevent the court from assuming jurisdiction
thereof. The Rules merely require, in such eventuality, that
the entity exercising the right of eminent domain should
state in the complaint that the true ownership of the
property cannot be ascertained or specified with accuracy.
27
We arrived at the same conclusion in Republic v. Rural Bank of Kabacan, Inc., 28 in

which we held thus:
The trial court should have been guided by Rule 67, Section
9 of the 1997 Rules of Court, which provides thus:
SEC. 9.Uncertain ownership; conflicting claims. If

court for the benefit of the person adjudged in the
same proceeding to be entitled thereto. But the
sums awarded to either the defendant or the court
already been made.
Hence, the appellate court erred in affirming the trial

court's Order to award payment of just compensation to
the defendants-intervenors. There is doubt as to the real
owner of Lot No. 3080. Despite the fact that the lot was
covered by TCT No. T-61963 and was registered under its
name, the Rural Bank of Kabacan manifested that the owner
of the lot was no longer the bank, but the defendants-
intervenors; however, it presented no proof as to the
conveyance thereof. In this regard, we deem it proper to
remand this case to the trial court for the reception of
evidence to establish the present owner of Lot No. 3080
who will be entitled to receive the payment of just
compensation. (Emphases supplied)
However, the authority to resolve ownership should be taken in the proper

context. The discussion in Republic was anchored on the question of who among
the respondents claiming ownership of the property must be indemnified by the
Government:
Now, to determine the person who is to be indemnified for

the expropriation of Lot 6, Block 6, Psd-2017, the court taking
cognizance of the expropriation must necessarily determine
if the sale to the Punzalan spouses by Antonio Feliciano is
valid or not. For if valid, said spouses must be the ones to be
paid by the condemnor; but if invalid, the money will be
paid to someone else. . . . . 29
Thus, such findings of ownership in an expropriation proceeding should not be

construed as final and binding on the parties. By filing an action for
expropriation, the condemnor (petitioner), merely serves notice that it is taking
title to and possession of the property, and that the defendant is asserting title to
or interest in the property, not to prove a right to possession, but to prove a right
to compensation for the taking. 30
If at all, this situation is akin to ejectment cases in which a court is temporarily

authorized to determine ownership, if only to determine who is entitled to
possession. This is not conclusive, and it remains open to challenge through
proper actions. 31 The consequences of Sec. 9, Rule 67 cannot be avoided, as they
are due to the intimate relationship of the issue of ownership with the claim for
the expropriation payment. 32
II
Inapplicability of Section 48, P.D. 1529
Verily, our interpretation of Sec. 9, Rule 67 does not run counter to Section 48 of
P.D. 1529. Under Sec. 48, collateral attacks on a Torrens title are prohibited. We
have explained the concept in Oo v. Lim, 33 to wit:
An action or proceeding is deemed an attack on a title when

its objective is to nullify the title, thereby challenging the
judgment pursuant to which the title was decreed. The
attack is direct when the objective is to annul or set aside
such judgment, or enjoin its enforcement. On the other hand,
the attack is indirect or collateral when, in an action to obtain
a different relief, an attack on the judgment is nevertheless
made as an incident thereof.
In several instances, we have considered an Answer praying for the cancellation

of the plaintiff's Torrens title as a form of a collateral attack. 34 We have afforded
the similar treatment in a petition questioning the validity of a deed of sale for a
registered land, 35 and in a reformation of a deed of sale to include areas
registered under the name of another party. 36 But a resolution on the issue of
ownership in a partition case was deemed neither to be a direct or collateral
attack, for "until and unless this issue of co-ownership is definitely and finally
resolved, it would be premature to effect a partition of the disputed properties."
37
Here, the attempt of petitioner to present evidence cannot be characterized as an

"attack." It must be emphasized that the objective of the case is to appropriate
private property, and the contest on private respondents' title arose only as an
incident to the issue of whom should be rightly compensated.
Contrary to petitioner's allegations, the Complaint and Amended Complaint

cannot also be considered as a direct attack. The amendment merely limited the
coverage of the expropriation proceedings to the uncontested portion of the
subject property. The RTC's Order declaring the property as subject of conflicting
claims is a recognition that there are varying claimants to the sums to be
awarded as just compensation. This serves as an authority for the court to
conduct a limited inquiry on the property's ownership.
WHEREFORE, the Court GRANTS the Petition for Review on Certiorari and the
prayer for a Writ of Preliminary Injunction. The assailed Decision and Resolution
of the Court of Appeals in CA-G.R. SP No. 93227, as well as the Decision of the
Regional Trial Court, Branch 105, Quezon City in Civil Case No. Q-01-44595, are
hereby REVERSED and SET ASIDE. This case is REMANDED to the RTC to
hear the issue of ownership for the purpose of just compensation.
||| (Republic v. Samson-Tatad, G.R. No. 187677, April 17, 2013)
FIRST DIVISION
[G.R. No. 172367. June 5, 2009.]
FELICIDAD DADIZON, ILUMINADA B. MURGIA,

PERLA B. MATIGA, DOMINADOR M. BERNADAS,
CIRILO B. DELIS, and HEIRS OF MARCELINO
BERNADAS, Namely: FE BERNADAS-PICARDAL and
CARMELITO BERNADAS, petitioners, vs. SOCORRO
BERNADAS, substituted by JEANETTE B. ALFAJARDO,
FELY BERNADAS, JULIET BERNADAS, GODOFREDO
BERNADAS, JR. and SOFIA C. BERNADAS, respondents.
DECISION
PUNO, C.J p:
Before us is a Petition for Review on Certiorari 1 filed under Rule 45

of the Rules of Court seeking to set aside the Decision 2 dated December 7,
2005 and the Resolution 3 dated March 15, 2006 of the Court of Appeals
(CA), which affirmed the Order 4 dated September 5, 2001 of the Regional
Trial Court (RTC), Branch 16 of the 8th Judicial Region in Naval, Biliran in
Civil Case No. B-1066. SIaHDA
Petitioners and respondents are the children and representatives of
the deceased children of the late Diosdado Bernadas, Sr. who died intestate
on February 1, 1977, leaving in co-ownership with his then surviving
spouse, Eustaquia Bernadas (who died on May 26, 2000), several parcels of
agricultural and residential land situated in Naval, Biliran.
On May 14, 1999, respondents filed a Complaint 5 against
petitioners to compel the partition of the one-half (1/2) conjugal share of the
properties left by their late father (subject properties) based on the Deed of
Extrajudicial Partition 6 dated February 24, 1996. Respondents alleged that
petitioner Felicidad Dadizon was in possession of the subject properties and
refused to heed their demands to cause the partition of the same.
In their Answer, 7 petitioners averred that the Deed of Extrajudicial
Partition dated February 24, 1996, which respondents sought to enforce, was
revoked by the Deed of Extrajudicial Partition 8 dated February 10, 1999.
They argued that certain parcels of land included in respondents' complaint
had long been disposed of or extrajudicially partitioned by them. They
further claimed that certain parcels of land listed in the Deed of Extrajudicial
Partition dated February 24, 1996 as sold to respondent Socorro Bernadas
could not go to the latter, since the alleged sales were under annulment in
Civil Case No. B-1091 pending before the RTC, Branch 16, Naval, Biliran, a
case filed by their mother, Eustaquia Bernadas, to revoke the sales of her
one-half (1/2) conjugal share on the grounds of lack of consideration, fraud
and lack of consent. 9
In their Reply, 10 respondents contended that the Deed of
Extrajudicial Partition dated February 10, 1999 was a product of malice
directed against respondent Socorro Bernadas, for not all of the heirs of their
late father participated in the execution of the alleged subsequent deed of
partition. The sales executed between their mother, Eustaquia Bernadas, and
respondent Soccorro Bernadas have not been annulled by the court; hence,
they remain valid and subsisting.
During trial, on June 13, 2000, 11 both parties manifested that in
view of the death of their mother, Eustaquia Bernadas, they have an ongoing
negotiation for the extrajudicial partition of the subject properties to end
their differences once and for all.
In the next scheduled hearing, on November 15, 2000, 12 the
counsel of respondents asked for postponement on the ground that he was
in the process of soliciting the signatures of other heirs to complete a
compromise agreement.
On January 30, 2001, the counsel of respondents filed a Project of
Partition 13 dated October 23, 2000. However, the same was not signed by
all of the heirs.
On the hearing of February 6, 2001, 14 the Project of Partition dated
October 23, 2000 was discussed by both parties, and the RTC ordered
petitioners to submit their comment thereon within 15 days. Petitioners did
not file any comment.
In its Order 15 dated March 22, 2001, the RTC noted that at the last
pre-trial conference, both parties informed the court that they already have
an extrajudicial partition of the subject properties and ordered both parties
to submit the extrajudicial partition for its approval.
On May 31, 2001, the RTC issued another Order 16 reiterating its
Order dated March 22, 2001, directing both parties to submit the signed
extrajudicial partition.
On July 16, 2001, respondents filed a Compliance 17 submitting the
following documents: (1) Project of Partition dated October 23, 2000; (2)
Deed of Extrajudicial Partition dated February 24, 1996; and (3) Deed of
Extrajudicial Partition 18 dated August 1, 1997 (involving one parcel of land
covered by Tax Declaration No. 00181). Respondents prayed that the
submitted documents be considered by the RTC relative to the subdivision
of the estate left by their late father. EIDTAa
On July 23, 2001, the RTC issued an Order 19 approving the Project
of Partition dated October 23, 2000.
Petitioners filed a Motion for Reconsideration 20 of the said Order,
but the same was denied by the RTC in its assailed Order 21 dated
September 5, 2001. The RTC noted that petitioners had failed to file any
comment on or objection to the Project of Partition dated October 23, 2000
despite previously being ordered to do so. Moreover, the parties had already
agreed to ask the court for its approval during pre-trial.
Hence, petitioners filed an appeal before the CA alleging, among
others, that the RTC erred in finding that their counsel agreed to the
approved Project of Partition dated October 23, 2000, and that it should be
noted that the said document does not bear the signature of their counsel. 22
On December 7, 2005, the CA rendered its assailed decision finding
the appeal to be without merit. The dispositive portion of the CA decision
reads:
WHEREFORE, in view of the foregoing premises, judgment
is hereby rendered by us DISMISSING the appeal filed in
this case and AFFIRMING the order dated September 5,
2001 issued by the RTC, Branch 16, of the 8th Judicial Region
in Naval, Biliran in Civil Case No. B-1066. 23
Petitioners filed a Motion for Reconsideration 24 of the assailed
decision, but the same was denied by the CA in its Resolution dated March
15, 2006.
Hence, this Petition.
Respondent Soccorro Bernadas, as substituted by Jeanette B.
Alfajardo et al., and respondent Sofia C. Bernadas filed separate comments
on the petition.
Before proceeding to the merits of the case, we shall first address a
procedural issue raised by respondent Sofia C. Bernadas.
Respondent Sofia C. Bernadas argues that there is a necessity to
implead all indispensable parties who were parties to the original case who
do not appear either as petitioners or as respondents in the case before us.
Respondent Sofia C. Bernadas' interpretation of the requirement to
implead all indispensable parties under Rule 7, Section 3 of the Rules of
Court is misplaced. There is no necessity for impleading all the parties in
Civil Case No. B-1066 in this petition.
While it is true that not all the parties in the original case below
appear as petitioners or respondents in the case before us, suffice it to say
that the mandatory requirement of impleading all indispensable parties
applies only to the filing of an original action, but not to an appeal, since it is
the party's choice whether to appeal or not, and he or she cannot be
compelled to do so.
As to the effect of a reversal of the assailed decision on the parties
who did not appeal, the rule is:
We have always recognized the general rule that in appellate
proceedings, the reversal of the judgment on appeal is
binding only on the parties in the appealed case and does
not affect or inure to the benefit of those who did not join or
were not made parties to the appeal. An exception to the
rule exists, however, where a judgment cannot be reversed
as to the party appealing without affecting the rights of his
co-debtor, or where the rights and liabilities of the parties
appealing are so interwoven and dependent on each other
as to be inseparable, in which case a reversal as to one
operates as a reversal as to all. This exception which is
based on a communality of interest of said parties is
recognized in this jurisdiction. 25 (emphasis supplied)
The instant case is such an exception, since the rights and liabilities
of all the parties concerned as the heirs of the late Diosdado Bernadas, Sr. are
inseparable. Hence, any reversal of the assailed decision will inure to the
benefit of those who did not join or were not made parties to the instant
case. Consequently, there is no basis for the fear expressed by respondent
Sofia C. Bernadas that the respective rights to their inheritance of the
persons who were not made parties to the case before us might be forfeited
by technicality. IAETDc
Nonetheless, we note that a review of the records below reveals
that the requirement of joining all indispensable parties to the proceedings
below has been satisfied.
Now, on the merits.
The issue for our consideration is whether or not the CA erred
when it affirmed the Order dated September 5, 2001 of the RTC.
We answer in the affirmative.
There are two stages in every action for partition under Rule 69 of
the Rules of Court.
The first stage is the determination of whether or not a co-
ownership in fact exists and a partition is proper (i.e., not otherwise legally
proscribed) and may be made by voluntary agreement of all the parties
interested in the property. 26
The second stage commences when it appears that "the parties are
unable to agree upon the partition" directed by the court. In that event,
partition shall be done for the parties by the court with the assistance of not
more than three (3) commissioners. 27
There are, thus, two ways in which a partition can take place under
Rule 69: by agreement under Section 2, and through commissioners when
such agreement cannot be reached under Sections 3 to 6.
Sections 2 and 3 of Rule 69 provide:

SEC. 2. Order for partition, and partition by agreement
thereunder. If after the trial the court finds that the plaintiff
has the right thereto, it shall order the partition of the real
estate among all the parties in interest. Thereupon the
parties may, if they are able to agree, make the partition
among themselves by proper instruments of conveyance,
and the court shall confirm the partition so agreed upon by
all the parties, and such partition, together with the order of
the court confirming the same, shall be recorded in the
registry of deeds of the place in which the property is
situated. (2a)
xxx xxx xxx
SEC. 3. Commissioners to make partition when parties fail to
agree. If the parties are unable to agree upon the partition,
the court shall appoint not more than three (3) competent
and disinterested persons as commissioners to make the
partition, commanding them to set off to the plaintiff and to
each party in interest such part and proportion of the
property as the court shall direct. (3a) (emphasis supplied)
AEcTaS
A careful study of the records of this case reveals that the RTC
departed from the foregoing procedure mandated by Rule 69.
In its Order dated July 23, 2001, the RTC noted that both parties
filed the Project of Partition dated October 23, 2000 that it approved. 28 In its
Order dated September 5, 2001 denying petitioners' motion for
reconsideration, the RTC reiterated that both parties filed the same. 29
However, the records show that the Project of Partition dated October 23,
2000 was filed only by respondents' counsel, 30 and that the same was not
signed by the respondents or all of the parties. 31
In its Order dated March 22, 2001, the RTC noted that both parties
have already agreed on the manner of partition of the subject properties, and
that they are seeking for the court's approval. 32 On the issue of whether the
RTC erred in finding that petitioners acceded to the Project of Partition
dated October 23, 2000, the CA sustained the RTC's finding and noted that
both parties manifested to the RTC that they already have an extrajudicial
partition, and that petitioners did not file any comment or suggestion on the
manner of distribution of the subject properties despite being required by
the RTC. 33
Even if petitioners did manifest in open court to the RTC that they
have already agreed with the respondents on the manner of partition of the
subject properties, what is material is that only the respondents filed the
Project of Partition dated October 23, 2000 and that the same did not bear the
signatures of petitioners because only a document signed by all of the
parties can signify that they agree on a partition. Hence, the RTC had no
authority to approve the Project of Partition dated October 23, 2000, which
did not bear all of the signatures of the parties, on the premise that they had
all agreed to the same. Likewise, the failure to file any comment or
suggestion as to manner of distribution of the subject properties does not
justify the RTC's non-observance of the procedure mandated by Rule 69.
When the parties were unable to submit the signed Project of Partition
despite being ordered to do so, the RTC should have ordered the
appointment of commissioners to make the partition as mandated by Section
3, Rule 69.
In partition proceedings, reference to commissioners is required
as a procedural step in the action and is not discretionary on the part of
the court. 34 We have held in a number of cases that if the parties are unable
to agree on a partition, the trial court should order the appointment of
commissioners.
In De Mesa v. Court of Appeals, 35 we held that the trial court
cannot compel petitioner to sign the extrajudicial deed of partition prepared
solely by private respondents for the reason that if the parties are unable to
agree on a partition, the trial court must order the appointment of
commissioners.
In Patricio v. Dario III, 36 we invalidated the order of the trial
court ordering the sale by public auction of the property subject of partition
on the ground that since the parties were unable to agree on a partition, the
trial court should have ordered a partition by commissioners pursuant to
Section 3, Rule 69 of the Rules of Court. It is only after it is made to appear to
the latter that the real estate, or a portion thereof, cannot be divided without
great prejudice to the interest of the parties, and one of the parties interested
asks that the property be sold instead of being assigned to one of the parties,
may the court order the commissioners to sell the real estate at public sale.
HIDCTA
In Heirs of Zoilo Llido v. Marquez, 37 we sustained the trial
court's order appointing commissioners to effect the partition in view of the
failure of the parties to submit a project of partition as follows:
It will be recalled that respondent judge, in his decision of
January 31, 1973 ordered the partition of the enumerated
properties and gave the parties thirty (30) days from notice
thereof within which to submit a project of partition.
Having failed to submit said project, the parties were given
another twenty (20) days to submit the same, otherwise,
commissioners would be appointed to effect the partition.
Again the parties failed to submit a project of partition.
Consequently, respondent judge issued his questioned order
of April 27, 1973, appointing the commissioners.
Likewise, the records show that the parties were unable to
submit a project of partition because the petitioners were
unwilling to submit themselves to a partition (Telegrams,
Rollo, pp. 105 and 106).
In view of the foregoing, it is evident that the instant petition
should be dismissed. Petitioners should not be rewarded for
disregarding the orders of respondent judge.
In Honorio v. Dunuan, 38 we struck down the order of the trial
court approving a project of partition filed by respondent upon the mere
failure of petitioner and his counsel to appear at the hearing and over his
subsequent objection and directed the trial court to immediately constitute
and appoint commissioners.
In this case, that petitioners insist on a manner of partition contrary
to the approved Project of Partition dated October 23, 2000 that was filed
and prepared solely by respondents all the way to this Court makes it more
manifest that the parties to this case are unable to agree on a partition.
IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The
Decision dated December 7, 2005 and the Resolution dated March 15, 2006 of
the Court of Appeals in CA-G.R. CV No. 73326 and the Orders dated July 23,
2001 and September 5, 2001 of the Regional Trial Court in Civil Case No. B-
1066 are hereby REVERSED and SET ASIDE. The case is REMANDED to the
Regional Trial Court, Branch 16 of the 8th Judicial Region in Naval, Biliran,
which is hereby directed to immediately constitute and appoint the
commissioners as provided by Section 3, Rule 69 of the Rules of Court, to
effect the partition in accordance with the other provisions of the same rule.
SO ORDERED.
||| (Dadizon v. Bernadas, G.R. No. 172367, June 05, 2009)
FIRST DIVISION
[G.R. No. 131237. July 31, 2000.]
ROSENDO T. UY, MEDRING SIOCO, BOBBY BERNARD

S. UY and LUISA T. UY, petitioners, vs. HONORABLE
PEDRO T. SANTIAGO, as Judge of Branch 101, Regional
Trial Court of Quezon City; BENITO PALOMADO, PIO
BERMEJO and SANTOS NGALIO, respondents.
Rogelio T. Karagdag, Jr. for petitioners.
King Cabangon & Capuchino Law Office for private respondents.
SYNOPSIS
Seeking to compel respondent judge to issue a writ of execution pending appeal

in the consolidated ejectment cases where judgment had been rendered in their
favor in both the Metropolitan and Regional Trial Courts, petitioners filed this
Petition for Mandamus. As basis for denying petitioners' Motion for Execution
Pending Appeal, respondent Judge cited private respondents' compliance with
the requirements to stay immediate execution of judgment pursuant to Section
19, Rule 70 of the 1997 Rules of Civil Procedure.
It is only the execution of the Metropolitan or Municipal Trial Court's judgment

pending appeal with the Regional Trial Court which may be stayed by a
compliance with the requisites provided in Rule 70, Section 19 of the 1997 Rules
of Civil Procedure. On the other hand, once the Regional Trial Court has
rendered a decision in its appellate jurisdiction, such decision shall be
immediately executory, without prejudice to an appeal, via a Petition for Review,
before the Court of Appeals and/or Supreme Court.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EJECTMENT; JUDGMENT

RENDERED BY THE REGIONAL TRIAL COURT IN ITS APPELLATE
JURISDICTION SHALL BE IMMEDIATELY EXECUTORY. It is only
execution of the Metropolitan or Municipal Trial Courts' judgment pending
appeal with the Regional Trial Court which may be stayed by a compliance with
the requisites provided in Rule 70, Section 19 of the 1997 Rules on Civil Procedure.
On the other hand, once the Regional Trial Court has rendered a decision in its
appellate jurisdiction, such decision shall, under Rule 70, Section 21 of the 1997
Rules on Civil Procedure, be immediately executory, without prejudice to an
appeal, via a Petition for Review, before the Court of Appeals and/or Supreme
Court.
2. ID.; ID.; MANDAMUS; ISSUANCE OF A WRIT OF EXECUTION PENDING

APPEAL IS A CLEAR LEGAL DUTY OF RESPONDENT JUDGE, HENCE,
MANDAMUS CAN LIE AGAINST HIM. Finding the issuance of the writ of
execution pending appeal a clear duty of respondent Judge under the law,
mandamus can and should lie against him. Indeed, mandamus will lie to compel a
judge or other public official to perform a duty specifically enjoined by law once
it is shown that the judge or public official has unlawfully neglected the
performance thereof. THCSAE
DECISION
In the instant Petition for Mandamus, petitioners seek to compel respondent

Judge to issue a writ of execution pending appeal in the consolidated ejectment
cases where judgment has been rendered in their favor in both the Metropolitan
and Regional Trial Courts.
The relevant antecedent facts are not disputed:
On December 19, 1996, the Metropolitan Trial Court of Quezon City, Branch 43,
rendered a Decision 1 in favor of petitioners in four consolidated ejectment cases.
Three of the cases involving private respondents were appealed and raffled to
Branch 101 of the Quezon City Regional Trial Courts, presided by respondent
Judge. On July 15, 1997, respondent Judge rendered a Decision affirming in toto
the decision of the court a quo. 2 A week thereafter, petitioners filed a Motion for
Issuance of Writ of Execution Pending Appeal, to which private respondents
filed their Opposition.
Meanwhile, on August 6, 1997, private respondents filed a Petition for Review

with the Court of Appeals assailing the Decision of respondent Judge in the
ejectment cases.
On August 12, 1997, respondent Judge issued an Order denying petitioners'

Motion for Execution Pending Appeal. 3 A Motion for Reconsideration was filed
on August 22, 1997, to which an Opposition was filed by private respondents.
On October 7, 1997, respondent Judge issued an Order denying petitioners'

Motion for Reconsideration. 4
Hence, the instant Petition for Mandamus for the issuance of a writ of execution
pending appeal, which according to petitioners is the mandatory duty of
respondent Judge. DTCAES
As basis for denying petitioners' Motion for Execution Pending Appeal,

respondent Judge cited private respondents' compliance with the requirements
to stay immediate execution of judgment, namely: (1) perfection of appeal; (2)
filing of a supersedeas bond; and (3) periodic deposit of the rentals falling due
during the pendency of the appeal.
Petitioners contend that Rule 70, Section 10, which enumerated the above-
mentioned requirements, has already been expressly repealed by Rule 70, Section
21 of the Revised Rules of Civil Procedure and that the execution of appealed
ejectment decisions with the Regional Trial Courts cannot now be stayed.
This issue of whether or not decisions of Regional Trial Courts in appealed

ejectment cases pending appeal with the Court of Appeals are immediately
executory and cannot be stayed has been answered in the recent case of
Northcastle Properties & Estate Corp. v. Judge Paas. 5 Upholding the position that it
is the ministerial duty of the Regional Trial Court, as appellate court, to
immediately execute its decision, this Court elucidated thus
"In her answer, Judge Paas contended that Section 19, Rule
70 of the Rules on Civil Procedure allows the stay of
execution of judgment if the defendant files sufficient
supersedeas bond and deposits to the appellate court from
time to time the amount of rent due under the contract. Since
Thadanis deposited sufficient supersedeas bond and are up
to date in depositing the monthly rental of P17,000.00
including 20% rental increase, Judge Paas stayed execution
of the judgment. She cited the case of Heirs of J.B.L. Reyes vs.
Metro Manila Builders, Inc., where the Court of Appeals
granted a temporary restraining order restraining the court
of origin from enforcing the execution until final disposition
of the case.
Northcastle on the other hand argued that the word "shall"

in Section 21, Rule 70 of the 1997 Rules of Civil Procedure
means that it is the ministerial duty of the court to
immediately execute the decision. Such interpretation,
according to complainants, is consistent with the summary
nature of ejectment proceedings.
A careful perusal of the two provisions reveals the

applicability of Section 19 only to ejectment cases pending
appeal with the Regional Trial Court, and Section 21 to those
decided by the Regional Trial Court.
Section 19, Rule 70 of the 1997 Rules on Civil Procedure

provides:
'SECTION 19. Immediate execution of judgment; how to stay
same. If judgment is rendered against the defendant,
execution shall issue immediately upon motion, unless an
appeal has been perfected and the defendant to stay
execution files a sufficient supersedeas bond, approved by
the Municipal Trial Court and executed in favor of the
plaintiff to pay the rents, damages, and costs accruing down
to the time of the judgment appealed from, and unless,
during the pendency of the appeal, he deposits with the
appellate court the amount of rent due from time to time
under the contract, if any, as determined by the judgment of
the Municipal Trial Court. In the absence of a contract, he
shall deposit with the Regional Trial Court the reasonable
value of the use and occupation of the premises for the
preceding month or period at the rate determined by the
judgment of the lower court on or before the tenth day of
each succeeding month or period. The supersedeas bond shall
be transmitted by the Municipal Trial Court, with the other
papers, to the clerk of the Regional Trial Court to which the action
is appealed.'
'All amounts so paid to the appellate court shall be

deposited with said court or authorized government
depositary bank, and shall be held there until the final
disposition of the appeal, unless the court, by agreement of
the interested parties, or in the absence of reasonable
grounds of opposition to a motion to withdraw, or for
justifiable reasons, shall decree otherwise. Should the
defendant fail to make the payments above prescribed from
time to time during the pendency of the appeal, the
appellate court, upon motion of the plaintiff, and upon proof
of such failure, shall order the execution of the judgment
appealed from with respect to the restoration of possession,
but such execution shall not be a bar to the appeal taking its
course until the final disposition thereof on the merits.'
'After the case is decided by the Regional Trial Court, any

money paid to the Court by the defendant for purposes of
the stay of execution shall be disposed of in accordance with
the provisions of the judgment of the Regional Trial Court.
In any case wherein it appears that the defendant has been
deprived of the lawful possession of land or building
pending the appeal by virtue of the execution of the
judgment of the Municipal Trial Court, damages for such
deprivation of possession and restoration of possession may
be allowed the defendant in the judgment of the Regional
Trial Court disposing of the appeal.' TIADCc
On the other hand, Section 21, Rule 70 of the 1997 Rules on

Civil Procedure provides:
'SECTION 21. Immediate execution on appeal to Court of Appeals

or Supreme Court The judgment of the Regional Trial Court
against the defendant shall be immediately executory,
without prejudice to a further appeal that may be taken
therefrom.'
We agree with the complainants.
The decision of the Regional Trial Court in an ejectment case

is immediately executory without prejudice to a petition for
review with the Court of Appeals." (emphasized in the
original)
From the foregoing, it is clear that it is only execution of the Metropolitan or

Municipal Trial Courts' judgment pending appeal with the Regional Trial Court
which may be stayed by a compliance with the requisites provided in Rule 70,
Section 19 of the 1997 Rules on Civil Procedure. On the other hand, once the
Regional Trial Court has rendered a decision in its appellate jurisdiction, such
decision shall, under Rule 70, Section 21 of the 1997 Rules on Civil Procedure, be
immediately executory, without prejudice to an appeal, via a Petition for Review,
before the Court of Appeals and/or Supreme Court.
Erasing any doubt on the matter is the more recent case of Teresa T . Gonzales
La'O & Co., Inc. vs. Sheriff Hatab, 6 where it was categorically held that
"Unlike Rule 70 of the 1964 Revised Rules of Court where

the defendant, after perfecting his appeal, could prevent the
immediate execution of the judgment by taking an appeal
and making a periodic deposit of monthly rentals during the
pendency of the appeal and thereby preventing the plaintiff
from taking possession of the premises in the meantime, the
present wording of Section 21, Rule 70 explicitly provides
that the judgment of the regional trial court in ejectment
cases appealed to it shall be immediately executory and can
be enforced despite the perfection of an appeal to a higher
court."
Private respondents' argument that execution pending appeal would deprive
them of their right to due process of law as it would render moot and academic
their Petition for Review before the Court of Appeals deserves scant
consideration. We must stress that what is in issue is only the propriety of
issuing a writ of execution pending appeal. It is not conclusive on the right of
possession of the land 7 and shall not have any effect on the merits of the
ejectment suit still on appeal. Moreover, it must be remembered that ejectment
cases are summary in nature for they involve perturbation of social order which
must be restored as promptly as possible. 8
Finding the issuance of the writ of execution pending appeal a clear duty of
respondent Judge under the law, mandamus can and should lie against him.
Indeed, mandamus will lie to compel a judge or other public official to perform a
duty specifically enjoined by law once it is shown that the judge or public official
has unlawfully neglected the performance thereof. 9
WHEREFORE, for the reasons aforestated, the instant Petition for Mandamus is
hereby GRANTED. The Orders, dated August 12, 1997 and October 7, 1997
issued by respondent Judge Pedro T. Santiago in Civil Cases Nos. Q-30362-64 are
hereby SET ASIDE. Respondent Judge is hereby ordered to cause the immediate
issuance of a writ of execution pending appeal in said Civil Cases Nos. Q-30362-
64. No pronouncement as to costs.
||| (Uy v. Santiago, G.R. No. 131237, July 31, 2000)
FIRST DIVISION
[G.R. No. 157985. December 2, 2005.]
ZENAIDA BUGARIN, VIOLETA ABANO, LIZA

ABAYATA, ANTONIO ALEGRE, REMEDIOS ALEGRE,
CHRIS ANASCO, JEFFREY ARQUILLOS, LOURDES
BAGARESE, EUGENIA BARAQUIL, PRECIOS BASOY,
RANNY BASOY, FELY BERMEJO, CARLOS BO, JUN BO,
ALEX BORRES, ANNA MARIE CORDOVA, ESPERANZE
CORDOVA, EDWIN DEPETILLO, ROMULO FERRY,
LEONISA GABRIEL, MA. FE GABRIEL, SALOME
CORDOVA, ELEN JACOB, JEREMIAS JACOB, OLIVIA
LERIN, CRISELDA MADEJA, JOMARI MANONG,
NESTOR MANONG, VALENTIN MANONG,
EDMUNDO/FELY MINA, TEDDY PARUAN,
SALVACION PASCUA, ROMMEL POLISTICO,
DANIEL/NANCY PRADO, ARMANDO ROMERO,
SANCHO VILLAFUERTE, and FERNANDO YAMID,
petitioners, vs. CECILIA B. PALISOC, MARINA B. MATA
and REYNALDO T. NEPOMUCENO, respondents.
RESOLUTION
QUISUMBING, J p:
Before us is a petition for review on certiorari assailing the Order 1 dated April
30, 2003 and the Special Order of Demolition 2 dated May 9, 2003 of the
Metropolitan Trial Court (MeTC) of Paraaque City, Branch 77. Petitioners had
applied for the issuance of a temporary restraining order (TRO) but the Court in
a resolution 3 dated May 15, 2003 denied the application.
The facts in this case, culled from the record, are as follows.
The present controversy arose from a complaint for ejectment, docketed as Civil
Case No. 11799, filed before the MeTC by private respondents Cecilia B. Palisoc
and Marina B. Mata. In a decision 4 dated February 27, 2002, the court declared
respondents as the rightful possessors of the properties in dispute. It also
ordered the petitioners to vacate the premises and pay to private respondents the
rentals.
Petitioners appealed to the Regional Trial Court (RTC) of Paraaque City, Branch
274 while private respondents moved for execution pending appeal. On January
8, 2003, the RTC affirmed the MeTC decision with the modification that
petitioners must start paying rentals from the date of the appealed decision. cdtai
2006
On January 28, 2003, petitioners filed a Motion for Reconsideration with

Opposition to the Issuance of a Writ of Execution. In an order dated March 3,
2003, the RTC denied the motion and granted private respondents' motion for
execution for failure of petitioners to post a supersedeas bond or to pay the back
rentals. Thus, a writ of execution pending appeal was issued. On March 7, 2003,
petitioners were served with the writ and notice to vacate.
On March 11, 2003, petitioners filed a Motion to Defer Implementation of the

Writ of Execution. On March 14, 2003, private respondents filed a Motion to
Issue a Special Order of Demolition since petitioners refused to vacate the
premises. The RTC deferred action on the motions to allow petitioners to exhaust
legal remedies available to them. aTIEcA
Petitioners thereafter filed a Supplement to the Motion to Defer Implementation

of Writ of Execution and Opposition to Motion to Issue Special Order of
Demolition, contending that Section 28 of Republic Act No. 7279 5 was not
complied with.
On April 4, 2003, private respondents filed a Motion Reiterating the Motion for
Issuance of Special Order of Demolition. In an order dated April 11, 2003, the
RTC declared the decision denying petitioners' appeal final and executory, and
remanded the records of the case to the MeTC without acting on the motions.
However, on April 10, 2003, petitioners filed a Petition for Certiorari and
Prohibition with Prayer for Preliminary Prohibitory Injunction before the Court
of Appeals. They also filed an Urgent Vigorous Opposition and Motion to
Suspend Proceedings on respondents' Motion Reiterating the Motion for
Issuance of Special Order of Demolition before the MeTC.
The MeTC set the Motion for the Issuance of Special Order of Demolition for
hearing. The court granted said motion on April 30, 2003, but gave petitioners
five (5) days from receipt of its order to voluntarily vacate the premises and
remove all structures and improvements made thereon.
On May 6, 2003, MeTC Branch Sheriff Reynaldo T. Nepomuceno reported that

petitioners refused to vacate the premises. Petitioners instead filed a Motion to
Quash and Recall the Order dated April 30, 2003 and/or Special Order of
Demolition. The MeTC denied the motion and issued the Special Order of
Demolition on May 9, 2003.
Hence, this petition where petitioners raise the lone error that
THE COURT A QUO, IN BRUSHING ASIDE REPUBLIC

ACT [NO.] 7279 IN THE RESOLUTION OF THE CASE
AGAINST THESE UNDERPRIVILEGED PETITIONERS,
HAS DECIDED A QUESTION OF SUBSTANCE, NOT
THERETOFORE DETERMINED BY THE SUPREME
COURT, AND/OR HAS DECIDED IT IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THE HONORABLE
SUPREME COURT. 6
Simply, the issue is, are the Orders of the MeTC proper?
Petitioners contend that the Orders of the MeTC violated the mandatory
requirements of Section 28 7 of Rep. Act No. 7279 since there was no 30-day
notice prior to the date of eviction or demolition and there had been no
consultation on the matter of resettlement. They also claim that there was neither
relocation nor financial assistance given. They insist that the MeTC orders are
patently unreasonable, impossible and in violation of the law. 8
Private respondents for their part argue that Rep. Act No. 7279 is not applicable.
They aver that there was no proof that petitioners are registered as eligible
socialized housing program beneficiaries in accordance with procedure set forth
in the Implementing Rules and Regulations Governing the Registration of
Socialized Housing Beneficiaries issued by the Department of Interior and Local
Government and the Housing and Urban Development Coordinating Council.
They aver that even if Rep. Act No. 7279 was applicable, the required notices
under the law had already been complied with. According to them, petitioners
were already notified on March 7, 2003 of an impending demolition, when the
writ of execution was served. 9
We find for respondents. TAIESD
Under Section 19, 10 Rule 70 of the Revised Rules on Civil Procedure, a judgment
on a forcible entry and detainer action is immediately executory to avoid further
injustice to a lawful possessor, and the court's duty to order the execution is
practically ministerial. 11 The defendant may stay it only by (a) perfecting an
appeal; (b) filing a supersedeas bond; and (c) making a periodic deposit of the
rental or reasonable compensation for the use and occupancy of the property
during the pendency of the appeal. 12 Once the Regional Trial Court decides on
the appeal, such decision is immediately executory under Section 21, 13 Rule 70,
without prejudice to an appeal, via a petition for review, before the Court of
Appeals or Supreme Court. 14
However, petitioners failed to file a petition for review. Records show that
petitioners received on March 12, 2003 the RTC decision denying their motion for
reconsideration. They had until March 27, 2003 to file a petition for review before
the Court of Appeals. Instead, they filed a petition for certiorari and prohibition
on April 10, 2003. In said petition, which is still pending, petitioners contended
that the RTC committed grave abuse of discretion in affirming the MeTC
decision and insisted that the latter court had no jurisdiction over the complaint.
The remedy to obtain reversal or modification of the judgment on the merits in

the instant case is appeal. This holds true even if the error ascribed to the court
rendering the judgment is its lack of jurisdiction over the subject matter, or the
exercise of power in excess thereof, or grave abuse of discretion in the findings of
fact or of law set out in the decision. The existence and availability of the right of
appeal prohibits the resort to certiorari because one of the requirements for the
latter remedy is that "there should be no appeal." 15
Clearly, petitioners' petition for certiorari before the Court of Appeals was filed as
a substitute for the lost remedy of appeal. Certiorari is not and cannot be made a
substitute for an appeal where the latter remedy is available but was lost through
fault or negligence. 16 Thus, the filing of the petition for certiorari did not prevent
the RTC decision from becoming final and executory. 17 The RTC acted correctly
when it remanded the case to the court of origin in the order dated April 11,
2003. 18
Thus, we find that the MeTC cannot be faulted for issuing the assailed orders to
enforce the RTC judgment. Both orders were issued after the requisite notice and
hearing. Moreover, the Court of Appeals did not issue any writ of preliminary
injunction to stay the execution of the judgment.
Petitioners tried to stay the execution of the order of demolition by filing a

petition for review with prayer for TRO before us. We earlier denied said prayer
for TRO. We also find petitioners' contention that the said orders violated Rep.
Act No. 7279, particularly Section 28(c), 19 totally without merit. Under the
provision, eviction or demolition may be allowed when there is a court order for
eviction and demolition, as in the case at bar. Moreover, nothing is shown on
record that petitioners are underprivileged and homeless citizens as defined in
Section 3(t) of Rep. Act No. 7279. 20 The procedure for the execution of the
eviction or demolition order under Section 28(c) is, in our view, not applicable.
It also appears that the order of demolition had already been executed.
Petitioners had already vacated the area and private respondents now possess
the properties free from all occupants, as evidenced by the sheriff's turn-over of
possession dated May 19, 2003. Thus, the instant case before us has indeed
become moot and academic.
WHEREFORE, the petition for review assailing the Order dated April 30, 2003
and the Special Order of Demolition dated May 9, 2003 of the Metropolitan Trial
Court of Paraaque City, Branch 77, is DENIED for mootness and lack of merit.
SO ORDERED.
||| (Bugarin v. Palisoc, G.R. No. 157985, December 02, 2005)
SECOND DIVISION
[G.R. No. 173606. December 3, 2012.]
VALERIANA VILLONDO, petitioner, vs. CARMEN

QUIJANO, ARDIANO ALCANTARA, and MARCELINO
EBENA, respondents.
DECISION
DEL CASTILLO, J p:
"In giving recognition to the action of forcible entry and detainer[,] the purpose
of the law is to protect the person who in fact has actual possession; and in case
of controverted right, it requires the parties to preserve the status quo until one or
the other of them sees fit to invoke the decision of a court of competent
jurisdiction upon the question of ownership. It is obviously just the person who
has first acquired possession [who] should remain in possession pending this
decision . . . ." 1
In a legal battle for forcible entry, two parties assert their alleged right to possess
a 2.66-hectare government timberland in Udlom, Sinsin, Cebu City. One of the
parties, Valeriana Villondo (Valeriana), prevailed in the Municipal Trial Court in
Cities (MTCC) but later lost her case before the Regional Trial Court (RTC) after
it rejected her standing as the real party-in-interest. And since the Court of
Appeals (CA) affirmed the RTC's ruling, Valeriana now comes to this Court to
assail the March 31, 2005 Decision 2 and July 10, 2006 Resolution 3 of the CA in
CA-G.R. SP No. 70734.
Factual Antecedents
In her Complaint 4 for forcible entry with preliminary mandatory injunction
before the MTCC in Cebu City, Valeriana claimed that in the morning of August
14, 1999, respondent Carmen Quijano (Carmen) and her farm laborers,
respondents Adriano Alcantara and Marcelino Ebena, intruded into her land
with the help of three policemen and other barangay officials. They destroyed the
plants therein, harvested the root crops, corn, and banana, built a hut, fenced off
the area, and posted a "NO TRESPASSING" sign, thus preventing Valeriana and
her family from entering the premises where they have always resided and
depriving them of their harvest. cEHITA
Valeriana argued that Carmen can never assert ownership over the property
because it is a government land. She claimed that Carmen's parents, Rufo and
Constancia Bacalla, were themselves aware that an ownership claim is worthless.
Thus, they ceded their plantations on the subject land to her husband Daniel
Villondo (Daniel) for P2,000.00 as declared in a "Kasabutan". 5
Valeriana based her and her family's right of possession on Certificate of

Stewardship No. 146099 in the name of 'Daniel T. Villondo', 6 which she claimed
to have been awarded to her now-deceased husband whose actual name is
'Daniel P. Villondo.' Said Certificate was issued by the Department of
Environment and Natural Resources on February 14, 1994. Valeriana averred
that her family had prior possession of the land as her husband started tilling the
same even before the war. When she married him in 1948, they continued to
occupy and cultivate the land together with their five children. To further
support her claim of prior possession and Carmen's alleged intrusion, she
submitted, inter alia, Carmen's letters that sought police and barangay assistance
in fencing the subject property, 7 her (Carmen) counsel's demand letter for
Valeriana's son Esteban Villondo (Esteban) to leave the property, 8 pictures of a
collapsed house on the subject land that Valeriana claims to belong to one of her
sons, 9 and an affidavit of Regino Habasa (Regino), a Bureau of Forestry
employee and a Barangay Sinsin resident, who attested that the Villondo family
had been tilling the land since 1951. 10
On the other hand, Carmen interposed that the alleged "Kasabutan" was never
brought to her attention by her parents. In any case, she asserted that such
allegation of Valeriana even supports her claim of prior possession. CHTAIc
Carmen tacked her possessory right to that of her parents Rufo and Constancia
Bacalla who in 1948 purchased 11 from Liberato and Vicente Abellanosa a 4.51
hectare land in Taop, Pardo, Cebu City covered by Tax Declaration No. 92638.
According to her, said 4.51 hectare land includes the disputed area which her
parents also cultivated and developed. Carmen submitted to the court her tax
declarations over the land. 12
The respondents also questioned Valeriana's legal personality to sue, contending

that "Daniel T. Villondo," 13 the named tiller in the Certificate of Stewardship
No. 146099, is the real party-in-interest and thus should be the plaintiff in the suit
and not Valeriana. They claimed that "Daniel T. Villondo" is actually Valeriana's
son Romualdo Villondo (Romualdo), a construction worker who had never even
cultivated the subject land. Respondents refuted Valeriana's claim that the
named tiller in the Certificate refers to her husband "Daniel P. Villondo," 14 who
was awarded by the government a Certificate of Stewardship over another parcel
of land in 1983. 15 Because of this, they asserted that Valeriana is misleading the
court by making it appear that she has successional rights from her husband as
steward. To support this, respondents submitted the respective stewardship
applications 16 as well as other documents 17 indicating that Daniel P. Villondo
and Daniel T. Villondo are different persons. Notably, Regino's Affidavit admits
that Daniel T. Villondo refers to Romualdo. 18
Incidentally, Carmen's attempt to have the land surveyed in June 1997 resulted in
the filing before the MTCC of Cebu of criminal cases for grave threats and grave
coercion docketed as Criminal Case Nos. R-55788-55789 19 against Valeriana, her
two children Esteban and Trinidad, and a daughter-in-law. Carmen alleged that
the four were armed with scythe, bolo, and pieces of wood when they prevented
her from entering and surveying the property, and even threatened to kill her if
she proceeds with the land survey. 20
Ruling of the Municipal Trial Court in Cities

After weighing the parties' respective evidence, the MTCC adjudged that the
Daniel T. Villondo under whose name the Certificate of Stewardship was issued,
is actually Valeriana's son, Romualdo. The MTCC pointed out that the
boundaries of the lot as reflected in Romualdo's Certificate of Stewardship are
way different from the boundaries mentioned in Tax Declaration No. 92638 that
Carmen has been relying upon. In fact, the land covered by Romualdo's
Certificate of Stewardship made no mention that it is bounded by Carmen's land
or the land of her predecessors-in-interest. 21 This thus disproved respondents'
claim that Certificate of Stewardship No. 146099 was issued over a land that
constitutes a portion of Carmen's property. aCHDAE
Noting that the ejectment case delves on possession de facto, the MTCC also
concluded that respondents indeed deprived Valeriana and her family of the
possession of the land. It reasoned that Carmen herself alleged in the pending
criminal cases for grave threats and grave coercion that she was prevented by the
Villondos from entering the property and this presupposes that Valeriana and
her family were in prior possession and occupation of the land in question. Thus,
in its March 2, 2001 Decision, 22 the MTCC ruled:
WHEREFORE, judgment is hereby rendered in favor of

[Valeriana] and against the [respondents] ordering the latter
to vacate and move out from the premises of the subject land
and to restore [Valeriana] to the peaceful possession and
occupation thereof and condemning them to pay [Valeriana],
jointly and severally, the following:
(a)Actual Damages in the amount of Twenty-Five Thousand

(PhP25,000.00) Pesos;
(b)Attorney's fees in the amount of Fifteen Thousand

(PhP15,000.00) Pesos; and
(c)Litigation expenses in the amount of Ten Thousand

(PhP10,000.00) Pesos.
SO ORDERED. 23

Dismayed with the judgment, respondents appealed to the RTC of Cebu City
and reiterated their claim of prior possession of the property. They also put in
issue therein lack of cause of action since Valeriana is not the real party-in-
interest. A supersedeas bond was likewise posted. 24 cADEHI
In its February 11, 2001 Resolution, 25 the RTC found Valeriana's Complaint
dismissible for lack of cause of action, viz.:
Based on the foregoing findings of the court a quo, the

complaint should have been initiated by Romualdo
Villondo, who is using the name of Daniel T. Villondo,
because he is the real party-in-interest and not by his
mother, the herein appellee Valeriana Villondo. There is also
no showing that Romualdo Villondo is a minor or an
incompetent who needs the assistance of his mother as
guardian ad litem. Because of this fatal defect, this case is
dismissible under Section 1, Rule 16 of the Rules of Court
because the herein appellee Valeriana Villondo is not the
real party-in-interest but Romualdo Villondo, and therefore
the complaint does not state a cause of action. 26
In any event, the RTC gave more credence to Carmen's tax declarations over
Valeriana's assertion of long-time possession which to it, was never established.
The dispositive portion of the said Resolution reads:
WHEREFORE, in view of the foregoing, the Decision

appealed from is hereby reversed in favor of the
[respondents] since the [petitioner] Valeriana Villondo is not
a real party-in-interest or beneficiary of the Certificate of
Stewardship . . . but her son Romualdo Villondo, who used
the name of Daniel T. Villondo, Jr. Hence, the court a quo
should have dismissed the complaint since it does not state a
cause of action.
Cost [de] officio.
Valeriana filed a Motion for Reconsideration 28 but the same was denied in an
Order 29 dated March 12, 2002. caEIDA

When Valeriana elevated the case to the CA, 30 she proffered that the only issue
that the courts should consider in forcible entry cases is actual possession. She
highlighted the fact that the RTC did not overturn the MTCC's factual finding of
her actual possession of the disputed property. She therefore claimed that the
RTC erred in dismissing her Complaint for the sole reason that she is not a real
party-in-interest and likewise prayed for the issuance of a writ of
execution/possession.
The CA however was not convinced. In its March 31, 2005 Decision, 31 it ruled:
[Valeriana's] allegation that she and her family were

deprived of their possession, cultivation and enjoyment of
the subject land may be true; however, it is equally
important, in order for her case to prosper, to show that she
has the right or interest to protect. One who has no right or
interest to protect cannot invoke the jurisdiction of the court
as party-plaintiff in an action for it is jurisprudentially
ordained that every action must be prosecuted or defended
in the name of the real party in interest. A "real party in
interest" is one who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the
suit. We agree with the RTC that petitioner is not the real
party in interest in the case at bench.
xxx xxx xxx
WHEREFORE, the petition is DENIED. The assailed

February 11, 2002 Resolution and the March 12, 2002 Order
of Branch 5, Regional Trial Court, Cebu City, are hereby
AFFIRMED. 32
In her Motion for Reconsideration, 33 Valeriana maintained that she is a real

party-in-interest since she was one of those dispossessed of the property.
However, the CA, in its July 10, 2006 Resolution, 34 ignored her plea for a
reconsideration. AEcTaS
The Sole Issue

Pleading before us for a review of the CA ruling, Valeriana underscores her
rightful personality as plaintiff and stressed that the CA erred in affirming the
RTC when it ruled that only Romualdo can be the plaintiff in the forcible entry
case.
Hence, the central issue to be resolved is: Whether Valeriana is a real party-in-
interest in the forcible entry case she filed.
Our Ruling
Notably, even public lands can be the subject of forcible entry cases as it has
already been held that ejectment proceedings may involve all kinds of land. 35
Thus, in the case at bench, while the parties are fighting over the possession of a
government land, the courts below are not deprived of jurisdiction to render
judgment thereon. 36 Courts must resolve the issue of possession even if the
parties to the ejectment suit are mere informal settlers. 37
For a court to restore possession, two things must be proven in a forcible entry
case: prior physical possession of the property and deprivation of the property
by means of force, intimidation, threat, strategy, or stealth. 38 "Possession de
facto, [i.e., the physical possession of a property,] and not possession de jure is the
only issue in a forcible entry case. This rule holds true regardless of the character
of a party's possession, provided that he has in his favor priority in time. . . ." 39
As used in forcible entry and unlawful detainer cases, 'possession' refers to
"physical possession, not legal possession in the sense contemplated in civil law."
40
Here, Valeriana is one of those in prior physical possession of the land who was
eventually dispossessed. EADCHS
Carmen failed to present evidence that she was in actual physical possession of
the land she claims. Her "[t]ax declarations are not conclusive proofs of
ownership, or even of possession." 41 They only constitute proofs of a claim of
title over the declared property. 42 Her acts betray her claim of prior possession.
Her counsel wrote Valeriana's son Esteban and demanded that the subject land
be vacated. Carmen had to seek help from the authorities in order to fence the
lot. Furthermore, by filing criminal cases for grave threats and grave coercion,
she herself acknowledged that Valeriana, together with Esteban, another son and
daughter-in-law, were the ones occupying the subject property and who
allegedly prevented her from conducting a land survey. These circumstances are
indicative of the Villondo family's possession of the premises.
With this in mind, is Valeriana the appropriate party to file a forcible entry case
against the respondents? We rule that the CA has no reason to withhold the relief
she prays for on the ground of a lack of cause of action.
"A real party-in-interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit." 43 As we have
explained:
'Interest' within the meaning of the rules means material

interest, an interest in issue and to be affected by the decree
as distinguished from mere interest in the question involved,
or a mere incidental interest. A real party-in-interest is one
who has a legal right. . . . The action must be brought by the
person who, by substantive law, possesses the right sought
to be enforced. . . . 44
Section 1, Rule 70 of the Rules of Court specifies who may be the plaintiff in an
action for forcible entry, viz.:
Section 1.Who may institute proceedings, and when. . . . a
person deprived of the possession of any land or building
by force, intimidation, threat, strategy, or stealth, or a
lessor, vendor, vendee, or other person against whom the
possession of any land or building is unlawfully withheld
after the expiration or termination of the right to hold
possession, by virtue of any contract, express or implied, or
the legal representatives or assigns of any such lessor,
vendor, vendee, or other person, may, at any time within
one (1) year after such unlawful deprivation or withholding
of possession, bring an action in the proper Municipal Trial
Court against the person or persons unlawfully
withholding or depriving of possession, or any person or
persons claiming under them, for the restitution of such
possession, together with damages and costs. (Emphasis
supplied.)
Sans the presence of the awardee of the Certificate of Stewardship, the provision
clearly allows Valeriana to institute the action for the recovery of the physical
possession of the property against the alleged usurper. She has a right or interest
to protect as she was the one dispossessed and thus, she can file the action for
forcible entry. Any judgment rendered by the courts below in the forcible entry
action will bind and definitely affect her claim to possess the subject property.
The fact that Valeriana is not the holder of the Certificate of Stewardship is not in
issue in a forcible entry case. This matter already delves into the character of her
possession. We emphasize that in ejectment suits, it does not even matter if the
party's title to the property is questionable. 45 TAcSaC
The MTCC correctly considered Valeriana as a real party-in-interest and

correctly delved strictly with the issue of physical possession. Notably, the CA,
other than dismissing the case for lack of cause of action, did not seem to dispute
the MTCC's factual finding of Valeriana's prior physical possession. Absent any
evidence of respondents' prior physical possession, Valeriana, who has cogently
convinced us that she was dispossessed of the land by force, is entitled to stay on
the property until she is lawfully ejected by others who can prove in a separate
proceeding that they have a better right.
We then end by highlighting the principle behind ejectment proceedings:
. . . Regardless of the actual condition of the title to the

property, the party in peaceable quiet possession shall not
be thrown out by a strong hand, violence, or terror.
Neither is the unlawful withholding of property allowed.
Courts will always uphold respect for prior possession. 46
WHEREFORE, the instant petition is hereby GRANTED. The assailed March 31,
2005 Decision and July 10, 2006 Resolution of the Court of Appeals in CA-G.R. SP
No. 70734 are hereby ANNULED and SET ASIDE. The Decision of the
Municipal Trial Court in Cities in Cebu, Branch 5, is REINSTATED and
AFFIRMED.
SO ORDERED.
||| (Villondo v. Quijano, G.R. No. 173606, December 03, 2012)
FIRST DIVISION
[G.R. No. 146364. June 3, 2004.]
COLITO T. PAJUYO, petitioner, vs. COURT OF APPEALS

and EDDIE GUEVARRA, respondents.
DECISION
CARPIO, J p:
The Case
Before us is a petition for review 1 of the 21 June 2000 Decision 2 and 14
December 2000 Resolution of the Court of Appeals in CA-G.R. SP No. 43129. The
Court of Appeals set aside the 11 November 1996 decision 3 of the Regional Trial
Court of Quezon City, Branch 81, 4 affirming the 15 December 1995 decision 5 of
the Metropolitan Trial Court of Quezon City, Branch 31. 6
The Antecedents
In June 1979, petitioner Colito T. Pajuyo ("Pajuyo") paid P400 to a certain Pedro
Perez for the rights over a 250-square meter lot in Barrio Payatas, Quezon City.
Pajuyo then constructed a house made of light materials on the lot. Pajuyo and
his family lived in the house from 1979 to 7 December 1985.
On 8 December 1985, Pajuyo and private respondent Eddie Guevarra

("Guevarra") executed a Kasunduan or agreement. Pajuyo, as owner of the house,
allowed Guevarra to live in the house for free provided Guevarra would
maintain the cleanliness and orderliness of the house. Guevarra promised that he
would voluntarily vacate the premises on Pajuyo's demand.
In September 1994, Pajuyo informed Guevarra of his need of the house and
demanded that Guevarra vacate the house. Guevarra refused.
Pajuyo filed an ejectment case against Guevarra with the Metropolitan Trial
Court of Quezon City, Branch 31 ("MTC").
In his Answer, Guevarra claimed that Pajuyo had no valid title or right of
possession over the lot where the house stands because the lot is within the 150
hectares set aside by PROCLAMATION NO. 137 for socialized housing.
Guevarra pointed out that from December 1985 to September 1994, Pajuyo did
not show up or communicate with him. Guevarra insisted that neither he nor
Pajuyo has valid title to the lot.
On 15 December 1995, the MTC rendered its decision in favor of Pajuyo. The
dispositive portion of the MTC decision reads:

rendered for the plaintiff and against defendant, ordering
the latter to:
A) vacate the house and lot occupied by the

defendant or any other person or persons
claiming any right under him;
B) pay unto plaintiff the sum of THREE HUNDRED

PESOS (P300.00) monthly as reasonable
compensation for the use of the premises
starting from the last demand;
C) pay plaintiff the sum of P3,000.00 as and by way

of attorney's fees; and
D) pay the cost of suit.
SO ORDERED. 7
Aggrieved, Guevarra appealed to the Regional Trial Court of Quezon City,

Branch 81 ("RTC").
On 11 November 1996, the RTC affirmed the MTC decision. The dispositive
portion of the RTC decision reads:
WHEREFORE, premises considered, the Court finds no

reversible error in the decision appealed from, being in
accord with the law and evidence presented, and the same is
hereby affirmed en toto.
SO ORDERED. 8
Guevarra received the RTC decision on 29 November 1996. Guevarra had only
until 14 December 1996 to file his appeal with the Court of Appeals. Instead of
filing his appeal with the Court of Appeals, Guevarra filed with the Supreme
Court a "Motion for Extension of Time to File Appeal by Certiorari Based on Rule
42" ("motion for extension"). Guevarra theorized that his appeal raised pure
questions of law. The Receiving Clerk of the Supreme Court received the motion
for extension on 13 December 1996 or one day before the right to appeal expired.
On 3 January 1997, Guevarra filed his petition for review with the Supreme
Court.
On 8 January 1997, the First Division of the Supreme Court issued a Resolution 9
referring the motion for extension to the Court of Appeals which has concurrent
jurisdiction over the case. The case presented no special and important matter for
the Supreme Court to take cognizance of at the first instance.
On 28 January 1997, the Thirteenth Division of the Court of Appeals issued a

Resolution 10 granting the motion for extension conditioned on the timeliness of
the filing of the motion.
On 27 February 1997, the Court of Appeals ordered Pajuyo to comment on

Guevarra's petition for review. On 11 April 1997, Pajuyo filed his Comment.
On 21 June 2000, the Court of Appeals issued its decision reversing the RTC
decision. The dispositive portion of the decision reads:
WHEREFORE, premises considered, the assailed Decision of

the court a quo in Civil Case No. Q-96-26943 is REVERSED
and SET ASIDE; and it is hereby declared that the ejectment
case filed against defendant-appellant is without factual and
legal basis.
SO ORDERED. 11
Pajuyo filed a motion for reconsideration of the decision. Pajuyo pointed out that
the Court of Appeals should have dismissed outright Guevarra's petition for
review because it was filed out of time. Moreover, it was Guevarra's counsel and
not Guevarra who signed the certification against forum-shopping.
On 14 December 2000, the Court of Appeals issued a resolution denying Pajuyo's

motion for reconsideration. The dispositive portion of the resolution reads:
WHEREFORE, for lack of merit, the motion for

reconsideration is hereby DENIED. No costs.
SO ORDERED. 12
The Ruling of the MTC
The MTC ruled that the subject of the agreement between Pajuyo and Guevarra
is the house and not the lot. Pajuyo is the owner of the house, and he allowed
Guevarra to use the house only by tolerance. Thus, Guevarra's refusal to vacate
the house on Pajuyo's demand made Guevarra's continued possession of the
house illegal.
The Ruling of the RTC

The RTC upheld the Kasunduan, which established the landlord and tenant
relationship between Pajuyo and Guevarra. The terms of the Kasunduan bound
Guevarra to return possession of the house on demand.
The RTC rejected Guevarra's claim of a better right under PROCLAMATION

NO. 137, the Revised National Government Center Housing Project Code of
Policies and other pertinent laws. In an ejectment suit, the RTC has no power to
decide Guevarra's rights under these laws. The RTC declared that in an ejectment
case, the only issue for resolution is material or physical possession, not
ownership.

The Court of Appeals declared that Pajuyo and Guevarra are squatters. Pajuyo
and Guevarra illegally occupied the contested lot which the government owned.
Perez, the person from whom Pajuyo acquired his rights, was also a squatter.
Perez had no right or title over the lot because it is public land. The assignment
of rights between Perez and Pajuyo, and the Kasunduan between Pajuyo and
Guevarra, did not have any legal effect. Pajuyo and Guevarra are in pari delicto or
in equal fault. The court will leave them where they are.
The Court of Appeals reversed the MTC and RTC rulings, which held that the
Kasunduan between Pajuyo and Guevarra created a legal tie akin to that of a
landlord and tenant relationship. The Court of Appeals ruled that the Kasunduan
is not a lease contract but a commodatum because the agreement is not for a price
certain.
Since Pajuyo admitted that he resurfaced only in 1994 to claim the property, the
appellate court held that Guevarra has a better right over the property under
PROCLAMATION NO. 137. President Corazon C. Aquino ("President Aquino")
issued PROCLAMATION NO. 137 on 7 September 1987. At that time, Guevarra
was in physical possession of the property. Under Article VI of the Code of
Policies Beneficiary Selection and Disposition of Homelots and Structures in the
National Housing Project ("the Code"), the actual occupant or caretaker of the lot
shall have first priority as beneficiary of the project. The Court of Appeals
concluded that Guevarra is first in the hierarchy of priority.
In denying Pajuyo's motion for reconsideration, the appellate court debunked
Pajuyo's claim that Guevarra filed his motion for extension beyond the period to
appeal.
The Court of Appeals pointed out that Guevarra's motion for extension filed
before the Supreme Court was stamped "13 December 1996 at 4:09 PM" by the
Supreme Court's Receiving Clerk. The Court of Appeals concluded that the
motion for extension bore a date, contrary to Pajuyo's claim that the motion for
extension was undated. Guevarra filed the motion for extension on time on 13
December 1996 since he filed the motion one day before the expiration of the
reglementary period on 14 December 1996. Thus, the motion for extension
properly complied with the condition imposed by the Court of Appeals in its 28
January 1997 Resolution. The Court of Appeals explained that the thirty-day
extension to file the petition for review was deemed granted because of such
compliance.
The Court of Appeals rejected Pajuyo's argument that the appellate court should
have dismissed the petition for review because it was Guevarra's counsel and not
Guevarra who signed the certification against forum-shopping. The Court of
Appeals pointed out that Pajuyo did not raise this issue in his Comment. The
Court of Appeals held that Pajuyo could not now seek the dismissal of the case
after he had extensively argued on the merits of the case. This technicality, the
appellate court opined, was clearly an afterthought.
The Issues
Pajuyo raises the following issues for resolution:
WHETHER THE COURT OF APPEALS ERRED OR

ABUSED ITS AUTHORITY AND DISCRETION
TANTAMOUNT TO LACK OF JURISDICTION:
1) in GRANTING, instead of denying, Private

Respondent's Motion for an Extension of
thirty days to file petition for review at the
time when there was no more period to
extend as the decision of the Regional Trial
Court had already become final and
executory.
2) in giving due course, instead of dismissing,

private respondent's Petition for Review
even though the certification against
forum-shopping was signed only by
counsel instead of by petitioner himself.
3) in ruling that the Kasunduan voluntarily entered
into by the parties was in fact a
commodatum, instead of a Contract of
Lease as found by the Metropolitan Trial
Court and in holding that "the ejectment
case filed against defendant-appellant is
without legal and factual basis".
4) in reversing and setting aside the Decision of the

Regional Trial Court in Civil Case No. Q-
96-26943 and in holding that the parties
are in pari delicto being both squatters,
therefore, illegal occupants of the
contested parcel of land.
5) in deciding the unlawful detainer case based on

the so-called Code of Policies of the
National Government Center Housing
Project instead of deciding the same under
the Kasunduan voluntarily executed by the
parties, the terms and conditions of which
are the laws between themselves. 13
The Ruling of the Court

The procedural issues Pajuyo is raising are baseless. However, we find merit in
the substantive issues Pajuyo is submitting for resolution.
Procedural Issues
Pajuyo insists that the Court of Appeals should have dismissed outright
Guevarra's petition for review because the RTC decision had already become
final and executory when the appellate court acted on Guevarra's motion for
extension to file the petition. Pajuyo points out that Guevarra had only one day
before the expiry of his period to appeal the RTC decision. Instead of filing the
petition for review with the Court of Appeals, Guevarra filed with this Court an
undated motion for extension of 30 days to file a petition for review. This Court
merely referred the motion to the Court of Appeals. Pajuyo believes that the
filing of the motion for extension with this Court did not toll the running of the
period to perfect the appeal. Hence, when the Court of Appeals received the
motion, the period to appeal had already expired.
We are not persuaded.

Decisions of the regional trial courts in the exercise of their appellate jurisdiction
are appealable to the Court of Appeals by petition for review in cases involving
questions of fact or mixed questions of fact and law. 14 Decisions of the regional
trial courts involving pure questions of law are appealable directly to this Court
by petition for review. 15 These modes of appeal are now embodied in Section 2,
Rule 41 of the 1997 Rules of Civil Procedure.
Guevarra believed that his appeal of the RTC decision involved only questions of
law. Guevarra thus filed his motion for extension to file petition for review
before this Court on 14 December 1996. On 3 January 1997, Guevarra then filed
his petition for review with this Court. A perusal of Guevarra's petition for
review gives the impression that the issues he raised were pure questions of law.
There is a question of law when the doubt or difference is on what the law is on a
certain state of facts. 16 There is a question of fact when the doubt or difference is
on the truth or falsity of the facts alleged. 17
In his petition for review before this Court, Guevarra no longer disputed the
facts. Guevarra's petition for review raised these questions: (1) Do ejectment
cases pertain only to possession of a structure, and not the lot on which the
structure stands? (2) Does a suit by a squatter against a fellow squatter constitute
a valid case for ejectment? (3) Should a Presidential Proclamation governing the
lot on which a squatter's structure stands be considered in an ejectment suit filed
by the owner of the structure?
These questions call for the evaluation of the rights of the parties under the law
on ejectment and the Presidential Proclamation. At first glance, the questions
Guevarra raised appeared purely legal. However, some factual questions still
have to be resolved because they have a bearing on the legal questions raised in
the petition for review. These factual matters refer to the metes and bounds of
the disputed property and the application of Guevarra as beneficiary of
PROCLAMATION NO. 137.
The Court of Appeals has the power to grant an extension of time to file a
petition for review. In Lacsamana v. Second Special Cases Division of the Intermediate
Appellate Court, 18 we declared that the Court of Appeals could grant extension
of time in appeals by petition for review. In Liboro v. Court of Appeals, 19 we
clarified that the prohibition against granting an extension of time applies only in
a case where ordinary appeal is perfected by a mere notice of appeal. The
prohibition does not apply in a petition for review where the pleading needs
verification. A petition for review, unlike an ordinary appeal, requires
preparation and research to present a persuasive position. 20 The drafting of the
petition for review entails more time and effort than filing a notice of appeal. 21
Hence, the Court of Appeals may allow an extension of time to file a petition for
review.
In the more recent case of Commissioner of Internal Revenue v. Court of Appeals, 22
we held that Liboro's clarification of Lacsamana is consistent with the Revised
Internal Rules of the Court of Appeals and Supreme Court Circular No. 1-91.
They all allow an extension of time for filing petitions for review with the Court
of Appeals. The extension, however, should be limited to only fifteen days save
in exceptionally meritorious cases where the Court of Appeals may grant a
longer period.
A judgment becomes "final and executory" by operation of law. Finality of

judgment becomes a fact on the lapse of the reglementary period to appeal if no
appeal is perfected. 23 The RTC decision could not have gained finality because
the Court of Appeals granted the 30-day extension to Guevarra.
The Court of Appeals did not commit grave abuse of discretion when it
approved Guevarra's motion for extension. The Court of Appeals gave due
course to the motion for extension because it complied with the condition set by
the appellate court in its resolution dated 28 January 1997. The resolution stated
that the Court of Appeals would only give due course to the motion for
extension if filed on time. The motion for extension met this condition.
The material dates to consider in determining the timeliness of the filing of the
motion for extension are (1) the date of receipt of the judgment or final order or
resolution subject of the petition, and (2) the date of filing of the motion for
extension. 24 It is the date of the filing of the motion or pleading, and not the
date of execution, that determines the timeliness of the filing of that motion or
pleading. Thus, even if the motion for extension bears no date, the date of filing
stamped on it is the reckoning point for determining the timeliness of its filing.
Guevarra had until 14 December 1996 to file an appeal from the RTC decision.
Guevarra filed his motion for extension before this Court on 13 December 1996,
the date stamped by this Court's Receiving Clerk on the motion for extension.
Clearly, Guevarra filed the motion for extension exactly one day before the lapse
of the reglementary period to appeal.
Assuming that the Court of Appeals should have dismissed Guevarra's appeal
on technical grounds, Pajuyo did not ask the appellate court to deny the motion
for extension and dismiss the petition for review at the earliest opportunity.
Instead, Pajuyo vigorously discussed the merits of the case. It was only when the
Court of Appeals ruled in Guevarra's favor that Pajuyo raised the procedural
issues against Guevarra's petition for review.
A party who, after voluntarily submitting a dispute for resolution, receives an

adverse decision on the merits, is estopped from attacking the jurisdiction of the
court. 25 Estoppel sets in not because the judgment of the court is a valid and
conclusive adjudication, but because the practice of attacking the court's
jurisdiction after voluntarily submitting to it is against public policy. 26
In his Comment before the Court of Appeals, Pajuyo also failed to discuss
Guevarra's failure to sign the certification against forum shopping. Instead,
Pajuyo harped on Guevarra's counsel signing the verification, claiming that the
counsel's verification is insufficient since it is based only on "mere information."
ACIESH
A party's failure to sign the certification against forum shopping is different from
the party's failure to sign personally the verification. The certificate of non-forum
shopping must be signed by the party, and not by counsel. 27 The certification of
counsel renders the petition defective. 28
On the other hand, the requirement on verification of a pleading is a formal and

not a jurisdictional requisite. 29 It is intended simply to secure an assurance that
what are alleged in the pleading are true and correct and not the product of the
imagination or a matter of speculation, and that the pleading is filed in good
faith. 30 The party need not sign the verification. A party's representative, lawyer
or any person who personally knows the truth of the facts alleged in the pleading
may sign the verification. 31
We agree with the Court of Appeals that the issue on the certificate against
forum shopping was merely an afterthought. Pajuyo did not call the Court of
Appeals' attention to this defect at the early stage of the proceedings. Pajuyo
raised this procedural issue too late in the proceedings.
Absence of Title over the Disputed Property will not Divest the Courts of
Jurisdiction to Resolve the Issue of Possession
Settled is the rule that the defendant's claim of ownership of the disputed
property will not divest the inferior court of its jurisdiction over the ejectment
case. 32 Even if the pleadings raise the issue of ownership, the court may pass on
such issue to determine only the question of possession, especially if the
ownership is inseparably linked with the possession. 33 The adjudication on the
issue of ownership is only provisional and will not bar an action between the
same parties involving title to the land. 34 This doctrine is a necessary
consequence of the nature of the two summary actions of ejectment, forcible
entry and unlawful detainer, where the only issue for adjudication is the physical
or material possession over the real property. 35
In this case, what Guevarra raised before the courts was that he and Pajuyo are
not the owners of the contested property and that they are mere squatters. Will
the defense that the parties to the ejectment case are not the owners of the
disputed lot allow the courts to renounce their jurisdiction over the case? The
Court of Appeals believed so and held that it would just leave the parties where
they are since they are in pari delicto.
We do not agree with the Court of Appeals.
Ownership or the right to possess arising from ownership is not at issue in an

action for recovery of possession. The parties cannot present evidence to prove
ownership or right to legal possession except to prove the nature of the
possession when necessary to resolve the issue of physical possession. 36 The
same is true when the defendant asserts the absence of title over the property.
The absence of title over the contested lot is not a ground for the courts to
withhold relief from the parties in an ejectment case.
The only question that the courts must resolve in ejectment proceedings is
who is entitled to the physical possession of the premises, that is, to the
possession de facto and not to the possession de jure. 37 It does not even matter if a
party's title to the property is questionable, 38 or when both parties intruded into
public land and their applications to own the land have yet to be approved by
the proper government agency. 39 Regardless of the actual condition of the title
to the property, the party in peaceable quiet possession shall not be thrown out
by a strong hand, violence or terror. 40 Neither is the unlawful withholding of
property allowed. Courts will always uphold respect for prior possession.
Thus, a party who can prove prior possession can recover such possession even
against the owner himself. 41 Whatever may be the character of his possession, if
he has in his favor prior possession in time, he has the security that entitles him
to remain on the property until a person with a better right lawfully ejects him.
42 To repeat, the only issue that the court has to settle in an ejectment suit is the
right to physical possession.
In Pitargue v. Sorilla, 43 the government owned the land in dispute. The

government did not authorize either the plaintiff or the defendant in the case of
forcible entry case to occupy the land. The plaintiff had prior possession and had
already introduced improvements on the public land. The plaintiff had a
pending application for the land with the Bureau of Lands when the defendant
ousted him from possession. The plaintiff filed the action of forcible entry against
the defendant. The government was not a party in the case of forcible entry.
The defendant questioned the jurisdiction of the courts to settle the issue of
possession because while the application of the plaintiff was still pending, title
remained with the government, and the Bureau of Public Lands had jurisdiction
over the case. We disagreed with the defendant. We ruled that courts have
jurisdiction to entertain ejectment suits even before the resolution of the
application. The plaintiff, by priority of his application and of his entry, acquired
prior physical possession over the public land applied for as against other
private claimants. That prior physical possession enjoys legal protection against
other private claimants because only a court can take away such physical
possession in an ejectment case.
While the Court did not brand the plaintiff and the defendant in Pitargue 44 as
squatters, strictly speaking, their entry into the disputed land was illegal. Both
the plaintiff and defendant entered the public land without the owner's
permission. Title to the land remained with the government because it had not
awarded to anyone ownership of the contested public land. Both the plaintiff and
the defendant were in effect squatting on government property. Yet, we upheld
the courts' jurisdiction to resolve the issue of possession even if the plaintiff and
the defendant in the ejectment case did not have any title over the contested land.
Courts must not abdicate their jurisdiction to resolve the issue of physical
possession because of the public need to preserve the basic policy behind the
summary actions of forcible entry and unlawful detainer. The underlying
philosophy behind ejectment suits is to prevent breach of the peace and criminal
disorder and to compel the party out of possession to respect and resort to the
law alone to obtain what he claims is his. 45 The party deprived of possession
must not take the law into his own hands. 46 Ejectment proceedings are
summary in nature so the authorities can settle speedily actions to recover
possession because of the overriding need to quell social disturbances. 47
We further explained in Pitargue the greater interest that is at stake in actions for
recovery of possession. We made the following pronouncements in Pitargue:
The question that is before this Court is: Are courts without
jurisdiction to take cognizance of possessory actions
involving these public lands before final award is made by
the Lands Department, and before title is given any of the
conflicting claimants? It is one of utmost importance, as
there are public lands everywhere and there are thousands
of settlers, especially in newly opened regions. It also
involves a matter of policy, as it requires the determination
of the respective authorities and functions of two coordinate
branches of the Government in connection with public land
conflicts.
Our problem is made simple by the fact that under the Civil
Code, either in the old, which was in force in this country
before the American occupation, or in the new, we have a
possessory action, the aim and purpose of which is the
recovery of the physical possession of real property,
irrespective of the question as to who has the title thereto.
Under the Spanish Civil Code we had the accion interdictal,
a summary proceeding which could be brought within one
year from dispossession (Roman Catholic Bishop of Cebu vs.
Mangaron, 6 Phil. 286, 291); and as early as October 1, 1901,
upon the enactment of the Code of Civil Procedure (Act No.
190 of the Philippine Commission) we implanted the
common law action of forcible entry (section 80 of Act No.
190), the object of which has been stated by this Court to be
"to prevent breaches of the peace and criminal disorder which
would ensue from the withdrawal of the remedy, and the
reasonable hope such withdrawal would create that some
advantage must accrue to those persons who, believing themselves
entitled to the possession of property, resort to force to gain
possession rather than to some appropriate action in the court to
assert their claims." (Supia and Batioco vs. Quintero and Ayala,
59 Phil. 312, 314.) So before the enactment of the first Public
Land Act (Act No. 926) the action of forcible entry was
already available in the courts of the country. So the
question to be resolved is, Did the Legislature intend, when
it vested the power and authority to alienate and dispose of
the public lands in the Lands Department, to exclude the
courts from entertaining the possessory action of forcible
entry between rival claimants or occupants of any land
before award thereof to any of the parties? Did Congress
intend that the lands applied for, or all public lands for that
matter, be removed from the jurisdiction of the judicial
Branch of the Government, so that any troubles arising
therefrom, or any breaches of the peace or disorders caused
by rival claimants, could be inquired into only by the Lands
Department to the exclusion of the courts? The answer to
this question seems to us evident. The Lands Department
does not have the means to police public lands; neither does
it have the means to prevent disorders arising therefrom, or
contain breaches of the peace among settlers; or to pass
promptly upon conflicts of possession. Then its power is
clearly limited to disposition and alienation, and while it may
decide conflicts of possession in order to make proper award, the
settlement of conflicts of possession which is recognized in the
court herein has another ultimate purpose, i.e., the protection of
actual possessors and occupants with a view to the prevention of
breaches of the peace. The power to dispose and alienate could not
have been intended to include the power to prevent or settle
disorders or breaches of the peace among rival settlers or claimants
prior to the final award. As to this, therefore, the
corresponding branches of the Government must continue to
exercise power and jurisdiction within the limits of their
respective functions. The vesting of the Lands Department with
authority to administer, dispose, and alienate public lands,
therefore, must not be understood as depriving the other branches
of the Government of the exercise of the respective functions or
powers thereon, such as the authority to stop disorders and quell
breaches of the peace by the police, the authority on the part of the
courts to take jurisdiction over possessory actions arising
therefrom not involving, directly or indirectly, alienation and
disposition.
Our attention has been called to a principle enunciated in

American courts to the effect that courts have no jurisdiction
to determine the rights of claimants to public lands, and that
until the disposition of the land has passed from the control
of the Federal Government, the courts will not interfere with
the administration of matters concerning the same. (50 C. J.
1093-1094.) We have no quarrel with this principle. The
determination of the respective rights of rival claimants to
public lands is different from the determination of who has
the actual physical possession or occupation with a view to
protecting the same and preventing disorder and breaches of
the peace. A judgment of the court ordering restitution of the
possession of a parcel of land to the actual occupant, who
has been deprived thereof by another through the use of
force or in any other illegal manner, can never be
"prejudicial interference" with the disposition or alienation
of public lands. On the other hand, if courts were deprived of
jurisdiction of cases involving conflicts of possession, that threat of
judicial action against breaches of the peace committed on public
lands would be eliminated, and a state of lawlessness would
probably be produced between applicants, occupants or squatters,
where force or might, not right or justice, would rule.
It must be borne in mind that the action that would be used

to solve conflicts of possession between rivals or conflicting
applicants or claimants would be no other than that of
forcible entry. This action, both in England and the United
States and in our jurisdiction, is a summary and expeditious
remedy whereby one in peaceful and quiet possession may
recover the possession of which he has been deprived by a
stronger hand, by violence or terror; its ultimate object being
to prevent breach of the peace and criminal disorder. (Supia
and Batioco vs. Quintero and Ayala, 59 Phil. 312, 314.) The basis
of the remedy is mere possession as a fact, of physical
possession, not a legal possession. (Mediran vs. Villanueva, 37
Phil. 752.) The title or right to possession is never in issue in
an action of forcible entry; as a matter of fact, evidence
thereof is expressly banned, except to prove the nature of the
possession. (Second 4, Rule 72, Rules of Court.) With this
nature of the action in mind, by no stretch of the imagination
can conclusion be arrived at that the use of the remedy in the
courts of justice would constitute an interference with the
alienation, disposition, and control of public lands. To limit
ourselves to the case at bar can it be pretended at all that its
result would in any way interfere with the manner of the
alienation or disposition of the land contested? On the
contrary, it would facilitate adjudication, for the question of
priority of possession having been decided in a final manner
by the courts, said question need no longer waste the time of
the land officers making the adjudication or award.
(Emphasis ours)
The Principle of Pari Delicto is not Applicable to Ejectment Cases

The Court of Appeals erroneously applied the principle of pari delicto to this case.
Articles 1411 and 1412 of the Civil Code 48 embody the principle of pari delicto.
We explained the principle of pari delicto in these words:
The rule of pari delicto is expressed in the maxims 'ex dolo

malo non eritur actio' and 'in pari delicto potior est conditio
defedentis.' The law will not aid either party to an illegal
agreement. It leaves the parties where it finds them. 49
The application of the pari delicto principle is not absolute, as there are
exceptions to its application. One of these exceptions is where the
application of the pari delicto rule would violate well-established public
policy. 50
In Drilon v. Gaurana, 51 we reiterated the basic policy behind the summary
actions of forcible entry and unlawful detainer. We held that:
It must be stated that the purpose of an action of forcible

entry and detainer is that, regardless of the actual condition
of the title to the property, the party in peaceable quiet
possession shall not be turned out by strong hand, violence
or terror. In affording this remedy of restitution the object of
the statute is to prevent breaches of the peace and criminal
disorder which would ensue from the withdrawal of the
remedy, and the reasonable hope such withdrawal would
create that some advantage must accrue to those persons
who, believing themselves entitled to the possession of
property, resort to force to gain possession rather than to
some appropriate action in the courts to assert their claims.
This is the philosophy at the foundation of all these actions
of forcible entry and detainer which are designed to compel
the party out of possession to respect and resort to the law
alone to obtain what he claims is his. 52
Clearly, the application of the principle of pari delicto to a case of ejectment

between squatters is fraught with danger. To shut out relief to squatters on the
ground of pari delicto would openly invite mayhem and lawlessness. A squatter
would oust another squatter from possession of the lot that the latter had
illegally occupied, emboldened by the knowledge that the courts would leave
them where they are. Nothing would then stand in the way of the ousted
squatter from re-claiming his prior possession at all cost.
Petty warfare over possession of properties is precisely what ejectment cases or

actions for recovery of possession seek to prevent. 53 Even the owner who has
title over the disputed property cannot take the law into his own hands to regain
possession of his property. The owner must go to court.
Courts must resolve the issue of possession even if the parties to the ejectment
suit are squatters. The determination of priority and superiority of possession is a
serious and urgent matter that cannot be left to the squatters to decide. To do so
would make squatters receive better treatment under the law. The law restrains
property owners from taking the law into their own hands. However, the
principle of pari delicto as applied by the Court of Appeals would give squatters
free rein to dispossess fellow squatters or violently retake possession of
properties usurped from them. Courts should not leave squatters to their own
devices in cases involving recovery of possession.
Possession is the only Issue for Resolution in an Ejectment Case

The case for review before the Court of Appeals was a simple case of ejectment.
The Court of Appeals refused to rule on the issue of physical possession.
Nevertheless, the appellate court held that the pivotal issue in this case is who
between Pajuyo and Guevarra has the "priority right as beneficiary of the
contested land under PROCLAMATION NO. 137." 54 According to the Court of
Appeals, Guevarra enjoys preferential right under PROCLAMATION NO. 137
because Article VI of the Code declares that the actual occupant or caretaker is
the one qualified to apply for socialized housing.
The ruling of the Court of Appeals has no factual and legal basis.
First. Guevarra did not present evidence to show that the contested lot is part of
a relocation site under PROCLAMATION NO. 137. PROCLAMATION NO. 137
laid down the metes and bounds of the land that it declared open for disposition
to bona fide residents.
The records do not show that the contested lot is within the land specified by
PROCLAMATION NO. 137. Guevarra had the burden to prove that the disputed
lot is within the coverage of PROCLAMATION NO. 137. He failed to do so.
Second. The Court of Appeals should not have given credence to Guevarra's
unsubstantiated claim that he is the beneficiary of PROCLAMATION NO. 137.
Guevarra merely alleged that in the survey the project administrator conducted,
he and not Pajuyo appeared as the actual occupant of the lot.
There is no proof that Guevarra actually availed of the benefits of

PROCLAMATION NO. 137. Pajuyo allowed Guevarra to occupy the disputed
property in 1985. President Aquino signed PROCLAMATION NO. 137 into law
on 11 March 1986. Pajuyo made his earliest demand for Guevarra to vacate the
property in September 1994.
During the time that Guevarra temporarily held the property up to the time that
PROCLAMATION NO. 137 allegedly segregated the disputed lot, Guevarra
never applied as beneficiary of PROCLAMATION NO. 137. Even when
Guevarra already knew that Pajuyo was reclaiming possession of the property,
Guevarra did not take any step to comply with the requirements of
PROCLAMATION NO. 137.
Third. Even assuming that the disputed lot is within the coverage of
PROCLAMATION NO. 137 and Guevarra has a pending application over the lot,
courts should still assume jurisdiction and resolve the issue of possession.
However, the jurisdiction of the courts would be limited to the issue of physical
possession only.
In Pitargue, 55 we ruled that courts have jurisdiction over possessory actions

involving public land to determine the issue of physical possession. The
determination of the respective rights of rival claimants to public land is,
however, distinct from the determination of who has the actual physical
possession or who has a better right of physical possession. 56 The
administrative disposition and alienation of public lands should be threshed out
in the proper government agency. 57
The Court of Appeals' determination of Pajuyo and Guevarra's rights under

PROCLAMATION NO. 137 was premature. Pajuyo and Guevarra were at most
merely potential beneficiaries of the law. Courts should not preempt the decision
of the administrative agency mandated by law to determine the qualifications of
applicants for the acquisition of public lands. Instead, courts should
expeditiously resolve the issue of physical possession in ejectment cases to
prevent disorder and breaches of peace. 58
Pajuyo is Entitled to Physical Possession of the Disputed Property

Guevarra does not dispute Pajuyo's prior possession of the lot and ownership of
the house built on it. Guevarra expressly admitted the existence and due
execution of the Kasunduan. The Kasunduan reads:
Ako, si COL[I]TO PAJUYO, may-ari ng bahay at lote sa Bo.

Payatas, Quezon City, ay nagbibigay pahintulot kay G.
Eddie Guevarra, na pansamantalang manirahan sa nasabing
bahay at lote ng "walang bayad." Kaugnay nito, kailangang
panatilihin nila ang kalinisan at kaayusan ng bahay at lote.
Sa sandaling kailangan na namin ang bahay at lote, sila'y

kusang aalis ng walang reklamo.
Based on the Kasunduan, Pajuyo permitted Guevarra to reside in the house and
lot free of rent, but Guevarra was under obligation to maintain the premises in
good condition. Guevarra promised to vacate the premises on Pajuyo's demand
but Guevarra broke his promise and refused to heed Pajuyo's demand to vacate.
These facts make out a case for unlawful detainer. Unlawful detainer involves
the withholding by a person from another of the possession of real property to
which the latter is entitled after the expiration or termination of the former's right
to hold possession under a contract, express or implied. 59
Where the plaintiff allows the defendant to use his property by tolerance without
any contract, the defendant is necessarily bound by an implied promise that he
will vacate on demand, failing which, an action for unlawful detainer will lie. 60
The defendant's refusal to comply with the demand makes his continued
possession of the property unlawful. 61 The status of the defendant in such a
case is similar to that of a lessee or tenant whose term of lease has expired but
whose occupancy continues by tolerance of the owner. 62
This principle should apply with greater force in cases where a contract
embodies the permission or tolerance to use the property. The Kasunduan
expressly articulated Pajuyo's forbearance. Pajuyo did not require Guevarra to
pay any rent but only to maintain the house and lot in good condition. Guevarra
expressly vowed in the Kasunduan that he would vacate the property on demand.
Guevarra's refusal to comply with Pajuyo's demand to vacate made Guevarra's
continued possession of the property unlawful.
We do not subscribe to the Court of Appeals' theory that the Kasunduan is one of
commodatum.
In a contract of commodatum, one of the parties delivers to another something not

consumable so that the latter may use the same for a certain time and return it. 63
An essential feature of commodatum is that it is gratuitous. Another feature of
commodatum is that the use of the thing belonging to another is for a certain
period. 64 Thus, the bailor cannot demand the return of the thing loaned until
after expiration of the period stipulated, or after accomplishment of the use for
which the commodatum is constituted. 65 If the bailor should have urgent need of
the thing, he may demand its return for temporary use. 66 If the use of the thing
is merely tolerated by the bailor, he can demand the return of the thing at will, in
which case the contractual relation is called a precarium. 67 Under the Civil Code,
precarium is a kind of commodatum. 68
The Kasunduan reveals that the accommodation accorded by Pajuyo to Guevarra

was not essentially gratuitous. While the Kasunduan did not require Guevarra to
pay rent, it obligated him to maintain the property in good condition. The
imposition of this obligation makes the Kasunduan a contract different from a
commodatum. The effects of the Kasunduan are also different from that of a
commodatum. Case law on ejectment has treated relationship based on tolerance
as one that is akin to a landlord-tenant relationship where the withdrawal of
permission would result in the termination of the lease. 69 The tenant's
withholding of the property would then be unlawful. This is settled
jurisprudence.
Even assuming that the relationship between Pajuyo and Guevarra is one of
commodatum, Guevarra as bailee would still have the duty to turn over
possession of the property to Pajuyo, the bailor. The obligation to deliver or to
return the thing received attaches to contracts for safekeeping, or contracts of
commission, administration and commodatum. 70 These contracts certainly
involve the obligation to deliver or return the thing received. 71
Guevarra turned his back on the Kasunduan on the sole ground that like him,
Pajuyo is also a squatter. Squatters, Guevarra pointed out, cannot enter into a
contract involving the land they illegally occupy. Guevarra insists that the
contract is void.
Guevarra should know that there must be honor even between squatters.
Guevarra freely entered into the Kasunduan. Guevarra cannot now impugn the
Kasunduan after he had benefited from it. The Kasunduan binds Guevarra.
The Kasunduan is not void for purposes of determining who between Pajuyo and
Guevarra has a right to physical possession of the contested property. The
Kasunduan is the undeniable evidence of Guevarra's recognition of Pajuyo's
better right of physical possession. Guevarra is clearly a possessor in bad faith.
The absence of a contract would not yield a different result, as there would still
be an implied promise to vacate.
Guevarra contends that there is "a pernicious evil that is sought to be avoided,
and that is allowing an absentee squatter who (sic) makes (sic) a profit out of his
illegal act." 72 Guevarra bases his argument on the preferential right given to the
actual occupant or caretaker under PROCLAMATION NO. 137 on socialized
housing.
Pajuyo did not profit from his arrangement with Guevarra because Guevarra
stayed in the property without paying any rent. There is also no proof that
Pajuyo is a professional squatter who rents out usurped properties to other
squatters. Moreover, it is for the proper government agency to decide who
between Pajuyo and Guevarra qualifies for socialized housing. The only issue
that we are addressing is physical possession.
Prior possession is not always a condition sine qua non in ejectment. 73 This is one
of the distinctions between forcible entry and unlawful detainer. 74 In forcible
entry, the plaintiff is deprived of physical possession of his land or building by
means of force, intimidation, threat, strategy or stealth. Thus, he must allege and
prove prior possession. 75 But in unlawful detainer, the defendant unlawfully
withholds possession after the expiration or termination of his right to possess
under any contract, express or implied. In such a case, prior physical possession
is not required. 76
Pajuyo's withdrawal of his permission to Guevarra terminated the Kasunduan.

Guevarra's transient right to possess the property ended as well. Moreover, it
was Pajuyo who was in actual possession of the property because Guevarra had
to seek Pajuyo's permission to temporarily hold the property and Guevarra had
to follow the conditions set by Pajuyo in the Kasunduan. Control over the
property still rested with Pajuyo and this is evidence of actual possession.
Pajuyo's absence did not affect his actual possession of the disputed property.
Possession in the eyes of the law does not mean that a man has to have his feet
on every square meter of the ground before he is deemed in possession. 77 One
may acquire possession not only by physical occupation, but also by the fact that
a thing is subject to the action of one's will. 78 Actual or physical occupation is
not always necessary. 79
Ruling on Possession Does not Bind Title to the Land in Dispute
We are aware of our pronouncement in cases where we declared that "squatters
and intruders who clandestinely enter into titled government property cannot,
by such act, acquire any legal right to said property." 80 We made this
declaration because the person who had title or who had the right to legal
possession over the disputed property was a party in the ejectment suit and that
party instituted the case against squatters or usurpers.
In this case, the owner of the land, which is the government, is not a party to the
ejectment case. This case is between squatters. Had the government participated
in this case, the courts could have evicted the contending squatters, Pajuyo and
Guevarra.
Since the party that has title or a better right over the property is not impleaded
in this case, we cannot evict on our own the parties. Such a ruling would
discourage squatters from seeking the aid of the courts in settling the issue of
physical possession. Stripping both the plaintiff and the defendant of possession
just because they are squatters would have the same dangerous implications as
the application of the principle of pari delicto. Squatters would then rather settle
the issue of physical possession among themselves than seek relief from the
courts if the plaintiff and defendant in the ejectment case would both stand to
lose possession of the disputed property. This would subvert the policy
underlying actions for recovery of possession.
Since Pajuyo has in his favor priority in time in holding the property, he is
entitled to remain on the property until a person who has title or a better right
lawfully ejects him. Guevarra is certainly not that person. The ruling in this case,
however, does not preclude Pajuyo and Guevarra from introducing evidence and
presenting arguments before the proper administrative agency to establish any
right to which they may be entitled under the law. 81
In no way should our ruling in this case be interpreted to condone squatting. The
ruling on the issue of physical possession does not affect title to the property nor
constitute a binding and conclusive adjudication on the merits on the issue of
ownership. 82 The owner can still go to court to recover lawfully the property
from the person who holds the property without legal title. Our ruling here does
not diminish the power of government agencies, including local governments, to
condemn, abate, remove or demolish illegal or unauthorized structures in
accordance with existing laws.
Attorney's Fees and Rentals

The MTC and RTC failed to justify the award of P3,000 attorney's fees to Pajuyo.
Attorney's fees as part of damages are awarded only in the instances enumerated
in Article 2208 of the Civil Code. 83 Thus, the award of attorney's fees is the
exception rather than the rule. 84 Attorney's fees are not awarded every time a
party prevails in a suit because of the policy that no premium should be placed
on the right to litigate. 85 We therefore delete the attorney's fees awarded to
Pajuyo.
We sustain the P300 monthly rentals the MTC and RTC assessed against
Guevarra. Guevarra did not dispute this factual finding of the two courts. We
find the amount reasonable compensation to Pajuyo. The P300 monthly rental is
counted from the last demand to vacate, which was on 16 February 1995.
WHEREFORE, we GRANT the petition. The Decision dated 21 June 2000 and
Resolution dated 14 December 2000 of the Court of Appeals in CA-G.R. SP No.
43129 are SET ASIDE. The Decision dated 11 November 1996 of the Regional
Trial Court of Quezon City, Branch 81 in Civil Case No. Q-96-26943, affirming
the Decision dated 15 December 1995 of the Metropolitan Trial Court of Quezon
City, Branch 31 in Civil Case No. 12432, is REINSTATED with MODIFICATION.
The award of attorney's fees is deleted. No costs.
||| (Pajuyo v. Court of Appeals, G.R. No. 146364, June 03, 2004)
FIRST DIVISION
[G.R. No. 147549. October 23, 2003.]
JESUS DELA ROSA and LUCILA DELA ROSA, petitioners,

vs. SANTIAGO CARLOS and TEOFILA PACHECO,
respondents.
Ponce Enrile Reyes & Manalastas for petitioners.
Wilfredo 0. Arceo for respondents.
SYNOPSIS
In the forcible entry case filed. by Jesus Dela Rosa and Lucila Dela Rosa against
Santiago Carlos and Teofila Pacheco, the latter answered that the former
obtained the Deed of Sale of the subject property through fraud and undue
influence and that their mother did not give her consent to the sale. Thereafter,
the trial court ruled in favor of Spouses Dela Rosa. It was affirmed in toto by the
Regional Trial Court (RTC). However, when this case was elevated to the Court
of Appeals, the appellate court reversed the decision of the trial court. It ruled,
among others, that the execution of the Deed of Sale did not transfer physical
possession of the property and that Lucila Dela Rosa may not dispossess her co-
owners Santiago and Teofila from the said property. Hence, this petition.
In granting the petition, the Court ruled that in a forcible entry case, the principal
issue for resolution is mere physical or material possession and not juridical
possession nor ownership of the property involved. In the present case, Santiago
and Teofila admitted that Spouses Dela Rosa visit the property. Visiting the
property on weekends and holidays is evidence of actual or physical possession.
Even if the Spouses Dela Rosa were already residing in Manila, they could
continue possessing the property in Bulacan. The fact of their residence in
Manila, by itself, does not result in loss of possession of the property in Bulacan.
The law does not require one in possession of a house to reside in the house to
maintain his possession.
Moreover, Santiago and Teofila cannot properly challenge the validity of the
Deed of Sale in the ejectment case because ejectment cases proceed
independently of any claim of ownership.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTION; FORCIBLE ENTRY; VERIFIED

POSITION PAPER CONSTITUTES THE AFFIDAVIT OF WITNESSES. The
Spouses Dela Rosa jointly verified their position paper by stating that all the
allegations in the position paper are true and correct of their "own personal
knowledge." The verification itself is an affidavit. Section 4 of Rule 7 states that a
"pleading is verified by an affidavit." Thus, the verified position paper
constitutes the affidavit of witnesses required under Rule 70. Certainly, the
Spouses Dela Rosa qualify as witnesses to their own complaint. While there are
no affidavits of other witnesses that support the complaint, the Spouses Dela
Rosa attached to their position paper documentary evidence that bolster their
claim of prior possession. Santiago and Teofila never raised as an issue the
alleged non-attachment to the complaint of affidavits of witnesses, either in the
MTC or in the RTC. In their petition for review before the Court of Appeals,
Santiago and Teofila did not also raise this issue. The MTC and RTC apparently
understood correctly that the verified complaint of the Spouses Dela Rosa
constitutes the affidavit of witnesses required under Rule 70. We rule that the
Court of Appeals erred in holding that the Spouses Dela Rosa failed to attach to
their complaint the affidavits required in Sections 10 and 14 of Rule 70.
2. ID.; ID.; ID.; PHYSICAL OR MATERIAL POSSESSION IS THE PRINCIPAL

ISSUE. In a forcible entry case, the principal issue for resolution is mere
physical or material possession (possession de facto) and not juridical possession
(possession de jure) nor ownership of the property involved.
3. ID.; ID.; ID.; ID.; VISITING THE PROPERTY ON WEEKENDS AND

HOLIDAYS IS EVIDENCE OF ACTUAL OR PHYSICAL POSSESSION.
Santiago and Teofila admit that the Spouses Dela Rosa visit the Property.
Visiting the Property on weekends and holidays is evidence of actual or physical
possession. Even if the Spouses Dela Rosa were already residing in Manila, they
could continue possessing the Property in Bulacan. The fact of their residence in
Manila, by itself, does not result in loss of possession of the Property in Bulacan.
The law does not require one in possession of a house to reside in the house to
maintain his possession.
4. ID.; ID.; ID.; ID.; POSSESSION DOES NOT MEAN THAT A MAN HAS TO
HAVE HIS FEET ON EVERY SQUARE METER OF THE GROUND. In
Somodio v. Court of Appeals, which the Spouses Dela Rosa cited, the petitioner
there began construction of a structure on his lot. His employment, however,
took him to Kidapawan, North Cotabato, and he left the unfinished structure to
the care of his uncle. He would visit the property every three months or on
weekends when he had time. The Court ruled that possession in the eyes of the
law does not mean that a man has to have his feet on every square meter of the
ground before he is deemed in possession. There is no cogent reason to deviate
from this doctrine.
5. ID.; ID.; ID.; ID.; RENOVATING THE HOUSE, FURNISHING THE SAME
AND CONSTRUCTING A PERIMETER FENCE ARE CLEAR INDICATIONS OF
PHYSICALLY POSSESSING THE PROPERTY. Santiago and Teofila likewise
do not deny that the Spouses Dela Rosa renovated the house, furnished the same
and constructed a perimeter fence around the Property. Santiago and Teofila
contend that these acts did not include the right to possess physically the Property.
These acts of dominion are clear indications that the Spouses Dela Rosa were in
possession of the Property. Santiago and Teofila failed to explain convincingly
how the Spouses Dela Rosa were able to renovate, furnish the house and
construct a perimeter fence around the Property without physically possessing
the Property. It is quite improbable to perform these acts without the Spouses
Dela Rosa physically possessing the Property.
6. ID.; ID.; ID.; VALIDITY OF DEED OF SALE CANNOT PROPERLY BE

CHALLENGED IN THE PRESENT ACTION. Santiago and Teofila cannot
properly challenge the validity of the Deed of Sale in the ejectment case because
ejectment cases proceed independently of any claim of ownership. Santiago and
Teofila claim that the Deed of Sale was executed without the consent of Benita,
Leonardo's spouse. They also claim that the Deed of Sale was executed through
fraud and undue influence. However, these issues cannot properly be addressed
in the present action. These issues can only be resolved in a separate action
specifically for the annulment of the Deed of Sale. Resolution of these issues, in
turn, will determine whether the surviving heirs of the Spouses Carlos are co-
owners of the Property who are likewise entitled to its possession. Co-ownership
is only a necessary consequence of the heirs' successional rights to the Property,
if any.
DECISION
CARPIO, J p:
The Case
This is a petition for review on certiorari 1 seeking to set aside the Decision 2 of
the Court of Appeals in CA-G.R. SP No. 54055 dated 20 July 2000 and the
Resolution dated 23 February 2001 denying the motion for reconsideration. The
Court of Appeals reversed the Decision 3 of the Regional Trial Court, Branch 22,
of Malolos, Bulacan ("RTC") and dismissed the complaint of Jesus Dela Rosa and
Lucila Dela Rosa for forcible entry against Santiago Carlos and Teofila Pacheco.
The Antecedents
This case stemmed from a complaint 4 for forcible entry filed by Jesus Dela Rosa
and Lucila Dela Rosa ("Spouses Dela Rosa") against Santiago Carlos ("Santiago")
and Teofila Pacheco ("Teofila") with the Municipal Trial Court 5 of Paombong,
Bulacan ("MTC").
In their complaint filed on 25 February 1998, the Spouses Dela Rosa alleged that
they are the owners of a house and lot ("Property") with an area of 352 square
meters located at No. 25 San Roque, Paombong, Bulacan. The Spouses Dela Rosa
claimed that Leonardo Carlos ("Leonardo") transferred to them the ownership of
the Property under the Absolute Deed of Sale ("Deed of Sale") executed on 1
September 1966. The Spouses Dela Rosa registered on 6 October 1966 the Deed of
Sale under Act No. 3344 with the Register of Deeds of Bulacan. The Spouses Dela
Rosa asserted that they renovated the house, furnished and occupied the same
from 1966 to the present. Since the Spouses Dela Rosa work and their children
study in Manila, they reside in the Property only during weekends and holidays.
However, they padlock the house on the Property while they are away and
instruct relatives who live nearby to watch over the Property.
The Spouses Dela Rosa further asserted that they have been paying the taxes for
the land since 1966 to 1997, and for the house from 1966 to 1993. In addition, the
Spouses Dela Rosa had a perimeter fence built to separate the Property from the
municipal road and to protect it from trespassers.
The Spouses Dela Rosa also asserted that in October 1997, they discovered that,
through stealth and without their knowledge and consent, Santiago had built a
house of strong materials on a vacant lot of the Property. Santiago did not secure
the necessary building permit from the Municipal Engineer's Office. Teofila had
also been transferring furniture to the house and sleeping there. On 20
November 1997, the Spouses Dela Rosa, through their counsel, demanded that
Santiago and Teofila demolish the house, remove their furniture and vacate the
premises within ten days from receipt of the letter. However, Santiago and
Teofila did not heed the Spouses Dela Rosa's demand.
In their answer, Santiago and Teofila alleged that they are the surviving heirs of
the Spouses Leonardo and Benita Carlos ("Spouses Carlos"). As heirs of the
Spouses Carlos, they, along with Lucila Dela Rosa, are co-owners of the Property.
They contended that the Spouses Dela Rosa obtained the Deed of Sale through
fraud and undue influence and that their mother did not consent to the sale of
the Property which they claimed as conjugal. They maintained that the Spouses
Dela Rosa were never in possession of the Property because the latter only went
there to visit their parents, and not as owners. Insisting that they have been
occupying the Property since birth, Santiago claimed that he constructed the
house on the Property in the concept of a co-owner. ECaSIT
After submission of the parties' position papers, the MTC rendered a Decision
dated 30 July 1998, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered declaring the

Plaintiffs to be entitled to physical possession of Lot 147-Part
particularly described in Tax Declaration No. 97-0297-00342
(Exhibit F) situated at San Roque, Paombong, Bulacan and
this Court orders:
1. The Defendants, their heirs, assigns or any other

persons claiming any right or interest over
the subject parcel of land under or in their
names to vacate the same and surrender
peaceful possession thereof in favor of the
Plaintiffs;
2. The Defendants to pay the Plaintiffs damages

limited to the fair rental value for the use
and occupation of the premises in the
amount of Two Thousand and Five
Hundred Pesos (P2,500.00) a month from
the date of the discovery of the
construction of the improvement (October
1997) until they finally vacate and restore
full possession thereof to the Plaintiffs;
3. The award of Twenty Thousand Pesos
(P20,000.00) in favor of the Plaintiffs as
and by way of attorney's fees and costs;
4. The Defendants' counter-claim is hereby

dismissed for lack of merit.
SO ORDERED. 6
Aggrieved, Santiago and Teofila appealed 7 to the RTC which rendered a

Decision 8 dated 31 May 1999 affirming in toto the decision of the MTC.
Dissatisfied with the decision of the RTC, Santiago and Teofila filed a petition for
review 9 with the Court of Appeals. The Court of Appeals rendered a Decision
dated 20 July 2000, the dispositive portion of which reads:
WHEREFORE, the appealed decision is REVERSED and SET

ASIDE and another rendered DISMISSING respondents'
complaint for forcible entry against petitioners.
SO ORDERED. 10
Hence, this petition for review.
The Ruling of the Trial Courts

The MTC, in ruling in favor of the Spouses Dela Rosa, held in part:
The evidence at hand disclose [sic] that the Plaintiffs took

possession of the subject premises upon the execution of the
sale on September 1, 1966 and have been in occupancy
thereof since then up to the present. Under the law,
possession is transferred to the vendee by virtue of the
notarized deed of conveyance. Under Article 1498 of the
Civil Code of the Philippines, "when the sale is made
through a public instrument, the execution thereof shall be
equivalent to the delivery of the object of the contract, if
from the deed the contrary does not appear or cannot clearly
be inferred." (Ong Ching Po, et al. vs. Court of Appeals, 239
SCRA 341)
In the same vein, Article 531 of the statute is explicit, thus:

"Possession is acquired by the material possession of a thing
or the exercise of a right, or by the fact that it is subject to the
action of our will or by the proper acts or legal formalities
established for acquiring such right." Aside from the legal
formalities as mentioned, Plaintiffs' prior material
occupation or possession is supported by photographs
depicting their residence (Exhibit Q) and their furnishings
(Exhibits O and O-1) thereon. Possession in the eyes of the
law does not mean that a man has to have his feet on every
square meter of ground before it can be said that he is in
possession. It is sufficient that petitioner (in this case, the
Plaintiffs) was able to subject the property to the action of his
will (Somodio vs. Court of Appeals, 235 SCRA 307).
xxx xxx xxx 11
Finding that the MTC's factual findings are clear and supported by more than
mere preponderance of evidence, 12 the RTC affirmed in toto the decision of the
MTC. Consequently, Santiago and Teofila filed a petition for review with the
Court of Appeals.

The Court of Appeals held that the execution of the deed of sale did not transfer
physical possession of the Property despite Article 1498 of the Civil Code, which
contemplates of constructive, not physical possession. The appellate court also
found that there was an obstacle to the delivery of possession because the
Spouses Carlos, Santiago and Teofila were residing and continued to reside in
the Property. TCHcAE
Noting that the Spouses Dela Rosa's position paper did not attach the affidavits
of witnesses required under Section 10 of Rule 70, the appellate court ruled that
the Spouses Dela Rosa failed to prove prior possession of the Property. The
appellate court pointed out that instead of proving prior possession, the Spouses
Dela Rosa admitted the contrary. In their opposition to the motion to dismiss, 13
the Spouses Dela Rosa stated that they do not actually reside in the Property but
in Manila and visit the Property only during weekends and vacations. The Court
of Appeals held that this admission confirms Santiago and Teofila's claim that
they have always been in physical possession of the Property since birth.
The Court of Appeals also held that the Spouses Dela Rosa did not verify their
complaint in violation of Section 4 of Rule 70. Neither did they attach a
certification against forum shopping in violation of Section 5 of Rule 7.
Moreover, the appellate court ruled that the sale, without the consent of Benita
Carlos, is void. Since the sale is void, no title passed to the Spouses Dela Rosa.
Lastly, the Court of Appeals ruled that assuming the sale is valid, the sale would
apply only to Leonardo's share in the Property. Benita retained her one-half
share in the Property that her children Santiago, Teofila, Lucila and Francisco
acquired by succession on her death. Thus, Lucila Dela Rosa may not dispossess
her co-owners Santiago and Teofila of the Property.
The Issues
The Spouses Dela Rosa assail the decision of the Court of Appeals on the
following grounds:
1. THE COURT OF APPEALS GRAVELY ERRED IN

CONSIDERING AS ONE OF THE GROUNDS FOR
REVERSING THE DECISION OF THE REGIONAL
TRIAL COURT AND OF THE MUNICIPAL TRIAL
COURT THE ERRONEOUS ASSUMPTION THAT
THE COMPLAINT APPENDED TO THE
PETITION FOR REVIEW FILED BY
RESPONDENTS LACKED VERIFICATION AND
CERTIFICATION OF NON-FORUM SHOPPING.

ALLOWING A COLLATERAL ATTACK ON THE
VALIDITY OF THE DEED OF ABSOLUTE SALE
IN AN EJECTMENT PROCEEDING AND RULING
THAT THE SAME IS VOID FOR LACK OF
MARITAL CONSENT OF BENITA CARLOS.

DECLARING THAT PETITIONERS FAILED TO
PROVE PRIOR PHYSICAL POSSESSION OVER
THE PROPERTY DESPITE THE
OVERWHELMING EVIDENCE TO THE
CONTRARY.

APPLYING THE RULES OF CO-OWNERSHIP
OVER THE PROPERTY. 14
The Court's Ruling

We grant the petition.
Before resolving the main issue, we shall first dispose of the procedural issues in
the instant case.
There is no longer any issue on the lack of verification and certification against
forum shopping of the complaint for forcible entry. The Court of Appeals itself
stated in its assailed Resolution that it was a mere "omission" 15 by Santiago and
Teofila in their petition for review. Santiago and Teofila failed to append to their
petition for review with the Court of Appeals the last page of the complaint
containing the verification and certification of non-forum shopping. 16 For the
failure of Santiago and Teofila to attach to their petition the page of the
complaint containing the verification and certification of non-forum shopping,
the appellate court should have faulted Santiago and Teofila and not the Spouses
Dela Rosa.
Another procedural question was the alleged non-submission of affidavits of

witnesses that the Spouses Dela Rosa should have attached to their position
paper. Section 10 of Rule 70 provides:
SEC. 10. Submission of affidavits and position papers. Within

ten (10) days from receipt of the order mentioned in the next
preceding section, the parties shall submit the affidavits of
their witnesses and other evidence on the factual issues
defined in the order, together with their position papers
setting forth the law and the facts relied upon by them.
Section 10 should be read in relation to Section 14 of the same Rule, which states:
SEC. 14. Affidavits. The affidavits required to be submitted

under this Rule shall state only facts of direct personal
knowledge of the affiants which are admissible in evidence,
and shall show their competence to testify to the matters
stated therein.
xxx xxx xxx
The Spouses Dela Rosa jointly verified their position paper by stating that all the
allegations in the position paper are true and correct of their "own personal
knowledge." 17 The verification itself is an affidavit. 18 Section 4 of Rule 7 states
that a "pleading is verified by an affidavit." Thus, the verified position paper
constitutes the affidavit of witnesses required under Rule 70. Certainly, the
Spouses Dela Rosa qualify as witnesses to their own complaint. While there are
no affidavits of other witnesses that support the complaint, the Spouses Dela
Rosa attached to their position paper documentary evidence that bolster their
claim of prior possession. SHCaEA
Santiago and Teofila never raised as an issue the alleged non-attachment to the
complaint of affidavits of witnesses, either in the MTC or in the RTC. In their
petition for review before the Court of Appeals, Santiago and Teofila did not also
raise this issue. The MTC and RTC apparently understood correctly that the
verified complaint of the Spouses Dela Rosa constitutes the affidavit of witnesses
required under Rule 70. We rule that the Court of Appeals erred in holding that
the Spouses Dela Rosa failed to attach to their complaint the affidavits required
in Sections 10 and 14 of Rule 70.
In a forcible entry case, the principal issue for resolution is mere physical or
material possession (possession de facto) and not juridical possession (possession
de jure) nor ownership of the property involved. 19 In the present case, both
parties claim prior possession of the Property. The Spouses Dela Rosa claim that
they have been in possession of the Property since 1966 upon the execution of the
deed of sale by Leonardo in their favor. On the other hand, Santiago and Teofila
claim that they have been continuously occupying the Property since birth and
the Spouses Dela Rosa were never in possession of the Property.
While admitting that Santiago and Teofila used to reside in the Property since
birth, the Spouses Dela Rosa contend that Santiago and Teofila moved out when
they married in 1961 and 1959, respectively. According to the Spouses Dela Rosa,
Santiago and his family live in Manila (at 3500-F Magsaysay Blvd., Sta. Mesa,
Manila) 20 while Teofila occupies the lot adjacent to the Property bearing,
however, the same address. 21 Santiago and Teofila did not dispute these
allegations by the Spouses Dela Rosa.
On the other hand, Santiago and Teofila admit that the Spouses Dela Rosa visit
the Property. Visiting the Property on weekends and holidays is evidence of
actual or physical possession. Even if the Spouses Dela Rosa were already
residing in Manila, they could continue possessing the Property in Bulacan. The
fact of their residence in Manila, by itself, does not result in loss of possession of
the Property in Bulacan. The law does not require one in possession of a house to
reside in the house to maintain his possession.
In Somodio v. Court of Appeals, 22 which the Spouses Dela Rosa cited, the
petitioner there began construction of a structure on his lot. His employment,
however, took him to Kidapawan, North Cotabato, and he left the unfinished
structure to the care of his uncle. He would visit the property every three months
or on weekends when he had time. The Court ruled that possession in the eyes of
the law does not mean that a man has to have his feet on every square meter of
the ground before he is deemed in possession. 23 There is no cogent reason to
deviate from this doctrine.
Santiago and Teofila likewise do not deny that the Spouses Dela Rosa renovated
the house, furnished the same and constructed a perimeter fence around the
Property. Santiago and Teofila contend that these acts did not include the right to
possess physically the Property. 24 These acts of dominion are clear indications
that the Spouses Dela Rosa were in possession of the Property. Santiago and
Teofila failed to explain convincingly how the Spouses Dela Rosa were able to
renovate, furnish the house and construct a perimeter fence around the Property
without physically possessing the Property. It is quite improbable to perform
these acts without the Spouses Dela Rosa physically possessing the Property.
Santiago and Teofila likewise challenged the validity of the sale between their
father Leonardo and the Spouses Dela Rosa. The sale transpired on 1 September
1966, before Leonardo's death. The Spouses Dela Rosa registered on 6 October
1966 the Deed of Sale under Act No. 3344 with the Registry of Deeds of
Paombong, Bulacan. If Santiago and Teofila truly believed that the Deed of Sale
is void, they should have filed an action to annul the same, but they did not.
Santiago and Teofila questioned the validity of the Deed of Sale only when the
Spouses Dela Rosa filed the forcible entry case.
However, Santiago and Teofila cannot properly challenge the validity of the
Deed of Sale in the ejectment case because ejectment cases proceed
independently off any claim of ownership. 25 Santiago and Teofila claim that the
Deed of Sale was executed without the consent of Benita, Leonardo's spouse.
They also claim that the Deed of Sale was executed through fraud and undue
influence. However, these issues cannot properly be addressed in the present
action. These issues can only be resolved in a separate action specifically for the
annulment of the Deed of Sale. Resolution of these issues, in turn, will determine
whether the surviving heirs of the Spouses Carlos are co-owners of the Property
who are likewise entitled to its possession. Co-ownership is only a necessary
consequence of the heirs' successional rights to the Property, if any. SEIaHT
WHEREFORE, we GRANT the petition. The Decision dated 20 July 2000 and
Resolution dated 23 February 2001 of the Court of Appeals in CA-G.R. SP No.
54055 are SET ASIDE. The Decision dated 31 May 1999 of the Regional of Trial
Court, Branch 22, of Malolos, Bulacan in Civil Case No. 878-M-98, affirming the
Decision dated 30 July 1998 of the Municipal Trial Court of Paombong, Bulacan
in Civil Case No. 98-720, is REINSTATED. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C .J ., Vitug and Azcuna, JJ ., concur.
||| (Dela Rosa v. Carlos, G.R. No. 147549, October 23, 2003)
SECOND DIVISION
[G.R. No. 171678. December 10, 2008.]
ROSA J. SALES, EARL RYAN CHENG and EMIL RALPH

CHENG, petitioners, vs. WILLIAM BARRO, respondent.
DECISION
QUISUMBING, J p:
For review on certiorari is the Decision 1 dated January 3, 2006 of the Court of
Appeals in CA-G.R. SP No. 90381, which reversed the Decision 2 dated March 10,
2005 of the Regional Trial Court (RTC) of Manila, Branch 39, in Civil Case No. 04-
111243. aTIEcA
The facts are as follows:
This case originated from the ejectment complaint filed by the petitioners against
the respondent, his wife, and all persons claiming rights under them before
Branch 28 of the Metropolitan Trial Court (MeTC) of Manila. In their complaint, 3
the petitioners alleged among others that (1) they are owners of the lot described
and embraced in Transfer Certificate of Title (TCT ) No. 262237 4 of the Registry
of Deeds of the City of Manila; (2) the respondent constructed a shanty thereon
without their consent; (3) the respondent and his co-defendants have not been
paying any rent to the petitioners for their occupation thereof; (4) the respondent
and his co-defendants refused the formal demand made by the petitioners for
them to vacate the subject lot; and (5) the Office of the Barangay Captain of
Barangay 464, Zone 46, 4th District, Manila issued the necessary Certification to
File Action. 5
In his answer, the respondent denied the allegations of the complaint, and
essentially claimed that (1) his construction of the temporary makeshift house on
the lot was tolerated by the petitioners, considering that he acted as the caretaker
thereof; and (2) he does not remember receiving any demand letter and
summons from the barangay and so he was surprised to know that an ejectment
complaint was filed against him. 6
In its Decision 7 dated September 27, 2004, the MeTC found in favor of the
petitioners. It held that the respondent, his wife, and all persons claiming rights
under them, being possessors by tolerance, can be validly ejected from the lot at
any time and after due notice. It then directed them to vacate the lot, pay P5,000 a
month from January 2004 up to such time that the lot is actually turned over to
the petitioners, and pay P10,000 as attorney's fees.
The respondent appealed to the RTC which affirmed in toto the assailed MeTC
decision.
Unfazed by the decision of the RTC, the respondent elevated the case to the
Court of Appeals. After finding the complaint to be substantially lacking in the
requisite allegations that would make out a case either for forcible entry or
unlawful detainer, 8 the Court of Appeals reversed the RTC decision and
accordingly dismissed the petitioners' complaint. The dispositive portion of the
Court of Appeals decision reads: IDASHa
WHEREFORE, premises considered, we hereby GRANT the
petition on the basis of the lower tribunals' lack of
jurisdiction, and accordingly DISMISS respondents'
ejectment complaint.
SO ORDERED. 9
The petitioners moved for reconsideration, but the Court of Appeals denied the
motion. Hence, this petition on the following grounds:
I.
WITH ALL DUE RESPECT, THE HONORABLE COURT OF

APPEALS SERIOUSLY ERRED IN DISMISSING
PETITIONERS' EJECTMENT COMPLAINT ON THE
ALLEGED GROUND THAT THE COMPLAINT FAILED TO
STATE THE JURISDICTIONAL FACT OF PRIOR
PHYSICAL POSSESSION. TSEcAD
II.
WITH ALL DUE RESPECT, THE HONORABLE COURT OF

APPEALS SERIOUSLY ERRED IN NOT RULING THAT
THE RESPONDENT WAS IN ESTOPPEL FROM
QUESTIONING THE JURISDICTION OF THE
METROPOLITAN TRIAL COURT ASSUMING, WITHOUT
ADMITTING, THAT THE LOWER COURT HAD NO
JURISDICTION OVER THE COMPLAINT. 10
Simply put, we are asked to resolve: (1) whether the Court of Appeals correctly
dismissed the complaint; and (2) whether the respondent was already estopped
from questioning the jurisdiction of the MeTC.
Anent the first issue, the petitioners argue that the complaint was for unlawful
detainer, and hence, there was no need for them to allege prior physical
possession of the lot. They further contend that their position that the complaint
was for unlawful detainer is supported by the claim of the respondent in his
answer that "he made a temporary makeshift structure on the lot to serve as his living
place and that the same was tolerated by the petitioners considering that he acted as
caretaker of the property." 11 For his part, the respondent insists that the Court of
Appeals was correct in dismissing the complaint. 12
After carefully examining the averments of the petitioners' complaint and the
character of the reliefs sought therein, 13 we hold that the Court of Appeals did
not err in finding that the complaint was for forcible entry, and that the Court of
Appeals correctly dismissed it.
There are two reasons why we could not subscribe to the petitioners' submission
that their complaint was for unlawful detainer. Firstly, the petitioners' own
averment in the complaint "that the defendant constructed a shanty in the lot of the
plaintiffs without their consent", 14 and the relief asked for by the petitioners that
the respondent and his wife "pay the amount of P10,000 a month beginning January
2004 as for reasonable rent of the subject premises", 15 clearly contradict their claim.
It must be highlighted that as admitted by the petitioners in their motion for
reconsideration 16 before the appellate court, and as evidenced by the TCT No.
262237 annexed to the complaint, the petitioners became owners of the property
only on January 6, 2004. By averring that the respondent constructed his shanty
on the lot without their consent and then praying that the MeTC direct the
respondent to pay them rent from January 2004, or from the inception of the
respondent's occupation of the lot, no other conclusion can be made except that
the petitioners had always considered respondent's occupation of the same to be
unlawful from the very beginning. Hence, the complaint can never support a
case for unlawful detainer. "It is a settled rule that in order to justify an action for
unlawful detainer, the owner's permission or tolerance must be present at the beginning
of the possession." 17 cCaSHA
Secondly, the nature of the complaint is neither changed nor dependent upon the
allegations and/or defenses made in the answer. As we had previously stated in
Caiza v. Court of Appeals, 18 "it is axiomatic that what determines the nature of an
action as well as which court has jurisdiction over it, are the allegations of the complaint
and the character of the relief sought."
As correctly found by the Court of Appeals, what the petitioners actually filed
was a fatally defective complaint for forcible entry, considering that there was no
allegation therein regarding the petitioners' prior physical possession of the lot.
19 In Tirona v. Alejo, we held that "in actions for forcible entry, two allegations are
mandatory for the municipal trial court to acquire jurisdiction: first, the plaintiff must
allege his prior physical possession of the property; and second, he must also allege that
he was deprived of his possession by any of the means provided for in Section 1, 20 Rule
70 of the Rules of Court, namely, force, intimidation, threats, strategy, and stealth." 21
The petitioners' allegation that they are the registered owners of the lot miserably
falls short of satisfying the required averment of prior physical possession. As we
had clarified and stressed in Tirona, "the word possession as used in forcible entry
and unlawful detainer, means nothing more than physical possession, not legal
possession in the sense contemplated in civil law." 22
Finally, was the respondent already estopped from questioning the jurisdiction
of the MeTC to try the petitioners' complaint? The petitioners argue that the
respondent is already estopped because the respondent failed to assail the
jurisdiction of the MeTC at the earliest opportunity and actively participated in
the proceedings before it. 23 The respondent counters that he could not be held
guilty of estoppel because he questioned in his answer and pleadings petitioners'
allegation that he was served a demand letter. By questioning the veracity of the
allegation of the existence of a jurisdictional requirement, he, in effect,
questioned the jurisdiction of the MeTC in trying the case. 24
It is well-settled that a court's jurisdiction may be raised at any stage of the

proceedings, even on appeal. The reason is that jurisdiction is conferred by law,
and lack of it affects the very authority of the court to take cognizance of and to
render judgment on the action. 25 The rule remains that estoppel does not confer
jurisdiction on a tribunal that has none over the cause of action or subject matter
of the case. 26 In any event, even if respondent did not raise the issue of
jurisdiction, the reviewing court is not precluded from ruling that it has no
jurisdiction over the case. In this sense, dismissal for lack of jurisdiction may
even be ordered by the court motu proprio. 27 ACcTDS
WHEREFORE, the instant petition is DENIED for lack of merit. Costs against the
petitioners.
SO ORDERED.
||| (Sales v. Barro, G.R. No. 171678, December 10, 2008)
THIRD DIVISION
[G.R. No. 149118. February 16, 2006.]
FLAVIANA LIM CAJAYON and CARMELITA LIM

CONSTANTINO, petitioners, vs. SPOUSES SANTIAGO
and FORTUNATA BATUYONG, respondents.
Contreras & Limqueco Law Offices for petitioners.
Rodelio B. Punzalan for respondents.
SYLLABUS
1.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; EJECTMENT; DISTINCTIONS

BETWEEN FORCIBLE ENTRY AND UNLAWFUL DETAINER. The
distinctions between the two forms of ejectment suits, are: first, in forcible entry,
the plaintiff must prove that he was in prior physical possession of the premises
until he was deprived thereof by the defendant, whereas, in unlawful detainer,
the plaintiff need not have been in prior physical possession; second, in forcible
entry, the possession of the land by the defendant is unlawful from the beginning
as he acquires possession thereof by force, intimidation, threat, strategy or
stealth, while in unlawful detainer, the possession of the defendant is inceptively
lawful but it becomes illegal by reason of the termination of his right to the
possession of the property under his contract with the plaintiff; third, in forcible
entry, the law does not require a previous demand for the defendant to vacate
the premises, but in unlawful detainer, the plaintiff must first make such
demand, which is jurisdictional in nature.
2.ID.; ID.; ID.; JURISDICTION OF COURT THEREIN IS DETERMINED BY THE

ALLEGATIONS OF THE COMPLAINT AND CHARACTER OF THE RELIEF
SOUGHT; CASE AT BAR. It is settled that jurisdiction of the court in
ejectment cases is determined by the allegations of the complaint and the
character of the relief sought. . . . In the complaint filed by respondents (plaintiffs
therein), taken in tandem with the textbook distinctions between forcible entry
and unlawful detainer, it is clear that the complaint makes out a case for forcible
entry, as opposed to unlawful detainer. . . . Respondents had been in prior
physical possession of the property in the concept of owner prior to petitioners'
intrusion on 21 May 1996. When petitioners encroached upon respondents' lot
and started construction works thereon the latter was dispossessed of the area
involved. Despite various demands by respondents to vacate, petitioners
obstinately refused to do so. Clearly, petitioners' entry into the said property was
illegal from the beginning, precluding an action for unlawful detainer.
3.ID.; ID.; ID.; ID.; SUFFICIENT ALLEGATIONS IN COMPLAINT TO

ESTABLISH A FORCIBLE ENTRY CASE. To establish a case of forcible entry,
the complaint must allege that one in physical possession of a land or building
has been deprived of that possession by another through force, intimidation,
threat, strategy or stealth. It is not essential, however, that the complaint should
expressly employ the language of the law. It would be sufficient that facts are set
up showing that dispossession took place under said conditions.
4.ID.; ID.; ID.; ID.; ID.; MEANING OF THE WORDS "BY FORCE,
INTIMIDATION, THREAT, STRATEGY OR STEALTH"; CASE AT BAR. The
words "by force, intimidation, threat, strategy or stealth" include every situation
or condition under which one person can wrongfully enter upon real property
and exclude another, who has had prior possession thereof. To constitute the use
of "force" as contemplated in the above-mentioned provision, the trespasser does
not have to institute a state of war. Nor is it even necessary that he use violence
against the person of the party in possession. The act of going on the property
and excluding the lawful possessor therefrom necessarily implies the exertion of
force over the property, and this is all that is necessary. In the case at bar,
petitioners' encroachment into respondents' property in an oppressive and
malevolent manner, coupled with their refusal to vacate the premises despite
knowledge of the proper boundaries and heedless of respondents' serious
objections, indelibly connotes "force" within the meaning of the law.
5.ID.; ID.; ID.; PRESCRIPTION; SUIT FILED WITHIN ONE YEAR PERIOD
FROM DISPOSSESSION MANDATED BY LAW IN CASE AT BAR.
Petitioners contend that while they concede they might have intruded on
respondents' property, the action is barred by prescription because it was filed
more than one (1) year after the occurrence of the alleged intrusion. The
contention is baseless. Section 1, Rule 70 of the Rules of Court allows a plaintiff to
bring an action in the proper inferior court for forcible entry or unlawful detainer
within one (1) year, respectively, after such unlawful deprivation or withholding
of possession. In forcible entry, the one-year period is counted from the date of
actual entry on the land. Records show that the ejectment suit was instituted on
11 April 1997. Petitioners' actual entry into the property, according to the
complaint, took place on 21 May 1996. Thus, the suit was filed well within the
one (1)-year period mandated by law.
6.CIVIL LAW; LAND REGISTRATION; BUILDER IN GOOD FAITH, DEFINED;

POSSESSION OF TITLED PROPERTY ADVERSE TO THE REGISTERED
OWNER IS NECESSARILY TAINTED WITH BAD FAITH; CASE AT BAR. As
a collateral issue, petitioners claim that they are at least entitled to the rights of a
builder in good faith on the premise that they are not the owners of the property
encroached upon. This contention is not tenable. Good faith consists in the belief
of the builder that the land he is building on is his and his ignorance of any
defect or flaw in his title. In the instant case, when the verification survey report
came to petitioners' knowledge their good faith ceased. The survey report is a
professional's field confirmation of petitioners' encroachment of respondents'
titled property. It is doctrinal in land registration law that possession of titled
property adverse to the registered owner is necessarily tainted with bad faith.
Thus, proceeding with the construction works on the disputed lot despite
knowledge of respondents' ownership put petitioners in bad faith.
7.REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF COURTS BELOW,

MORE SO WHEN AFFIRMED BY THE APPELLATE COURT, CANNOT BE
RAISED IN A PETITION FOR REVIEW ON CERTIORARI; CASE AT BAR.
Petitioners question the evidentiary weight of the verification survey report.
They point out that since the survey was a unilateral act of respondents, done as
it was without their consent, they should not be bound by its findings. In raising
the issue, petitioners are in effect asking this Court to reassess the factual
findings of the courts below, a task which is beyond this Court's domain. Factual
matters cannot be raised in a petition for review on certiorari. This Court at this
stage is limited to reviewing errors of law that may have been committed by the
lower courts. We find no ample reason to depart from this rule, more so in this
case where the Court of Appeals has affirmed the factual findings of the RTC and
the MeTC.
8.ID.; ID.; PRESUMPTION OF REGULARITY OF PERFORMANCE OF

OFFICIAL DUTIES; EVIDENTIARY VALUE OF THE VERIFICATION SURVEY
REPORT PREPARED BY A GOVERNMENT FUNCTIONARY; CASE AT BAR.
There is a presumption that official duty is regularly performed, i.e.,
government officials who perform them are clothed with the presumption of
regularity, as the courts below pointed out. In this case, the verification survey
was conducted by a government functionary. Even prescinding from the
presumption of regularity, what appears on record is that the verification survey
was conducted with the agreement of both parties and in their presence. That
was the finding made by the courts below and affirmed by the appellate court
without any wrinkle.
DECISION
TINGA, J p:
This petition for review on certiorari challenges the two rulings of the Court of
Appeals in CA G.R. SP. No. 50952. The first decision dated 27 November 2000 1
upheld the ruling of the Regional Trial Court (RTC) affirming the Metropolitan
Trial Court (MeTC) order for ejectment, while the Resolution dated 5 July 2001 2
denied the motion for reconsideration.
First, the factual background of the case.
Flaviana Lim Cajayon and Carmelita Lim Constantino (petitioners) and Isagani
P. Candelaria (Candelaria) were co-owners of a 260-square meter lot, then
covered by Transfer Certificate of Title (TCT) No. C-10870. On 1 February 1995, a
partition agreement 3 was entered into by petitioners and Candelaria, wherein
Lot 6-A, Psd 00-034294, containing an area of 100 square meters, more or less,
was adjudicated to Candelaria, while Lot 6-B, Psd 00-034294, containing an area
of 160 square meters, more or less, was given to petitioners. TCT No. C-10870
was cancelled and TCT No. 288500 was issued in the name of petitioners.
On 30 May 1995, Candelaria sold his property, including the improvements

thereon, to Spouses Santiago and Fortunata Batuyong (respondents). TCT No.
294743 was issued in their names over the said parcel of land. 4
On 21 May 1996, petitioners started the construction of a seven (7)-door

bungalow-type building that allegedly intruded into the lot of respondents. At
the instance of respondents, petitioners were summoned by barangay officials to
a meeting on the matter. It was then agreed upon that petitioners would defer
the construction work pending the result of a relocation survey to be conducted
by a government surveyor.
A verification survey was conducted by Geodetic Engineer Florentina C.

Valencia. She submitted a report dated 12 November 1996 which yielded the
findings that Lot 6-A (Candelaria's) and Lot 6-B (petitioners') were not correctly
positioned geographically on the ground with respect to TCT No. 294743. Thus,
as per survey, sub-lot B with an area of 10.43 square meters serves as right of
way of Lot 6-B (petitioners' lot) while sub-lot C with an area of 10.18 square
meters was the portion of Lot 6-A (respondents lot) presently occupied by
petitioners. 5
Despite the delineation of said boundaries, petitioners proceeded with the

forestalled construction, allegedly occupying at least 20.61 square meters of
respondents' lot, including the portion being used as right of way for petitioners'
tenants. cETCID
After respondents secured a permit from the barangay and the Caloocan City
Building Official to fence their lot, they made demands to petitioners to vacate
the encroached portion but to no avail. Respondents brought the matter to the
barangay but no amicable settlement was reached. A Certificate to File Action
was issued to them by the Barangay Lupon Tagapayapa. A final demand was
made through a letter dated 20 May 1997 upon petitioners to vacate the
encroached premises. Petitioners, however, vehemently refused to vacate and
surrender the premises.
On 14 April 1997, respondents filed an ejectment case against petitioners before

the Metropolitan Trial Court 6 (MeTC) of Caloocan City, docketed as Civil Case
No. 23359. In a Decision 7 dated 2 July 1998, the MeTC ordered petitioners to
vacate and surrender possession of a portion of respondents' lot and to pay
P500.00 per month as fair rental value from May 1996 until the premises is finally
vacated, plus P5,000.00 as attorneys fees and costs of the suit. 8
On appeal, the RTC 9 affirmed the judgment of the MeTC. 10 In doing so, the
RTC debunked the three (3) arguments posed by petitioners. First, contrary to
petitioners' submission, the RTC ruled that the MeTC had jurisdiction over the
instant complaint. The RTC noted that the issue of jurisdiction was never raised
in the court a quo while on the other hand, petitioners actively participated in the
proceedings therein by filing their Answer and Position Paper. Evidently,
petitioners raised the question of jurisdiction as a mere afterthought as he did so
only after he obtained an adverse judgment. Second, the allegations of the
complaint sufficiently averred a case for ejectment which the RTC found to be
within the jurisdiction of the court a quo. Third, the trial court ruled that
petitioners categorically recognized the validity of the verification survey done
by Engineer Valencia, as shown by the presence of petitioner Flaviana Cajayon
during the verification survey and setting of monuments per survey report. 11
Petitioners filed a motion for new trial and/or reconsideration but it was denied
in an Order 12 dated 12 January 1999 of the RTC. They elevated the case to the
Court of Appeals by way of petition for review under Rule 42 of the Rules of
Court. On 27 November 2000, the appellate court rendered a Decision 13
dismissing the petition. Holding that the exclusive jurisdiction to try unlawful
detainer cases is vested with the MeTC, the appellate court ratiocinated, thus:
The complaint in the instant case establishes jurisdictional

facts necessary to sustain the action for unlawful detainer
and the remedy it seeks is merely to obtain possession of the
controverted lot from respondents. Specifically, it alleges
that sometime on May 21, 1996, petitioners started
construction works in the area which intruded into a portion
of respondents property; that the parties eventually agreed
to stop the construction subject to the result of a survey to be
conducted thereon; that a survey was conducted in the
presence of the parties and a report was submitted by Engr.
Valencia on November 12, 1996, showing an encroachment
of about 20.61 square meters of respondents' lot including
that portion being used as a right of way for petitioners'
tenants; that even after the boundaries had been verified,
petitioners resumed the construction on the area; that
despite verbal and written demands, the last of which was
made on March 20, 1999, petitioners refused to vacate and
surrender the encroached area. Surely, respondents' resort to
unlawful detainer when petitioners failed to leave the
controverted premises upon demand is in order. 14
The appellate court also held that the fact that petitioners houses already stood
on the controverted lot long before the purchase of the land by respondents
failed to negate the case for ejectment. 15 The appellate court emphasized that
prior physical possession is not a condition sine qua non in unlawful detainer
cases. The court likewise sustained the RTC findings on the validity of the
verification survey conducted by Engineer Valencia that petitioners have
encroached on a 20.61 square meter portion of respondents' lot. DHcEAa
On 5 July 2001, the Court of Appeals issued a Resolution 16 denying petitioners'

Motion for Reconsideration.
Petitioners now come to us via the present petition, submitting as issues the
question of jurisdiction and the weight to be accorded to the verification survey
results. 17
Petitioners anchor their petition on the court a quo's lack of jurisdiction over the
instant suit. The averments in the complaint do not make out a case for
ejectment, they claim, as their entry into the disputed lot was not made by force,
intimidation, threat, strategy or stealth. Neither was their possession of the
disputed property by virtue of the tolerance of respondents or the latter's
predecessor-in-interest.
Respondents counter that the jurisdictional elements necessary to maintain an

action for unlawful detainer clearly obtain in the case at bar, namely: (a) after the
parties agreed to the conduct of a survey by a government surveyor and after the
survey, it was determined that the structures introduced by herein petitioners
have encroached a portion of herein respondents lot; (b) notices to vacate and
surrender of possession of the encroached portion were made to petitioners, the
last being on March 20, 1997; and (c) the suit was instituted on April 11, 1997 or
within one (1) year from date of last demand. 18
Respondents also stress that possession of the premises by petitioners took place
more than one year before the filing of the complaint and the absence of an
allegation in the complaint that such possession of the disputed portion was
merely by virtue of respondents tolerance does not deprive the lower court of its
original and exclusive jurisdiction nor will it negate respondents action for
unlawful detainer. 19
It is settled that jurisdiction of the court in ejectment cases is determined by the

allegations of the complaint and the character of the relief sought. 20
The Complaint 21 filed by respondents (plaintiffs therein) alleged these material

facts:
2.That defendants and Isagani P. Candelaria were the former

co-owners of a certain piece of land located in Maypajo,
Caloocan City containing an area of 260 square meters, more
or less, under TCT No. C-10870 issued by the Register of
Deeds of Caloocan City; cDICaS
3.That on February 1, 1995, said co-owners subdivided this

parcel of land by virtue of a Partition Agreement wherein
Lot 6-A, Psd 00-034294, containing an area of 100 square
meters, more or less, was given to Isagani P. Candelaria,
while Lot 6-B, Psd 00-034294, containing an area of 160
square meters, more or less, was given to defendants. A
copy of said Partition Agreement is hereto attached as
Annex "A";
xxx xxx xxx
5.That on May 30, 1995, Isagani P. Candelaria sold his share

to the herein plaintiffs, including the improvements thereon,
in the sum of P100,000.00, under a Deed of Absolute Sale . . .;
xxx xxx xxx
7.That sometime in May 21, 1996, defendants started

construction works in the area and intruded into the lot
owned by the plaintiffs causing the latter to protest and
report the matter to the barangay authorities;
8.That on the same day, the parties were summoned to

appear before the Barangay Chairman wherein defendants
agreed to stop the construction works, and in a subsequent
conference on June 7, 1996, they agreed to defer the matter
pending the result of a survey to be conducted by a
government surveyor;
xxx xxx xxx
11.That the following day, September 5, 1996, Geodetic

Engineer Florentina C. Valencia conducted a survey of the
aforesaid property and placed the concrete monuments
thereon in the presence of plaintiffs and defendants;
12.That on November 12, 1996, a verification survey report

was submitted by Geodetic Engineer Florentina C. Valencia
together with the survey verification plan . . .;
13.That despite defendants' knowledge of the property

boundary, and despite repeated serious objections from
plaintiffs, defendants proceeded to construct a seven-door
bungalow-type semi-concrete building, occupying at least
10.18 square meters and another 10.43 square meters for the
right of way, thus encroaching upon at least 20.61 square
meters of plaintiffs' lot, and further demolishing plaintiff's
wall.
xxx xxx xxx
20.That despite repeated and continuous demands made

by plaintiffs upon defendants, both oral and written, the
last being on March 20, 1997, defendants in manifest bad
faith, wanton attitude, and in a malevolent and oppressive
manner and in utter disregard of the property rights of
plaintiffs, have failed and refused, and still fail and refuse
to vacate the same up to the present time . . .. 22
From the above-quoted allegations taken in tandem with the textbook

distinctions between forcible entry and unlawful detainer, it is clear that the
complaint makes out a case for forcible entry, as opposed to unlawful detainer.
The distinctions between the two forms of ejectment suits, are: first, in forcible
entry, the plaintiff must prove that he was in prior physical possession of the
premises until he was deprived thereof by the defendant, whereas, in unlawful
detainer, the plaintiff need not have been in prior physical possession; second, in
forcible entry, the possession of the land by the defendant is unlawful from the
beginning as he acquires possession thereof by force, intimidation, threat,
strategy or stealth, while in unlawful detainer, the possession of the defendant is
inceptively lawful but it becomes illegal by reason of the termination of his right
to the possession of the property under his contract with the plaintiff; third, in
forcible entry, the law does not require a previous demand for the defendant to
vacate the premises, but in unlawful detainer, the plaintiff must first make such
demand, which is jurisdictional in nature. 23
Respondents had been in prior physical possession of the property in the concept
of owner prior to petitioners' intrusion on 21 May 1996. When petitioners
encroached upon respondents' lot and started construction works thereon the
latter was dispossessed of the area involved. Despite various demands by
respondents to vacate, petitioners obstinately refused to do so. Clearly,
petitioners' entry into the said property was illegal from the beginning,
precluding an action for unlawful detainer. cdasiajur
On the other hand, to establish a case of forcible entry, the complaint must allege
that one in physical possession of a land or building has been deprived of that
possession by another through force, intimidation, threat, strategy or stealth. 24
It is not essential, however, that the complaint should expressly employ the
language of the law. It would be sufficient that facts are set up showing that
dispossession took place under said conditions. 25
The words "by force, intimidation, threat, strategy or stealth" include every
situation or condition under which one person can wrongfully enter upon real
property and exclude another, who has had prior possession thereof. To
constitute the use of "force" as contemplated in the above-mentioned provision,
the trespasser does not have to institute a state of war. Nor is it even necessary
that he use violence against the person of the party in possession. The act of
going on the property and excluding the lawful possessor therefrom necessarily
implies the exertion of force over the property, and this is all that is necessary. 26
In the case at bar, petitioners' encroachment into respondents' property in an
oppressive and malevolent manner, coupled with their refusal to vacate the
premises despite knowledge of the proper boundaries and heedless of
respondents' serious objections, indelibly connotes "force" within the meaning of
the law.
Petitioners contend that while they concede they might have intruded on
respondents' property, the action is barred by prescription because it was filed
more than one (1) year after the occurrence of the alleged intrusion. The
contention is baseless. Section 1, Rule 70 of the Rules of Court allows a plaintiff to
bring an action in the proper inferior court for forcible entry or unlawful detainer
within one (1) year, respectively, after such unlawful deprivation or withholding
of possession. In forcible entry, the one-year period is counted from the date of
actual entry on the land. 27
Records show that the ejectment suit was instituted on 11 April 1997. Petitioners'
actual entry into the property, according to the complaint, took place on 21 May
1996. Thus, the suit was filed well within the one (1)-year period mandated by
law.
As a collateral issue, petitioners claim that they are at least entitled to the rights
of a builder in good faith on the premise that they are not the owners of the
property encroached upon.
This contention is not tenable. Good faith consists in the belief of the builder that
the land he is building on is his and his ignorance of any defect or flaw in his
title. 28 In the instant case, when the verification survey report came to
petitioners' knowledge their good faith ceased. The survey report is a
professionals field confirmation of petitioners encroachment of respondents'
titled property. It is doctrinal in land registration law that possession of titled
property adverse to the registered owner is necessarily tainted with bad faith.
Thus, proceeding with the construction works on the disputed lot despite
knowledge of respondents ownership put petitioners in bad faith.
Now, the second issue. Petitioners question the evidentiary weight of the
verification survey report. They point out that since the survey was a unilateral
act of respondents, done as it was without their consent, they should not be
bound by its findings. 29
In raising the issue, petitioners are in effect asking this Court to reassess the
factual findings of the courts below, a task which is beyond this Court's domain.
Factual matters cannot be raised in a petition for review on certiorari. This Court
at this stage is limited to reviewing errors of law that may have been committed
by the lower courts. 30 We find no ample reason to depart from this rule, more so
in this case where the Court of Appeals has affirmed the factual findings of the
RTC and the MeTC. ESTaHC
Moreover, there is a presumption that official duty is regularly performed, 31 i.e.,

government officials who perform them are clothed with the presumption of
regularity, 32 as the courts below pointed out. 33 In this case, the verification
survey was conducted by a government functionary.
Even prescinding from the presumption of regularity, what appears on record is

that the verification survey was conducted with the agreement of both parties
and in their presence. That was the finding made by the courts below and
affirmed by the appellate court without any wrinkle. 34
WHEREFORE, based on the foregoing, this Petition is DENIED and the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
||| (Cajayon v. Spouses Batuyong, G.R. No. 149118, February 16, 2006)
FIRST DIVISION
[G.R. No. 173616. June 25, 2014.]
AIR TRANSPORTATION OFFICE (ATO), petitioner, vs.

HON. COURT OF APPEALS (NINETEENTH DIVISION)
and BERNIE G. MIAQUE, respondents.
DECISION
This petition for certiorari and prohibition of the Air Transportation Office (ATO)
seeks the nullification of the Court of Appeals' Resolution 1 dated March 29, 2006
and Resolution 2 dated May 30, 2006 in CA-G.R. CEB-SP No. 01603. The
Resolution dated March 29, 2006 granted the application for temporary
restraining order (TRO) of Bernie G. Miaque, while the Resolution dated May 30,
2006 issued a writ of preliminary injunction enjoining the implementation of the
writ of execution issued by the Regional Trial Court (RTC) of Iloilo despite
Miaque's alleged continued failure and refusal to make current the supersedeas
bond and to pay to the ATO the rental and concession privilege fees.
The proceedings on the main case of ejectment

MTCC of Iloilo City: Civil Case No. 01 (38)
In May 2001, the ATO filed a complaint for unlawful detainer against Miaque in
the Municipal Trial Court in Cities (MTCC) of Iloilo City, Branch 3. It was
docketed as Civil Case No. 01 (38). The ATO sought the following, among others:
(1) That Miaque be ordered to permanently vacate and

peacefully return to the ATO possession of:
(a) the 800-square meter Refreshment Parlor

fronting the New Terminal Building-Iloilo
Airport;
(b) the 310-square meter Restaurant/Gift Shop

inside the Iloilo Airport Terminal; and
(c) all areas occupied or otherwise utilized by

Miaque incident to his operation of the
Porterage Service within the Iloilo Airport;
and
(2) That Miaque be ordered to immediately pay the ATO the

amount of not less than P1,296,103.10, representing
unpaid space rental and concessionaire privilege
fees as of October 15, 2000 plus interest and
additional rental and fees which may be proven
during the trial. 3
The MTCC subsequently rendered a Decision 4 dated May 27, 2002 the
dispositive part of which reads:
WHEREFORE, judgment is rendered finding [Miaque] to be

unlawfully detaining the following premises and orders
[him], his men and privies to:
a. vacate the 800[-]square meter Refreshment Parlor

fronting the New Terminal Building-Iloilo Airport.
[Miaque] is further ordered to pay [the ATO] the
rental and concessionaire privilege fee[s] accruing
from November 1986 to October 2000, totaling
P460,060.70, plus differential billings from January
1990 to July 1993 for P4,652.60 and interest charges
from January 2000 to October 2000 for P2,678.38 or
a total amount of P467,397.68 as of October 2000,
less the payments made by [Miaque] under Official
Receipt No. 4317842 dated December 1998, and the
monthly current lease/concession privilege fee
from November 2000 until [Miaque] shall have
vacated the premises;
(b) vacate the 310[-]square meter Restaurant/Gift

Shop inside the Iloilo Terminal Building which was
reduced to a total of 183 square meters in 1998
(51.56 square meters inside the pre-departure area
and 126.72 square meters outside the pre-departure
area). [Miaque] is also ordered to pay [the ATO]
rentals/concessionaire's privilege fee[s] from
January 16, 1992 to October 15, 2000 in the total
amount of P719,708.43 and from October 16, 2000,
to pay the current monthly lease/concessionaire
privilege fees until [Miaque] shall have vacated the
premises; and
(c) vacate the area occupied or used by [Miaque]

incident to his operation of the Porterage Service
within the Iloilo Airport. [Miaque] is further
ordered to pay Tender Offer Fee due from March
1992 to October 2000 in the total amount of
P108,997.07. [Miaque] is further ordered to pay the
current monthly concession privilege fee from
October 2000 until such time that [Miaque] shall
have vacated the premises.
Costs against [Miaque]. 5
RTC of Iloilo City: Civil Case No. 02-27292

Miaque appealed the MTCC Decision to the RTC of Iloilo City, Branch 24. It was
docketed as Civil Case No. 02-27292. The RTC, in its Decision 6 dated June 7,
2003, affirmed the MTCC Decision in its entirety. Miaque's motion for
reconsideration was denied. 7
Court of Appeals: CA-G.R. SP No. 79439

Miaque questioned the RTC Decision in the Court of Appeals by filing a petition
for review, docketed as CA-G.R. SP No. 79439, on September 25, 2003. In a
Decision 8 dated April 29, 2005, the Court of Appeals dismissed the petition and
affirmed the RTC Decision. Miaque moved for reconsideration but it was denied
in a Resolution dated January 5, 2006. 9
Supreme Court: G.R. No. 171099

Miaque brought the case to this Court in a petition for review, docketed as G.R.
No. 171099. In a Resolution 10 dated February 22, 2006, the petition was denied
as no reversible error in the Court of Appeals Decision was sufficiently shown.
The motion for reconsideration of Miaque was denied with finality. 11
The proceedings on execution

As an incident of CA-G.R. SP No. 79439, the Court of Appeals issued on
February 27, 2004 a temporary restraining order (TRO) effective for a period of
60 days and required Miaque to post a bond in the amount of P100,000.00. 12
After the lapse of the TRO, the ATO filed an urgent motion for the execution of
the RTC Decision pursuant to Section 21, Rule 70 of the Rules of Court. This was
opposed by Miaque. 13
In an Order 14 dated August 2, 2004, the RTC granted the ATO's motion:
Wherefore, in view of the above consideration, the court

finds merit [i]n the reasons given in the motion of [the ATO]
and hereby Grants the issuance of a Writ of Execution.
Pursuant to Section 21, Rule 70 of the 1997 Rules of Civil

Procedure, which mandates that the judgment of this Court
being immediately executory in cases of this nature, let a
writ of execution shall issue, ordering the sheriff of this
Court to effect its Decision dated June 7, 2003, affirming the
Decision of the MTCC, Branch 3, Iloilo City.
Furnish copies of this order to the Asst. Solicitor Almira

Tomampos of the Office of the Solicitor General and Atty.
Rex Rico, counsel for [Miaque]. 15
Miaque sought reconsideration of the above Order but the RTC denied the
motion in an Order 16 dated August 13, 2004. Thereafter, the RTC issued a Writ
of Execution dated August 16, 2004. 17
However, the Court of Appeals issued a Resolution 18 dated August 18, 2004
ordering the issuance of a writ of preliminary injunction and enjoining the ATO
and all persons acting in its behalf from enforcing the respective Decisions of the
MTCC and the RTC while CA-G.R. SP No. 79439 is pending. Thus, after the
dismissal of Miaque's petition for review in CA-G.R. SP No. 79439, the ATO filed
another urgent motion for execution of the RTC Decision. In its motion, the ATO
pointed out that the supersedeas bond filed by Miaque had lapsed and was not
renewed and that the rental and concessionaire privilege fees have not been paid
at all in violation of Section 8, Rule 70 of the Rules of Court. 19 Miaque again
opposed the ATO's urgent motion for execution, 20 while the ATO filed a
supplemental urgent motion for execution stating that Miaque's appeal in the
Court of Appeals had been dismissed. 21
In an Order 22 dated June 1, 2005, the RTC granted the ATO's urgent motion for
execution and issued a Writ of Execution 23 dated June 2, 2005. On the basis of
the said writ, a notice to vacate was given to Miaque. 24 On June 3, 2005, Miaque
filed a motion for reconsideration of the Order dated June 1, 2005, with prayer to
set aside the writ of execution and notice to vacate. 25 At the same time, he filed
a motion in CA-G.R. SP No. 79439 praying that the Court of Appeals order the
RTC judge and the concerned sheriffs to desist from implementing the writ of
execution. 26 Thereafter, the Court of Appeals issued a Resolution 27 dated June
14, 2005 ordering the sheriffs to desist from executing the Decisions of the MTCC
and the RTC while CA-G.R. SP No. 79439 is still pending. However, on June 15,
2005, before the concerned sheriffs received a copy of the Resolution dated June
14, 2005, the said sheriffs implemented the writ of execution and delivered the
possession of the following premises to the ATO:
(a) the Restaurant/Gift Shop inside the Iloilo Terminal

Building in the reduced area of 183 square meters;
and
(b) the area which Miaque occupied or used incident to his

operation of the Porterage Service within the Iloilo
Airport.
The sheriffs who implemented the writ then filed a return of service 28 and
issued reports of partial delivery of possession. 29 However, Miaque
subsequently regained possession of the said premises on the strength of the
Court of Appeals' Resolution dated June 14, 2005. 30
On February 9, 2006, after the Court of Appeals issued its Resolution dated
January 5, 2006 denying Miaque's motion for reconsideration of the Decision
dated April 29, 2005 in CA-G.R. SP No. 79439, the ATO filed with the RTC a
motion for the revival of the writs of execution dated August 16, 2004 and June 2,
2005. 31 This was opposed by Miaque. 32 After the RTC heard the parties, it
issued an Order 33 dated March 20, 2006 granting the ATO's motion and revived
the writs of execution dated August 16, 2004 and June 2, 2005. Miaque filed a
motion for reconsideration but the RTC denied it. 34
A new case in the Court of Appeals: CA-G.R. CEB-SP No. 01603

On March 28, 2006, Miaque filed a petition 35 for certiorari (with prayer for
issuance of TRO and/or writ of preliminary injunction) in the Court of Appeals,
docketed as CA-G.R. CEB-SP No. 01603, where he assailed the RTC's Order
dated March 20, 2006. He prayed, among others, that the implementation of the
writs of execution be enjoined. It is here where the Court of Appeals issued the
Resolutions being challenged in this case, namely, the Resolution dated March
29, 2006 issuing a TRO effective for 60 days, and Resolution dated May 30, 2006
issuing a writ of preliminary injunction enjoining the implementation of the
writs of execution dated August 16, 2004 and June 2, 2005. In particular, the
Resolution dated May 30, 2006 reads:
Before us for resolution is [Miaque]'s application for the

issuance of a writ of preliminary injunction that would
restrain the respondent judge, Sheriffs Marcial B. Lambuso,
Winston T. Eguia, Camilo I. Divinagracia, Jr. and Eric
George S. Luntao and all other persons acting for and in
their behalves, from enforcing the orders issued by the
respondent judge on March 20, 2006 and March 24, 2006,
including the writ[s] of execution issued pursuant thereto,
while the petition in the case at bench is still pending with
us.
After examining judiciously the record in this case, together

with the submissions and contentions of the parties, we have
come up with a finding and so hold that there is a sufficient
showing by [Miaque] that the grounds for the issuance of a
writ of preliminary injunction enumerated in Section 3 of
Rule 58 of the 1997 Revised Rules of Court exist. We find
that [Miaque] has a right in esse to be protected and the acts
against which the injunction is sought to be directed are
violative of said right. To our mind, [Miaque] appears to
have a clear legal right to hold on to the premises leased by
him from ATO at least until such time when he shall have
been duly ejected therefrom by a writ of execution of
judgment caused to be issued by the MTCC in Iloilo City,
which is the court of origin of the decision promulgated by
this Court in CA-G.R. SP No. 79439 on April 29, 2005. Under
the attendant circumstances, it appears that the respondent
judge or the RTC in Iloilo City has no jurisdiction to order
the issuance of such writ of execution because we gave due
course to the petition for review filed with us in CA-G.R. SP
No. 79439 and, in fact, rendered a decision on the merit in
said case, thereby divesting the RTC in Iloilo City of
jurisdiction over the case as provided for in the third
paragraph of Section 8(a) of Rule 42 of the 1997 Revised
Rules of Court. In City of Manila vs. Court of Appeals, 204
SCRA 362, as cited in Mocles vs. Maravilla, 239 SCRA 188, the
Supreme Court held as follows:
"The rule is that, if the judgment of the

metropolitan trial court is appealed to the RTC and
the decision of the latter itself is elevated to the CA
whose decision thereafter became final, the case
should be remanded through the RTC to the
metropolitan trial court for execution."
WHEREFORE, in view of the foregoing premises, a WRIT

OF PRELIMINARY INJUNCTION is hereby ordered or
caused to be issued by us enjoining the respondent judge,
Sheriffs Marcial B. Lambuso, Winston T. Eguia, Camilo I.
Divinagracia, Jr. and Eric George S. Luntao and all other
persons acting for and in their behalves, from enforcing the
orders issued by the respondent judge on March 20, 2006
and March 24, 2006, including the writ[s] of execution issued
pursuant thereto, while the petition in the case at bench is
still pending with us.
This is subject to the petitioner's putting up of a bond in the

sum of ONE HUNDRED THOUSAND PESOS
(P100,000.00) to the effect that he will pay to the respondent
ATO all damages which said office may sustain by reason of
the injunctive writ if we should finally decide that [Miaque]
is not entitled thereto. 36
The present petition

The ATO claims that the Court of Appeals acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the TRO and the
subsequent writ of preliminary injunction through the Order dated March 29,
2006 and the Resolution dated May 30, 2006, respectively. According to the ATO,
the Court of Appeals ignored the government's right under the law, Rules of
Court, jurisprudence and equity to the possession as well as to the payment of
rental and concession privilege fees which, at the time of the filing of this
petition, already amounted to P2 Million. Such right had already been decided
with finality by this Court, which affirmed the Decision dated April 29, 2005 of
the Court of Appeals in CA-G.R. SP No. 79439, but the Court of Appeals has
repeatedly thwarted it. The RTC acted properly and pursuant to Section 21, Rule
70 of the Rules of Court when it issued the writs of execution. 37 Moreover, the
ATO asserts that a TRO cannot restrain an accomplished fact, as the RTC's writ
of execution dated June 1, 2005 had already been partially implemented. 38
The ATO also argues that, by his admission that the issues in CA-G.R. SP No.
79439 and CA-G.R. CEB-SP No. 01603 are exactly the same, Miaque has
committed forum shopping. In this connection, the ATO points out that, in his
opposition to the ATO's motion for additional period of time to file its comment
on Miaque's petition in CA-G.R. CEB-SP No. 01603, Miaque pointed out the
similarity of the core issues in CA-G.R. SP No. 79439 and CA-G.R. CEB-SP No.
01603, to wit:
b) The legal issues raised by the petition [in CA-G.R. CEB-SP

No. 01603] are very simple and not complicated. In fact, the
threshold issue, i.e., whether or not respondent court (RTC)
has jurisdiction to issue the writ of execution after the appeal
over its decision had been perfected and the petition for
review [in CA-G.R. SP No. 79439] given due course, is
exactly the same one earlier raised by [the ATO itself in its]
"Motion for Reconsideration" of the Resolution dated June
14, 2005, in CA G.R. No. 79439, entitled "Bernie G. Miaque vs.
Hon. Danilo P. Galvez and Air Transportation Office (ATO)",
(same parties in this proceeding), then pending before the
20th Division, Court of Appeals, Cebu City.
Hence, all that [the ATO has] to do is simply to reiterate [its]

said arguments, the law and jurisprudence [it has] earlier
invoked and, if [it wishes], add some more arguments, laws
or jurisprudence thereto. Such an exercise would definitely
not require a sixty (60) day period. A ten (10) day period is
more than sufficient. 39
The ATO further contends that the subject premises form part of a public utility
infrastructure and, pursuant to Presidential Decree No. 1818, the issuance of a
TRO against a public utility infrastructure is prohibited. 40
The ATO adds that Miaque's petition for certiorari in CA-G.R. CEB-SP No. 01603
introduces a new matter which is the alleged novation of the MTCC Decision
when he deposited the amount of P319,900.00 to the Land Bank of the
Philippines account of the ATO in February 2006. At any rate, the ATO asserts
that its tenacity in pursuing the execution of the judgment against Miaque belies
its consent to the alleged novation. 41
For his part, Miaque argues that this Court has no jurisdiction to dismiss a
petition still pending with the Court of Appeals. Thus, the ATO cannot properly
pray that this Court dismiss CA-G.R. CEB-SP No. 01603. According to Miaque,
the jurisdiction of this Court is limited only to the determination of whether or
not the Court of Appeals gravely abused its discretion in issuing a TRO and,
subsequently, a preliminary injunction in CA-G.R. CEB-SP No. 01603. In this
connection, Miaque insists that the Court of Appeals acted well within its
jurisdiction in the issuance of both the Order dated March 29, 2006 granting a
TRO and the Resolution dated May 30, 2006 issuing a writ of preliminary
injunction in CA-G.R. CEB-SP No. 01603. As this Court has effectively affirmed
the MTCC Decision, then it is the MTCC and not the RTC which should have
directed the execution of the MTCC Decision. Moreover, the RTC had no
jurisdiction to issue the writs of execution dated August 16, 2004 and June 1, 2005
because the said court already lost its jurisdiction when Miaque filed an appeal
to the Court of Appeals on September 25, 2003, which appeal was given due
course. 42
Miaque also asserts that the ATO's claim that the RTC's writ of execution had
been partially implemented is not true and that he is in possession of the entire
subject premises when the Court of Appeals issued the TRO and writ of
preliminary injunction being challenged in this case. Finally, Miaque alleges that
no writ may be issued to enforce the MTCC Decision as the said decision had
already been novated by his deposit of P319,000.00 to the ATO's account with the
Land Bank of the Philippines in February 2006. 43
This Court, in a Resolution 44 dated August 14, 2006, issued a TRO enjoining the
Court of Appeals, Miaque, and his agents and representatives from
implementing the Resolution dated March 29, 2006 and the Resolution dated
May 30, 2006 in CA-G.R. CEB-SP No. 01603.
The Court's ruling

Preliminarily, the Court notes that the challenge to the Order dated March 29,
2006 granting a TRO, effective for 60 days, is moot as its effectivity had already
lapsed.
Cutting through the tangled web of issues presented by the contending parties,
the basic question in this petition is whether or not the Court of Appeals
committed grave abuse of discretion amounting to lack or excess of jurisdiction
in issuing the Resolution dated May 30, 2006 which granted petitioner's
application for the issuance of a writ of preliminary injunction in CA-G.R. CEB-
SP No. 01603.
Section 21, Rule 70 of the Rules of Court provides the key to that question:
Sec. 21. Immediate execution on appeal to Court of Appeals or

Supreme Court. The judgment of the Regional Trial Court
against the defendant shall be immediately executory,
without prejudice to a further appeal that may be taken
therefrom. (Emphasis supplied.)
This reflects Section 21 of the Revised Rule on Summary Procedure:
Sec. 21. Appeal. The judgment or final order shall be

appealable to the appropriate Regional Trial Court which
shall decide the same in accordance with Section 22 of Batas
Pambansa Blg. 129. The decision of the Regional Trial
Court in civil cases governed by this Rule, including
forcible entry and unlawful detainer, shall be immediately
executory, without prejudice to a further appeal that may be
taken therefrom. Section 10 of Rule 70 shall be deemed
repealed. (Emphasis and underscoring supplied.)
The above provisions are supplemented and reinforced by Section 4, Rule 39 and
Section 8 (b), Rule 42 of the Rules of Court which respectively provide:
Sec. 4. Judgments not stayed by appeal. Judgments in actions

for injunction, receivership, accounting and support, and
such other judgments as are now or may hereafter be
declared to be immediately executory, shall be enforceable
after their rendition and shall not be stayed by an appeal
taken therefrom, unless otherwise ordered by the trial court.
On appeal therefrom, the appellate court in its discretion
may make an order suspending, modifying, restoring or
granting the injunction, receivership, accounting, or award
of support.
The stay of execution shall be upon such terms as to bond or

otherwise as may be considered proper for the security or
protection of the rights of the adverse party.
xxx xxx xxx
Sec. 8. Perfection of appeal; effect thereof.
(a) Upon the timely filing of a petition for review and the
payment of the corresponding docket and other lawful fees,
the appeal is deemed perfected as to the petitioner.
The Regional Trial Court loses jurisdiction over the case

upon the perfection of the appeals filed in due time and the
expiration of the time to appeal of the other parties.
However, before the Court of Appeals gives due course to

the petition, the Regional Trial Court may issue orders for
the protection and preservation of the rights of the parties
which do not involve any matter litigated by the appeal,
approve compromises, permit appeals of indigent litigants,
order execution pending appeal in accordance with Section 2
of Rule 39, and allow withdrawal of the appeal.
(b) Except in civil cases decided under the Rules on

Summary Procedure, the appeal shall stay the judgment or
final order unless the Court of Appeals, the law, or these
Rules shall provide otherwise. (Emphases supplied.)
The totality of all the provisions above shows the following significant
characteristics of the RTC judgment in an ejectment case appealed to it:
(1) The judgment of the RTC against the defendant-appellant

is immediately executory, without prejudice to a
further appeal that may be taken therefrom; and
(2) Such judgment of the RTC is not stayed by an appeal

taken therefrom, unless otherwise ordered by the
RTC or, in the appellate court's discretion,
suspended or modified.
The first characteristic the judgment of the RTC is immediately executory is

emphasized by the fact that no resolutory condition has been imposed that will
prevent or stay the execution of the RTC's judgment. 45 The significance of this
may be better appreciated by comparing Section 21 of Rule 70 with its precursor,
Section 10, Rule 70 of the 1964 Rules of Court which provided:
Sec. 10. Stay of execution on appeal to Court of Appeals or

Supreme Court. Where defendant appeals from a judgment
of the Court of First Instance, execution of said judgment,
with respect to the restoration of possession, shall not be
stayed unless the appellant deposits the same amounts and
within the periods referred to in section 8 of this rule to be
disposed of in the same manner as therein provided.
Under the old provision, the procedure on appeal from the RTC's judgment to
the Court of Appeals was, with the exception of the need for a supersedeas bond
which was not applicable, virtually the same as the procedure on appeal of the
MTC's judgment to the RTC. Thus, in the contemplated recourse to the Court of
Appeals, the defendant, after perfecting his appeal, could also prevent the
immediate execution of the judgment by making the periodic deposit of rentals
during the pendency of the appeal and thereby correspondingly prevent
restitution of the premises to the plaintiff who had already twice vindicated his
claim to the property in the two lower courts. On the other hand, under the
amendatory procedure introduced by the present Section 21 of Rule 70, the
judgment of the RTC shall be immediately executory and can accordingly be
enforced forthwith. It shall not be stayed by the mere continuing deposit of
monthly rentals by the dispossessor during the pendency of the case in the Court
of Appeals or this Court, although such execution of the judgment shall be
without prejudice to that appeal taking its due course. This reiterates Section 21
of the Revised Rule on Summary Procedure which replaced the appellate
procedure in, and repealed, the former Section 10, Rule 70 of the 1964 Rules of
Court. 46 Teresa T. Gonzales La'O & Co., Inc. v. Sheriff Hatab 47 states:
Unlike Rule 70 of the 1964 Revised Rules of Court where the

defendant, after perfecting his appeal, could prevent the
immediate execution of the judgment by taking an appeal
and making a periodic deposit of monthly rentals during the
pendency of the appeal thereby preventing the plaintiff from
taking possession of the premises in the meantime, the
present wording of Section 21, Rule 70 explicitly provides
that the judgment of the regional trial court in ejectment
cases appealed to it shall be immediately executory and
can be enforced despite the perfection of an appeal to a
higher court. 48 (Emphasis supplied.)
The RTC's duty to issue a writ of execution under Section 21 of Rule 70 is

ministerial and may be compelled by mandamus. 49 Section 21 of Rule 70
presupposes that the defendant in a forcible entry or unlawful detainer case is
unsatisfied with the RTC's judgment and appeals to a higher court. It authorizes
the RTC to immediately issue a writ of execution without prejudice to the appeal
taking its due course. 50 The rationale of immediate execution of judgment in an
ejectment case is to avoid injustice to a lawful possessor. 51 Nevertheless, it
should be stressed that the appellate court may stay the writ of execution should
circumstances so require. 52
The second characteristic the judgment of the RTC is not stayed by an appeal
taken therefrom reinforces the first. The judgment of the RTC in an ejectment
case is enforceable upon its rendition and, upon motion, immediately executory
notwithstanding an appeal taken therefrom.
The execution of the RTC's judgment is not discretionary execution under

Section 2, Rule 39 of the Rules of Court which provides:
Section 2. Discretionary execution.
(a) Execution of a judgment or a final order pending appeal. On

motion of the prevailing party with notice to the adverse
party filed in the trial court while it has jurisdiction over the
case and is in possession of either the original record or the
record on appeal, as the case may be, at the time of the filing
of such motion, said court may, in its discretion, order
execution of a judgment or final order even before the
expiration of the period to appeal.
After the trial court has lost jurisdiction, the motion for
execution pending appeal may be filed in the appellate
court.
Discretionary execution may only issue upon good reasons

to be stated in a special order after due hearing.
(b) Execution of several, separate or partial judgments. A

several, separate or partial judgment may be executed under
the same terms and conditions as execution of a judgment or
final order pending appeal.
Discretionary execution is authorized while the trial court, which rendered the
judgment sought to be executed, still has jurisdiction over the case as the period
to appeal has not yet lapsed and is in possession of either the original record or
the record on appeal, as the case may be, at the time of the filing of the motion
for execution. It is part of the trial court's residual powers, or those powers which
it retains after losing jurisdiction over the case as a result of the perfection of the
appeal. 53 As a rule, the judgment of the RTC, rendered in the exercise of its
appellate jurisdiction, being sought to be executed in a discretionary execution is
stayed by the appeal to the Court of Appeals pursuant to Section 8 (b), Rule 42 of
the Rules of Court. On the other hand, execution of the RTC's judgment under
Section 21, Rule 70 is not discretionary execution but a ministerial duty of the
RTC. 54 It is not governed by Section 2, Rule 39 of the Rules of Court but by
Section 4, Rule 39 of the Rules of Court on judgments not stayed by appeal. In
this connection, it is not covered by the general rule, that the judgment of the
RTC is stayed by appeal to the Court of Appeals under Section 8 (b), Rule 42 of
the Rules of Court, but constitutes an exception to the said rule. In connection
with the second characteristic of the RTC judgment in an ejectment case appealed
to it, the consequence of the above distinctions between discretionary execution
and the execution of the RTC's judgment in an ejectment case on appeal to the
Court of Appeals is that the former may be availed of in the RTC only before
the Court of Appeals gives due course to the appeal while the latter may be
availed of in the RTC at any stage of the appeal to the Court of Appeals. But
then again, in the latter case, the Court of Appeals may stay the writ of execution
issued by the RTC should circumstances so require. 55 City of Naga v. Hon.
Asuncion 56 explains:
This is not to say that the losing defendant in an ejectment

case is without recourse to avoid immediate execution of the
RTC decision. The defendant may . . . appeal said judgment
to the Court of Appeals and therein apply for a writ of
preliminary injunction. Thus, as held in Benedicto v. Court of
Appeals, even if RTC judgments in unlawful detainer cases
are immediately executory, preliminary injunction may still
be granted. (Citation omitted.)
To reiterate, despite the immediately executory nature of the judgment of the

RTC in ejectment cases, which judgment is not stayed by an appeal taken
therefrom, the Court of Appeals may issue a writ of preliminary injunction that
will restrain or enjoin the execution of the RTC's judgment. In the exercise of
such authority, the Court of Appeals should constantly be aware that the grant of
a preliminary injunction in a case rests on the sound discretion of the court with
the caveat that it should be made with great caution. 57
A writ of preliminary injunction is an extraordinary event which must be

granted only in the face of actual and existing substantial rights. The duty of
the court taking cognizance of a prayer for a writ of preliminary injunction is to
determine whether the requisites necessary for the grant of an injunction are
present in the case before it. In the absence of the same, and where facts are
shown to be wanting in bringing the matter within the conditions for its
issuance, the ancillary writ must be struck down for having been rendered in
grave abuse of discretion. 58
In this case, the decisions of the MTCC in Civil Case No. 01 (38), of the RTC in
Civil Case No. 02-27292, and of the Court of Appeals in CA-G.R. SP No. 79439
unanimously recognized the right of the ATO to possession of the property and
the corresponding obligation of Miaque to immediately vacate the subject
premises. This means that the MTCC, the RTC, and the Court of Appeals all
ruled that Miaque does not have any right to continue in possession of the said
premises. It is therefore puzzling how the Court of Appeals justified its issuance
of the writ of preliminary injunction with the sweeping statement that Miaque
"appears to have a clear legal right to hold on to the premises leased by him from
ATO at least until such time when he shall have been duly ejected therefrom by a
writ of execution of judgment caused to be issued by the MTCC in Iloilo City,
which is the court of origin of the decision promulgated by this Court in CA-G.R.
SP No. 79439." Unfortunately, in its Resolution dated May 30, 2006 granting a
writ of preliminary injunction in Miaque's favor, the Court of Appeals did not
state the source or basis of Miaque's "clear legal right to hold on to the [said]
premises." This is fatal.
In Nisce v. Equitable PCI Bank, Inc., 59 this Court stated that, in granting or
dismissing an application for a writ of preliminary injunction, the court must
state in its order the findings and conclusions based on the evidence and the
law. This is to enable the appellate court to determine whether the trial court
committed grave abuse of its discretion amounting to excess or lack of
jurisdiction in resolving, one way or the other, the plea for injunctive relief. In
the absence of proof of a legal right and the injury sustained by one who seeks
an injunctive writ, an order for the issuance of a writ of preliminary injunction
will be nullified. Thus, where the right of one who seeks an injunctive writ is
doubtful or disputed, a preliminary injunction is not proper. The possibility of
irreparable damage without proof of an actual existing right is not a ground for a
preliminary injunction.
The sole basis of the Court of Appeals in issuing its Resolution dated May 30,
2006 is its view that the RTC "has no jurisdiction to order the issuance of [the]
writ of execution" because, when it gave due course to the petition for review in
CA-G.R. SP No. 79439, the RTC was already divested of jurisdiction over the case
pursuant to the third paragraph of Section 8 (a), Rule 42 of the Rules of Court.
The Court of Appeals is mistaken. It disregards both (1) the immediately
executory nature of the judgment of the RTC in ejectment cases, and (2) the rule
that such judgment of the RTC is not stayed by an appeal taken therefrom. It
ignores the nature of the RTC's function to issue a writ of execution of its
judgment in an ejectment case as ministerial and not discretionary.
The RTC was validly exercising its jurisdiction pursuant to Section 21, Rule 70 of
the Rules of Court when it issued the writs of execution dated August 16, 2004
and June 2, 2005. While the Court of Appeals in CA-G.R. SP No. 79439 enjoined
the execution of the RTC's judgment during the pendency of CA-G.R. SP No.
79439, the RTC revived the writs of execution dated August 16, 2004 and June 1,
2005 in its Order dated March 20, 2006, after the Court of Appeals denied
Miaque's motion for reconsideration of the dismissal of the petition in CA-G.R.
SP No. 79439. Indeed, the said writs of execution need not even be revived
because they continue in effect during the period within which the judgment
may be enforced by motion, that is within five years from entry of judgment,
pursuant to Section 14, 60 Rule 39 of the Rules of Court in relation to Section 6 61
of the same Rule.
There is grave abuse of discretion when an act is (1) done contrary

to the Constitution, the law or jurisprudence, or (2) executed whimsically,
capriciously or arbitrarily out of malice, ill will or personal bias. 62 In this
case, the Court of Appeals issued the Resolution dated May 30, 2006
granting Miaque's prayer for a writ of preliminary injunction contrary to
Section 21, Rule 70 and other relevant provisions of the Rules of Court, as
well as this Court's pronouncements in Teresa T. Gonzales La'O & Co., Inc. 63
and Nisce. 64 Thus, the Court of Appeals committed grave abuse of
discretion when it issued the Resolution dated May 30, 2006 in CA-G.R.
CEB-SP No. 01603.
This Court notes that the controversy between the parties in this case has been
unduly protracted, considering that the decisions of the MTCC, the RTC, the
Court of Appeals, and this Court in favor of the ATO and against Miaque on the
ejectment case are already final and executory. The Court of Appeals should
therefore proceed expeditiously in resolving CA-G.R. CEB-SP No. 01603.
WHEREFORE, the petition is hereby GRANTED. The Resolution dated May 30,
2006 of the Court of Appeals in CA-G.R. CEB-SP No. 01603 is ANNULLED for
having been rendered with grave abuse of discretion. The Court of Appeals is
directed to conduct its proceedings in CA-G.R. CEB-SP No. 01603 expeditiously
and without delay.
||| (Air Transportation Office v. Court of Appeals, G.R. No. 173616, June 25, 2014)
THIRD DIVISION
[G.R. No. 151168. August 25, 2010.]
CEBU AUTOMETIC MOTORS, INC. and TIRSO

UYTENGSU III, petitioners, vs. GENERAL MILLING
CORPORATION, respondent.
DECISION
BRION, J p:
We resolve the petition filed by Cebu Autometic Motors, Inc. (CAMI) to assail the
decision 1 of the Court of Appeals (CA) in CA-G.R. SP No. 64363. The CA
decision:
a)reversed and set aside the decision of the Regional Trial

Court of Cebu, Branch 16 (RTC) in Civil Case No.
CEB-25804 dismissing respondent General Milling
Corporation's (GMC) unlawful detainer complaint
against CAMI; 2 and
b)reinstated the decision of the Municipal Trial Court in

Cities (MTCC) in Civil Case No. R-41923 3 ordering:
CAMI to vacate the subject property; and CAMI
and Tirso Uytengsu III (Uytengsu) to pay GMC
actual damages in the amount of P20,000.00 a
month from the date of demand until property has
been vacated, as well as P50,000.00 for attorney's
fees.
FACTUAL ANTECEDENTS
GMC, a domestic corporation, is the registered owner of the GMC Plaza
Complex, a commercial building on Legaspi Extension corner McArthur
Boulevard, Cebu City. On February 2, 1998, GMC, represented by its General
Manager, Luis Calalang, Jr. (Calalang), entered into a contract with CAMI, a
domestic corporation, for the lease of a 2,906 square meter commercial space
within GMC's building (leased premises).
The lease contract was for a period of twenty (20) years, with the monthly rental
fixed at P10,000.00. The contract further stipulated that the property shall be used
exclusively by CAMI as a garage and repair shop for vehicles, 4 and imposed
upon CAMI the following terms and conditions: HSacEI
C.The LESSEE shall upon the signing of this contract

immediately deposit with the LESSOR the following
amounts:
a.The sum of PESOS: TEN THOUSAND &

00/100 (P10,000.00) inclusive of VAT
Philippine currency, to be applied as
rental for the last month;
b.The sum PESOS TEN THOUSAND & 00/100

(P10,000.00) as guarantee deposit to
defray the cost of the repairs necessary to
keep the leased premises in a good state of
repair and to pay the LESSEE'S unpaid
bills from the various utility services in the
leased premises; that this amount shall be
refundable, if upon the termination of this
contract, the leased premises are in good
state of repair and the various utility bills
have been paid.
xxx xxx xxx
H.The LESSEE shall not place or install any signboard,

billboard, neon lights, or other form of advertising signs on
the leased premises or on any part thereof, except upon the
prior written consent of the LESSOR.
xxx xxx xxx
M.Finally, the failure on the part of the LESSOR to insist

upon a strict performance of any of the terms, conditions
and covenants hereof shall not be deemed a relinquishment
or waiver of any right or remedy that said LESSOR may
have, nor shall it be construed as a waiver of any subsequent
breach or default of the terms, conditions and covenants
herein contained, unless expressed in writing and signed by
the LESSOR or its duly authorized representative. 5
According to GMC, CAMI violated the provisions of the lease contract when: a)
CAMI subleased a portion of the leased premises without securing GMC's prior
written consent; b) CAMI introduced improvements to the leased premises
without securing GMC's consent; and c) CAMI did not deliver the required
advance rental and deposit to GMC upon the execution of the lease contract.
On June 11, 1999, GMC sent CAMI a letter informing the latter that it was
terminating the lease contract and demanding that CAMI vacate the premises
and settle all its unpaid accounts before the end of that month.
On July 7, 1999, GMC filed a complaint for unlawful detainer with the MTCC
against CAMI, asserting that it terminated the lease contract on June 11, 1999
because CAMI violated the terms of the contract and continued to do so despite
GMC's repeated demands and reminders for compliance; and that CAMI refused
to vacate the leased premises. GMC also impleaded Uytengsu, the General
Manager of CAMI, in his official and personal capacities.
In response, CAMI denied that it had subleased any portion of the leased
premises. On the improvements allegedly introduced without GMC's consent,
CAMI explained that these were introduced prior to the execution of the present
lease contract; in fact, these improvements were made with GMC's knowledge
and were the reason why GMC decided to enter into the present lease contract
with CAMI for 20 years at the low rental of only P10,000.00 a month. On its
alleged failure to deliver the advance rental and deposit, CAMI pointed out that
Calalang, GMC's representative, had verbally waived this requirement.
Moreover, CAMI contended that a party is considered in default only if it fails to
comply with the demand to observe the terms and conditions of the contract.
Since CAMI immediately deposited the amount of P20,000.00 with the court as
advance rental and deposit after it learned of the unlawful detainer complaint, it
could not be considered in default. Consequently, CAMI posits that it did not
violate any of the provisions of the lease contract, and GMC had no right to
terminate the lease contract and to demand CAMI's ejectment from the leased
premises. AHaDSI
On July 5, 2000, the MTCC rendered its decision in favor of GMC. The
dispositive portion of its ruling reads:
WHEREFORE, judgment is hereby rendered in favor of the

plaintiff [GMC] and against the defendant [CAMI], to wit:
1.Ordering the defendants and all other person (sic) staying

in the premises of the plaintiff to vacate the property and
remove all their temporary structure therein;
2.Ordering the defendants to pay plaintiff compensatory

damages in the amount of P20,000.00 a month from date (sic)
demand until dependants vacate plaintiff property;
3.Ordering the defendants to pay plaintiff Attorney's Fees in

the amount of P50,000.00;
4.Ordering the defendants to pay the costs.
SO ORDERED.
The RTC reversed the MTCC decision and dismissed GMC's complaint after
finding that CAMI had not violated the terms and conditions of the lease
contract. The RTC learned that Calalang had waived payment of the advance
rental and deposit, and had given his consent to the introduction of
improvements, signboards and alterations on the leased premises. The RTC also
held that CAMI did not sublease the premises.
GMC sought relief from the RTC decision through a petition for review with the
CA. GMC claimed that Calalang's waiver of the advance rental and deposit was
void since it was not in writing. In response, CAMI questioned whether GMC
had complied with the requisites of Section 2, Rule 70 of the Rules of Court prior
to the filing of the unlawful detainer complaint an issue that, according to GMC,
was raised for the first time before the CA.
In the assailed September 28, 2001 decision, the CA reversed the RTC decision
and held that even though the advance rental and deposit payments could be
waived under the contract, the waiver had to be in writing and signed by a duly
authorized representative of GMC in order to be effective. Since Calalang's
waiver was not contained in a written document, it could not bind GMC.
As to the contention that GMC failed to comply with the jurisdictional

requirement found in Section 2, Rule 70 of the Rules of Court, the CA held that
such a belated claim could no longer be entertained at that late stage of the
proceedings. Since CAMI freely litigated on the issues presented by GMC before
the lower courts without raising this issue, it cannot now raise the issue on the
basis of estoppel.
THE PETITION
CAMI now comes to this Court via a petition for review on certiorari, 6 claiming
that the CA committed reversible error in its September 28, 2001 decision and
November 22, 2001 resolution. CSHEAI
First, CAMI contends that the demand letter sent by GMC merely stated that it
expected CAMI to vacate the premises and pay all its unsettled accounts by the
end of June 1999; the letter did not demand compliance with the terms of the
contract. Thus, CAMI could not be considered in default and GMC had no cause
to terminate the lease contract. The defective demand letter also failed to comply
with the demand required by Section 2, Rule 70 of the Rules of Court; pursuant
to Arquelada v. Philippine Veterans Bank 7 which held that the demand from the
lessor to pay or to comply with the conditions of the lease and to vacate the
premises must be alleged in the complaint for unlawful detainer for the MTCC to
acquire jurisdiction over the case the MTCC thus failed to acquire jurisdiction
over GMC's complaint against it.
Next, CAMI assails the CA interpretation of paragraph M of the lease contract. 8

According to CAMI, paragraph M only applies when the waiver refers to the
right of GMC to take action for any violation of the terms and conditions of the
contract. Where the waiver relates to the performance of the term or condition,
such as waiver of the payment of advance rental and deposit, the waiver does
not need to be in writing.
Last, CAMI questions the reinstatement of the MTCC decision, which ordered
CAMI and Uytengsu to pay for actual damages to GMC in the amount of
P20,000.00 per month from the time of demand until CAMI actually vacated the
property, and attorney's fees in the amount of P50,000. CAMI assails the award
of damages for having no legal or factual basis.
GMC, on the other hand, contends that CAMI never raised the issue of GMC's
lack of demand before either the MTCC or the RTC as one of its defenses;
instead, this issue, as well as the corresponding issue of the MTCC's lack of
jurisdiction, was raised for the first time on appeal before the CA. GMC also
reiterates the CA's ruling that any waiver of the lease contract's terms and
conditions must be in writing in order to be effective. Finally, GMC dismisses
CAMI's questions on the inclusion of Uytengsu, as well as the award of actual
damages and attorney's fees, for not having been raised before the lower courts.
THE COURT'S RULING

We resolve to grant the petition.
Petition raises factual questions

In petitions for review on certiorari under Rule 45 of the Rules of Civil Procedure,
only questions of law may be raised and passed upon by this Court. As in any
general rule, however, certain exceptions may exist. 9 In the present case, we are
asked to either uphold GMC's unlawful detainer complaint or dismiss it outright
under a situation where the findings of facts of the trial court and the appellate
court conflict with each other, which is one of the recognized exceptions to the
requirement that Rule 45 petitions deal only with questions of law. If necessary,
therefore, we can examine the evidence on record in this case and determine the
truth or falsity of the parties' submissions and allegations. aDcETC
On the issue of demand

GMC claims that CAMI belatedly raised the issue of lack of demand. On the
other hand, CAMI contends in its Motion to Admit Reply 10 that it raised this
defense as early as its Answer before the MTCC.
We agree with CAMI. The MTCC decision, which quoted CAMI's Answer
extensively, clearly shows that CAMI stated that it will be in default with respect to
the advance rental and deposit only after GMC has made a demand for the payment.
CAMI also stated that it had already deposited the advance rental and deposit
with the Clerk of Court of the MTCC. Lastly, CAMI denied GMC's claim in its
complaint that a demand had been made. 11 These statements, taken together, clearly
belie GMC's claim that CAMI never raised the lack of demand as an issue before
the lower court.
Another issue raised, relating to demand, is whether GMC sent CAMI the
required demand letter. Invoking Article 1169 of the Civil Code, 12 CAMI
principally contends that it could not be considered in default because GMC
never sent a proper demand letter.
CAMI, in invoking Article 1169, apparently overlooked that what is involved is

not a mere mora or delay in the performance of a generic obligation to give or to
do that would eventually lead to the remedy of rescission or specific
performance. What is involved in the case is a contract of lease and the twin
remedies of rescission and judicial ejectment after either the failure to pay rent or
to comply with the conditions of the lease. This situation calls for the application,
not of Article 1169 of the Civil Code but, of Article 1673 in relation to Section 2,
Rule 70 of the Rules of Court. Article 1673 states:
Article 1673. The lessor may judicially eject the lessee for
any of the following causes:
xxx xxx xxx
(3)Violation of any of the conditions agreed upon in the

contract; . . .
Based on this provision, a lessor may judicially eject (and thereby likewise
rescind the contract of lease) the lessee if the latter violates any of the conditions
agreed upon in the lease contract. Implemented in accordance with Section 2,
Rule 70, the lessor is not required to first bring an action for rescission, but may ask the
court to do so and simultaneously seek the ejectment of the lessee in a single action for
unlawful detainer. 13 Section 2, Rule 70 of the Rules of Court provides:
Sec 2.Lessor to proceed against lessee only after demand.
Unless otherwise stipulated, such action by the lessor shall

be commenced only after demand to pay or comply with
the conditions of the lease and to vacate is made upon the
lessee, or by serving written notice of such demand upon
the person found on the premises, or by posting such notice
on the premises if no person be found thereon, and the
lessee fails to comply therewith after fifteen (15) days in the
case of land or five (5) days in the case of buildings.
[Emphasis supplied.] DSTCIa
GMC insists that it complied with the required demand when it sent CAMI the
following letter:
June 11, 1999
CEBU AUTOMETIC MOTORS, INC.
GMC Plaza Complex
Legaspi Extension cor.
MacArthur Boulevard
Cebu City
ATTENTION: MR. TIRSO UYTENGSU III
Gentlemen:
We are informing you of the termination of the Contract of

Lease over our clients, General Milling Corporation
premises at GMC Plaza Complex effective June 30, 1999.
Your repeated violations of the terms of the contract, failure

to deposit the required amounts (equivalent to two to three
months rent) the subleasing of a portion of the leased
premises without the required prior written consent, the
introduction of improvements and alterations and the
installation of a signboard without the prior written consent,
leave us no choice.
It should be mentioned that the latest Contract of Lease was
questionably entered by you and Mr. Luis Calalang, Jr.
hurriedly, knowing fully well that the same was completely
one-sided in your favor and totally disadvantageous to
GMC. It was as if there was a plot or scheme to take
advantage of the situation at the time.
We expect you to vacate the premises, settle all your

unpaid accounts on or before the end of June, 1999.
With this demand letter as evidence, we hold it undisputed that GMC did serve a
prior demand on CAMI. The question, however, is whether this is the demand
that Section 2, Rule 70 of the Rules of Court contemplates as a jurisdictional
requirement before a lessor can undertake a judicial ejectment pursuant to
Article 1673 of the Civil Code.
Section 2, Rule 70, on its face, involves two demands that may be made in the
same demand letter, namely, (1) the demand for payment of the amounts due the
lessor, or the compliance with the conditions of the lease, and (2) the demand to
vacate the premises. These demands, of course, are not intended to be complied
with at the same time; otherwise, the provision becomes contradictory as it is
pointless to demand payment or compliance if the demand to vacate is already
absolute and must be heeded at the same time as the demand to pay or to
comply. It is only after the demands for payment or compliance are made on the lessee
and subsequently rejected or ignored that the basis for the unlawful detainer action
arises. EIASDT
The twin aspects of the demand letter can best be understood when Section 2,
Rule 70 is read and understood as the specific implementing procedural rule to
carry out the results that Article 1673 mandates the rescission of the contract
of lease and the judicial ejectment of the lessee. The judicial rescission of a
contract of lease is essentially governed by Article 1659 of the Civil Code,
grounded on the breach of the parties' statutory obligations: in the case of the
lessee, for its failure to pay the rent or to use the property under lease for the
purpose it was intended. Article 1673, read with Section 2, Rule 70 of the Rules,
does away with the need for an independent judicial action to rescind prior to
ejectment by combining these remedies in an unlawful detainer action.
The law of contracts (essentially, Articles 1191 of the Civil Code for judicial
rescission and Article 1659 for the judicial rescission of lease agreements) firmly
establishes that the failure to pay or to comply with the contractual term does
not, by itself, give rise to a cause of action for rescission; the cause of action only
accrues after the lessee has been in default for its failure to heed the demand
to pay or to comply. 14 With the contract judicially rescinded, the demand to
vacate finds full legal basis.
Article 1673, implemented pursuant to Section 2, Rule 70, does away with a
separate judicial action for rescission, and allows under a single complaint the
judicial ejectment of the lessee after extrajudicial rescission has taken place. These
combined remedies account for the separate aspects of the demand letter: the
demand to pay rentals or to comply with the terms of the lease, and to vacate.
The tenant's refusal to heed the demand to vacate, coming after the demand to
pay or to comply similarly went unheeded, renders unlawful the continued
possession of the leased premises; hence, the unlawful detainer action. 15
In Dio v. Concepcion, we ruled that:
Under Article 1673 of the Civil Code, the lessor may

judicially eject the lessee for, among other causes: (1) lack of
payment of the price stipulated; or (2) violation of any of the
conditions agreed upon in the contract. Previous to the
institution of such action, the lessor must make a demand
upon the lessee to pay or comply with the conditions of the
lease and to vacate the premises. It is the owner's demand
for the tenant to vacate the premises and the tenant's
refusal to do so which makes unlawful the withholding of
possession. 16 Such refusal violates the owner's right of
possession giving rise to an action for unlawful detainer.
Mr. Justice Jose Vitug further explained the Court's action in this case in his
Separate Opinion when he said:
I just would like to add, by way of clarification, that the
principal remedies open to an obligee, upon the breach of an
obligation, are generally judicial in nature and must be
independently sought in litigation, i.e., an action for
performance (specific, substitute or equivalent) or rescission
(resolution) of a reciprocal obligation. The right to rescind
(resolve) is recognized in reciprocal obligations; it is implicit,
however, in third paragraph of Article 1191 of the Civil Code
that the rescission there contemplated can only be invoked
judicially. Hence, the mere failure of a party to comply with
what is incumbent upon him does not ipso jure produce the
rescission (resolution) of the obligation.
Exceptionally, under the law and, to a limited degree, by

agreement of the parties, extrajudicial remedies may become
available such as, in the latter case, an option to rescind or
terminate a contract upon the violation of a resolutory
facultative condition. In the case of lease agreements, despite
the absence of an explicit stipulation, that option has been
reserved by law in favor of a lessee under Article 1673 of the
Civil Code by providing that the lessor may judicially eject
the lessee for, among other grounds, a violation of any of the
conditions agreed upon in the contract. The provision, read
in conjunction with Section 2, Rule 70, of the 1997 Rules of
Civil Procedure, would, absent a contrary stipulation,
merely require a written demand on the lessee to pay or to
comply with the conditions of the lease and to vacate the
premises prior to the institution of an action for ejectment.
The above provisions, in effect, authorizes the lessor to
terminate extrajudicially the lease (with the same effect as
rescission) by simply serving due notice to the lessee.
In this particular instance, therefore, the only relevant court

jurisdiction involved is that of the first level court in the
action for ejectment, an independent judicial action for
rescission being unnecessary.
Thus, as further clarified, an extrajudicial rescission gave rise to the demand to

vacate that, upon being refused, rendered the possession illegal and laid the
lessee open to ejectment. The rescission, an extrajudicial one, was triggered by
the lessee's refusal to pay the rent or to comply with the terms of the lease. The
Court put it in plainer terms in Arquelada v. Philippine Veterans Bank: 17 where it
said: DEIHSa
As contemplated in Section 2, the demand required is the

demand to pay or comply with the conditions of the lease
and not merely a demand to vacate. Consequently, both
demands either to pay rent or adhere to the terms of the
lease and vacate are necessary to make the lessee a
deforciant in order that an ejectment suit may be filed. It is
the lessor's demand for the lessee to vacate the premises and
the tenant's refusal to do so which makes unlawful the
withholding of the possession. Such refusal violates the
lessor's right of possession giving rise to an action for
unlawful detainer. However, prior to the institution of such
action, a demand from the lessor to pay or comply with the
conditions of the lease and to vacate the premises is
required under the aforequoted rule. Thus, mere failure to
pay the rents due or violation of the terms of the lease does
not automatically render a person's possession unlawful.
Furthermore, the giving of such demands must be alleged in
the complaint, otherwise the MTC cannot acquire
jurisdiction over the case. [Emphasis supplied.]
A close examination of GMC's letter to CAMI tells us that the letter merely
informed recipient CAMI that GMC had terminated the lease based on the cited
violations of the terms of the lease, and on the basis of this termination, required
CAMI to vacate the premises by the end of the month. In other words, the letter
did not demand compliance with the terms of the lease; GMC was past this point as it had
rescinded the contract of lease and was already demanding that the leased premises be
vacated and the amounts owing be paid. Thus, whether or not the amounts due were
paid, the lease remained terminated because of the cited violations.
From this perspective, GMC did not fully comply with the requirements of Section
2, Rule 70. Technically, no extrajudicial rescission effectively took place as a
result of the cited violations until the demand to pay or comply was duly served
and was rejected or disregarded by the lessee. This aspect of the demand letter
missing in the demand letter and whose rejection would have triggered the
demand to vacate gave GMC no effective cause of action to judicially demand
the lessee's ejectment. All these, the appellate court unfortunately failed to
appreciate.
Our above conclusion renders unnecessary any further ruling on the merits of
the parties' positions on the existence of the substantive grounds for rescission
and ejectment.
WHEREFORE, premises considered, we GRANT the petition and REVERSE

and SET ASIDE the decision of the Court of Appeals dated September 28, 2001
in CA-G.R. SP. No. 64363. We accordingly DECLARE General Milling
Corporation's complaint for unlawful detainer, Civil Case No. R-41923 before the
Municipal Trial Court in Cities of Cebu City, DISMISSED for lack of cause of
action. Costs against the respondent General Milling Corporation.
SO ORDERED. aDTSHc
||| (Cebu Autometic Motors, Inc. v. General Milling Corp., G.R. No. 151168, August
25, 2010)
FIRST DIVISION
[G.R. No. 168062. June 29, 2010.]
VICTORIAS MILLING CO., INC., petitioner, vs. COURT

OF APPEALS and INTERNATIONAL
PHARMACEUTICALS, INC., respondents.
DECISION
DEL CASTILLO, J p:
In an ejectment case mandated to be tried under summary procedure, the

paramount consideration is its expeditious and inexpensive resolution without
regard to technicalities.
This petition for certiorari assails the May 6, 2005 Resolution 1 of the Court of
Appeals (CA) in CA-G.R. CEB-SP No. 00365 which granted the petition for
certiorari filed before it by respondent International Pharmaceuticals, Inc. (IPI)
and ordered the issuance of a writ of preliminary injunction enjoining the
Municipal Circuit Trial Court (MCTC) of E.B. Magalona-Manapla, Negros
Occidental from proceeding with Civil Case No. 392-M, an ejectment case, and
disturbing IPI's possession of the leased premises until further orders.
Factual Antecedents
On March 4, 2004, petitioner Victorias Milling Co. (VMC), Inc., filed a complaint
for unlawful detainer and damages against respondent IPI before the MCTC of
E.B. Magalona-Manapla, docketed as Civil Case No. 392-M. On March 10, 2004,
the sheriff served the summons upon Danilo Maglasang, IPI's Human Relations
Department Manager.
On March 19, 2004, IPI filed its Answer with express reservation that said
Answer should not be construed as a waiver of the lack of jurisdiction of the
MCTC over the person of IPI, for non-service of summons on the proper person.
It then filed an Omnibus Motion for Hearing of Affirmative Defenses raised in
the Answer and moved for the suspension of proceedings.
Ruling of the Municipal Circuit Trial Court

On August 30, 2004, the MCTC issued an Order 2 denying the suspension of the
proceedings of the case sought by IPI. It disposed as follows:
WHEREFORE, in accordance with the Rule on Summary

Procedure, set this case for preliminary conference on
September 29, 2004 at 9:30 o'clock in the morning. HTAIcD
SO ORDERED. 3
The motion for reconsideration was denied.

Thus IPI filed a petition for certiorari with the CA, Cebu City to question the
jurisdiction of the MCTC over its person.
On February 22, 2005, the CA directed VMC to file its comment, to which IPI
filed its reply. VMC thereafter filed its rejoinder.
In the meantime, in the MCTC, during the scheduled preliminary conference, IPI
moved for the deferment of the preliminary conference while VMC moved for
the termination of the same. The said preliminary conference was terminated and
the parties were directed to submit the affidavits of their witnesses and other
evidence together with their position papers. The parties subsequently submitted
the required position papers with the MCTC. 4
On May 6, 2005, the CA issued the assailed Resolution which states in full:
After going over the verified petition for certiorari and

prohibition with prayer for a writ of preliminary injunction
dated February 9, 2005, the comment dated March 7, 2005
filed by private respondent, the reply dated 23 March 2005
of petitioner, the rejoinder dated April 11, 2005 filed by the
private respondent, taking into account that among others
petitioner questions the jurisdiction of the trial court over its
person because summons was served on its Human
Relations Manager in violation of Section 11 of Rule 14 of the
1997 Rules on Civil Procedure, in order not to render
ineffectual whatever judgment that may be rendered in the
above-entitled case and to preserve the rights of the parties
during the pendency of this case, conditioned upon the
putting up of an injunction bond in the sum of P200,000.00 to
answer for whatever damages that the private respondent
may sustain should this Court [decide] that the petitioner is
not entitled thereto, let a WRIT OF PRELIMINARY
INJUNCTION be issued enjoining the public respondent
Municipal Circuit Trial Court of E. B. Magalona-Manapla,
Municipality of Magalona from proceeding with Civil Case
No. 392-M and disturbing the possession of the petitioner
over the leased premises during the pendency of this
petition until further orders from this Court.
The parties are given twenty (20) days from receipt hereof to
file simultaneously their respective memoranda on the
merits amplifying their positions and supporting their
arguments with pertinent jurisprudence on the matter.
SO ORDERED. 5
VMC no longer filed a motion for reconsideration of the CA's Resolution, on the
ground that the questioned CA Resolution is patently null and void and due to
the urgency of VMC's predicament. It instead immediately filed the present
petition for certiorari.
Issues
Petitioner raises the following issues:
WHETHER . . . THE PUBLIC RESPONDENT CA HAD

GRAVELY ABUSED ITS DISCRETION AMOUNTING TO A
LACK OR EXCESS OF ITS JURISDICTION BY ORDERING
THE ISSUANCE OF AN INJUNCTIVE WRIT ON THE
BASIS OF, IN CONNECTION WITH, AND/OR AS AN
INCIDENT OF A CLEARLY PROHIBITED/DISALLOWED
PETITION OR PLEADING (FOR CERTIORARI AND
PROHIBITION AGAINST INTERLOCUTORY ORDERS IN
AN EJECTMENT SUIT)

GRAVELY ABUSED ITS DISCRETION AMOUNTING TO
AN EXCESS OF ITS JURISDICTION BY
FAILING/REFUSING TO DISMISS/DENY OUTRIGHT
THE PETITION FOR CERTIORARI AND PROHIBITION AS
FILED BEFORE IT IN CA-G.R. CEB-SP NO. 00365
(AGAINST INTERLOCUTORY ORDERS IN AN
EJECTMENT SUIT) NOTWITHSTANDING ITS EXPRESSLY
BEING A PROHIBITED/ DISALLOWED
PETITION/PLEADING UNDER THE PROVISIONS OF
RULE 70, SEC. 13(7) OF THE [RULES] OF COURT

GRAVELY ABUSED ITS DISCRETION AMOUNTING TO
AN EXCESS OF ITS JURISDICTION BY
FAILING/REFUSING TO DISMISS/DENY OUTRIGHT
THE PETITION FOR CERTIORARI AND PROHIBITION AS
DIRECTLY FILED BEFORE IT IN CA-G.R. CEB-SP NO.
00356 (AGAINST INTERLOCUTORY ORDERS IN AN
EJECTMENT SUIT) IN BLATANT DISREGARD OF THE
HIERARCHY OF COURTS 6
Petitioner's Arguments
Petitioner contends that the petition for certiorari filed by IPI assailing the
MCTC's interlocutory order in an ejectment case is clearly and specifically
prohibited under Section 13 of Rule 70 of the Rules of Court as well as the Rule
on Summary Procedure. The rules being clear and unambiguous, it submits that
the said petition should have been dismissed outright by the CA.
Petitioner also argues that Go v. Court of Appeals, 7 where the trial court ordered
the "indefinite suspension" of the ejectment case therein, cannot be applied to the
present case to favor IPI. CcAIDa
It further contends that the petition having been filed with the CA, and not the
RTC, disregards the hierarchy of courts.
Finally, it alleges that IPI does not have a clear and unmistakable right to the
property subject of the case as to be entitled to an injunctive writ. It emphasizes
that the grant of the injunctive writ by the CA will serve no other purpose but to
cause undue and unnecessary delay to what should be the speedy and summary
disposition of the ejectment suit which is repugnant to public policy.
Respondent IPI's Arguments

IPI on the other hand contends that the Rule on Summary Procedure was not
intended to undermine the rules of jurisdiction and rules on service of summons.
It insists that in the present case, as in Go v. Court of Appeals, 8 there is a
procedural void which justified the CA's act of providing an equitable remedy, of
not immediately dismissing the petition for certiorari before it and of issuing the
injunctive writ.
Our Ruling
The petition has merit.
There is no Procedural Void that Would Cause Delay

Rule 70 of the Rules of Court, on forcible entry and unlawful detainer cases,
provides:
Sec. 13.Prohibited pleadings and motions. The following

petitions, motions, or pleadings shall not be allowed:
1.Motion to dismiss the complaint except on the

ground of lack of jurisdiction over the
subject matter, or failure to comply with
section 12;
2.Motion for a bill of particulars;
3.Motion for a new trial, or for reconsideration of a

judgment, or for reopening of trial;
4.Petition for relief from judgment;
5.Motion for extension of time to file pleadings,

affidavits or any other paper;
6.Memoranda;
7.Petition for certiorari, mandamus, or prohibition

against any interlocutory order issued by
the court;
8.Motion to declare the defendant in default;
9.Dilatory motions for postponement;
10.Reply;
11.Third-party complaints;
12.Interventions. (Emphasis supplied)
Although it is alleged that there may be a technical error in connection with the
service of summons, there is no showing of any substantive injustice that would
be caused to IPI so as to call for the disregard of the clear and categorical
prohibition of filing petitions for certiorari. It must be pointed out that the Rule on
Summary Procedure, by way of exception, permits only a motion to dismiss on
the ground of lack of jurisdiction over the subject matter but it does not mention
the ground of lack of jurisdiction over the person. It is a settled rule of statutory
construction that the express mention of one thing implies the exclusion of all
others. Expressio unius est exclusio alterius. From this it can be gleaned that
allegations on the matter of lack of jurisdiction over the person by reason of
improper service of summons, by itself, without a convincing showing of any
resulting substantive injustice, cannot be used to hinder or stop the proceedings
before the MCTC in the ejectment suit. With more reason, such ground should
not be used to justify the violation of an express prohibition in the rules
prohibiting the petition for certiorari.
IPI's arguments attempting to show how the Rule on Summary Procedure or lack
of rules on certain matters would lead to injustice are hypothetical and need not
be addressed in the present case. Of primary importance here is that IPI, the real
defendant in the ejectment case, filed its Answer and participated in the
proceedings before the MCTC. aACEID
The purpose of the Rule on Summary Procedure is to achieve an expeditious and

inexpensive determination of cases without regard to technical rules. 9 In the
present case, weighing the consequences of continuing with the proceedings in
the MCTC as against the consequences of allowing a petition for certiorari, it is
more in accord with justice, the purpose of the Rule on Summary Procedure, the
policy of speedy and inexpensive determination of cases, and the proper
administration of justice, to obey the provisions in the Rule on Summary
Procedure prohibiting petitions for certiorari.
The present situation, where IPI had filed the prohibited petition for certiorari; the
CA's taking cognizance thereof; and the subsequent issuance of the writ of
injunction enjoining the ejectment suit from taking its normal course in an
expeditious and summary manner, and the ensuing delay is the antithesis of and
is precisely the very circumstance which the Rule on Summary Procedure seeks
to prevent.
The petition for certiorari questioning the MCTC's interlocutory order is not
needed here. The rules provide respondent IPI with adequate relief. At the
proper time, IPI has the right to appeal to the RTC, and in the meantime no
injustice will be caused to it by waiting for the MCTC to completely finish
resolving the ejectment suit. The proceedings before the MCTC being summary
in nature, the time and expense involved therein are minimal. IPI has already
raised the matter of improper service of summons in its Answer. The MCTC's
error/s, if any, on any of the matters raised by respondent IPI can be threshed
out during appeal after the MCTC has finally resolved the ejectment case under
summary procedure.
As accurately pointed out by petitioner, Go v. Court of Appeals 10 does not

support the case of respondent IPI. The factual milieu and circumstances of the
said case do not fit with the present case. They are in fact the exact opposite of
those in the present case before the court hearing the original ejectment case. Not
only was there an absence of any "indefinite suspension" of the ejectment suit
before the MCTC but likewise there was no "procedural void" that would
otherwise cause delay in the summary and expeditious resolution thereof that
transpired to warrant applicability of Go v. Court of Appeals. 11 It is worth
pointing out that in Go v. Court of Appeals 12 the Supreme Court categorically
upheld that "the purpose of the Rule on Summary Procedure is to achieve an
expeditious and inexpensive determination of cases without regard to technical
rules. Pursuant to this objective, the Rule prohibits petitions for certiorari, like a
number of other pleadings, in order to prevent unnecessary delays and to
expedite the disposition of cases."
Considering that the petition for certiorari filed before the CA is categorically
prohibited, the CA should not have entertained the same but should have
dismissed it outright.
The other issues raised by petitioner, being unnecessary to resolve the main
matter involved in this case, will no longer be discussed.
WHEREFORE, the petition is GRANTED. The May 6, 2005 Resolution of the

Court of Appeals, together with the Writ of Preliminary Injunction, in CA-G.R.
CEB-SP No. 00365 is NULLIFIED and SET ASIDE. The Court of Appeals is
ORDERED to dismiss the petition for certiorari before it docketed as CA-G.R.
CEB-SP No. 00365.
SO
||| (Victorias Milling Co., Inc. v. Court of Appeals, G.R. No. 168062, June 29, 2010)
FIRST DIVISION
[G.R. No. 148843. September 5, 2012.]
ANTIOQUIA DEVELOPMENT CORPORATION and

JAMAICA REALTY & MARKETING CORPORATION,
petitioners, vs. BENJAMIN P. RABACAL, EULALIA
CANTALEJO, TERESITA CANTALEJO, RUDY RAMOS,
DOMINGO AGUILAR, DOMINGO CANTALEJO,
VIRGINIA CANTALEJO, DULCE AQUINO, ROGELIO
REDONDO, VIRGILIO CANTALEJO, FRANCISCO
LUMBRES and RODOLFO DELA CERNA, respondents.
DECISION
VILLARAMA, JR., J p:
Before us is a petition for review on certiorari under Rule 45 seeking to set aside
the Decision 1 dated November 28, 2000 and Resolution 2 dated July 3, 2001 of
the Court of Appeals (CA) in CA-G.R. SP No. 58390, and to July 3, 2001 of the
Court of Appeals (CA) in CA-G.R. SP No. 58390, and to reinstate the Joint
Decision 3 dated September 30, 1999 of the Regional Trial Court (RTC) of Bian,
Laguna, Branch 24, which modified the Consolidated Decision 4 dated August
11, 1998 of the Municipal Trial Court (MTC) of Cabuyao, Laguna. TcDAHS
The factual antecedents:
Petitioner Antioquia Development Corporation (ADC) is the registered owner of

several parcels of land located at Mamatid, Cabuyao, Laguna, and covered by
Transfer Certificate of Title (TCT) Nos. T-278043, T-278044, T-278045, T-278050,
T-278051, T-278052, T-278053, T-278054, T-244163, T-277164, T-278068, T-278069
and T-278070 of the Registry of Deeds of Laguna, Calamba Branch.
On May 29, 1989, ADC entered into a joint venture agreement with petitioner
Jamaica Realty & Marketing Corporation (JRMC), a real estate developer, for the
construction of a residential subdivision on its property.
Respondents are among the defendants 5 in the twenty (20) ejectment cases (Civil
Case Nos. 493 to 512) filed by petitioners in the MTC. Petitioners alleged that
defendants were seasonal planters/workers on the property who were allowed
by the former owner, Mariano Antioquia, Sr., to construct their houses on the
land with an agreement that they would surrender peacefully the premises when
the owner needs the same. However, despite oral and written demands by
petitioners, defendants refused to vacate the premises. Petitioners further
averred that Municipal Mayor Constancio G. Alimagno, Jr. had interceded in
behalf of the defendants and dialogues were conducted between the parties but
no settlement was reached as petitioners insisted that they have no legal
obligation to pay the defendants because the latter's occupation is by mere
tolerance. Defendants, moreover, are occupying the commercial area of the
property and their continued stay therein has caused petitioners financial losses
since prospective buyers refused to buy the property. Petitioners thus prayed
that judgment be rendered ordering the defendants to vacate the property,
surrender the same to petitioners, and to pay the petitioners P10,000 as attorney's
fees, plus costs.
Answering defendants, including herein respondents, commonly asserted that

the previous owner, a certain Dr. Carillo of Bian, Laguna, gave them express
permission to build their respective houses on the property through the
intercession of then Barangay Captain Paulino Hilaga. It was agreed that
defendants would clean and clear the land, and would stay there as long as
necessary. Such agreement was respected by the succeeding owner, Mariano
Antioquia, Sr. Defendants further claimed that in 1994, negotiations with
petitioners were conducted for the defendants to vacate the property. Petitioners
offered to give each of the defendants a 60-square meter lot valued at P118,000
payable in 10 years, without interest, and each defendant will also receive P2,000
as expenses for transfer. To this, defendants made the following counter-offer: a
60-square meter lot for each defendant for the price of P12,000, payable in 10
years, without interest, and in addition, petitioners would give each defendant
P7,000 as expenses for transfer.
Defendants further claimed that during their meeting with Mayor Constancio
Alimagno, Jr., the latter proposed a 60-square meter lot for each defendant priced
at P15,000. In the succeeding dialogues, defendants demanded to be given
P50,000 each as disturbance compensation but the petitioners refused.
Defendants contended that in addition to lots where they can build new houses,
they should also be given disturbance compensation since they were permitted
by the former owner to stay on the land which agreement should be honored
and they being members of the "Samahang Kapit-Bisig."
On August 11, 1998, the MTC rendered a Consolidated Decision, 6 the

dispositive portion of which states:
WHEREFORE, judgment is hereby rendered:
1.Ordering individual defendants in Civil Cases Nos. 494,

495, 496, 498, 499, 501, 503, 504, 505, 506, 508, 509, 510, 511
and 512, namely, Benjamin Rabacal, Eulalia and Teresita
Cantalejo, Rudy Ramos, Domingo Cantalejo, Virginia
Cantalejo, Dulce Aquino, Domingo Aguilar, Nestor Bariring,
Placido Celis, Felix Garcia, Rogelio Redondo, Virgilio
Cantalejo, Sonny Lumbres, Maxima Roxas, and Rodelio dela
Cerna and all persons claiming rights under them to vacate
the land covered by TCT Nos. 27803, 278050, 278051, 278052,
244163, 277164, 278043, 278044, 278045, 278069, 278070,
278068, and 278054 of the Register of Deeds of Laguna, and
surrender possession thereof to the plaintiffs;
2.Ordering plaintiffs to pay the above-named defendants the

amount of Thirty Thousand (P30,000.00) Pesos each as
disturbance compensation;
3.Dismissing Civil Cases Nos. 493, 497, 500, 507 and 502.
SO ORDERED. 7
Not satisfied, petitioners appealed to the RTC which found merit in petitioners'
argument that there is no clear and convincing basis for the award of disturbance
compensation, and that they are entitled to the award of attorney's fees as they
were constrained to litigate to protect their interest on account of the defendants'
unwarranted refusal to vacate the land and return its possession to petitioners.
The RTC thus decreed in its Joint Decision: 8 IDSaAH
WHEREFORE, premises considered, the appealed

consolidated decision of the Municipal Trial Court of
Cabuyao, Laguna, is hereby AFFIRMED in all other respects
with the modification that paragraph two (2) of the
dispositive portion thereof is deleted and another one
entered to read as follows:
"2.a.Ordering the defendants in each case named under

paragraph one (1) of the consolidated decision, except
Nestor Bariring, Placido Celis and Felix Garcia, defendants
in Civil Cases Nos. 504, 505 and 506 (now B-5424, B-5425 and
B-5426), to pay plaintiffs the amount of P250.00 a month as
reasonable compensation for the use and occupation of that
portion of the premises in question from the filing of these
cases in the lower court until full possession thereof is
actually surrendered to the plaintiffs; and
"2.b.Ordering the defendants in each of the fifteen (15) cases

as mentioned under paragraph one (1) of the said
consolidated decision to pay plaintiff the amount of
P2,000.00, or the total amount of P30,000.00, as and by way
of reasonable attorney's fees, plus costs.
SO ORDERED. 9
Respondents elevated the case to the CA in a petition for review under Rule 42 of
the 1997 Rules of Civil Procedure, as amended. They argued that since
petitioners allowed them to construct their residential houses on the property,
both are in pari delicto, the rights of one and the other shall be the same as though
both acted in good faith, citing Article 453 of the Civil Code of the Philippines.
As to the award of disturbance compensation, respondents asserted that the
MTC was correct in applying equity in resolving the controversy considering
that their occupation of their homelots was by virtue of unwritten grant by Dr.
Carillo in recognition of their contribution to the preservation of the property,
especially in safeguarding it from encroachment of outsiders/squatters.
By Decision dated November 28, 2000, the CA reversed the RTC and upheld the
award of disturbance compensation by the MTC. The CA thus ruled:
In heeding petitioners' appeal that this case be decided on

the basis of equity and justice, We take Our light from
Section 36 of RA No. 3844, as amended, provides:
"Possession of Landholding; Exceptions.

Notwithstanding any agreement as to the period or
future surrender of the land, an agricultural lessee
shall continue in the enjoyment and possession of
his landholding except when his dispossession has
been authorized by the Court in a judgment that is
final and executory if after due hearing it is shown
that:
"(1)The agricultural lessor-owner or a member of

his immediate family will personally cultivate the
landholding or will convert the landholding, if
suitably located, into residential, factory, hospital
or school site or other useful non-agricultural
purpose: Provided, That the agricultural lessee
shall be entitled to disturbance compensation
equivalent to five years rental on his landholding in
addition to his rights under Sections twenty-five
and thirty-four, . . ."
It is not far-fetched to say that the petitioners' dwellings on

the premises prevented encroachers from entering the
property, which in turn redounded to the benefit of the
developers. We take note of the fact that respondents had
undertaken a series of negotiations with the petitioners
(Rollo, p. 55), admitting in their comment that they had
offered petitioners the sum of P2,000.00 in addition to a
home lot of sixty (60) square meters at a very reasonable
price of P18,000.00 payable on installment basis (Rollo, p. 81)
for the latter to transfer. In view of all the foregoing, We rule
that the award of compensation to the petitioners is
warranted.
WHEREFORE, upon the premises, the petition is

GRANTED. The appealed portion of the RTC Decision is
REVERSED and SET ASIDE and the MTC Decision is
ordered REINSTATED.
SO ORDERED. 10 DTEScI
In its Resolution dated July 3, 2001, the CA granted the motion for
reconsideration of petitioners with respect only to the inclusion of defendants
Nestor Baring, Placido Celis and Felix Garcia who did not file any answer to the
complaint. Accordingly, the CA upheld its Decision but deleted the names of the
said non-answering defendants from the list of those entitled to receive
disturbance compensation from petitioners. 11
Hence, this petition assailing the CA in setting aside the judgment of the RTC
and reinstating the MTC's Consolidated Decision which granted disturbance
compensation to the respondents. Petitioners argue that Section 36 of Republic
Act (R.A.) No. 3844 has no application in this case, there being no agricultural
tenancy relationship between petitioners and respondents. They also point out
that respondents were not tenants of the late Mariano Antioquia, Sr. who bought
the property in 1986 with respondents occupying the same by mere tolerance as
there was no proof that respondents were the tenants of the previous owner, a
certain Dr. Carillo who supposedly allowed them to stay on the land as long as
they want without any rentals provided they will help in clearing the land.
From respondents' declarations, we find that no tenancy relations existed

between them and petitioners, and neither was there any proof that they were
the tenants of the late Mariano Antioquia, Sr. A tenant has been defined under
Section 5 (a) of R.A. No. 1199 as a person who, himself, and with the aid available
from within his immediate household, cultivates the land belonging to or
possessed by another, with the latter's consent for purposes of production,
sharing the produce with the landholder under the share tenancy system, or
paying to the landholder a price certain or ascertainable in produce or in money
or both, under the leasehold system. 12 Thus, there must be a concurrence of the
following requisites in order to create a tenancy relationship between the parties:
(1) the parties are the landowner and the tenant; (2) the subject is agricultural
land; (3) there is consent; (4) the purpose is agricultural production; (5) there is
personal cultivation; and (6) there is sharing of harvests. 13
Once the tenancy relationship is established, the tenant is entitled to security of

tenure and cannot be ejected by the landlord unless ordered by the court for
causes provided by law. 14 However, none of the afore-stated requisites was
proven in this case as respondents admitted they were allowed to stay on the
land by a certain Dr. Carillo before Mariano Antioquia, Sr. bought it, not for the
purpose of agricultural production, but allegedly to help clear the land.
Respondents having failed to establish their status as tenants or agricultural

lessees, they are not entitled to security of tenure nor are they covered by the
Land Reform Program of the Government under existing laws, 15 including the
right to receive disturbance compensation under Section 36 (1) of R.A. No. 3844,
as amended. On the matter of disturbance compensation, we have held that
Section 36 (1) of the Code of Agrarian Reforms (R.A. No. 3844) would apply only
if the land in question was subject of an agricultural leasehold, 16 a fact that was
not established before the lower courts. Clearly, there was no basis for the MTC's
award of disturbance compensation to herein respondents.
Respondents' prior physical possession of the property upon the supposed

permission given by the predecessor-in-interest of Mariano Antioquia, Sr. and
apparently with the latter's tolerance as the subsequent owner, does not
automatically entitle them to continue in said possession and does not give them
a better right to the property. Well-settled is the rule that persons who occupy
the land of another at the latter's tolerance or permission, without any contract
between them is bound by an implied promise that they will vacate the same
upon demand, failing which a summary action for ejectment is the proper
remedy against them. 17 From the time the title to the property was transferred
in the name of petitioner ADC, respondents' possession was converted into one
by mere tolerance by the owner. The forbearance ceased when said new owner
made a demand on respondents to vacate the property. Thenceforth,
respondents' occupancy had become unlawful. 18
While the CA correctly sustained the lower courts in ordering the respondents to
vacate the subject premises, said appellate court erred in setting aside the RTC's
Joint Decision which deleted the award of disturbance compensation in favor of
the respondents and granted petitioners' claim for damages. EScAID
It is settled that the plaintiff in an ejectment case is entitled to damages caused by

his loss of the use and possession of the premises. Damages in the context of
Section 17, Rule 70 of the 1997 Rules of Civil Procedure is limited to "rent" or fair
rental value or the reasonable compensation for the use and occupation of the
property. 19 Since petitioners did not appeal the amount of rental fixed by the
RTC (P250.00 per month), the same may be safely presumed as reasonable
compensation for respondents' use and occupation of the property.
Respondents nonetheless contend that reinstatement of the RTC Joint Decision

would grossly cause injustice to them who labored to clear the land and guard it
against entry of squatters. While the amount of P30,000 awarded by the MTC
and affirmed by the CA would be inadequate considering the costs and expenses
of relocating their respective families, they are willing to accept said amount to
put an end to this case. They insist that it is petitioners who were unjustly
enriched by respondents' efforts to clear the land and prevent encroachment by
illegal occupants. They prayed for the affirmance of the CA Decision which
upheld the award of P50,000 to each defendant on equitable considerations.
The Court is not persuaded.
There is nothing in existing laws and procedural rules that obliges a plaintiff in
an unlawful detainer or forcible entry case to pay compensation or financial
assistance to defendants whose occupation was either illegal from the beginning
or had become such when they refused to vacate the subject premises upon
demand by the owner or person having better right to its possession. On the
contrary, our Rules of Court expressly recognizes the right of such plaintiff to
claim for damages arising from the unlawful deprivation of physical possession.
We stress that equity, which has been aptly described as "justice outside legality,"
is applied only in the absence of, and never against, statutory law or judicial
rules of procedure. Positive rules prevail over all abstract arguments based on
equity contra legem. 20 For all its conceded merit, equity is available only in the
absence of law and not as its replacement. 21 The CA thus erred in applying
equity to favor the grant of disturbance compensation which has no basis in law.
There is likewise no merit in respondents' assertion that the payment of
reasonable compensation for the use and occupation of the property after
demand to vacate was made by petitioners would unjustly enrich the latter.
Respondents themselves admitted they were able to build houses on the land
and stayed there for several years without paying any rental even when Mariano
Antioquia, Sr. already bought the land. And yet, respondents still ask to be
compensated for their long years of occupying the premises rent-free while its
owners could not make use of the same throughout such period.
A plaintiff adjudged to have the better right to possession in an ejectment case

cannot be said to have been unjustly enriched by the court's award of reasonable
compensation for the use and occupation of the premises. As we held in Car Cool
Philippines, Inc. v. Ushio Realty and Development Corporation: 22
CAR COOL asserts that to award damages to USHIO Realty

would constitute unjust enrichment at the expense of CAR
COOL. CAR COOL claims that it never benefited from its
occupation of the property after USHIO Realty's agents
entered the property on 1 October 1995 and unlawfully
destroyed CAR COOL's office, equipment and spare parts.
Because of the destruction of the equipment and spare parts
needed to operate its business, CAR COOL asserts that it
was no longer possible to continue its business operations.
Rule 70 of the Rules of Civil Procedure, which governs the

rule on ejectment (forcible entry and unlawful detainer),
provides under Sections 17 and 19 that:
"Sec. 17.Judgment. If after trial the court finds that

the allegations of the complaint are true, it shall
render judgment in favor of the plaintiff for the
restitution of the premises, the sum justly due as
arrears of rent or as reasonable compensation for
the use and occupation of the premises, attorney's
fees and costs. If it finds that said allegations are
not true, it shall render judgment for the defendant
to recover his costs. If a counterclaim is established,
the court shall render judgment for the sum found
in arrears from either party and award costs as
justice requires. (Emphasis supplied) HCSEIT
Sec. 19.Immediate execution of judgment; how to stay

same. If judgment is rendered against the
defendant, execution shall issue immediately upon
motion, unless an appeal has been perfected and
the defendant to stay execution files a sufficient
supersedeas bond, approved by the Municipal Trial
Court and executed in favor of the plaintiff to pay
the rents, damages, and costs accruing down to the
time of the judgment appealed from, and unless,
during the pendency of the appeal, he deposits
with the appellate court the amount of rent due
from time to time under the contract, if any, as
determined by the judgment of the Municipal Trial
Court. In the absence of a contract, he shall
deposit with the Regional Trial Court the
reasonable value of the use and occupation of the
premises for the preceding month or period at the
rate determined by the judgment of the lower
court on or before the tenth day of each
succeeding month or period. The supersedeas
bond shall be transmitted by the Municipal Trial
Court, with the other papers, to the clerk of the
Regional Trial Court to which the action is
appealed." (Emphasis supplied)
xxx xxx xxx
USHIO Realty, as the new owner of the property, has a right

to physical possession of the property. Since CAR COOL
deprived USHIO Realty of its property, CAR COOL should
pay USHIO Realty rentals as reasonable compensation for
the use and occupation of the property.
Contrary to CAR COOL's allegations, the payment of

damages in the form of rentals for the property does not
constitute unjust enrichment. The Court of Appeals held:
". . . [T]he alleged payment by the

petitioner as rentals were given to the
former owner (Lopez) and not to the
private respondent who was not privy
to the transaction. As a matter of fact, it
never benefited financially from the
alleged transaction. Aside from that, the
postdated checks the "private
respondent" admitted to have received,
as rental payments for September to
December 1995, were never encashed.
On the contrary, the private respondent
even offered to return the same to the
petitioner, but was refused. [T]herefore,
it did not amount to payment."
We have held that "[t]here is unjust enrichment when a

person unjustly retains a benefit to the loss of another, or
when a person retains money or property of another against
the fundamental principles of justice, equity and good
conscience." Article 22 of the Civil Code provides that
"[e]very person who through an act of performance by
another, or any other means, acquires or comes into
possession of something at the expense of the latter without
just or legal ground, shall return the same to him." The
principle of unjust enrichment under Article 22 requires two
conditions: (1) that a person is benefited without a valid
basis or justification, and (2) that such benefit is derived at
another's expense or damage.
There is no unjust enrichment when the person who will

benefit has a valid claim to such benefit. Under Section 17 of
Rule 70 of the Rules of Civil Procedure, USHIO Realty has
the legal right to receive some amount as reasonable
compensation for CAR COOL's occupation of the property.
Thus, in Benitez v. Court of Appeals we held that:
". . . Damages are recoverable in ejectment cases

under Section 8, Rule 70 of the Revised Rules of
Court. These damages arise from the loss of the use
and occupation of the property, and not the
damages which private respondents may have
suffered but which have no direct relation to their
loss of material possession. Damages in the context
of Section 8, Rule 70 is limited to "rent" or "fair
market value" for the use and occupation of the
property." 23
(Emphasis and italicization supplied)
We also sustain the RTC's grant of attorney's fees in favor of petitioners who
were "constrained to litigate [to protect their interest] due to the unwarranted
refusal of the . . . defendants to vacate and surrender possession of the premises
in question." 24 There is no doubt whatsoever that it is within the MTC's
competence and jurisdiction to award attorney's fees and costs in an ejectment
case, 25 in accordance with Section 17, Rule 70 of the 1997 Rules of Civil
Procedure, as amended. DAEICc
WHEREFORE, the petition for review on certiorari is GRANTED. The Decision

dated November 28, 2000 and Resolution dated July 3, 2001 of the Court of
Appeals in CA-G.R. SP No. 58390 are SET ASIDE. The Joint Decision dated
September 30, 1999 of the Regional Trial Court of Bian, Laguna, Branch 24 in
Civil Case Nos. B-5413 to B-5432 is hereby REINSTATED and UPHELD.
||| (Antioquia Development Corp. v. Rabacal, G.R. No. 148843, September 05, 2012)
THIRD DIVISION
[G.R. No. 139442. December 6, 2006.]
LOURDES DELA CRUZ, petitioner, vs. HON. COURT OF

APPEALS and MELBA TAN TE, respondents.
DECISION
VELASCO, JR., J p:
For unto every one that hath shall be given, and he shall have
abundance: but from him that hath not shall be taken away even
that which he hath.
Holy Bible, Matthew 25:29
The Case
This petition for review seeks to nullify the April 30, 1999 Decision and the July
16, 1999 Resolution of the Court of Appeals in CA-G.R. SP No. 49097, which
reversed the Decision of the Manila Regional Trial Court (RTC), Branch 35, in
Civil Case No. 98-89174, and reinstated the Decision of the Manila Metropolitan
Trial Court (MeTC), Branch 20, which ordered petitioner Dela Cruz to vacate the
subject lot in favor of respondent Tan Te. 1
The Facts
The Reyes family, represented by Mr. Lino Reyes, owned the lot located at No.
1332 Lacson Street (formerly Gov. Forbes Street), Sampaloc, Manila. Petitioner
Lourdes Dela Cruz was one of their lessees, and she religiously paid rent over a
portion of the lot for well over 40 years. Sometime in 1989, a fire struck the
premises and destroyed, among others, petitioner's dwelling. After the fire,
petitioner and some tenants returned to the said lot and rebuilt their respective
houses; simultaneously, the Reyes family made several verbal demands on the
remaining lessees, including petitioner, to vacate the lot but the latter did not
comply. On February 21, 1994, petitioner was served a written demand to vacate
said lot but refused to leave. Despite the setback, the Reyes family did not initiate
court proceedings against any of the lessees.
On November 26, 1996, the disputed lot was sold by the Reyeses to respondent
Melba Tan Te by virtue of the November 26, 1996 Deed of Absolute Sale.
Respondent bought the lot in question for residential purposes. Despite the sale,
petitioner Dela Cruz did not give up the lot. HSIaAT
On January 14, 1997, petitioner was sent a written demand to relinquish the
premises which she ignored, prompting respondent Tan Te to initiate
conciliation proceedings at the barangay level. While respondent attempted to
settle the dispute by offering financial assistance, petitioner countered by asking
PhP 500,000.00 for her house. Respondent rejected the counter offer which she
considered unconscionable. As a result, a certificate to file action was issued to
Tan Te.
On September 8, 1997, respondent Tan Te filed an ejectment complaint with

damages before the Manila MeTC, entitled Melba Tan Te v. Lourdes Dela Cruz and
docketed as Civil Case No. 156730-CV. The complaint averred that: (1) the
previous owners, the Reyeses were in possession and control of the contested lot;
(2) on November 26, 1996, the lot was sold to Tan Te; (3) prior to the sale, Dela
Cruz forcibly entered the property with strategy and/or stealth; (4) the petitioner
unlawfully deprived the respondent of physical possession of the property and
continues to do so; and, (5) the respondent sent several written demands to
petitioner to vacate the premises but refused to do so.
On October 24, 1997, petitioner filed her answer and alleged that: (1) the MeTC
had no jurisdiction over the case because it falls within the jurisdiction of the
RTC as more than one year had elapsed from petitioner's forcible entry; (2) she
was a rent-paying tenant protected by PD 20; 2 (3) her lease constituted a legal
encumbrance upon the property; and (4) the lot was subject of expropriation.
The Ruling of the Manila MeTC

On April 3, 1998, the MeTC decided as follows:
WHEREFORE, judgment is hereby rendered in favor of the

plaintiff as follows:
1. Ordering the defendant and all persons claiming right
under her to vacate the premises situated at 1332 Lacson
Street (formerly Gov. Forbes Street), Sampaloc, Manila and
peacefully return possession thereof to plaintiff; THaDAE
2. Ordering the defendant to pay the plaintiff the amount of

P360.00 a month from December 1996 to November 1997;
P432.00 a month from December 1997 to November 1998,
plus 20% for each subsequent year until the premises shall
have been vacated and turned over to the plaintiff;
3. Ordering the defendant to pay the plaintiff the amount of

P10,000.00 as attorney's fees; and, the costs of the suit.
SO ORDERED. 3
The Ruling of the Regional Trial Court

Unconvinced, petitioner Dela Cruz appealed the Decision of the MeTC in the
Manila RTC and the appeal was docketed as Civil Case No. 98-89174. On
September 1, 1998, the RTC rendered its judgment setting aside the April 3, 1998
Decision of the Manila MeTC and dismissed respondent Tan Te's Complaint on
the ground that it was the RTC and not the MeTC which had jurisdiction over
the subject matter of the case. The RTC believed that since Tan Te's predecessor-
in-interest learned of petitioner's intrusion into the lot as early as February 21,
1994, the ejectment suit should have been filed within the one-year prescriptive
period which expired on February 21, 1995. Since the Reyes did not file the
ejectment suit and respondent Tan Te filed the action only on September 8, 1997,
then the suit had become an accion publiciana cognizable by the RTC.

Disappointed at the turn of events, respondent Tan Te appealed the adverse
Decision to the Court of Appeals (CA) which was docketed as CA-G.R. SP No.
49097. This time, the CA rendered a Decision in favor of respondent Tan Te
reversing the Manila RTC September 1, 1998 Decision and reinstated the Manila
MeTC April 3, 1998 Decision.
Petitioner tried to have the CA reconsider its Decision but was rebutted in its
July 16, 1999 Resolution.
Unyielding to the CA Decision and the denial of her request for reconsideration,
petitioner Dela Cruz now seeks legal remedy through the instant Petition for
Review on Certiorari before the Court.
The Issues
Petitioner Dela Cruz claims two (2) reversible errors on the part of the appellate
court, to wit: EAISDH
THE HON. COURT OF APPEALS, WITH DUE RESPECT,

WENT BEYOND THE ISSUES OF THE CASE AND
CONTRARY TO THOSE OF THE TRIAL COURT.
THE HON. COURT OF APPEALS, WITH DUE RESPECT,

ERRED IN REVERSING THE DECISION OF THE RTC AND
IN EFFECT, REINSTATING THE DECISION OF THE
[MeTC] WHICH IS CONTRADICTED BY THE EVIDENCE
ON RECORD. 4
The Court's Ruling

Discussion on Rule 45
Before we dwell on the principal issues, a few procedural matters must first be
resolved.
Petitioner Dela Cruz asks the Court to review the findings of facts of the CA, a
course of action proscribed by Section 1, Rule 45. Firm is the rule that findings of
fact of the CA are final and conclusive and cannot be reviewed on appeal to this
Court provided they are supported by evidence on record or substantial
evidence. Fortunately for petitioner, we will be liberal with her petition
considering that the CA's factual findings contradict those of the RTC, and there
was an asseveration that the court a quo went beyond the issues of the case.
Indeed, these grounds were considered exceptions to the factual issue bar rule.
Secondly, the petition unnecessarily impleaded the CA in violation of Section 4,

Rule 45. We will let this breach pass only because there is a need to entertain the
petition due to the conflicting rulings between the lower courts; however, a
repetition may result to sanctions.
The actual threshold issue is which court, the Manila RTC or the Manila MeTC,
has jurisdiction over the Tan Te ejectment suit. Once the jurisdictional issue is
settled, the heart of the dispute is whether or not respondent is entitled to the
ejectment of petitioner Dela Cruz from the premises. ECaITc
However, the petition is bereft of merit.
On the Issue of Jurisdiction

Jurisdiction is the power or capacity given by the law to a court or tribunal to
entertain, hear and determine certain controversies. 5 Jurisdiction over the
subject matter is conferred by law.
Section 33 of Chapter III on Metropolitan Trial Courts, Municipal Trial Courts,

and Municipal Circuit Trial Courts of B. P. No. 129 6 provides:
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal

Trial Courts and Municipal Circuit Trial Courts in civil cases.
Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts shall exercise:
xxx xxx xxx
(2) Exclusive original jurisdiction over cases of forcible entry

and unlawful detainer: Provided, That when, in such cases,
the defendant raises the question of ownership in his
pleadings and the question of possession cannot be resolved
without deciding the issue of ownership, the issue of
ownership shall be resolved only to determine the issue of
possession.
Thus exclusive, original jurisdiction over ejectment proceedings (accion

interdictal) is lodged with the first level courts. This is clarified in Section 1, Rule
70 of the 1997 Rules of Civil Procedure that embraces an action for forcible entry
(detentacion), where one is deprived of physical possession of any land or
building by means of force, intimidation, threat, strategy, or stealth. In actions for
forcible entry, three (3) requisites have to be met for the municipal trial court to
acquire jurisdiction. First, the plaintiffs must allege their prior physical
possession of the property. Second, they must also assert that they were deprived
of possession either by force, intimidation, threat, strategy, or stealth. Third, the
action must be filed within one (1) year from the time the owners or legal
possessors learned of their deprivation of physical possession of the land or
building. TAIESD
The other kind of ejectment proceeding is unlawful detainer (desahucio), where

one unlawfully withholds possession of the subject property after the expiration
or termination of the right to possess. Here, the issue of rightful possession is the
one decisive; for in such action, the defendant is the party in actual possession
and the plaintiff's cause of action is the termination of the defendant's right to
continue in possession. 7 The essential requisites of unlawful detainer are: (1) the
fact of lease by virtue of a contract express or implied; (2) the expiration or
termination of the possessor's right to hold possession; (3) withholding by the
lessee of the possession of the land or building after expiration or termination of
the right to possession; (4) letter of demand upon lessee to pay the rental or
comply with the terms of the lease and vacate the premises; and (5) the action
must be filed within one (1) year from date of last demand received by the
defendant.
A person who wants to recover physical possession of his real property will
prefer an ejectment suit because it is governed by the Rule on Summary
Procedure which allows immediate execution of the judgment under Section 19,
Rule 70 unless the defendant perfects an appeal in the RTC and complies with
the requirements to stay execution; all of which are nevertheless beneficial to the
interests of the lot owner or the holder of the right of possession.
On the other hand, Section 19, of Chapter II of B.P. No. 129 on Regional Trial
Courts provides:
Section 19. Jurisdiction in civil cases. Regional Trial Courts

shall exercise exclusive original jurisdiction:
xxx xxx xxx
(2) In all civil actions which involve the title to, or possession
of, real property, or any interest therein, except actions for
forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred upon
Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts.
Two (2) kinds of action to recover possession of real property which fall under
the jurisdiction of the RTC are: (1) the plenary action for the recovery of the real
right of possession (accion publiciana) when the dispossession has lasted for more
than one year or when the action was filed more than one (1) year from date of
the last demand received by the lessee or defendant; and (2) an action for the
recovery of ownership (accion reivindicatoria) which includes the recovery of
possession. TCaADS
These actions are governed by the regular rules of procedure and adjudication
takes a longer period than the summary ejectment suit.
To determine whether a complaint for recovery of possession falls under the

jurisdiction of the MeTC (first level court) or the RTC (second level court), we are
compelled to go over the allegations of the complaint. The general rule is that
what determines the nature of the action and the court that has jurisdiction over
the case are the allegations in the complaint. These cannot be made to depend
upon the defenses set up in the answer or pleadings filed by the defendant. 8
This general rule however admits exceptions. In Ignacio v. CFI of Bulacan, it was
held "that while the allegations in the complaint make out a case for forcible
entry, where tenancy is averred by way of defense and is proved to be the real
issue, the case should be dismissed for lack of jurisdiction as the case should
properly be filed with the then Court of Agrarian Relations." 9
The cause of action in a complaint is not what the designation of the complaint
states, but what the allegations in the body of the complaint define and describe.
The designation or caption is not controlling, more than the allegations in the
complaint themselves are, for it is not even an indispensable part of the
complaint. 10
Let us refer to the allegations of the complaint filed in the Manila MeTC in Civil
Case No. 98-89174, which we quote verbatim:
3. That plaintiff is the absolute and registered owner of a

parcel of land located at No. 1332, Lacson Street, Sampaloc,
Manila now being occupied by defendant;
4. That plaintiff purchased the above-said parcel of land

together with its improvements from the legal heirs of the
late EMERLINDA DIMAYUGA REYES on November 26,
1996, under and by virtue of a Deed of Absolute Sale . . .;
DTIaHE
5. That pursuant to the said deed of sale, the title to the land
and all its improvements was transferred in plaintiff's name
as evidenced by Transfer Certificate of Title No. 233273
issued by the Register of Deeds of Manila on April 22, 1997 .
. .;
6. That prior to said sale, the previous owners, represented

by Mr. Lino Reyes, husband of the said deceased Emerlinda
D. Reyes and the administrator of her estate, was in
possession and control of the property subject of this
complaint;
7. That also prior to said sale, defendant, without the

knowledge and consent of Mr. Lino Reyes, surreptitiously
and by means of stealth and strategy entered, used and
occupied the said premises thus depriving the former of
rightful possession thereof;
8. That on February 21, 1994, Mr. Lino Reyes, through Atty.

Alejo Sedico, his lawyer, furnished the defendants a letter
formally demanding that defendant vacate the premises . . .;
9. That, however, defendant failed and refused to vacate
despite just and legal demand by Mr. Lino Reyes;
10. That after the sale to plaintiff of said premises, plaintiff

has several times demanded of defendants to vacate the
premises, the last demand having been made on them
personally and in writing on January 14, 1997 . . .;
11. That defendant failed and refused and still fails and
refuses to vacate the premises without legal cause or
justifiable reason whatsoever; 11
The answer of petitioner averred:
4. The Court has no jurisdiction over the case, having been

filed by plaintiff more than the reglementary one year period
to commence forcible entry case, which is reckoned from the
date of the alleged unlawful entry of defendant by the use of
stealth and strategy into the premises;
5. For more than four decades now, defendant has been and
still is a rent-paying tenant of the subject land occupied by
their residential house, dating back to the original owner-
lessor, the Dimayuga family. Her lease with no definite
duration, commenced with a rent at P60.00 per month until
it was gradually increased in the ensuing years. As of
November 1996, it stood at P300.00 a month; ESAHca
6. In this circumstances [sic], defendant enjoys the protective

mantle of P.D. 20 and the subsequent rental control status
against dispossession. She cannot be ejected other than for
causes prescribed under B.P. Blg. 25. Further, in case of sale
of the land, she has the right of first refusal under the
express provision of P.D. 1571;
7. Throughout the years of her tenancy, defendant has been

updated in her rental payment until the collector of the
original owner-lessor no longer came around as she has
done theretofore;
7.1. As a result, she was compelled to file a petition

for consignation of rent before the Metropolitan
Trial Court of Manila;
8. A bona fide tenant within the ambit if [sic] P.D. 20 and the
subsequent rental control status, including B.P. Blg. 25,
under its terms, cannot be ousted on a plea of expiration of
her monthly lease;
9. Her lease constitutes a legal encumbrance upon the

property of the lessor/owner and binds the latter's
successor-in-interest who is under obligation to respect it;
10. The land at bench is the subject of a pending

expropriation proceedings;
11. Plaintiff being a married woman cannot sue or be sued

without being joined by her husband; 12
Undeniably, the aforequoted allegations of the complaint are vague and iffy in
revealing the nature of the action for ejectment.
The allegations in the complaint show that prior to the sale by Lino Reyes,
representing the estate of his wife Emerlinda Reyes, he was in possession and
control of the subject lot but were deprived of said possession when petitioner,
by means of stealth and strategy, entered and occupied the same lot. These
circumstances imply that he had prior physical possession of the subject lot and
can make up a forcible entry complaint. ECcTaH
On the other hand, the allegation that petitioner Dela Cruz was served several
demands to leave the premises but refused to do so would seem to indicate an
action for unlawful detainer since a written demand is not necessary in an action
for forcible entry. It is a fact that the MeTC complaint was filed on September 8,
1997 within one (1) year from the date of the last written demand upon petitioner
Dela Cruz on January 14, 1997.
As previously discussed, the settled rule is jurisdiction is based on the allegations

in the initiatory pleading and the defenses in the answer are deemed irrelevant
and immaterial in its determination. However, we relax the rule and consider the
complaint at bar as an exception in view of the special and unique circumstances
present. First, as inIgnacio v. CFI of Bulacan, 13 the defense of lack of jurisdiction
was raised in the answer wherein there was an admission that petitioner Dela
Cruz was a lessee of the former owners of the lot, the Reyeses, prior to the sale to
respondent Tan Te. The fact that petitioner was a tenant of the predecessors-in-
interest of respondent Tan Te is material to the determination of jurisdiction.
Since this is a judicial admission against the interest of petitioner, such admission
can be considered in determining jurisdiction. Second, the ejectment suit was
filed with the Manila MeTC on September 8, 1997 or more than nine (9) years
ago. To dismiss the complaint would be a serious blow to the effective
dispensation of justice as the parties will start anew and incur additional legal
expenses after having litigated for a long time. Equitable justice dictates that
allegations in the answer should be considered to aid in arriving at the real
nature of the action. Lastly, Section 6, Rule 1 of the Rules of Court clearly
empowers the Court to construe Rule 70 and other pertinent procedural
issuances "in a liberal manner to promote just, speedy, and inexpensive
disposition of every action and proceeding."
Based on the complaint and the answer, it is apparent that the Tan Te ejectment
complaint is after all a complaint for unlawful detainer. It was admitted that
petitioner Dela Cruz was a lessee of the Reyeses for around four (4) decades.
Thus, initially petitioner as lessee is the legal possessor of the subject lot by virtue
of a contract of lease. When fire destroyed her house, the Reyeses considered the
lease terminated; but petitioner Dela Cruz persisted in returning to the lot and
occupied it by strategy and stealth without the consent of the owners. The
Reyeses however tolerated the continued occupancy of the lot by petitioner.
Thus, when the lot was sold to respondent Tan Te, the rights of the Reyeses, with
respect to the lot, were transferred to their subrogee, respondent Tan Te, who for
a time also tolerated the stay of petitioner until she decided to eject the latter by
sending several demands, the last being the January 14, 1997 letter of demand.
Since the action was filed with the MeTC on September 8, 1997, the action was
instituted well within the one (1) year period reckoned from January 14, 1997.
Hence, the nature of the complaint is one of unlawful detainer and the Manila
MeTC had jurisdiction over the complaint. IHEAcC
Thus, an ejectment complaint based on possession by tolerance of the owner,

like the Tan Te complaint, is a specie of unlawful detainer cases.
As early as 1913, case law introduced the concept of possession by tolerance in

ejectment cases as follows:
It is true that the landlord might, upon the failure of the

tenant to pay the stipulated rents, consider the contract
broken and demand immediate possession of the rented
property, thus converting a legal possession into illegal
possession. Upon the other hand, however, the landlord
might conclude to give the tenant credit for the payment of
the rents and allow him to continue indefinitely in the
possession of the property. In other words, the landlord
might choose to give the tenant credit from month to month
or from year to year for the payment of their rent, relying
upon his honesty of his financial ability to pay the same.
During such period the tenant would not be in illegal
possession of the property and the landlord could not
maintain an action of desahucio until after he had taken
steps to convert the legal possession into illegal possession.
A mere failure to pay the rent in accordance with the
contract would justify the landlord, after the legal notice, in
bringing an action of desahucio. The landlord might,
however, elect to recognize the contract as still in force and
sue for the sums due under it. It would seem to be clear that
the landlord might sue for the rents due and [unpaid,
without electing to terminate the contract of tenancy;]
[w]hether he can declare the contract of tenancy broken and
sue in an action desahucio for the possession of the property
and in a separate actions for the rents due and damages, etc.
14
The concept of possession by tolerance in unlawful detainer cases was further

refined and applied in pertinent cases submitted for decision by 1966. The rule
was articulated as follows:
Where despite the lessee's failure to pay rent after the first
demand, the lessor did not choose to bring an action in court
but suffered the lessee to continue occupying the land for
nearly two years, after which the lessor made a second
demand, the one-year period for bringing the detainer case
in the justice of the peace court should be counted not from
the day the lessee refused the first demand for payment of
rent but from the time the second demand for rents and
surrender of possession was not complied with. 15
In Calubayan v. Pascual, a case usually cited in subsequent decisions on ejectment,

the concept of possession by tolerance was further elucidated as follows:
In allowing several years to pass without requiring the

occupant to vacate the premises nor filing an action to eject
him, plaintiffs have acquiesced to defendant's possession
and use of the premises. It has been held that a person who
occupies the land of another at the latter's tolerance or
permission, without any contract between them, is
necessarily bound by an implied promise that he will
vacate upon demand, failing which a summary action for
ejectment is the proper remedy against them. The status of
the defendant is analogous to that of a lessee or tenant
whose term of lease has expired but whose occupancy
continued by tolerance of the owner. In such a case, the
unlawful deprivation or withholding of possession is to be
counted from the date of the demand to vacate. 16
(Emphasis supplied.) HDacIT
From the foregoing jurisprudence, it is unequivocal that petitioner's possession

after she intruded into the lot after the fire was by tolerance or leniency of the
Reyeses and hence, the action is properly an unlawful detainer case falling under
the jurisdiction of the Manila MeTC.
Even if we concede that it is the RTC and not the MeTC that has jurisdiction over
the Tan Te complaint, following the reasoning that neither respondent nor her
predecessor-in-interest filed an ejectment suit within one (1) year from February
21, 1994 when the Reyeses knew of the unlawful entry of petitioner, and hence,
the complaint is transformed into an accion publiciana, the Court deems it fair and
just to suspend its rules in order to render efficient, effective, and expeditious
justice considering the nine (9) year pendency of the ejectment suit. More
importantly, if there was uncertainty on the issue of jurisdiction that arose from
the averments of the complaint, the same cannot be attributed to respondent Tan
Te but to her counsel who could have been confused as to the actual nature of the
ejectment suit. The lawyer's apparent imprecise language used in the preparation
of the complaint without any participation on the part of Tan Te is sufficient
special or compelling reason for the grant of relief.
The case of Barnes v. Padilla 17 elucidates the rationale behind the exercise by this
Court of the power to relax, or even suspend, the application of the rules of
procedure:
Let it be emphasized that the rules of procedure should be

viewed as mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result
in technicalities that tend to frustrate rather than promote
substantial justice, must always be eschewed. Even the Rules
of Court reflect this principle. The power to suspend or even
disregard rules can be so pervasive and compelling as to
alter even that which this Court itself has already declared to
be final . . . .
The emerging trend in the rulings of this Court is to afford

every party litigant the amplest opportunity for the proper
and just determination of his cause, free from the constraints
of technicalities. Time and again, this Court has consistently
held that rules must not be applied rigidly so as not to
override substantial justice. 18
Moreover, Section 8, Rule 40 authorizes the RTC in case of affirmance of an

order of the municipal trial court dismissing a case without trial on the merits
and the ground of dismissal is lack of jurisdiction over the subject matter to
try the case on the merits as if the case was originally filed with it if the RTC has
jurisdiction over the case. In the same vein, this Court, in the exercise of its rule-
making power, can suspend its rules with respect to this particular case (pro hac
vice), even if initially, the MeTC did not have jurisdiction over the ejectment suit,
and decide to assume jurisdiction over it in order to promptly resolve the
dispute. cEHSTC
The issue of jurisdiction settled, we now scrutinize the main issue.
At the heart of every ejectment suit is the issue of who is entitled to physical
possession of the lot or possession de facto.
We rule in favor of respondent Tan Te for the following reasons:
1. Petitioner admitted in her Answer that she was a rent-paying tenant of the
Reyeses, predecessors-in-interest of respondent Tan Te. As such, she recognized
the ownership of the lot by respondent, which includes the right of possession.
2. After the fire raged over the structures on the subject lot in late 1989 the
contracts of lease expired, as a result of which Lino Reyes demanded that all
occupants, including petitioner, vacate the lot but the latter refused to abandon
the premises. During the duration of the lease, petitioner's possession was legal
but it became unlawful after the fire when the lease contracts were deemed
terminated and demands were made for the tenants to return possession of the
lot.
3. Petitioner's possession is one by the Reyeses' tolerance and generosity and

later by respondent Tan Te's.
Petitioner fully knows that her stay in the subject lot is at the leniency and
magnanimity of Mr. Lino Reyes and later of respondent Tan Te; and her
acquiescence to such use of the lot carries with it an implicit and assumed
commitment that she would leave the premises the moment it is needed by the
owner. When respondent Tan Te made a last, written demand on January 14,
1997 and petitioner breached her promise to leave upon demand, she lost her
right to the physical possession of the lot. Thus, respondent Tan Te should now
be allowed to occupy her lot for residential purposes, a dream that will finally be
realized after nine (9) years of litigation.
Petitioner raises the ancillary issue that on March 15, 1998, the Manila City
Council passed and approved Ordinance No. 7951: DHaECI
[a]uthorizing the Manila City Mayor to acquire either by

negotiation or expropriation certain parcels of land covered
by Transfer Certificates of Title Nos. 233273, 175106 and
140471, containing an area of One Thousand Four Hundred
Twenty Five (1,425) square meters, located at Maria Clara
and Governor Forbes Streets, Sta. Cruz, Manila, for low cost
housing and award to actual bonafide residents thereat and
further authorizing the City Mayor to avail for that purpose
any available funds of the city and other existing funding
facilities from other government agencies . . . . 19
It readily appears that this issue was not presented before the Court of Appeals
in CA-G.R. SP No. 49097 despite the fact that the respondent's petition was filed
on September 25, 1998, six months after the ordinance was passed. Thus, this
issue is proscribed as are all issues raised for the first time before the Court are
proscribed.
Even granting for the sake of argument that we entertain the issue, we rule that
the intended expropriation of respondent's lot (TCT No. 233273) by the city
government of Manila will not affect the resolution of this petition. For one thing,
the issue can be raised by petitioner in the appropriate legal proceeding.
Secondly, the intended expropriation might not even be implemented since it is
clear from the ordinance that the City Mayor will still locate available funds for
project, meaning the said expense is not a regular item in the budget.
WHEREFORE, this petition is DENIED for lack of merit. The April 30, 1999
Decision of the Court of Appeals reinstating the April 3, 1998 MeTC Decision in
Civil Case No. 156730-CV and the July 16, 1999 Resolution in CA-G.R. SP No.
49097 are hereby AFFIRMED IN TOTO.
||| (Dela Cruz v. Court of Appeals, G.R. No. 139442, December 06, 2006)
FIRST DIVISION
[G.R. No. 77647. August 7, 1989.]
CETUS DEVELOPMENT INC., petitioner, vs. COURT OF

APPEALS and EDERLINA NAVALTA, respondents.
[G.R. No. 77648. August 7, 1989.]
CETUS DEVELOPMENT, INC., petitioner, vs. COURT OF

APPEALS and ONG TENG, respondents.
[G.R. No. 77649. August 7, 1989.]

APPEALS and JOSE LIWANAG, respondents.
[G.R. No. 77650. August 7, 1989.]

APPEALS and LEANDRO CANLAS, respondents.
[G.R. No. 77651. August 7, 1989.]

APPEALS and VICTORIA SUDARIO, respondents.
[G.R. No. 77652. August 7, 1989.]

APPEAL and FLORA NAGBUYA, respondents.
SYLLABUS

DEMAND A JURISDICTIONAL REQUIREMENT FOR THE PURPOSE OF
BRINGING THE SUIT. We hold that the demand required and contemplated
in Section 2, aforequoted, is a jurisdictional requirement for the purpose of
bringing an unlawful detainer suit for failure to pay rent or comply with the
conditions of lease. It partakes of an extrajudicial remedy that must be pursued
before resorting to judicial action so much so that when there is full compliance
with the demand, there arises no necessity for court action.
2. ID.; ID.; ID.; ID.; REQUISITES THAT MUST CONCUR BEFORE AN ACTION
MAY BE FILED. For the purpose of bringing an ejectment suit, two requisites
must concur, namely: (1) there must be failure to pay rent or comply with the
conditions of the lease and (2) there must be demand both to pay or to comply
and vacate with in the period specified in Section 2, Rule 70, namely 15 days in
case of lands and 5 days in case of buildings. The first requisite refers to the
existence of the cause of action for unlawful detainer while the second refers to
the jurisdictional requirement of demand in order that said cause of action may
be pursued.
3. CIVIL LAW; OBLIGATIONS AND CONTRACTS; ARTICLE 1169 OF THE

CIVIL CODE; APPLICABLE IN CASE AT BAR. It is very clear that in the case
at bar, no cause of action for ejectment has accrued. There was no failure yet on
the part of private respondents to pay rents for three consecutive months. As the
terms of the individual verbal leases which were on a month-to-month basis
were not alleged and proved, the general rule on necessity of demand applies, to
wit: there is default in the fulfillment of an obligation when the creditor demands
payment at the maturity of the obligation or at anytime thereafter. This is explicit
in Article 1169, New Civil Code which provides that "(t)hose obliged to deliver
or to do something incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation." Petitioner
has not shown that its case falls on any of the following exceptions where
demand is not required: (a) when the obligation or the law so declares; (b) when
from the nature and circumstances of the obligation it can be inferred that time is
of the essence of the contract; and (c) when demand would be useless, as when
the obligor has rendered it beyond his power to perform.
4. ID.; ID.; ID.; DEMAND REQUIRED UNDER ART. 1169 CIVIL CODE; MAY BE
ORAL OR WRITTEN. The demand required in Article 1169 of the Civil Code
may be in any form, provided that it can be proved. The proof of this demand
lies upon the creditor. Without such demand, oral or written, the effects of
default do not arise. This demand is different from the demand required under
Section 2, Rule 70, which is merely a jurisdictional requirement before an existing
cause of action may be pursued.
5. ID.; ID.; FAILURE TO SEND COLLECTOR WHEN CUSTOMARY,

CONSIDERED VALID DEFENSE FOR NON-PAYMENT OF RENT; DOMICILE
OF LESSEE, PLACE OF PAYMENT IN THE ABSENT OF AGREEMENT.
Petitioner claims that its failure to send a collector to collect the rentals cannot be
considered a valid defense for the reason that sending a collector is not one of the
obligations of the lessor under Article 1654. While it is true that a lessor is not
obligated to send a collector, it has been duly established that it has been
customary for private respondents to pay the rentals through a collector. Besides
Article 1257, New Civil Code provides that where no agreement has been
designated for the payment of the rentals, the place of payment is at the domicile
of the defendants. Hence, it could not be said that they were in default in the
payment of their rentals as the delay in paying the same was not imputable to
them. Rather, it was attributable to petitioner's omission or neglect to collect.
6. ID.; WHERE THERE IS LACK OF DEMAND FOR PAYMENT, ARTICLE 1256

OF THE CIVIL CODE, NOT APPLICABLE; CASE AT BAR. Petitioner argues
that neither is its refusal to accept the rentals a defense for non-payment as
Article 1256 provides that "[i]f the creditor to whom the tender of payment has
been made refuses without just cause to accept it, the debtor shall be released
from responsibility by the consignation of the thing due." It bears emphasis that
in this case there was no unjustified on the part of petitioner or non-acceptance
without reason that would constitute mora accipiendi and warrant consignation.
There was simply lack of demand for payment of the rentals.
DECISION
MEDIALDEA, J p:
This is a petition for review on certiorari of the decision dated January 30, 1987 of
the Court of Appeals in CA-GR Nos. SP-079450 entitled, "Cetus Development,
Inc., Petitioner vs. Hon. Conrado T. Limcaoco, Presiding Judge, Regional Trial
Court of Manila, Branch XI, Ederlina Navalta, et. al., respondents."
The following facts appear in the records:
The private respondents, Ederlina Navalta, Ong Teng, Jose Liwanag, Leandro
Canlas, Victoria Sudario, and Flora Nagbuya were the lessees of the premises
located at No. 512 Quezon Boulevard, Quiapo, Manila, originally owned by the
Susana Realty. These individual verbal leases were on a month-to-month basis at
the following rates: Ederlina Navalta at the rate of P80.50; Ong Teng at the rate of
P96.10; Jose Liwanag at the rate of P40.35; Leandro Canlas at the rate of P80.55;
Victoria Sudario at the rate of P50.45 and Flora Nagbuya at the rate of P80.55.
The payments of the rentals were paid by the lessees to a collector of the Susana
Realty who went to the premises monthly.
Sometime in March, 1984, the Susana Realty sold the leased premises to the
petitioner, Cetus Development, Inc., a corporation duly organized and existing
under the laws of the Philippines. From April to June, 1984, the private
respondents continued to pay their monthly rentals to a collector sent by the
petitioner. In the succeeding months of July, August and September 1984, the
respondents failed to pay their monthly individual rentals as no collector came.
On October 9, 1984, the petitioner sent a letter to each of the private respondents
demanding that they vacate the subject premises and to pay the back rentals for
the months of July, August and September, 1984, within fifteen (15) days from
the receipt thereof. Immediately upon the receipt of the said demand letters on
October 10, 1984, the private respondents paid their respective arrearages in rent
which were accepted by the petitioner subject to the unilateral condition that the
acceptance was without prejudice to the filing of an ejectment suit. Subsequent
monthly rental payments were likewise accepted by the petitioner under the
same condition.
For failure of the private respondents to vacate the premises as demanded in the
latter dated October 9, 1984, the petitioner with the Metropolitan Trial Court of
Manila complaints for ejectment against the former, as follows: (1) 105972-CV,
against Ederlina Navalta; (2) 105973-CV, against Jose Liwanag; (3) 4 CV, against
Flora Nagbuya; (4) 105975-CV, against Leandro Canlas; (5) 105976-CV, against
Victoria Sudario and (6) 105977-CV, against Ong Teng.
In their respective answers, the six (6) private respondents interposed a common
defense. They claimed that since the occupancy of the premises they paid their
monthly rental regularly through a collector of the lessor; that their non-payment
of the rentals for the months of July, August and September, 1984, was due to the
failure of the petitioner (as the new owner) to send its collector; that they were at
a loss as to where they should pay their rentals; that sometime later, one of the
respondent called the office of the petitioner to inquire as to where they would
make such payments and he was told that a collector would be sent to receive the
same; that no collector was ever sent by the petitioner; and that instead they
received a uniform demand letter dated October 9, 1984.
The private respondents, thru counsel, later filed a motion for was consolidation
of the six cases and as a result thereof, the said cases were consolidated in The
Metropolitan Trial Court of Manila, Branch XII, presided over by Judge Eduardo
S. Quintos, Jr. On June 4, 1985, the trial court rendered its decision dismissing the
six cases, a pertinent portion of which reads, as follow: Cdpr
"The records of this case show how that the time of the filing
of this complaints, the rental had all been paid. Hence, the
plaintiff cannot eject the defendants from the leased
premises, because at the time these cases were instituted,
there are no rentals in arrears.
"The acceptance of the back rental by the plaintiff before the

filing of the complaint, as in these case, the alleged rental
arrearages were paid immediately after receipt of the
demand letter, removes its cause of action in an unlawful
detainer case, even if the acceptance was without prejudice.
xxx xxx xxx
"Furthermore, the court has observed that the account

involved which constitutes the rentals of the tenants are
relatively small to which the ejectment may not lie on
grounds of equity and for humanitarian reasons.
"Defendants' counterclaim for litigation expenses has no

legal and factual basis for assessing the same against
plaintiff.
"WHEREFORE, judgment is hereby rendered dismissing

these cases, without pronouncement as to costs.
"Defendants' counterclaim is likewise dismissed.
"SO ORDERED." (pp 32-33, Rollo, G.R. No. 77647)
Not satisfied with the decision of the Metropolitan Trial Court, the petitioner
appealed to the Regional Trial Court of Manila and the same was assigned to
Branch IX thereof presided over by Judge Conrado T. Limcaoco (now Associate
Justice of the Court of Appeals). In its decision dated November 19, 1985, the
Regional Trial Court dismissed the appeal for lack of merit.
In due time, a petition for review of the decision of the Regional Trial Court was
filed by the petitioner with the Court of Appeals. Said petition was dismissed on
January 30, 1987, for lack of merit.
Aggrieved by the decision of the Court of Appeals, petitioner now comes to Us

in this petition, assigning the following errors:
ASSIGNMENT OF ERRORS
"I
"RESPONDENT COURT OF APPEALS COMMITTED A
GRAVE ABUSE OF DISCRETION, AMOUNTING TO
LACK OF JURISDICTION, WHEN IT ERRED IN HOLDING
THAT THE CAUSE OF ACTION FOR UNLAWFUL
DETAINER IN THESE CASES DID NOT EXIST WHEN THE
COMPLAINTS WERE FILED BECAUSE PRIVATE
RESPONDENTS TENDERED, AND PETITIONER
ACCEPTED, THE PAYMENT OF THE THREE (3) MONTHS
RENTAL IN ARREARS WITHIN THE FIFTEEN (15) DAY
PERIOD FROM PRIVATE RESPONDENTS' RECEIPT OF
PETITIONER'S DEMAND LETTERS TO VACATE THE
SUBJECT' PREMISES AND TO PAY THE RENTALS IN
ARREARS.
"II
RESPONDENT COURT OF APPEALS COMMITTED A
LACK OF JURISDICTION, WEN IT ERRED IN AFFIRMING
THE DISMISSAL OF THE COMPLAINTS IN THESE CASES
NOTWITHSTANDING THE EXISTENCE OF VALID
GROUNDS FOR THE JUDICIAL EJECTMENT OF PRIVATE
RESPONDENT.
"III
"RESPONDENT COURT OF APPEALS COMMITTED A
LACK OF JURISDICTION, WHEN IT ERRED IN HOLDING
THAT THESE CASES ARE CLASSIC EXAMPLES TO
CIRCUMVENT THE RENT CONTROL LAW." (pp. 164-165,
Rollo, G.R. No. 77647)
The Court of Appeals defined the basic issue in this case as follows: whether or
not there exists a cause of action when the complaints for unlawful detainer were
filed considering the fact that upon demand by petitioner from private
respondents for payment of their back rentals, the latter immediately tendered
payment which was accepted by petitioner.
In holding that there was no cause of action, the respondent Court relied on
Section 2, Rule 70 of the Rules of Court, which provides:
"Sec. 2. Landlord to proceed against tenant only after demand.

No landlord or his legal representative or assign, shall bring
such action against a tenant for failure to pay rent due or to
comply with the conditions of his lease, unless the tenant
shall have failed to pay such rent or comply with such
conditions for a period of fifteen (15) days or five (5) days in
case of building, after demand therefor, made upon him
personally, or by serving written notice of such demand
upon the person found on the premises, or by posting such
notice on the premises if no persons be found thereon."
It interpreted the said provision as follows:
". . . the right to bring an action of ejectment or unlawful

detainer must be counted from the time the defendants
failed to pay rent after the demand therefor. It is not the
failure per se to pay rent as agreed in the contract, but the
failure to pay the rent after a demand therefor is made, that
entitles the lessor to bring an action for unlawful detainer. In
other words, the demand contemplated by the above-quoted
provision is not a demand to vacate, but a demand made by
the landlord upon his tenant for the latter to pay the rent
due. If the tenant fails to comply with the said demand
within the period provided, his possession becomes
unlawful and the landlord may then bring the action for
ejectment." (p. 28, Rollo, G.R. No. 77647)
We hold that the demand required and contemplated in Section 2, aforequoted,

is a jurisdictional requirement for the purpose of bringing an unlawful detainer
suit for failure to pay rent or comply with the conditions of lease. It partakes of
an extrajudicial remedy that must be pursued before resorting to judicial action
so much so that when there is full compliance with the demand, there arises no
necessity for court action. LLpr
As to whether this demand is merely a demand to pay rent or comply with the
conditions of the lease or also a demand to vacate, the answer can be gleaned
from said Section 2. This section presupposes the existence of a cause of action
for unlawful detainer as it speaks of "failure to pay rent due or comply with the
conditions of the lease." The existence of said cause of action gives the lessor the
right under Article 1659 of the New Civil Code to ask for the rescission of the
contract of lease and indemnification for damages, or only the latter, allowing the
contract to remain in force. Accordingly, if the option chosen is for specific
performance, then the demand referred to is obviously to pay rent or to comply
with the conditions of the lease violated. However, if rescission is the option
chosen, the demand must be for the lessee to pay rents or to comply with the
conditions of the lease and to vacate. Accordingly, the rule that has been
followed in our jurisprudence where rescission is clearly the option taken, is that
both demands to pay rent and to vacate are necessary to make a lessee a
deforciant in order that an ejectment suit may be filed (Casilan, et al. vs. Tomassi,
L-16574, February 28, 1964, 10 SCRA 261; Rickards vs. Gonzales, 109 Phil. 423;
Dikit vs. Icasiano, 89 Phil. 44).
Thus, for the purpose of bringing an ejectment suit, two requisites must concur,
namely: (1) there must be failure to pay rent or comply with the conditions of the
lease and (2) there must be demand both to pay or to comply and vacate with in
the period specified in Section 2, Rule 70, namely 15 days in case of lands and 5
days in case of buildings. The first requisite refers to the existence of the cause of
action for unlawful detainer while the second refers to the jurisdictional
requirement of demand in order that said cause of action may be pursued.
It is very clear that in the case at bar, no cause of action for ejectment has accrued.
There was no failure yet on the part of private respondents to pay rents for three
consecutive months. As the terms of the individual verbal leases which were on a
month-to-month basis were not alleged and proved, the general rule on necessity
of demand applies, to wit: there is default in the fulfillment of an obligation
when the creditor demands payment at the maturity of the obligation or at
anytime thereafter. This is explicit in Article 1169, New Civil Code which
provides that "(t)hose obliged to deliver or to do something incur in delay from
the time the obligee judicially or extrajudicially demands from them the
fulfillment of their obligation." Petitioner has not shown that its case falls on any
of the following exceptions where demand is not required: (a) when the
obligation or the law so declares; (b) when from the nature and circumstances of
the obligation it can be inferred that time is of the essence of the contract; and (c)
when demand would be useless, as when the obligor has rendered it beyond his
power to perform.
The demand required in Article 1169 of the Civil Code may be in any form,
provided that it can be proved. The proof of this demand lies upon the creditor.
Without such demand, oral or written, the effects of default do not arise. This
demand is different from the demand required under Section 2, Rule 70, which is
merely a jurisdictional requirement before an existing cause of action may be
pursued.
The facts on record fail to show proof that petitioner demanded the payment of
the rentals when the obligation matured. Coupled with the fact that no collector
was sent as previously done in the past, the private respondents cannot be held
guilty of mora solvendi or delay in the payment of rentals. Thus, when petitioner
first demanded the payment of the 3-month arrearages and private respondents
lost no time in making tender and payment, which petitioner accepted, no cause
of action for ejectment accrued. Hence, its demand to vacate was premature as it
was an exercise of a non-existing right to rescind.
In contradistinction, where the right of rescission exists, payment of the

arrearages in rental after the demand to pay and to vacate under Section 2, Rule
70 does not extinguish The cause of action for ejectment as the lessor is not only
entitled to recover the unpaid rents but also to eject the lessee.
Petitioner correctly argues that acceptance of tendered payment does not

constitute a waiver of the cause of action for ejectment especially when accepted
with the written condition that it was "without prejudice to the filing of an
ejectment suit". Indeed, it is illogical or ridiculous not to accept the tender of
payment of rentals merely to preserve the right to file an action for unlawful
detainer. However, this line of argument presupposes that a cause of action for
ejectment has already accrued, which is not true in the instant case.
Petitioner likewise claims that its failure to send a collector to collect the rentals
cannot be considered a valid defense for the reason that sending a collector is not
one of the obligations of the lessor under Article 1654. While it is true that a
lessor is not obligated to send a collector, it has been duly established that it has
been customary for private respondents to pay the rentals through a collector.
Besides Article 1257, New Civil Code provides that where no agreement has
been designated for the payment of the rentals, the place of payment is at the
domicile of the defendants. Hence, it could not be said that they were in default
in the payment of their rentals as the delay in paying the same was not
imputable to them. Rather, it was attributable to petitioner's omission or neglect
to collect. LLjur
Petitioner also argues that neither is its refusal to accept the rentals a defense for
non-payment as Article 1256 provides that "[i]f the creditor to whom the tender
of payment has been made refuses without just cause to accept it, the debtor shall
be released from responsibility by the consignation of the thing due." It bears
emphasis that in this case there was no unjustified on the part of petitioner or
non-acceptance without reason that would constitute mora accipiendi and warrant
consignation. There was simply lack of demand for payment of the rentals.
In sum, We hold that respondent court of appeals did not commit grave abuse of
discretion amounting to lack of jurisdiction in its conclusion affirming the trail
court's decision dismissing petitioner's complaint for lack of cause of action. We
do not agree, however the reasons relied upon.
ACCORDINGLY, the petition for review on certiorari is hereby DENIED for lack
of merit and the decision dated January 30, 1987 of respondent Court of Appeals
is hereby AFFIRMED.
||| (Cetus Development Inc. v. Court of Appeals, G.R. No. 77647, 77648, 77649,
77650, 77651, 77652, August 07, 1989)
SECOND DIVISION
[G.R. No. 76880. December 20, 1988.]
ILUMINADA N. VILLEGAS, petitioner, vs. THE COURT

OF APPEALS & RUFO QUEMUEL, respondents.
Jose F. Maacop for petitioner.
Benjamin Q. Quitoriano for private respondent.
SYLLABUS

DEFINED; CASE AT BAR. Admittedly Rufo Quemuel was a lessor of the
subject property. He voluntarily entered into a compromise agreement with the
lessors after he refused to pay the increase in rent of the leased premises. His
right to stay therein as a lessee expired on January 15, 1981 after he had failed to
pay the rent from December 1970. No demand was necessary for him to vacate
the premises as this was specifically provided for in the agreement that lessee
Quemuel should vacate the leased premises without the necessity of further
demand upon failure to comply with the terms of the agreement. Since then or
since April 16, 1981, the expiration of the period granting him an extension of
time to comply with the terms of the agreement, Quemuel was already
unlawfully withholding possession of the leased premises from his lessor, herein
petitioner. To remedy this situation, the law grants the petitioner-lessor the right
of filing a case of unlawful detainer against herein lessee. Unlawful detainer is
defined as the act of withholding the possession of land or building from another
who is entitled to it after the expiration or termination of the right of the illegal
detainer to hold possession by virtue of a contract, express or implied, when one
year had not yet elapsed from the time the original possession had become illegal
(Co Tiamco v. Diaz, 75 Phil. 728). Under Sec. 1, Rule 70 of the Revised Rules of
Court, it is provided that the act of withholding possession which could be the
subject matter of an ejectment suit is that which results from any (emphasis
supplied) contract. In other words an unlawful detainer case can spring not only
from a contract of lease but may also spring from a compromise agreement
which is also a contract such as in the case at bar.
2. ID.; ID.; ID.; JURISDICTION OVER UNLAWFUL DETAINER CASES. And

under Section 33 of Batas Pambansa Bilang 129 otherwise known as the Judiciary
Reorganization Act of 1980, the Metropolitan Trial Court shall exercise exclusive
original jurisdiction over such case.
DECISION
PARAS, J p:
Before Us is a Petition to Review by Certiorari the decision 1 of the

respondent Court of Appeals in CA-G.R. SP No. 09840 entitled "Rufo
Quemuel v. Honorable Rosalio A. de Leon and Iluminada Villegas"
dismissing the ejectment case and setting aside the judgment of the Regional
Trial Court (RTC), Branch II in Civil Case No. 86-35993 and that of the
Metropolitan Trial Court (MTC) of Manila, Branch XXIX in Civil Case No.
069239-CV an action for unlawful detainer involving a two-storey house at
No. 2645 Enrique St., Singalong, Manila.
The subject property is allocated by petitioner Iluminada Villegas,
(the only child of plaintiff Senedela Nazareth and the late Felino Nazareth,
the registered owner of said property) to her son Ramon Villegas as his
residence. Private respondent Rufo Quemuel (defendant therein) is a lessee
of said property, allegedly since 1969 of the second floor of the house for a
present monthly rental of P160.00 and in 1974, a lessee of the ground floor
for a monthly rental of P200.00.
The records show that Civil Case No. 020179 for Unlawful Detainer
was instituted by Senedela Nazareth (now deceased) against the lessee
Quemuel on January 24, 1977 when the latter refused to pay the increase in
rent or to vacate the premises. On February 26, 1980, said case was
dismissed upon motion of the aforesaid plaintiff.
After the dismissal and after the receipt from lessor of a letter of
demand dated April 7, 1980, lessee Quemuel entered into an agreement
dated September 16, 1980 with Senedela Nazareth and Iluminada Villegas,
which provided among others the condonation of all unpaid rentals from
December, 1976 up to January 15, 1981, if Quemuel leaves voluntarily and
surrenders peacefully the leased premises on or before January 15, 1981
without need of further demand. In the event of failure of herein private
respondent Quemuel to surrender peacefully the leased premises he will
pay damages in the amount of P20,000.00 and in addition, he pays all the
back rentals from December 1, 1976 to January 15, 1981 and all rentals
thereafter.
In his letter dated January 12, 1981, Quemuel requested from
Ramon Villegas an extension of three (3) months or up to April 16, 1981
within which to comply with the agreement, which request was granted.
In a letter dated August 1, 1981 of Iluminada Villegas and Senedela
Nazareth to Rufo Quemuel, demand to comply with the terms of the
agreement was made after the latter (Rufo Quemuel) failed to comply
despite the extension given. In their second letter dated August 17, 1981 the
same demands were made. The last of such demand letters was allegedly
made on October 2, 1981, asking for the refund of P6,000.00 and demanding
that Quemuel vacate the premises and pay the back rentals up to September,
1981 in the sum of P21,750.00.
Before any action was filed in court, the dispute was brought before
the Barangay Office which issued a Certificate to File Action as no settlement
could be reached between the parties.
On August 17, 1981, a complaint for Unlawful Detainer and
Damages was filed by Iluminada Villegas and Senedela Nazareth in the
Court of First. Instance of Manila (Branch XL, Civil Case No. 142560) to
enforce the agreement. However, after answer of Rufo Quemuel, said case
was withdrawn by motion of plaintiffs dated November 16, 1981 which was
granted by the court on December 18, 1981.
Meanwhile, on December 1, 1981 before the aforementioned motion
to withdraw was granted, the lessors Iluminada Villegas and Senedela
Nazareth filed before the City Court of Manila, an ejectment case (Civil Case
No. 069239-CV) against Rufo Quemuel. Said court rendered judgment, the
decretal portion of which reads:
"WHEREFORE, judgment is hereby rendered ordering
defendant 2 and all persons claiming rights under him to
vacate the premises located at 2645 Enrique St., Singalong,
Manila and surrender possession thereof to plaintiffs. 3
"Defendant is ordered further to pay plaintiffs:
"(a) the sum of P42,375.00 as back rentals for the period from
December, 1976 to April, 1985 less payments made, if any,
and the further sum of P375 .00 every month thereafter until
the premises are vacated;
"(b) the sum of P6,000.00 as refund plus interest thereon at

the legal rate from December, 1981 until paid;
"(c) the sum of P4,000.00 for attorney's fees;
"(d) and the costs of suit." (p. 17, Rollo).
Defendant appealed to the Regional Trial Court of Manila, the same

being docketed as Civil Case No. 86-35993, wherein judgment was rendered,
the dispositive portion reading as follows:
"WHEREFORE, judgment is hereby rendered as follows:
"(1) Declaring that plaintiffs have the right to evict defendant

and all persons claiming rights under him from subject
premises on the ground of arrears in payment of rent for at
least 50 months before the filing of the case; and,
"(2) Affirming the Decision of the trial court, excepting only

that portion in the dispositive part covered by paragraph (b)
concerning the refund of P6,000.00 to plaintiffs, which
portion is hereby ordered to be deleted from said decision.
"Defendant is further ordered to pay the costs of suit in this

instance." (pp. 356-357, Original Record; Annex "A," Rollo).
Defendant appealed to the respondent Court of Appeals on a

Petition for Review docketed as CA-G.R. SP 09840 assigning several errors,
which were resolved by the respondent Court of Appeals as follows:
"Before passing upon the other errors ascribed to respondent
court's decision under review, the fifth assigned error
deserves priority and should be tackled first because it
relates to the question of propriety of the summary action
for unlawful detainer at bar, and the jurisdiction of the
Metropolitan Trial Court a quo to take cognizance of and
decide the present controversy.
"After a careful study, we find for petitioner. 4 His

submission in support of the fifth error relied upon by him is
well-grounded. Although the original cause of action of
respondent lessor was based on the verbal lease agreement
entered into on September 1, 1969, and the other verbal lease
contract of June, 1974 sued upon in the previous ejectment
case, Civil Case No. 020179, which was dismissed upon
action of plaintiff-lessor; the ejectment case under
consideration is actually anchored upon the extra-judicial
compromise agreement hammered out by the parties on
September 16, 1980 (Exhibits "A" & "A-1," pp. 109-194,
Original Record). Not being contrary to law, morals, good
customs, public order and public policy the said contract is
binding upon the contracting parties and is respected as the
law between them. (Castro vs. Court of Appeals, 99 SCRA
722; Escano vs. Court of Appeals, 100 SCRA 197). And from
its stipulations, it is palpably clear that subject compromise
agreement is not a lease contract violations with (sic) which
may entitle lessor to the judicial ejectment of the lessee; but
one which is incapable of pecuniary estimation and litigable
before the Regional Trial Courts under Section 19 (1), BP Blg.
129. Obviously, the rights of the parties thereunder can not
be determined summarily in an ejectment proceeding.
'Where the litigants raised not merely the

question of who among them was entitled to the
possession but also prayed that the court rule on
their respective rights under the documents upon
which they predicated their claims to the
possession, the case is converted from one of
unlawful detainer suit into one that is incapable of
pecuniary estimation, which can only be addressed
to the original jurisdiction of the Court of First
Instance. Therefore, the JP court has no jurisdiction
over the case.' (Rivera vs. Halili, L-15159, Sept. 30,
1963)
"All things considered, particularly the agreement litigated
upon (Exhibit "A") and the demand letters of August 1, 1981
(Exhibits "C" & "C-1") and of August 15, 1981 (Exhibit "D"),
We are of the irresistible conclusion that, as theorized by
petitioner, the controversy at bar is not within the
competence of the inferior court of origin to decide, as it did,
in the ejectment case. It is cognizable, as an action for specific
performance and damages, by the Regional Trial Court in
the exercise of its exclusive original jurisdiction thereover.
(Sic.)
"In view of the foregoing finding and conclusion, we can not

help but declare both the decision of the Metropolitan Trial
Court a quo, dated April 7, 1986, and subject decision, dated
August 13, 1986, of the respondent court, null and void for
want of jurisdiction. Consequently, it is unnecessary for this
Court to still rule upon the other points raised in petitioner's
assignment of errors. Suffice it to stress that a void decision
decides nothing and is completely barren of force and effect.
"WHEREFORE, the judgment of the respondent Court in

Civil Case No. 86-35993 and that of the Metropolitan Trial
Court a quo in Civil Case No. 069239-CV are hereby set
aside; and in lieu thereof, the said ejectment case is ordered
DISMISSED. Costs against private respondent.
"SO ORDERED." (pp. 18-20, Rollo)
Not satisfied with the decision of the respondent court, plaintiffs

now come to Us submitting the following:
"ISSUES AND PROPOSITIONS"
"1. It is respectfully submitted that the Metropolitan Trial

Court had original jurisdiction to try and decide Civil Case
No. 069239 regardless of whether herein petitioner's cause of
action is anchored not only upon the failure of herein private
respondent to pay the rent from 1976 but also upon the
failure of private respondent to comply with the terms and
conditions of their compromise agreement, particularly the
portion thereof that he should vacate the leased premises on
or before January 15, 1981 or on April 16, 1981, as extended.
"2. It is also respectfully submitted that the herein private

respondent should be ordered to vacate the leased premises
and to pay rentals therefor from December 1, 1976 up to the
time he surrenders possession of the leased premises to
herein petitioner at the rate of P375.00 a month and also to
pay attorney's fee." (p. 64, Rollo)
Petitioner's contentions hold water.

Admittedly Rufo Quemuel was a lessor of the subject property. He
voluntarily entered into a compromise agreement with the lessors after he
refused to pay the increase in rent of the leased premises. His right to stay
therein as a lessee expired on January 15, 1981 after he had failed to pay the
rent from December 1970. No demand was necessary for him to vacate the
premises as this was specifically provided for in the agreement that lessee
Quemuel should vacate the leased premises without the necessity of further
demand upon failure to comply with the terms of the agreement. Since then
or since April 16, 1981, the expiration of the period granting him an
extension of time to comply with the terms of the agreement, Quemuel was
already unlawfully withholding possession of the leased premises from his
lessor, herein petitioner. To remedy this situation, the law grants the
petitioner-lessor the right of filing a case of unlawful detainer against herein
lessee. Unlawful detainer is defined as the act of withholding the possession
of land or building from another who is entitled to it after the expiration or
termination of the right of the illegal detainer to hold possession by virtue of
a contract, express or implied, when one year had not yet elapsed from the
time the original possession had become illegal (Co Tiamco v. Diaz, 75 Phil.
728). Under Sec. 1, Rule 70 of the Revised Rules of Court, it is provided that
the act of withholding possession which could be the subject matter of an
ejectment suit is that which results from any (emphasis supplied) contract. In
other words an unlawful detainer case can spring not only from a contract of
lease but may also spring from a compromise agreement which is also a
contract such as in the case at bar. And under Section 33 of Batas Pambansa
Bilang 129 otherwise known as the Judiciary Reorganization Act of 1980, the
Metropolitan Trial Court shall exercise exclusive original jurisdiction over
such case.
WHEREFORE, premises considered, the assailed judgment is
hereby SET ASIDE and the judgment of the Regional Trial Court affirming
with modification the judgment of the Metropolitan Trial Court in Civil Case
No. 069239-CW is hereby REINSTATED.
SO ORDERED.
Melencio-Herrera, Padilla and Regalado, JJ., concur.
||| (Villegas v. Court of Appeals, G.R. No. 76880, December 20, 1988)
EN BANC
[A.M. No. RTJ-11-2666. February 15, 2011.]
[Formerly A.M. OCA IPI No. 09-3320-RTJ]
JOSEPHINE JAZMINES TAN, complainant, vs. JUDGE

SIBANAH E. USMAN, Regional Trial Court, Branch 29,
Catbalogan, Samar, respondent.
DECISION
By a verified November 22, 2009 Complaint, 1 Josephine Jazmines Tan

(complainant) charges Judge Sibanah E. Usman (respondent), Presiding Judge of
Branch 28, 2 Regional Trial Court, Catbalogan, Samar, with abuse of power and
authority, conduct unbecoming a judicial officer, mental dishonesty, grave
misconduct, gross ignorance of the law and knowingly rendering an unjust
order, and bribery and corruption, in connection with Civil Case No. 7681 3 and
Criminal Case No. 6536. 4
It appears that complainant, together with his co-plaintiffs in the civil case/co-
accused in the criminal case, filed a Motion for Inhibition 5 against respondent.
The movants attached to their motion the Affidavit 6 of complainant.
Complainant claims that during the hearing of the Motion for Inhibition,
respondent became very emotional, coerced her to testify without the assistance
of counsel and demanded a public apology from her; and that while she
requested to refer the motion to the Executive Judge, respondent interrogated her
relentlessly following which he issued an Order 7 of August 28, 2009 finding her
guilty of Direct Contempt and ordered her detention. Thus respondent disposed
in his Order:
IN VIEW THEREOF, premises considered, in order to set as

an example for anyone not to make fabricated charges
against the Court employees and judges, and also to restore
the integrity of the Court, the affiant, Josephine Jazmines
Tan is hereby cited of Direct Contempt of Court and thus
ordered detained at the Samar Provincial Jail until she
divulges the name of the informant/employee of the Court
or publicly apologize to the employees of the Court, the
Presiding Judge and the Executive Judge, but the period of
detention shall not exceed more than thirty (30) days
beginning from her service of confinement. Mrs. Perla
Santiago, PO3 Marlon Villanueva and PO3 Doroteo Montejo
are hereby directed to escort the affiant, Josephine Jazmines
Tan, to the Samar Provincial Jail for detention. 8 (emphasis
supplied; underscoring partly in the original, partly
supplied) ScaAET
Complainant was in fact detained from August 28, 2009 until September 16, 2009
9 or for a total of 19 days.
In his January 14, 2010 Answer 10 to the complaint, respondent explained that
during the hearing of the Motion for Inhibition, the employees of the court
appeared before complainant but she failed to name any of them as having
allegedly told her that Jaime Cui, Jr. "was bragging that they have disbursed a
substantial amount of money" to him (respondent); that Atty. Lee M. Zosa, the
private prosecutor in the criminal case, and Atty. Benly Frederick Bergonio,
counsel for the PNB in the civil case, moved that complainant be cited for Direct
Contempt of Court and that she be detained until she divulges the name of her
informant; and that Atty. Jose M. Mendiola, complainant's lawyer, failed to give
any comment because, according to him, complainant did not consult him about
the filing of the Motion for Inhibition. 11
Respondent went on to explain that since he issued his August 28, 2009 Order in
an official capacity, the remedy of complainant was to file a motion for
reconsideration or an appeal, not an administrative case; that he gave
complainant a maximum of 30 days detention to give her "a wider opportunity to
either apologize or divulge the name of her informant, so that even before the
expiration of the period, the court can lift the Order of Contempt." 12
By Report of November 25, 2010, 13 the Office of the Court Administrator (OCA)
came up with the following evaluation of the Complaint:
The instant administrative case is partly meritorious.
Complainant Tan failed to prove that respondent Judge

Usman committed an Act Unbecoming a Judge by shouting
at her at the hearing on the Motion for Inhibition. Aside from
her allegation, there is nothing on record to support her
claim. The TSN did not contain any inappropriate language.
Neither did it reflect any observation/manifestation from
the lawyers present, (who are presumably aware and
vigilant of their duties as officers of the court) of any
untoward incident. Complainant Tan countered that given
the limitations of the TSN, i.e., its inability to capture the
nuance of speech and project emotions vividly, the fact that
respondent Judge Usman shouted expletives cannot be
erased or rendered inexistent by this limitation.
Downplaying the TSN's significance by highlighting its
limitation is not the same as saying that respondent Judge
Usman did in fact shout at her. In other words, she cannot
rely on the TSN's limitation and present it as proof that
respondent Judge Usman shouted at her.
The charge of Mental Dishonesty has no merit. When

respondent Judge Usman included other court employees
and the Executive Judge in his discourse on the charge of
bribery/corruption against him, he was not twisting the
facts but was merely discussing the projected overall effect
of the complainant Tan's accusation. The perception that a
particular employee of the judiciary is corrupt, eventually,
engulfs the entire institution. aACEID
Hence, complainant Tan failed to prove by substantial

evidence her charge of Knowingly Rendering an Unjust
Order. The records bear nothing to show that a competent
court had previously adjudged respondent Judge Usman
guilty of the crime of Knowingly Rendering an Unjust Order
in Civil Case No. 7681 and/or Criminal Case No. 6536.
Complainant Tan likewise failed to prove the charge of

Bribery/Corruption. Bare allegation alone is insufficient to
hold respondent Judge Usman liable. Complainant Tan
admitted the deficiency of her proof when, at the outset, she
reserved her right to submit other proofs in support of this
particular charge.
Based on the evidence presented, respondent Judge Usman

gravely abused his authority and is grossly ignorant of the
rule on Direct Contempt of Court. . . .
xxx xxx xxx
. . . [I]n the Order dated 28 August 2009, respondent Judge

Usman directed that complainant Tan be detained for a
period not exceeding thirty (30) days. No amount of
rationalization can reconcile the limit of the 10-day period of
imprisonment for Direct Contempt of Court set in section 1,
Rule 71 of the Rules of Court with the 30-day (maximum
period of) imprisonment that respondent Judge Usman fixed
in the Order. This Office finds nothing in the rule, which
suggests, however remotely, the theory that the 10-day
period of imprisonment in Section 1, Rule 71 is pliable
enough to validly stretch to 30 days. By virtue of his office,
respondent Judge Usman knows or should have known this
so basic a rule. The glaring clarity of the rule tripped
respondent Judge Usman to commit a glaring error, which
was made even more flagrant by the fact that complainant
Tan was actually imprisoned for 19 days.
Further, respondent Judge Usman failed to indicate in the Order

the amount of bond as required under Section 2, Rule 71 of the
Rules of Court. Due to this omission, complainant Tan's
option to stay the execution of the judgment had been
rendered nugatory, and a result thereof caused her
immediate detention. An order of direct contempt is not
immediately executory. Respondent Judge Usman's error,
however, made it so.
Respondent Judge Usman wielded power abusively by

depriving complainant Tan her liberty for nine (9) days
without due process of law. Lest any misperception of this
institution thrive, this regretful incident must be decisively
addressed. 14 (emphasis partly in the original, partly
supplied; italics in the original; underscoring supplied)
In its Report, the OCA also listed the other administrative complaints filed
against respondent 15 and their respective status, viz.: ETaHCD
. . . Per Alphalist as of 30, June 2010, respondent Judge

Usman was the subject of other administrative complaints,
to wit:
RTJ-91-777 Irregular Financial Support Complaint Dismissed

(3.23.93) Fine 2 mos. Salary
(3.5.02)
03-1744-RTJ w/ Violation of R.A. No. 3019, Suspension 2 mos. & Fine 10
RTJ-02-1713 knowingly rendering unjust (10.25.05)
orders, bias and partiality, etc.
RTJ-08-2098 Falsification of Certificate of Fine 2T (1.16.08)
(05-2170-RTJ) Service and Dishonesty
RTJ-07-2053 Grave abuse of discretion, Suspension 1 mo. (11.27.08)
(05-2171-RTJ) dishonesty
RTJ-02-1713 Graft and Corruption, Suspension 2 mos. & Fine 10
(01-1257-RTJ) incompetence, gross ignorance (10.25.05)
of the law, dishonesty, and
partiality, absenteeism
RTJ-05-1922 (per instruction of Court En Suspension 2 mos. & Fine 10
(02-12-18-SC) Banc) (10.25.05)
RTJ-05-1923 (per instruction of Court En Suspension 2 mos. & Fine 10
(03-3-157-RTC) Banc) (10.25.05)
Thus, the OCA recommended that this case be re-docketed as a regular
administrative matter and that:
a.the administrative complaint . . . for Conduct Unbecoming

a Judicial Officer, Mental Dishonesty, Grave
Misconduct, Knowingly Rendering an Unjust
Order and/or Bribery/Corruption be DISMISSED
for lack of merit;
b.respondent Judge Usman be found guilty of Gross

Ignorance of the Law for which he should be
ordered to pay a FINE in the amount of TWENTY
ONE THOUSAND PESOS (P21,000.00) to be paid
within fifteen (15) days from finality of the
Resolution of the Court[.] 16 (underscoring
supplied)
Rule 71 of the Rules of Court provides:
SECTION 1.Direct contempt punished summarily. A person

guilty of misbehavior in the presence of or so near a court as
to obstruct or interrupt the proceedings before the same,
including disrespect toward the court, offensive
personalities toward others, or refusal to be sworn or to
answer as a witness, or to subscribe an affidavit or
deposition when lawfully required to do so, may be
summarily adjudged in contempt by such court and
punished by a fine not exceeding two thousand pesos or
imprisonment not exceeding ten (10) days, or both, if it be a
Regional Trial Court or a court of equivalent or higher rank;
or by a fine not exceeding two hundred pesos or
imprisonment not exceeding (1) day, or both, if it be a lower
court. CTAIHc
SEC. 2.Remedy therefrom. The person adjudged in direct

contempt by any court may not appeal therefrom, but may
avail himself of the remedies of certiorari or prohibition. The
execution of the judgment shall be suspended pending
resolution of such petition, provided such person file a bond
fixed by the court which rendered the judgment and
conditioned that he will abide by and perform the judgment
should the petition be decided against him. (emphasis and
underscoring supplied)
Failure to follow basic legal commands as prescribed by law and the rules is
tantamount to gross ignorance of the law. By accepting the exalted position of a
judge, respondent ought to have been familiar with the legal norms and precepts
as well as the procedural rules. 17
Contrary to respondent's claim, complainant has no remedy of appeal, as the

above-quoted Section 2 of Rule 71 shows. And the penalty for direct contempt if
imprisonment is imposed should not, as Section 1 of Rule 71 provides, exceed 10
days. As stated earlier, complainant was detained for 19 days or 9 days more
than the limit imposed by the Rules.
More. Respondent did not fix the bond, in violation of the same Section 2 of Rule
71, which complainant could have posted had she desired to challenge the order.
And on the same day the Order was issued, respondent ordered the confinement
of complainant to the provincial jail.
Oclarit v. Paderanga 18 instructs:
. . . [A]n order of direct contempt is not immediately

executory or enforceable. The contemner must be afforded a
reasonable remedy to extricate or purge himself of the
contempt. Thus, in the 1997 Rules of Civil Procedure, as
amended, the Court introduced a new provision granting a
remedy to a person adjudged in direct contempt by any
court. Such person may not appeal therefrom, but may avail
himself of certiorari or prohibition. In such case, the
resolution of such petition provided the contemner files a
bond fixed by the court which rendered the judgment and
should the petition be decided against him. 19 (underscoring
supplied)
Under Section 8 of Rule 140, gross ignorance of the law or procedure is classified
as a serious charge which is, under Section 11 (A), punishable by:
1.Dismissal from the service, forfeiture of all or part of the

benefits as the Court may determine, and
disqualification from reinstatement or appointment
to any public office, including government-owned
or -controlled corporations. Provided, however, That
the forfeiture of benefits shall in no case include
accrued leave credits;
2.Suspension from office without salary and other benefits

for more than three (3) but not exceeding six (6)
months; or
3.A fine of more than P20,000.00 but not exceeding

P40,000.00.
Respondent having been repeatedly penalized by this Court, with suspension

and fine, as shown by the above-listed administrative charges, the recommended
penalty of P21,000 should be increased to P30,000.
WHEREFORE, for gross ignorance of the law and procedure, Judge Sibanah
Usman is FINED in the amount of Thirty Thousand (P30,000) Pesos, with a
WARNING that a repetition of the same or similar act shall be dealt with more
severely.
SO ORDERED.
||| (Tan v. Usman, A.M. No. RTJ-11-2666, February 15, 2011)
EN BANC
[G.R. Nos. 115908. March 29, 1995.]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.

DANNY GODOY, accused-appellant.
[G.R. Nos. 115909. March 29, 1995.]
JUDGE EUSTAQUIO Z. GACOTT, JR., * complainant, vs.

MAURICIO REYNOSO, JR., and EVA PONCE DE LEON,
respondents.
SYLLABUS
1. JUDICIAL ETHICS; JUDGES; SHOULD BE PATIENT AND TOLERATE
MOMENTARY OUTBREAK OF DISAPPOINTMENT. It has been insightfully
explained and suggested that a judge will generally and wisely pass unnoticed
any mere hasty and unguarded expression of passion, or at least pass it with
simply a reproof. It is so that in every case where a judge decides for one party,
he decides against another; and oftentimes both parties are beforehand equally
confident and sanguine. The disappointment, therefore, is great, and it is not in
human nature that there should be other than a bitter feeling, which often
reaches to the judge as the cause of the supposed wrong. A judge, therefore,
ought to be patient, and tolerate everything which appears as but the momentary
outbreak of disappointment. A second thought will generally make a party
ashamed of such outbreak, and the dignity of the court will suffer none by
passing it in silence.
2. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CONTEMPT; SNIDE

REMARKS OR SARCASTIC INNUENDOES DO NOT NECESSARILY
CONSTITUTE CONTEMPT. Snide remarks or sarcastic innuendoes do not
necessarily assume that level of contumely which is actionable under Rule 71 of
the Rules of Court.
3. ID.; ID.; CONTEMPT; DUAL ASPECT. The exercise of the power to punish
for contempt has a dual aspect, primarily, the proper punishment of the guilty
party for his disrespect to the court, and, secondarily, his compulsory
performance of some act or duty required of him by the court and which he
refuses to perform.
4. ID.; ID.; ID.; ID.; CLASSIFICATIONS. Due perhaps to this twofold aspect of
the exercise of the power to punish them, contempts are classified as civil or
criminal. However, the line of demarcation between acts constituting criminal
contempt, as distinguished from civil contempt, is quite indistinct. The confusion
in attempts to classify civil and criminal contempts is due to the fact that there
are contempts in which both elements appear; or there are contempts which are
either wholly civil nor altogether criminal, but partake of the characteristics of
both; or it is also possible that the same act may constitute both a civil and
criminal contempt.
5. ID.; ID.; ID.; ID.; CRIMINAL CONTEMPT, DISTINGUISHED FROM CIVIL

CONTEMPT. A criminal contempt is conduct that is directed against the
dignity and authority of the court or a judge acting judicially; it is an act
obstructing the administration of justice which tends to bring the court into
disrepute or disrespect. On the other hand, civil contempt consists in failing to
do something ordered to be done by a court in a civil action for the benefit of the
opposing party therein and is, therefore, an offense against the party in whose
behalf the violated order is made. A criminal contempt, being directed against
the dignity and authority of the court, is an offense against organized society
and, in addition, is also held to be an offense against public justice which raises
an issue between the public and the accused, and the proceedings to punish it are
punitive. On the other hand, the proceedings to punish a civil contempt are
remedial and for the purpose of the preservation of the right of private persons.
It has been held that civil contempt is neither a felony nor a misdemeanor, but a
power of the court. It has further been stated that intent is a necessary element in
criminal contempt, and that no one can be punished for a criminal contempt
unless the evidence makes it clear that he intended to commit it. On the contrary,
there is authority indicating that since the purpose of civil contempt proceedings
is remedial, the defendant's intent in committing the contempt is immaterial.
Hence, good faith or the absence of intent to violate the court's order is not a
defense in civil contempt.
6. ID.; ID.; ID.; ID.; ID.; AS TO PURPOSE FOR WHICH POWER IS EXERCISED.
A major factor in determining whether a contempt is civil or criminal is the
purpose for which the power is exercised. Where the primary purpose is to
preserve the court's authority and to punish for disobedience of its orders, the
contempt is criminal. Where the primary purpose is to provide a remedy for an
injured suitor and to coerce compliance with an order, the contempt is civil. A
criminal contempt involves no element of personal injury. It is directed against
the power and dignity of the court; private parties have little, if any, interest in
the proceedings for punishment. Conversely, if the contempt consists in the
refusal of a person to do an act that the court has ordered him to do for the
benefit or advantage of a party to an action pending before the court, and the
contemnor is committed until he complies with the order, the commitment is in
the nature of an execution to enforce the judgment of the court; the party in
whose favor that judgment was rendered is the real party in interest in the
proceedings. Civil contempt proceedings look only to the future. And it is said
that in civil contempt proceedings, the contemnor must be in a position to purge
himself.
7. ID.; ID.; ID.; ID.; ID.; AS TO CHARACTER OF THE CONTEMPT

PROCEEDING. It has been said that the real character of the proceedings is to
be determined by the relief sought, or the dominant purpose, and the
proceedings are to be regarded as criminal when the purpose is primarily
punishment, and civil when the purpose is primarily compensatory or remedial.
Criminal contempt proceedings are generally held to be in the nature of criminal
or quasi-criminal actions. They are punitive in nature, and the Government, the
courts, and the people are interested in their prosecution. Their purpose is to
preserve the power and vindicate the authority and dignity of the court, and to
punish for disobedience of its orders. Strictly speaking, however, they are not
criminal proceedings or prosecutions, even though the contemptuous act
involved is also a crime. The proceeding has been characterized as sui generis,
partaking of some of the elements of both a civil and criminal proceeding, but
really constituting neither. In general, criminal contempt proceedings should be
conducted in accordance with the principles and rules applicable to criminal
cases, in so far as such procedure is consistent with the summary nature of
contempt proceedings. So it has been held that the strict rules that govern
criminal prosecutions apply to a prosecution for criminal contempt, that the
accused is to be afforded many of the protections provided in regular criminal
cases, and that proceedings under statutes governing them are to be strictly
construed. However, criminal proceedings are not required to take any particular
form so long as the substantial rights of the accused are preserved. Civil
contempt proceedings are generally held to be remedial and civil in their nature;
that is, they are proceedings for the enforcement of some duty, and essentially a
remedy for coercing a person to do the thing required. As otherwise expressed, a
proceeding for civil contempt is one instituted to preserve and enforce the rights
of a private party to an action and to compel obedience to a judgment or decree
intended to benefit such a party litigant. So a proceeding is one for civil
contempt, regardless of its form, if the act charged is wholly the disobedience, by
one party to a suit, of a special order made in behalf of the other party and the
disobeyed order may still be obeyed, and the purpose of the punishment is to aid
in an enforcement of obedience. The rules of procedure governing criminal
contempt proceedings, or criminal prosecutions, ordinarily are inapplicable to
civil contempt proceedings. It has been held that a proceeding for contempt to
enforce a remedy in a civil action is a proceeding in that action. Accordingly,
where there has been a violation of a court order in a civil action, it is not
necessary to docket an independent action in contempt or proceed in an
independent prosecution to enforce the order. It has been held, however, that
while the proceeding is auxiliary to the main case in that it proceeds out of the
original case, it is essentially a new and independent proceeding in that it
involves new issues and must be initiated by the issuance and service of new
process. In general, civil contempt proceedings should be instituted by an
aggrieved party, or his successor, or someone who has a pecuniary interest in the
right to be protected. In criminal contempt proceedings, it is generally held that
the State is the real prosecutor. Contempt is not presumed. In proceedings for
criminal contempt, the defendant is presumed innocent and the burden is on the
prosecution to prove the charges beyond reasonable doubt. In proceedings for
civil contempt, there is no presumption, although the burden of proof is on the
complainant, and while the proof need not be beyond reasonable doubt, it must
amount to more than a mere preponderance of evidence. It has been said that the
burden of proof in a civil contempt proceeding lies somewhere between the
criminal "reasonable doubt" burden and the civil "fair preponderance" burden.
8. ID.; ID.; ID.; ID.; ID.; CRIMINAL CONTEMPT, CONSTRUED. Under

paragraph (d) of Section 3, Rule 71 of the Rules of Court on indirect contempt,
any improper conduct tending, directly or indirectly, to impede, obstruct, or
degrade the administration of justice, constitutes criminal contempt.
9. CONSTITUTIONAL LAW; BILL OF RIGHTS; FREEDOM OF SPEECH AND

PRESS; ABUSE OF SAID RIGHTS BY OBSTRUCTING THE ADMINISTRATION
OF JUSTICE WILL SUBJECT THE ABUSER TO PUNISHMENT FOR
CONTEMPT OF COURT. A person charged with contempt of court for
making certain utterances or publishing writings which are clearly opprobrious
may not, ordinarily, escape liability therefor by merely invoking the
constitutional guaranties of freedom of speech and press. Liberty of speech and
the press must not be confused with an abuse of such liberties. Obstructing, by
means of the spoken or written word, the administration of justice by the courts
has been described as an abuse of the liberty of speech or the press such as will
subject the abuser to punishment for contempt of court.
10. ID.; ID.; ID.; PERSONS ENGAGED IN THE NEWSPAPER BUSINESS

CANNOT CLAIM ANY OTHER RIGHT THAN THAT POSSESSED BY PERSON
NOT IN THAT BUSINESS. The right of freedom of the press is only a specific
instance of the general right of freedom of speech; persons engaged in the
newspaper business cannot claim any other or greater right than that possessed
by persons not in that business.
11. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CONTEMPT; MAY BE

ADJUDGED IN POST-LITIGATION PUBLICATIONS. In In re Brillantes, 42
O.G. 59 and in In re Almacen, L-27654, February 18, 1970, 31 SCRA 562, decided
by this Court, the general rule that there can be no contempt in post-litigation
publications is not necessarily all-embracing under certain situations. From the
shift in judicial approach in Brillantes to the position announced in Almacen, it can
inevitably be concluded that the termination of the case is not a guaranty of
immunity from a contempt charge for publications or utterances which are
defamatory or libelous, depending on the purpose and effects thereof. In other
words, one may still be cited for contempt of court even after a case has ended,
where such punitive action is necessary to protect the court and its dignity and to
vindicate it from acts or conduct intended or calculated to degrade, ridicule or
bring the court into disfavor and thereby erode or destroy public confidence in
that court.
12. ID.; ID.; ID.; ID.; RATIONALE. The rationale for making a qualification to
the rule generally considered as the American doctrine, which rule as herein
qualified we now adopt and refer to as the Philippine doctrine on this issue, is
profoundly and eloquently explicated by Justice Moran in Alarcon, to wit: It is
true that the Constitution guarantees the freedom of speech and of the press. But
license or abuse of that freedom should not be confused with freedom in its true
sense. Well-ordered liberty demands no less unrelaxing vigilance against abuse
of the sacred guaranties of the Constitution than the fullest protection of their
legitimate exercise. As important as is the maintenance of a free press and the
free exercise of the rights of the citizens is the maintenance of a judiciary
unhampered in its administration of justice and secure in its continuous
enjoyment of public confidence. "The administration of justice and freedom of
the press, though separate and distinct are equally sacred, and neither should be
violated by the other. The press and the courts have correlative rights and duties
and should cooperate to uphold the principles of the Constitution and the laws,
from which the former receives its prerogatives and the latter its jurisdiction."
(U.S. vs. Sullens, 36 Fed., 2d., 230.) Democracy cannot long endure in a country
where liberty is grossly misused any more than where liberty is illegitimately
abridged. . . .
13. CONSTITUTIONAL LAW; BILL OF RIGHTS; FREEDOM OF PRESS;

CONSTRUED. The liberty of the press consists in the right to publish with
impunity the truth, with good motives and for justifiable ends, whether it
respects governments or individuals; the right freely to publish whatever the
citizen may please and to be protected against any responsibility for so doing,
except in so far as such publications, from their blasphemy, obscenity, or
scandalous character, may be a public offense, or as by their falsehood and
malice they may injuriously affect the standing, reputation, or pecuniary
interests of individuals. The true liberty of the press is amply secured by
permitting very man to publish his opinions; but it is due to the peace and
dignity of society to inquire into the motives of such publications, and to
distinguish between those which are meant for use and reformation, and with an
eye solely to the public good, and those which are intended merely to delude and
defame. To the late description, it is impossible that any good government
should afford protection and impunity.
14. ID.; ID.; ID.; ID. The liberty of the press means that anyone can publish
anything he pleases, but he is liable for the abuse of this liberty. If he does this by
scandalizing the courts of his country, he is liable to be punished for contempt. In
other words, the abuse of the privilege consists principally in not telling the
truth. There is a right to publish the truth, but no right to publish falsehood to
the injury of others with impunity. It, therefore, does not include the right to
malign the courts, to libel and slander and utter the most flagrant and indecent
calumnies about the court and its officers, nor to invade the sanctuaries of the
temples of justice. Such practices and such miscreants ought to be condemned,
and the courts would deserve condemnation and abolition if they did not
vigorously and fearlessly punish such offenders. Such practices are an abuse of
the liberty of the press, and if the slander relates to the courts, it concerns the
whole public and is consequently punishable summarily as a criminal contempt.
It is therefor the liberty of the press that is guaranteed, not the licentiousness. It is
the right to speak the truth, not the right to bear false witness against your
neighbor.
15. REMEDIAL LAW; SPECIAL CIVIL ACTION; CONTEMPT; CRITICISM OF

COURT'S RULING OR DECISION CONFINED TO FACTS, GENERALLY NOT
CONTEMPTUOUS. Generally, criticism of a court's rulings or decisions is not
improper, and may not be restricted after a case has been finally disposed of and
has ceased to be pending. So long as critics confine their criticisms to facts and
base them on the decisions of the court, they commit no contempt no matter how
severe the criticism may be; but when they pass beyond that line and charge that
judicial conduct was influenced by improper, corrupt, or selfish motives, or that
such conduct was affected by political prejudice or interest, the tendency is to
create distrust and destroy the confidence of the people in their courts.
16. ID.; ID.; ID.; POST-LITIGATION PUBLICATION; WHEN CONSIDERED

CONTEMPTUOUS. In Philippine rule, therefore, is that in case of a post-
litigation newspaper publication, fair criticism of the court, its proceedings and
its members, are allowed. However, there may be a contempt of court, even
though the case has been terminated, if the publication is attended by either of
these two circumstances: (1) where it tends to bring the court into disrespect or,
in other words, to scandalize the court; or (2) where there is a clear and present
danger that the administration of justice would be impeded. And this brings us
to the familiar invocation of freedom of expression usually resorted to as a
defense in contempt proceedings.
17. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT OF FULL SPEECH;

MUST NOT BE USED TO IMPAIR EFFICIENCY OF COURTS OR PUBLIC
RESPECT THEREFOR. The right of free speech is guaranteed by the
Constitution and must be sacredly guarded, but than an abuse thereof is
expressly prohibited by that instrument and must not be permitted to destroy or
impair the efficiency of the courts of the public respect therefor and the
confidence therein.
18. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CONTEMPT; POST-

LITIGATION PUBLICATION, CLEAR AND PRESENT DANGER TO THE
ADMINISTRATION OF JUSTICE; INHERENT TENDENCY TO INFLUENCE
OR OBSTRUCT THE ADMINISTRATION OF JUSTICE. To constitute
contempt, criticism of a past action of the court must pose a clear and resent
danger to a fair administration of justice, that is, the publication must have an
inherent tendency to influence, intimidate, impede, embarrass, or obstruct the
court's administration of justice. It is not merely a private wrong against the
rights of litigants and judges, but a public wrong, a crime against the State, to
undertake by libel or slander to impair confidence in the judicial functions.
19. ID.; ID.; ID.; GENERALLY, NO OTHER COURT THAN THE ONE
CONDEMNED WILL PUNISH A GIVEN CONTEMPT. In whatever context it
may rise, contempt of court involves the doing of an act, or the failure to do an
act, in such a manner as to create an affront to the court and the sovereign
dignity with which it is clothed. As a matter of practical judicial administration,
jurisdiction has been felt properly to rest in only one tribunal at a time with
respect to a given controversy. Partly because of administrative considerations,
and partly to visit the full personal effect of the punishment on a contemnor, the
rule has been that no other court than the one contemned will punish a given
contempt.
20. ID.; ID.; ID.; ID.; RATIONALE. The rationale that is usually advanced for
the general rule that the power to punish for contempt rests with the court
contemned is that contempt proceedings ar sui generis and are triable only by the
court against whose authority the contempts are charged; the power to punish
for contempt exists for the purpose of enabling a court to compel due decorum
and respect in its presence and due obedience to its judgments, orders and
processes; and in order that a court may compel obedience to its orders, it must
have the right to inquire whether there has been any disobedience thereof, for to
submit the question of disobedience to another tribunal would operate to
deprive the proceeding of half its efficiency.
21. ID.; ID.; ID.; ID.; EXCEPTIONS. There are, however, several
jurisprudentially and statutorily recognized exceptions to the general rule, both
under Philippine and American jurisprudence, viz.: 1. Indirect contempt
committed against an inferior court may also be tried by the proper regional trial
court, regardless of the imposable penalty. 2. Indirect contempt against the
Supreme Court may be caused to be investigated by a prosecuting officer and the
charge may be filed in and tried by the regional trial court, or the case may be
referred to it for hearing and recommendation where the charge involves
questions of fact. 3. In People vs. Alarcon, et al., supra, this Court ruled that "in the
interrelation of the different courts forming our integrated judicial system, one
court is not an agent or representative of another and may not, for this reason,
punish contempts in vindication of thee authority and decorum which are not its
own. The appeal transfers the proceedings to the appellate court, and this last
court becomes thereby charged with the authority to deal with contempts
committed after the perfection of the appeal." 4. A court may punish contempts
committed against a court or judge constituting one of its parts or agencies, as in
the case of a court composed of several coordinate branches or divisions. 5.
Where the singular jurisdiction of a given matter has ben transferred from the
contemned court to another court. 6. A new court wholly replacing a prior court
has jurisdiction to punish for violations of orders entered by its predecessor,
although where the successor court is created by a statute which does not
extinguish jurisdiction in the predecessor, an affirmative transfer of jurisdiction
before the contempt occurs is necessary to empower the successor court to act. 7.
Transfers of jurisdiction by appellate review have produced numerous instances
where contempt against the trial court has ben punished in the appellate court,
and vice versa. Some appellate courts have taken the view that a contempt
committed after an appeal is taken is particularly contemptuous of the appellate
court because of the tendency of such contempts to upset the status quo or
otherwise interfere with the jurisdiction of such court. 8. A judge may disqualify
himself, or be disqualified, on a contempt hearing or in the main case, which
circumstance may require a transfer of jurisdiction, but where a judge is
disqualified only in the main case, because of matters which do not disqualify
him in a contempt proceeding, the regular judge should sit in the contempt
proceeding. Likewise, where the regular judge is absent or otherwise unavailable
and an order is entered by another judge and made returnable to the proper
court, the regular judge may punish for violations of orders so entered. 9. Where
the same act is a contempt against two or more courts, it is no bar to contempt
against the other. 10. While professional disciplinary proceedings have been
resorted to as a punishment for contempt, the more recent view is that
punishment is of secondary importance to thee need to protect the courts and the
people from improper professional practice. To the substantial extent that
disciplinary action remains a punishment, disciplinary measures imposed by
another court than the one contemned furnish an exception to the rule against
punishing for contempt of another court. 11. Some contemptuous acts are also
crimes, usually misdemeanors, which are often punishable in other courts than
those against which the contemptuous act was done. 12. Finally, a conviction for
contempt proceedings in one of them that there is also a contempt against
another court has been allowed to stand on the basis that the failure of the
defendant to make timely objection operated as a waiver of the right to be tried
before the court actually contemned.
22. ID.; ID.; ID.; WHERE THE ENTIRE CASE HAS ALREADY BEEN
APPEALED, JURISDICTION TO PUNISH FOR CONTEMPT RESTS WITH THE
APPELLATE COURT OR WHERE THERE IS A TENDENCY TO AFFECT THE
STATUS QUO OR INTERFERE WITH THE JURISDICTION OF THE
APPELLATE COURT. The rule, as now accepted and deemed applicable to
the present incident, is that where the entire case has already been appealed,
jurisdiction to punish for contempt rests with the appellate court where the
appeal completely transfers the proceedings thereto or where there is a tendency
to affect the status quo or otherwise interfere with the jurisdiction of the appellate
court. Accordingly, this Court having acquired jurisdiction over the complaint
for indirect contempt against herein respondents, it has taken judicial cognizance
thereof and has accordingly resolved the same.
23. ID.; ID.; ID.; POWER TO PUNISH FOR CONTEMPT DOES NOT PREVENT
A PROSECUTION FOR LIBEL EITHER BEFORE, DURING OR AFTER
INSTITUTION OF CONTEMPT PROCEEDINGS. The availability, however,
of the power to punish for contempt does not and will not prevent a prosecution
for libel, either before, during, or after the institution of contempt proceedings. In
other words, the fact that certain contemptuous conduct likewise constitutes an
indictable libel against the judge of the court contemned dos not necessarily
require him to bring a libel action, rather than relying on contempt proceedings.
24. ID.; ID.; ID.; ID.; WHERE AN ACT CONSTITUTES CONTEMPT AND IS
PUNISHABLE ALSO BY LIBEL, THE OUTRAGED COURT IS NOT
PREVENTED FROM PUNISHING FOR CONTEMPT. The fact that an act
constituting a contempt is also criminal and punishable by indictment or other
method of criminal prosecution dos not prevent the outrage court from
punishing the contempt. This principle stems from the fundamental doctrine that
an act may be punished as a contempt even though it has been punished as a
criminal offense. The defense of having once been in jeopardy, based on a
conviction for the criminal offense, would not lie in bar of the contempt
proceedings, on the proposition that a contempt may be an offense against the
dignity of a court and, at the same time, an offense against the peace and dignity
of the people of the State. But more importantly, adherence to the American
doctrine by insisting that a judge should instead file an action for libel will
definitely give rise to an absurd situation and may even cause more harm than
good.
25. ID.; ID.; ID.; ID.; REASON. Hence, the suggestion that judges who are
unjustly attacked have a remedy in an action for libel, has been assailed as being
without rational basis in principle. In the first place, the outrage is not directed to
the judge as a private individual but to the judge as such or to the court as an
organ of the administration of justice. In the second place, public interests will
gravely suffer where the judge, as such, will, from time to time, be pulled down
and disrobed of his judicial authority to face his assailant on equal grounds and
prosecute cases in his behalf as a private individual. The same reasons of public
policy which exempt a judge from civil liability in the exercise of his judicial
functions, most fundamental of which is the policy to confine his time
exclusively to the discharge of his public duties, applies here with equal, if not
superior, force.
26. ID.; ID.; ID.; POWER TO PUNISH FOR CONTEMPT, SEPARATE AND
DISTINCT FROM THE POWER TO DISBAR. The basic rule here is that the
power to punish for contempt and the power to disbar are separate and distinct,
and that the exercise of one does not exclude the exercise of the other. A
contempt proceeding for misbehavior in court is designed to vindicate the
authority of the court; on the other hand, the object of a disciplinary proceeding
is to deal with the fitness of the court's officer to continue in that office, to
preserve and protect the court and the public from the official ministrations of
persons unfit or unworthy to hold such office. The principal purpose of the
exercise of the power to cite for contempt is to safeguard the functions of the
court and should thus be used sparingly on a preservative and not on the
vindictive principle. The principal purpose of the exercise of disciplinary
authority by the Supreme Court is to assure respect for orders os such court by
attorneys who, as much as judges, are responsible for the orderly administration
of justice.
28. ID.; ACTIONS; IMPOSITION OF FINE AS PENALTY IN CONTEMPT

PROCEEDINGS, NOT RES JUDICATA TO A SUBSEQUENT CHARGE FOR
UNPROFESSIONAL CONDUCT; REASON. The imposition of a fine as a
penalty in a contempt proceeding is not considered res Judicata to a subsequent
charge for unprofessional conduct. In the same manner, an attorney's conviction
for contempt was not collaterally estopped by reason of a subsequent disbarment
proceeding in which the court found in his favor on essentially the same facts
leading to conviction. It has likewise been the rule that a notice to a lawyer to
show cause why he should not be punished for contempt cannot be considered
as a notice to show cause why he should not be suspended from the practice of
law, considering that they have distinct objects and for each of them a different
procedure is established. Contempt of court is governed by the procedures laid
down under Rule 71 of the Rules of Court, whereas disciplinary actions in the
practice of law are governed by Rules 138 and 139 thereof.
29. ID.; SUPREME COURT; WITH INHERENT AUTHORITY TO PUNISH FOR

CONTEMPT AND TO DISCIPLINE LAWYERS. Although apparently
different in legal bases, the authority to punish for contempt and to discipline
lawyers are both inherent in the Supreme Court and are equally incidents of the
court's basic power to oversee the proper administration of justice and the
orderly discharge of judicial functions. (Zaldivar vs. Sandiganbayan, et al.G.R. Nos.
79690-79707, October 7, 1988, 166 SCRA 316)
DECISION
REGALADO, J p:
For separate resolution, as an incident arising from these criminal

cases under automatic review by the court, is a complaint 1 filed by Judge
Eustaquio Z. Gacott, Jr. of the Regional Trial Court of Palawan and Puerto
Princesa City, Branch 47, to cite for indirect contempt Mauricio Reynoso, Jr.,
a columnist, and Eva P. Ponce de Leon, publisher and chairman of the
editorial board, respectively, of the Palawan Times. His Honor's plaint is
based on an article written by respondent Reynoso, Jr. in his column, "On
the Beat," and published in the July 20, 1994 issue of said newspaper which
is of general circulation in Puerto Princesa City. cdll
The pertinent portions of the article complained of are hereunder
reproduced, with the alleged contemptuous statements italicized for ready
identification as the particulars equivalent to the innuendo in a libel charge:
Isang maalab na issues (sic) pa ay ang DEATH THREATS
laban kono kay Judge Eustaquio Gacott, Jr. ng mga pamilya
ng kanyang sinentensiyahan ng Double Death Penalty.
Sinabi ni Wilmar Godoy sa DWRM programa na wala silang
pagbabantang ginawa umano, at hindi nila ito kailan man
isinaisip. Umaasa na lamang sila sa magiging resulta ng
review ng Korte Suprema. Ayon naman kay Gacott sa
kanyang interview sa DYPR ay totoong pinagbabantaan siya
ng mga Godoy. Kaya ayon marami siyang Security na armado,
in full battle gear. Kung totoo ito, bakit hindi niya kasuhan
ang mga ito? Ito rin ang katanungan ni Mr. Tony Omaga
Diaz, ang station manager ng DYPR. O bale ba gumawa siya
ng sariling MULTO pagkatapos ay takot na takot siya sa multong
kanyang ginawa.
Usap-usapan pa rin ang kaso ni Godoy. Ito raw ay isang

open book maging sa kanyang mga co-teachers sa Pulot na
nagli-live in si Godoy at ang babaing si Mia Taha. Matagal
na ang kanilang ugnayan. Meron ding "balita" ewan kung
totoo, na noong si Godoy daw ay nasa Provincial Jail pa ay
dinadalaw siya ni Taha at kumakain pa sila sa labas kasama ang
isang Provincial Guard. Ito rin ang dahilan kung bakit
ipinagpilitan ni Judge Gacott na madala kaagad sa Muntinlupa sa
National Bilibid Prisons si Godoy kahit na ang kaso ay naka-apela
pa.
xxx xxx xxx

Pero mayroon payo si Atty. Telesforo Paredes, Jr. sa mga
mamamayan ng Palawan, mag-ingat kayo sa paglalakad at
baka kung hindi kayo madapa ay madulas daw kayo. Dahil
ayon daw kay Judge Gacott, base sa kanyang interview sa
Magandang Gabi Bayan, "Tagilid na raw ang mundo.
Maraming nagpapatunay daw dito, maski sa kapitolyo."
Joke lang. Pero isang warning din sa may mga nobya, na mag-
ingat sa pag-break sa inyong girlfriend, dahil baka mademanda
kayo at masentensiyahan ng double death penalty, lalo na kung
kay Judge Gacott, dahil alam na ninyo, tagilid ang laban diyan.
The complaint avers that the article tends to impede, obstruct,
belittle, downgrade and degrade the administration of justice; that the article
contains averments which are disrespectful, discourteous, insulting,
offensive and derogatory; that it does not only cast aspersions on the
integrity and honesty of complainant as a judge and on his ability to
administer justice objectively and impartially, but is an imputation that he is
biased and he prejudges the cases filed before him; and that the article is sub
judice because it is still pending automatic review. LibLex
Respondent Mauricio Reynoso, Jr. contends in his Comment 2 that
his article does not intend to impede nor obstruct the administration of
justice because the same was published after complainant had promulgated
his decision in the case; that such publication will not affect or influence the
review by the Supreme Court of the criminal case, considering that the
Palawan Times is circulated only in the City of Puerto Princesa and some
parts of Palawan; that the comments made therein were made in good faith
and in the exercise of the freedom of expression and of the press; that while
the article may contain unfavorable comments about complainant, it cannot
be considered as having the tendency to degrade or impede the
administration of justice; and that the complaint, which is for contempt of a
judge of a regional trial court, was erroneously filed with the Supreme Court
contrary to Section 4, Rule 71 of the Rules of Court.
Respondent Eva P. Ponce de Leon, in her Comment 3 and

Supplemental Comment 4 asserts that the article is merely in reaction to the
television interview given by complainant in the show, "Magandang Gabi
Bayan," last June 18, 1994 wherein the latter defended his decision in
Criminal Cases Nos. 11640-41, entitled "People vs. Godoy;" that the article is
no longer sub judice as the same was published only after complainant had
rendered his decision and had already lost jurisdiction over the case; that the
article cannot be considered contemptuous and defamatory in the absence of
a clear and present danger that it will tend directly or indirectly to impede,
obstruct, or ridicule the administration of justice; that it constitutes a valid
exercise of the constitutionally guaranteed freedom of the press; that a
reading of the subject article in its entirety will show that the same does not
constitute contempt but, at most, is merely a fair criticism which did not
intend to malign nor place him in disrepute in the performance of his
functions; and that respondent Ponce de Leon cannot be held liable for
contempt because she did not have either actual knowledge of, or personal
connection with, the authorship or publication of the allegedly
contemptuous article, since she had just returned from the United States
when the same was published.
On the issue of whether the specified statements complained of are
contumacious in nature, we are inclined, based on an overall perusal and
objective analysis of the subject article, to hold in the negative. We have read
and reread the article in its entirety and we are fully convinced that what is
involved here is a situation wherein the alleged disparaging statements have
been taken out of context. If the statements claimed to be contumacious had
been read with contextual care, there would have been no reason for this
contempt proceeding.
In our aforestated evaluation, we were sufficiently persuaded to
favorably consider the following explanation of respondent Ponce de Leon
in her Supplemental Comment:
On the other hand, a reading of the subject article in its
entirety will show that the same does not constitute
contempt, but at most, merely constitutes fair criticism.
The first portion of the article reads:
"Isang maalab na issues (sic) pa ay ang DEATH

THREATS laban kono kay Judge Eustaquio Gacott,
Jr. ng mga pamilya ng kanyang sinentensiyahan ng
Double Death Penalty. Sinabi ni Wilmar Godoy sa
DWRM programa na wala silang pagbabantang
ginawa umano, at hindi nila ito kailan man
isinaisip. Ayon naman kay Gacott sa kanyang
interview sa DYPR ay totoong pinagbantaan siya
ng mga Godoy. Kaya ayon marami siyang Security
na armado, in full battle gear. Kung totoo ito, bakit
hindi niya kasuhan ang mga ito? Ito rin ang
katanungan ni Mr. Tony Omaga Diaz, ang station
manager ng DYPR. O bale ba gumawa siya ng
sariling MULTO pagkatapos ay takot na takot siya
sa multong kanyang ginawa."
The foregoing does not even deal with the merits of the case,
but with the public accusations being made by Complainant
that he is being given death threats by the family of the
accused, Danny Godoy. The article only makes a justifiable
query as to why Complainant does not file the appropriate
charges if his accusations are true.
"Usap-usapan pa rin ang kaso ni Godoy. Ito raw ay

isang open book maging sa kanyang mga co-
teachers sa Pulot na nagli-live in si Godoy at ang
babaing si Mia Taha. Matagal na ang kanilang
ugnayan. Meron ding "balita" ewan kung totoo, na
noong si Godoy daw ay nasa Provincial Jail pa ay
dinadalaw siya ni Taha at kumakain pa sila sa labas
kasama ang isang Provincial Guard. Ito rin ang
dahilan kung bakit ipinagpilitan ni Judge Gacott na
madala kaagad sa Muntinlupa sa National Bilibid
Prisons si Godoy kahit na ang kaso ay naka-apela
pa. (Emphasis supplied)
The foregoing is merely a report of rumors regarding the

accused Danny Godoy. They are not presented as facts by
respondent Mauricio Reynoso, Jr. In fact, he even goes to the
extent of acknowledging that he himself does not know if
the rumors are true or not. LLpr
The subject article then offers the following analysis:
"Malaking epekto ang desisyon ng Korte Suprema

sa dalawang tao, kay Danny Godoy at Judge
Gacott. Kung babaliktarin ng Supreme Court ang
decision ni Gacott, lalaya si Godoy, si Gacott naman
ang masisira, ang kanyang aspirations na maitaas
sa Court of Appeals at eventually makasama sa
mga miyembro ng korte suprema ng bansa. Kung
papaboran naman si Gacott ay sigurado na ang
kamatayan ni Godoy, at double pa pero si Gacott
maitataas pa ang puwesto. Tayo naman, hintay
lamang tayo ng ano mang magiging developments
ng kaso."
The foregoing is nothing more than a fair analysis. For

indeed, if the Honorable Court affirms the Decision of
Complainant, the accused Danny Godoy would be meted
the death sentence. On the other hand, if the Decision is
reversed, this may adversely affect the aspirations of
Complainant to be promoted to the Court of Appeals, and
eventually to the Honorable Court.
Finally, the subject article reads:
"Pero mayroong payo si Atty. Telesforo Paredes, Jr.

sa mga mamamayan ng Palawan, mag-ingat kayo
sa paglalakad at baka kung hindi kayo madapa ay
madulas daw kayo. Dahil ayon daw kay Judge
Gacott, base sa kanyang interview sa Magandang
Gabi Bayan, "Tagilid na raw ang mundo. Maraming
nagpapatunay daw dito, maski sa kapitolyo." Joke
lang. Pero isang warning din sa may mga nobya, na
mag-ingat sa pag-break sa inyong girlfriend, dahil
baka mademanda kayo at masentensyahan ng
double death penalty, lalo na kung kay Judge
Gacott, dahil alam na ninyo, tagilid ang laban
diyan."
Again, the subject article merely reports what Atty. Telesforo

Paredes, Jr. allegedly said. But more importantly, the
foregoing is merely a reaction not so much to Complainant's
Decision, but to the public statements made by Complainant
in the national television show "Magandang Gabi Bayan."
Snide remarks or sarcastic innuendoes do not necessarily assume

that level of contumely which is actionable under Rule 71 of the Rules of
Court. Neither do we believe that the publication in question was intended
to influence this Court for it could not conceivably be capable of doing so.
The article has not transcended the legal limits for editorial comment and
criticism. Besides, it has not been shown that there exists a substantive evil
which is extremely serious and that the degree of its imminence is so
exceptionally high as to warrant punishment for contempt and sufficient to
disregard the constitutional guaranties of free speech and press.
It has been insightfully explained and suggested that a judge will
generally and wisely pass unnoticed any mere hasty and unguarded
expression of passion, or at least pass it with simply a reproof. It is so that in
every case where a judge decides for one party, he decides against another;
and oftentimes both parties are beforehand equally confident and sanguine.
The disappointment, therefore, is great, and it is not in human nature that
there should be other than a bitter feeling, which often reaches to the judge
as the cause of the supposed wrong. A judge, therefore, ought to be patient,
and tolerate everything which appears as but the momentary outbreak of
disappointment. A second thought will generally make a party ashamed of
such outbreak, and the dignity of the court will suffer none by passing it in
silence. 5
Prescinding from the foregoing adjudgment, the Court observes
that there are two primary issues presented in this incident which deserve a
more extended disquisition, firstly, because of their importance and frequent
involvement in contempt proceedings filed in the courts, and, secondly, by
reason of the fact that there are numerous and variant pronouncements on
the subject of contempt which need to be clarified. The principal issues are
(1) whether or not there can be contempt of court in case of post-litigation
statements or publications; and (2) which court has jurisdiction over a
contempt committed against the trial court while the case is pending on
appeal. Other cognate and related issues must also be discussed so as to
provide judicial guidance on the present state of our statutory and case laws
thereon. Cdpr
Before we go into a more intensive analysis of said issues, however,
it may be beneficial for purposes thereof to preliminarily revisit and
expound on the nature and implications of a special civil action for contempt
or of any initiatory pleading therefor filed as an incident in the main case.
That exercise will further explain and justify our disposition of the contempt
charge herein.
I
Prefatorial Considerations
The exercise of the power to punish for contempt has a dual aspect,
primarily, the proper punishment of the guilty party for his disrespect to the
court, and, secondarily, his compulsory performance of some act or duty
required of him by the court and which he refuses to perform. Due perhaps
to this twofold aspect of the exercise of the power to punish them, contempts
are classified as civil or criminal. 6 However, the line of demarcation
between acts constituting criminal contempt, as distinguished from civil
contempt, is quite indistinct. The confusion in attempts to classify civil and
criminal contempts is due to the fact that there are contempts in which both
elements appear; or there are contempts which are neither wholly civil nor
altogether criminal, but partake of the characteristics of both; or it is also
possible that the same act may constitute both a civil and criminal contempt.
A. As to the Nature of the Offense.
A criminal contempt is conduct that is directed against the dignity
and authority of the court or a judge acting judicially; it is an act obstructing
the administration of justice which tends to bring the court into disrepute or
disrespect. 7 On the other hand, civil contempt consists in failing to do
something ordered to be done by a court in a civil action for the benefit of
the opposing party therein and is, therefore, an offense against the party in
whose behalf the violated order is made. 8
A criminal contempt, being directed against the dignity and

authority of the court, is an offense against organized society and, in
addition, is also held to be an offense against public justice which raises an
issue between the public and the accused, and the proceedings to punish it
are punitive. On the other hand, the proceedings to punish a civil contempt
are remedial and for the purpose of the preservation of the right of private
persons. It has been held that civil contempt is neither a felony nor a
misdemeanor, but a power of the court. 9
It has further been stated that intent is a necessary element in
criminal contempt, and that no one can be punished for a criminal contempt
unless the evidence makes it clear that he intended to commit it. On the
contrary, there is authority indicating that since the purpose of civil
contempt proceedings is remedial, the defendant's intent in committing the
contempt is immaterial. Hence, good faith or the absence of intent to violate
the court's order is not a defense in civil contempt. 10
B. As to the Purpose for which the Power is Exercised
A major factor in determining whether a contempt is civil or
criminal is the purpose for which the power is exercised. Where the primary
purpose is to preserve the court's authority and to punish for disobedience
of its orders, the contempt is criminal. Where the primary purpose is to
provide a remedy for an injured suitor and to coerce compliance with an
order, the contempt is civil. A criminal contempt involves no element of
personal injury. It is directed against the power and dignity of the court;
private parties have little, if any, interest in the proceedings for punishment.
Conversely, if the contempt consists in the refusal of a person to do an act
that the court has ordered him to do for the benefit or advantage of a party
to an action pending before the court, and the contemnor is committed until
he complies with the order, the commitment is in the nature of an execution
to enforce the judgment of the court; the party in whose favor that judgment
was rendered is the real party in interest in the proceedings. Civil contempt
proceedings look only to the future. And it is said that in civil contempt
proceedings, the contemnor must be in a position to purge himself. 11
C. As to the Character of the Contempt Proceeding
It has been said that the real character of the proceedings is to be
determined by the relief sought, or the dominant purpose, and the
proceedings are to be regarded as criminal when the purpose is primarily
punishment, and civil when the purpose is primarily compensatory or
remedial. 12
Criminal contempt proceedings are generally held to be in the
nature of criminal or quasi-criminal actions. They are punitive in nature, and
the Government, the courts, and the people are interested in their
prosecution. Their purpose is to preserve the power and vindicate the
authority and dignity of the court, and to punish for disobedience of its
orders. Strictly speaking, however, they are not criminal proceedings or
prosecutions, even though the contemptuous act involved is also a crime.
The proceeding has been characterized as sui generis, partaking of some of
the elements of both a civil and criminal proceeding, but really constituting
neither. In general, criminal contempt proceedings should be conducted in
accordance with the principles and rules applicable to criminal cases, in so
far as such procedure is consistent with the summary nature of contempt
proceedings. So it has been held that the strict rules that govern criminal
prosecutions apply to a prosecution for criminal contempt, that the accused
is to be afforded many of the protections provided in regular criminal cases,
and that proceedings under statutes governing them are to be strictly
construed. However, criminal proceedings are not required to take any
particular form so long as the substantial rights of the accused are preserved.
13
Civil contempt proceedings are generally held to be remedial and
civil in their nature; that is, they are proceedings for the enforcement of
some duty, and essentially a remedy for coercing a person to do the thing
required. As otherwise expressed, a proceeding for civil contempt is one
instituted to preserve and enforce the rights of a private party to an action
and to compel obedience to a judgment or decree intended to benefit such a
party litigant. So a proceeding is one for civil contempt, regardless of its
form, if the act charged is wholly the disobedience, by one party to a suit, of
a special order made in behalf of the other party and the disobeyed order
may still be obeyed, and the purpose of the punishment is to aid in an
enforcement of obedience. The rules of procedure governing criminal
contempt proceedings, or criminal prosecutions, ordinarily are inapplicable
to civil contempt proceedings. It has been held that a proceeding for
contempt to enforce a remedy in a civil action is a proceeding in that action.
Accordingly, where there has been a violation of a court order in a civil
action, it is not necessary to docket an independent action in contempt or
proceed in an independent prosecution to enforce the order. It has been
held, however, that while the proceeding is auxiliary to the main case in that
it proceeds out of the original case, it is essentially a new and independent
proceeding in that it involves new issues and must be initiated by the
issuance and service of new process. 14
In general, civil contempt proceedings should be instituted by an
aggrieved party, or his successor, or someone who has a pecuniary interest
in the right to be protected. In criminal contempt proceedings, it is generally
held that the State is the real prosecutor. 15
Contempt is not presumed. In proceedings for criminal contempt,
the defendant is presumed innocent and the burden is on the prosecution to
prove the charges beyond reasonable doubt. In proceedings for civil
contempt, there is no presumption, although the burden of proof is on the
complainant, and while the proof need not be beyond reasonable doubt, it
must amount to more than a mere preponderance of evidence. It has been
said that the burden of proof in a civil contempt proceeding lies somewhere
between the criminal "reasonable doubt" burden and the civil "fair
preponderance" burden. 16
On the basis of the foregoing legal principles which are now well
settled, it can be safely concluded that under paragraph (d) of Section 3, Rule
71 of the Rules of Court on indirect contempt, any improper conduct
tending, directly or indirectly, to impede, obstruct, or degrade the
administration of justice, constitutes criminal contempt. LibLex
II
Whether or not Post-Litigation Publications can be the Subject of Contempt
Proceedings
A. Effect of Freedom of Speech and Press Guaranties
In the case of In re Sotto, 17 this Court had the opportunity to define
the relation between the courts and the press, quoting therein the statements
made by Judge Holmes in U.S. vs. Sullen, 18 thus:
The administration of justice and the freedom of the press,
though separate and distinct, are equally sacred, and neither
should be violated by the other. The press and the courts
have correlative rights and duties and should cooperate to
uphold the principles of the Constitution and laws, from
which the former receives its prerogative and the latter its
jurisdiction. The right of legitimate publicity must be
scrupulously recognized and care taken at all times to avoid
impinging upon it. In a clear case where it is necessary in
order to dispose of judicial business unhampered by
publications which reasonably tend to impair the
impartiality of verdicts, or otherwise obstruct the
administration of justice, this Court will not hesitate to
exercise its undoubted power to punish for contempt. This
Court must be permitted to proceed with the disposition of
its business in an orderly manner free from outside
interference obstructive of its constitutional functions. This
right will be insisted upon as vital to an impartial court, and,
as a last resort, as an individual exercises the right of self-
defense, it will act to preserve its existence as an
unprejudiced tribunal.
Hence, a person charged with contempt of court for making certain

utterances or publishing writings which are clearly opprobrious may not,
ordinarily, escape liability therefor by merely invoking the constitutional
guaranties of freedom of speech and press. Liberty of speech and the press
must not be confused with an abuse of such liberties. Obstructing, by means
of the spoken or written word, the administration of justice by the courts has
been described as an abuse of the liberty of speech or the press such as will
subject the abuser to punishment for contempt of court.
Guaranties of free speech and a free press, as they appear in the
Constitution, are frequently couched so as to impute responsibility for any
abuse of the privilege, and it is sometimes recognized that with respect to
whether an allegedly scandalous publication or utterance is to be treated as a
contempt, a line must be drawn between those speeches or writings which
are protected by the privilege of free speech and a free press and those
which constitute an abuse of it.
The right of freedom of the press is only a specific instance of the
general right of freedom of speech; persons engaged in the newspaper
business cannot claim any other or greater right than that possessed by
persons not in that business. 19
B. Different Doctrines or Schools of Thought
In the case of In re Francisco Brillantes, 20 Justice Perfecto explained
in his dissenting opinion that "as to whether contempt may be committed for
criticising a tribunal after the same has rendered decision or taken final
action on a matter which is the subject of criticism, there are two schools of
thought represented, respectively, by what we may call the English doctrine
and the American doctrine, the first for the affirmative and the last one for
the negative. The question now is to determine which of the two doctrines is
more conformable to reason and justice and, therefore, should be adopted
and applied by our tribunals.
1. The English Doctrine

According to Justice Perfecto, the rule in England is that there can
be contempt of court even after the case has been terminated. He then
proceeded to ramify:
In England comments upon the court's action in a concluded
case, where libelous or calculated to bring the court into
disrepute, were freely punishable as contempt under the
early common law. Distinction between pending and
concluded matters does not seem to have been made. Any
comment impairing the dignity of the court was punishable
as contempt regardless of the time at which made. LLjur
xxx xxx xxx
The whole theory of the early common law of contempt is
admirably delivered by Wilmot, J., in King vs. Almon, . . . .
The publication there complained of was a volume
containing a diatribe against Lord Mansfield for allowing an
amendment of pleading as of course, and apparently from
corrupt motives, in a concluded case, and further charging
him with having introduced a practice to defeat the efficacy
of the writ of habeas corpus. It is there said: "The
arraignment of the justice of the judges is arraigning the
King's justice; it is an impeachment of his wisdom and
goodness in the choice of his judges, and excites in the mind
of the people a general dissatisfaction with all judicial
determinations, and indisposes their minds to obey them;
and, whenever men's allegiance to the laws is so
fundamentally shaken, it is the most fatal and most
dangerous obstruction of justice, and, in my opinion, calls
for a more rapid and immediate redress than any other
obstruction whatever not for the sake of the judges as
private individuals, but because they are the channels by
which the Kings' justice is conveyed to the people. To be
impartial, and to be universally thought so, are both
absolutely necessary for giving justice that free, open, and
uninterrupted current which it has for many ages found all
over this Kingdom, and which so eminently distinguishes
and exalts it above all nations upon the earth . . . . The
constitution has provided very apt and proper remedies for
correcting and rectifying the involuntary mistakes of judges,
and for punishing and removing them for any voluntary
perversions of justice. But, if their authority is to be trampled
upon by pamphleteers and newswriters, and the people are
to be told that the power given to the judges for their
protection is prostituted to their destruction, the court may
retain its power some little time; but I am sure it will
instantly lose all its authority, and the power of the court
will not long survive the authority of it: Is it possible to stab
that authority more fatally than by charging the court, and
more particularly the chief justice, with having introduced a
rule to subvert the constitutional liberty of the people? A
greater scandal could not be published . . . . It is conceded
that an act of violence upon his person when he was making
such an order would be contempt punishable by attachment.
Upon what principle? For striking a judge in walking along
the streets would not be a contempt of the court. The reason,
therefore, must be, that he is in the exercise of his office, and
discharging the function of a judge of this court; and, if his
person is under this protection, why should not his character
be under the same protection? It is not for the sake of the
individual, but for the sake of the public, that his person is
under such protection; and, in respect of the public, the
imputing of corruption and the perversion of justice to him,
in an order made by him at his chambers, is attended with
much more mischievous consequences than a blow; and
therefore the reason of proceeding in this summary manner
applies with equal, if not superior, force, to one case as well
as the other. There is no greater obstruction to the execution
of justice from the striking a judge than from the abusing
him, because his order lies open to be enforced or
discharged, whether the judge is struck or abused for
making it.
2. The American Doctrine

In American jurisprudence, the general rule is that defamatory
comments on the conduct of a judge with respect to past cases or matters
finally disposed of do not constitute contempt, even though libelous and
reflecting on the integrity of the judge and the court. 21 It has been said that
the power to punish as a contempt a criticism concerning a case made after
its termination is denied under the theory that such a power is not necessary
as a safeguard to the proper functioning of the court as a judicial tribunal.
And it has been said that comments, however stringent, relating to judicial
proceedings which are past and ended are not contempt of court even
though they may be a libel against the judge or some other officer of the
court. There is even the view that when a case is finished, the courts and
judges are subject to the same criticisms as other people and that no
comment published in connection with a completed case, however libelous
or unjust, is punishable as contempt of court. Thus it is said that the
remedies of a judge who suffers abuse at the hands of the press, not
amounting to contempt, are the same as those available to persons outside
the judiciary. 22
To the same effect was the holding in People ex rel. Supreme Court vs.
Albertson, 23 where it was declared that
The great weight of authority is to the effect that in so far
as proceedings to punish for contempt are concerned
comment upon the behavior of the court in cases fully
determined in the particular court criticized is unrestricted
under our constitutional guaranty of liberty of the press and
free speech, especially in the absence of a statute of direct
application to the contrary. This view in brief is based upon
the theory that keeping our constitutional guaranties in
mind libelous publications which bear upon the
proceedings of a court while they are pending may in some
way affect their correct determination, and are properly the
subject of contempt proceedings. On the other hand, such
publications or oral utterances of entirely retrospective
bearing come within the sphere of authorized comment
unless they affect a judge personally, when he has his
remedy in an action of libel or slander, as does any other
individual thus offended. He has the right to bring an action
at law before a jury of his peers.
Along similar lines, in Ex Parte McLeod, 24 the court ruled that:

The right of a court to punish, as for contempts, criticisms of
its acts, or even libels upon its officers, not going to the
extent, by improper publications, of influencing a pending
trial, . . . would not only be dangerous to the rights of the
people, but its exercise would drag down the dignity and
moral influence of these tribunals. Such criticism is the right
of the citizen, and essential not only to the proper
administration of justice, but to the public tranquility and
contentment. Withdrawing power from courts to summarily
interfere with such exercise of the right of the press and
freedom of speech deprives them of no useful power.
Likewise, the State Supreme Court of Montana in State ex rel.

Metcalf vs. District Court, 25 pointed out that the legal proceeding involved
therein was not pending when the alleged libelous article was published,
then referred to the guaranty of freedom of speech and the press, and
eventually held that the publication involved was not punishable as
contempt. It declared that so long as the published criticism does not impede
the due administration of the law, it is better to maintain the guaranty of the
Constitution than to undertake to compel respect or punish libel by the
summary process of contempt. LLphil
Finally, in holding that persons who had published newspaper
articles alleging that a designated judge had been intentionally partial and
corrupt in the trial of certain causes which had been decided and were not
pending when the publication occurred could not be punished as for
contempt the court, in State ex rel. Attorney General vs. Circuit Court, 26 cited a
number of cases supporting the view that libelous newspaper comments
upon the acts of a court in actions past and ended do not constitute
contempt. It pointed out that some of such decisions took the position that to
punish such publications would constitute a serious invasion of
constitutional guaranties of free speech and a free press.
It ratiocinated in this manner: "Important as it is that courts should
perform their grave public duties unimpeded and unprejudiced by
illegitimate influences, there are other rights guaranteed to all citizens by
our Constitution and form of government, either expressly or impliedly,
which are fully as important, and which must be guarded with an equally
zealous care. These rights are the rights of free speech and of free
publication of the citizens' sentiments on all subjects. It seems clear to us that
so extreme a power as to punish for contempt because of libelous
publications as to past litigation, is inconsistent with, and would materially
impair, the constitutional rights of free speech and free press."
However, even under American jurisprudence, as shall hereafter be
demonstrated, the aforesaid rulings are not without exceptions. There is
ample authority that, under proper circumstances, constitutional guaranties
of freedom of speech and liberty of the press do not protect contemptuous
publications relating to court proceedings even though such publications are
not made until after the pendency of the litigation in question. 27
3. The Philippine Doctrine
In the Philippine setting, as we have noted, there are conflicting
views on this issue which have to be analyzed and, if possible, reconciled.
On that exordial indication, we have digressed into these aspects of the law
on contempt and seized upon this incident in the criminal cases at bar in
order to essay a rapprochement of such views into what we may call the
Philippine doctrine.
In the early cases decided by this Court involving contempts

through newspaper publications, the rule was that contemptuous
publications were actionable only if committed with respect to pending
suits. Apparently, the weight of authority then was to the effect that
criticism of the conduct of a judge or a court with regard to matters finally
disposed of does not constitute contempt, even though it may be libelous.
That rule first found application in the case of In re Lozano, et al. 28
and was reiterated in the subsequent cases of In re Abistado, 29 and People vs.
Alarcon, et al., 30 where this Court, speaking through Justice Malcolm, tersely
stated:
The rule is well established that newspaper publications
tending to impede, obstruct, embarrass, or influence the
courts in administering justice in a pending suit or
proceeding constitute criminal contempt which is summarily
punishable by the courts. The rule is otherwise after the
cause is ended. . . . (6 R.C.L., pp. 508-515).
It will be noted that the aforequoted conclusion was arrived at after

a short discourse presented by the ponente on the existing divergence of
opinions on the matter between the English and American courts. But the
learned justice, notwithstanding his preference for and application of the
American doctrine, nonetheless thereafter made the recommendatory
observation that "(w)ith reference to the applicability of the above
authorities, it should be remarked first of all that this court is not bound to
accept any of them absolutely and unqualifiedly. What is best for the
maintenance of the judiciary in the Philippines should be the criterion."
It seems that this view was shared by then Associate Justice Moran
when he dissented from the majority opinion in the aforecited case of People
vs. Alarcon, et al., which upheld the doctrine enunciated in Lozano and
Abistado, in this wise: "I know that in the United States, publications about
courts, after the conclusion of a pending case, no matter how perverse or
scandalous, are in many instances brought within the constitutional
protection of the liberty of the press. But while this rule may find
justification in that country, considering the American temper and
psychology and the stability of its political institutions, it is doubtful
whether here a similar toleration of gross misuse of liberty of the press
would, under our circumstances, result in no untoward consequences to our
structure of democracy yet in the process of healthful development and
growth."
Such perception could have probably impelled Justice Moran to
deviate from the then accepted doctrine, with this rationalization:
Contempt, by reason of publications relating to courts and to
court proceedings, are of two kinds. A publication which
tends to impede, obstruct, embarrass or influence the courts
in administering justice in a pending suit or proceeding,
constitutes criminal contempt which is summarily
punishable by courts. This is the rule announced in the cases
relied upon by the majority. A publication which tends to
degrade the courts and to destroy public confidence in them
or that which tends to bring them in any way into disrepute,
constitutes likewise criminal contempt, and is equally
punishable by courts. In the language of the majority, what
is sought, in the first kind of contempt, to be shielded against
the influence of newspaper comments, is the all-important
duty of the courts to administer justice in the decision of a
pending case. In the second kind of contempt, the punitive
hand of justice is extended to vindicate the courts from any
act or conduct calculated to bring them into disfavor or to
destroy public confidence in them. In the first, there is no
contempt where there is no action pending, as there is no
decision which might in any way be influenced by the
newspaper publication. In the second, the contempt exists,
with or without a pending case, as what is sought to be
protected is the court itself and its dignity. Courts would
lose their utility if public confidence in them is destroyed.
That dissenting opinion was impliedly adopted in the subsequent

case of In re Brillantes, 31 where the editor of the Manila Guardian was
declared in contempt of court for publishing an editorial, stating that the
1944 Bar Examinations were conducted in a farcical manner, even after the
case involving the validity of said examinations had been terminated. This
was followed by In re Almacen 32 where the Court stated categorically that
the rule that bars contempt after a judicial proceeding has terminated had
lost much of its validity, invoking therein the ruling in Brillantes and quoting
with approval the dissenting opinion in Alarcon. LLpr
It appears, therefore, that in the two latest cases decided by this
Court, the general rule that there can be no contempt in post-litigation
publications is not necessarily all-embracing under certain situations. From
the shift in judicial approach in Brillantes to the position announced in
Almacen, it can inevitably be concluded that the termination of the case is not
a guaranty of immunity from a contempt charge for publications or
utterances which are defamatory or libelous, depending on the purpose and
effects thereof. In other words, one may still be cited for contempt of court
even after a case has ended, where such punitive action is necessary to
protect the court and its dignity and to vindicate it from acts or conduct
intended or calculated to degrade, ridicule or bring the court into disfavor
and thereby erode or destroy public confidence in that court.
This qualified distinction is not without justification and, in fact,
was also foreshadowed by the concurring opinion of Justice Briones in
Brillantes wherein, after noting the conflicting views on the amenability of
the contemnor during the pendency or after the termination of the judicial
proceeding in the court involved as illustrated by the English and American
doctrines thereon, he advanced the proposition that
. . . esta distincion no tiene mucha importancia. Lo
importante para mi es ver si la critica lanzada por el
recurrido es falsa y esta concebida en terminos tales que
"tiende directamente a degradar la administracion de
justicia," . . . es indiferente si versa sobre un asunto o
negociacion totalmente terminada o no; el desacato existe
entonces y debe ser castigado.
. . . Se trata simplemente de la facultad inherente en los

tribunales de reprimir y castigar todo acto que tiende a
embarazarles y obstruirles en su funcion de administrar
justicia, . . . .
The rationale for making a qualification to the rule generally

considered as the American doctrine, which rule as herein qualified we now
adopt and refer to as the Philippine doctrine on this issue, is profoundly and
eloquently explicated by Justice Moran in Alarcon, to wit:
It is true that the Constitution guarantees the freedom of
speech and of the press. But license or abuse of that freedom
should not be confused with freedom in its true sense. Well-
ordered liberty demands no less unrelaxing vigilance against
abuse of the sacred guaranties of the Constitution than the
fullest protection of their legitimate exercise. As important as
is the maintenance of a free press and the free exercise of the
rights of the citizens is the maintenance of a judiciary
unhampered in its administration of justice and secure in its
continuous enjoyment of public confidence. "The
administration of justice and freedom of the press, though
separate and distinct are equally sacred, and neither should
be violated by the other. The press and the courts have
correlative rights and duties and should cooperate to uphold
the principles of the Constitution and the laws, from which
the former receives its prerogatives and the latter its
jurisdiction." (U.S. vs. Sullens, 36 Fed., 2d., 230.) Democracy
cannot long endure in a country where liberty is grossly
misused any more than where liberty is illegitimately
abridged.
xxx xxx xxx

If the contemptuous publication made by the respondent
herein were directed to this Court in connection with a case
already decided, the effect of the rule laid down by the
majority is to deny this court the power to vindicate its
dignity. The mischievous consequences that will follow from
the situation thus sought to be permitted, are both too
obvious and odious to be stated. The administration of
justice, no matter how righteous, may be identified with all
sorts of fancied scandal and corruption. Litigants,
discontented for having lost their cases, will have every way
to give vent to their resentment. Respect and obedience to
law will ultimately be shattered, and, as a consequence, the
utility of the courts will completely disappear.
It may be said that respect to courts cannot be compelled

and that public confidence should be a tribute to judicial
worth, virtue and intelligence. But compelling respect to
courts is one thing and denying the courts the power to
vindicate themselves when outraged is another. I know of
no principle of law that authorizes with impunity a
discontented citizen to unleash, by newspaper publications,
the avalanche of his wrath and venom upon courts and
judges. If he believes that a judge is corrupt and that justice
has somewhere been perverted, law and order require that
he follow the processes provided by the Constitution and the
statutes by instituting the corresponding proceedings for
impeachment or otherwise. As Mr. Justice Palmer, in
speaking of the duty of courts and court officers, has wisely
said:
"Would it be just to the persons who are called

upon to exercise these powers to compel them to do
so, and at the same time allow them to be
maltreated or libeled because they did so? How
would a suitor like a juryman trying his case who
might expect he would be assaulted, beaten, his
property destroyed, or his reputation blasted, in
case he decided against his opponent? Apply the
same thing to judges, or the sheriff, and how long
could organized society hold together? With
reference to a judge, if he has acted corruptly, it is
worse than a mere contempt. But it is apparent it
would not be right that the court of which he is a
member should determine this, and consequently
the law has provided a plain and easy method of
bringing him to justice by a petition to Parliament;
but, while the law authorizes this, it does not allow
infamous charges to be made against him by
persons, either in the newspapers or otherwise,
with reference to how he has or shall discharge the
duties of his office. It must be apparent to all right
thinking men that, if such were allowed to be
indulged in, it must end in the usefulness of the
court itself being destroyed, however righteous its
judges may act. From what I have said it must not
be supposed that I think that the decisions of the
court, or the actions of the judges, or other persons
composing the court, are not to be discussed; on the
contrary, I would allow the freest criticism of all
such acts if done in a fair spirit, only stopping at
what must injure or destroy the court itself and
bring the administration of the law into disrepute,
or be an outrage on the persons whose acts are
discussed, or when such discussion would interfere
with the right decision of the cause before the
court."
We do not hesitate to hereby give our imprimatur to the

aforequoted opinion which, we fully believe, conforms to basic dogmatic
teachings on judicial and professional conduct requiring respect for and the
giving of due deference to the judicial system and its members ethical
standards which this Court has, time and again, been trying to inculcate in
the minds of every member of the Bar and the public in general. LexLib
4. Cautela on the Balancing of Interests.
On the bases of the foregoing authorities, it is evident that a line has
to be drawn between those utterances or writings which are protected by the
privileges of free speech and a free press and those which constitute an
abuse thereof, in determining whether an allegedly scurrilous publication or
statement is to be treated as contempt of court. But to find the line where the
permissible right of free speech ends and its reprehensible abuse begins is
not always an easy task. In contempt proceedings, it was held that this line
must usually be defined by the courts themselves, and in such cases its
location is to be established with special care and caution. 33
In so doing, it becomes necessary to give the subject that careful
examination commensurate with its importance, mindful that, on the one
hand, the dignity and authority of the courts must be maintained, while, on
the other, free speech, a free press, and the liberty of the citizen must be
preserved. Both are equally valuable rights. If the court is shorn of its power
to punish for contempt in all proper cases, it cannot preserve its authority, so
that even without any constitutional or statutory guaranty this power is
inherent in the court. But the Constitution itself, in the Bill of Rights,
guarantees free speech and liberty of the press. Of course, it was never
intended, under the guise of these constitutional guaranties, that the power
of the court should be trenched upon. 34
How to determine whether an act or utterance is covered by the
protective mantle of the constitutional guaranty of liberty of the press or
whether it is already outside or an abuse thereof, is an altogether different
matter. We have perforce to draw from tenets in American jurisprudence,
although with discriminating choice, since after all our present doctrines on
contempt vis-a-vis constitutional limitations trace their roots in the main to
the lessons laid down and born of the social and judicial experience in that
jurisdiction.
The liberty of the press consists in the right to publish with
impunity the truth, with good motives and for justifiable ends, whether it
respects governments or individuals; the right freely to publish whatever the
citizen may please and to be protected against any responsibility for so
doing, except in so far as such publications, from their blasphemy, obscenity,
or scandalous character, may be a public offense, or as by their falsehood
and malice they may injuriously affect the standing, reputation, or pecuniary
interests of individuals. The true liberty of the press is amply secured by
permitting every man to publish his opinions; but it is due to the peace and
dignity of society to inquire into the motives of such publications, and to
distinguish between those which are meant for use and reformation, and
with an eye solely to the public good, and those which are intended merely
to delude and defame. To the latter description, it is impossible that any
good government should afford protection and impunity.
The liberty of the press means that anyone can publish anything he
pleases, but he is liable for the abuse of this liberty. If he does this by
scandalizing the courts of his country, he is liable to be punished for
contempt. In other words, the abuse of the privilege consists principally in
not telling the truth. There is a right to publish the truth, but no right to
publish falsehood to the injury of others with impunity. It, therefore, does
not include the right to malign the courts, to libel and slander and utter the
most flagrant and indecent calumnies about the court and its officers, nor to
invade the sanctuaries of the temples of justice. Such practices and such
miscreants ought to be condemned, and the courts would deserve
condemnation and abolition if they did not vigorously and fearlessly punish
such offenders. Such practices are an abuse of the liberty of the press, and if
the slander relates to the courts, it concerns the whole public and is
consequently punishable summarily as a criminal contempt. It is therefore
the liberty of the press that is guaranteed, not the licentiousness. It is the
right to speak the truth, not the right to bear false witness against your
neighbor. 35
This brings to fore the need to make a distinction between adverse
criticism of the court's decision after the case is ended and "scandalizing the
court itself." The latter is not criticism; it is personal and scurrilous abuse of a
judge as such, in which case it shall be dealt with as a case of contempt. 36
It must be clearly understood and always borne in mind that there
is a vast difference between criticism or fair comment on the one side and
defamation on the other. Where defamation commences, true criticism ends.
True criticism differs from defamation in the following particulars: (1)
Criticism deals only with such things as invite public attention or call for
public comment. (2) Criticism never attacks the individual but only his
work. In every case the attack is on a man's acts, or on some thing, and not
upon the man himself. A true critic never indulges in personalities. (3) True
criticism never imputes or insinuates dishonorable motives, unless justice
absolutely requires it, and then only on the clearest proofs. (4) The critic
never takes advantage of the occasion to gratify private malice, or to attain
any other object beyond the fair discussion of matters of public interest, and
the judicious guidance of the public taste. 37
Generally, criticism of a court's rulings or decisions is not improper,
and may not be restricted after a case has been finally disposed of and has
ceased to be pending. So long as critics confine their criticisms to facts and
base them on the decisions of the court, they commit no contempt no matter
how severe the criticism may be; but when they pass beyond that line and
charge that judicial conduct was influenced by improper, corrupt, or selfish
motives, or that such conduct was affected by political prejudice or interest,
the tendency is to create distrust and destroy the confidence of the people in
their courts. 38
Moreover, it has been held that criticism of courts after a case is
finally disposed of, does not constitute contempt and, to this effect, a case
may be said to be pending so long as there is still something for the court to
do therein. But criticism should be distinguished from insult. A criticism
after a case has been disposed of can no longer influence the court, and on
that ground it does not constitute contempt. On the other hand, an insult
hurled to the court, even after a case is decided, can under no circumstance
be justified. Mere criticism or comment on the correctness or wrongness,
soundness or unsoundness of the decision of the court in a pending case
made in good faith may be tolerated; but to hurl the false charge that the
Supreme Court has been committing deliberately so many blunders and
injustices would tend necessarily to undermine the confidence of the people
in the honesty and integrity of its members, and consequently to lower or
degrade the administration of justice, and it constitutes contempt. 39
The Philippine rule, therefore, is that in case of a post-litigation
newspaper publication, fair criticism of the court, its proceedings and its
members, are allowed. However, there may be a contempt of court, even
though the case has been terminated, if the publication is attended by either
of these two circumstances: (1) where it tends to bring the court into
disrespect or, in other words, to scandalize the court; 40 or (2) where there is
a clear and present danger that the administration of justice would be
impeded. And this brings us to the familiar invocation of freedom of
expression usually resorted to as a defense in contempt proceedings.
On the first ground, it has been said that the right of free speech is
guaranteed by the Constitution and must be sacredly guarded, but that an
abuse thereof is expressly prohibited by that instrument and must not be
permitted to destroy or impair the efficiency of the courts of the public
respect therefor and the confidence therein. 41
Thus, in State vs. Morril, 42 the court said that any citizen has the
right to publish the proceedings and decisions of the court, and if he deems
it necessary for the public good, to comment upon them freely, discuss their
correctness, the fitness or unfitness of the judges for their stations, and the
fidelity with which they perform the important public trusts reposed in
them; but he has no right to attempt, by defamatory publications, to degrade
the tribunal, destroy public confidence in it, and dispose the community to
disregard and set at naught its orders, judgments and decrees. Such
publications are an abuse of the liberty of the press; and tend to sap the very
foundation of good order and well-being in society by obstructing the course
of justice. Courts possess the power to punish for contempt libelous
publications regarding their proceedings, present or past, upon the ground
that they tend to degrade the tribunals, destroy public confidence and
respect for their judgments and decrees, so essentially necessary to the good
order and well-being of society, and most effectually obstruct the free course
of justice.
Then, in In re Hayes, 43 it was said that publishers of newspapers
have the right, but no higher right than others, to bring to public notice the
conduct of the courts, provided the publications are true and fair in spirit.
The liberty of the press secures the privilege of discussing in a decent and
temperate manner the decisions and judgments of a court of justice; but the
language should be that of fair and honorable criticism, and should not go to
the extent of assigning to any party or the court false or dishonest motives.
There is no law to restrain or punish the freest expressions of disapprobation
that any person may entertain of what is done in or by the courts. Under the
right of freedom of speech and of the press the public has a right to know
and discuss all judicial proceedings, but this does not include the right to
attempt, by wanton defamation, groundless charges of unfairness and
stubborn partisanship, to degrade the tribunal and impair its efficiency.
Finally, in Weston vs. Commonwealth, 44 it was ruled that the

freedom of speech may not be exercised in such a manner as to destroy
respect for the courts, the very institution which is the guardian of that right.
The dignity of the courts and the duty of the citizens to respect them are
necessary adjuncts to the administration of justice. Denigrating the court by
libelous attacks upon judicial conduct in an ended case, as well as one which
is pending before it, may seriously interfere with the administration of
justice. While such an attack may not affect the particular litigation which
has been terminated, it may very well affect the course of justice in future
litigation and impair, if not destroy, the judicial efficiency of the court or
judge subjected to the attack.
Anent the second ground, the rule in American jurisprudence is
that false and libelous utterances present a clear and present danger to the
administration of justice. 45 To constitute contempt, criticism of a past action
of the court must pose a clear and present danger to a fair administration of
justice, that is, the publication must have an inherent tendency to influence,
intimidate, impede, embarrass, or obstruct the court's administration of
justice. 46 It is not merely a private wrong against the rights of litigants and
judges, but a public wrong, a crime against the State, to undertake by libel or
slander to impair confidence in the judicial functions. 47
Elucidating on the matter, this Court, in Cabansag vs. Fernandez, et
al., 48 held as follows:
. . . The first, as interpreted in a number of cases, means that
the evil consequence of the comment or utterance must be
"extremely serious and the degree of imminence extremely
high" before the utterance can be punished. The danger to be
guarded against is the "substantive evil" sought to be
prevented. And this evil is primarily the "disorderly and
unfair administration of justice." This test establishes a
definite rule in constitutional law. It provides the criterion as
to what words may be published. Under this rule, the
advocacy of ideas cannot constitutionally be abridged unless
there is a clear and present danger that such advocacy will
harm the administration of justice.
xxx xxx xxx
Thus, speaking of the extent and scope of the application of

this rule, the Supreme Court of the United States said: "Clear
and present danger of substantive evils as a result of
indiscriminate publications regarding judicial proceedings
justifies an impairment of the constitutional right of freedom
of speech and press only if the evils are extremely serious
and the degree of imminence extremely high. . . . The
possibility of engendering disrespect for the judiciary as a
result of the published criticism of a judge is not such a
substantive evil as will justify impairment of the
constitutional right of freedom of speech and press." . . .
No less important is the ruling on the power of the court to

punish for contempt in relation to the freedom of speech and
press. We quote: "Freedom of speech and press should not
be impaired through the exercise of the power to punish for
contempt of court unless there is no doubt that the
utterances in question are a serious and imminent threat to
the administration of justice. A judge may not hold in
contempt one who ventures to publish anything that tends
to make him unpopular or to belittle him. The vehemence of
the language used in newspaper publications concerning a
judge's decision is not alone the measure of the power to
punish for contempt. The fires which it kindles must
constitute an imminent, not merely a likely, threat to the
administration of justice." . . .
And in weighing the danger of possible interference with the

courts by newspaper criticism against the free speech to
determine whether such criticism may constitutionally be
punished as contempt, it was ruled that "freedom of public
comment should in borderline instances weigh heavily
against a possible tendency to influence pending cases." . . .
The question in every case, according to Justice Holmes, is

whether the words used are used in such circumstances and
are of such a nature as to create a clear and present danger
that they will bring about the substantive evils that congress
has a right to prevent. It is a question of proximity and
degree. . . .
Although Cabansag involved a contempt committed during the

pendency of a case, no compelling reason exists why the doctrines
enunciated therein should not be made applicable to vituperative
publications made after the termination of the case. Whether a case is
pending or not, there is the constant and ever growing need to protect the
courts from a substantive evil, such as invective conduct or utterances which
tend to impede or degrade the administration of justice, or which calumniate
the courts and their judges. At any rate, in the case of In re Bozorth, 49 it was
there expressly and categorically ruled that the clear and present danger rule
equally applies to publications made after the determination of a case, with
the court declaring that a curtailment of criticism of the conduct of finally
concluded litigation, to be justified, must be in terms of some serious
substantive evil which it is designed to avert.
Adverting again to what was further said in State vs. Shepherd,
supra, let it here be emphasized that the protection and safety of life, liberty,
property and character, the peace of society, the proper administration of
justice and even the perpetuity of our institutions and form of government,
imperatively demand that everyone lawyer, layman, citizen, stranger,
newspaperman, friend or foe shall treat the courts with proper respect
and shall not attempt to degrade them, or impair the respect of the people,
or destroy the faith of the people in them. When the temples of justice
become polluted or are not kept pure and clean, the foundations of free
government are undermined, and the institution itself threatened. llcd
III
Jurisdiction in Contempt Proceedings where the Alleged Contumely is Committed
Against a Lower Court while the Case is Pending in the Appellate or Higher
Court
In whatever context it may arise, contempt of court involves the
doing of an act, or the failure to do an act, in such a manner as to create an
affront to the court and the sovereign dignity with which it is clothed. As a
matter of practical judicial administration, jurisdiction has been felt properly
to rest in only one tribunal at a time with respect to a given controversy.
Partly because of administrative considerations, and partly to visit the full
personal effect of the punishment on a contemnor, the rule has been that no
other court than the one contemned will punish a given contempt. 50
The rationale that is usually advanced for the general rule that the
power to punish for contempt rests with the court contemned is that
contempt proceedings are sui generis and are triable only by the court against
whose authority the contempts are charged; 51 the power to punish for
contempt exists for the purpose of enabling a court to compel due decorum
and respect in its presence and due obedience to its judgments, orders and
processes: 52 and in order that a court may compel obedience to its orders, it
must have the right to inquire whether there has been any disobedience
thereof, for to submit the question of disobedience to another tribunal would
operate to deprive the proceeding of half its efficiency. 53
There are, however, several jurisprudentially and statutorily
recognized exceptions to the general rule, both under Philippine and
American jurisprudence, viz.:
1. Indirect contempt committed against an inferior court may also
be tried by the proper regional trial court, regardless of the imposable
penalty. 54
2. Indirect contempt against the Supreme Court may be caused to
be investigated by a prosecuting officer and the charge may be filed in and
tried by the regional trial court, or the case may be referred to it for hearing
and recommendation where the charge involves questions of fact. 55
3. In People vs. Alarcon, et al., supra, this Court ruled that "in the
interrelation of the different courts forming our integrated judicial system,
one court is not an agent or representative of another and may not, for this
reason, punish contempts in vindication of the authority and decorum
which are not its own. The appeal transfers the proceedings to the appellate
court, and this last court becomes thereby charged with the authority to deal
with contempts committed after the perfection of the appeal." The apparent
reason is that both the moral and legal effect of a punishment for contempt
would be missed if it were regarded as the resentment of personal affronts
offered to judges. Contempts are punished as offenses against the
administration of justice, and the offense of violating a judicial order is
punishable by the court which is charged with its enforcement, regardless of
the court which may have made the order. 56 However, the rule
presupposes a complete transfer of jurisdiction to the appellate court, and
there is authority that where the contempt does not relate to the subject
matter of the appeal, jurisdiction to punish remains in the trial court. 57
4. A court may punish contempts committed against a court or
judge constituting one of its parts or agencies, as in the case of a court
composed of several coordinate branches or divisions. 58
5. The biggest factor accounting for the exceptions is where the
singular jurisdiction of a given matter has been transferred from the
contemned court to another court. One of the most common reasons for a
transfer of jurisdiction among courts is improper venue. The cases involving
venue deal primarily with the question whether a change of venue is
available after a contempt proceeding has been begun. While generally a
change of venue is not available in a contempt proceeding, some
jurisdictions allow such a change in proper circumstances. 59
6. A new court wholly replacing a prior court has jurisdiction to

punish for violations of orders entered by its predecessor, although where
the successor court is created by a statute which does not extinguish
jurisdiction in the predecessor, an affirmative transfer of jurisdiction before
the contempt occurs is necessary to empower the successor court to act. 60
7. Transfers of jurisdiction by appellate review have produced
numerous instances where contempt against the trial court has been
punished in the appellate court, and vice versa. Some appellate courts have
taken the view that a contempt committed after an appeal is taken is
particularly contemptuous of the appellate court because of the tendency of
such contempts to upset the status quo or otherwise interfere with the
jurisdiction of such court. 61
8. A judge may disqualify himself, or be disqualified, on a
contempt hearing or in the main case, which circumstance may require a
transfer of jurisdiction, but where a judge is disqualified only in the main
case, because of matters which do not disqualify him in a contempt
proceeding, the regular judge should sit in the contempt proceeding.
Likewise, where the regular judge is absent or otherwise unavailable and an
order is entered by another judge and made returnable to the proper court,
the regular judge may punish for violations of orders so entered. 62
9. Where the same act is a contempt against two or more courts, it is
no bar to contempt proceedings in one of them that there is also a contempt
against the other. 63
10. While professional disciplinary proceedings have been resorted
to as a punishment for contempt, the more recent view is that punishment is
of secondary importance to the need to protect the courts and the people
from improper professional practice. To the substantial extent that
disciplinary action remains a punishment, disciplinary measures imposed
by another court that the one contemned furnish an exception to the rule
against punishing for contempt of another court. 64
11. Some contemptuous acts are also crimes, usually
misdemeanors, which are often punishable in other courts than those against
which the contemptuous act was done. 65
12. Finally, a conviction for contempt against another court has
been allowed to stand on the basis that the failure of the defendant to make
timely objection operated as a waiver of the right to be tried before the court
actually contemned. 66
The rule, as now accepted and deemed applicable to the present
incident, is that where the entire case has already been appealed, jurisdiction
to punish for contempt rests with the appellate court where the appeal
completely transfers the proceedings thereto or where there is a tendency to
affect the status quo or otherwise interfere with the jurisdiction of the
appellate court. Accordingly, this Court having acquired jurisdiction over
the complaint for indirect contempt against herein respondents, it has taken
judicial cognizance thereof and has accordingly resolved the same.
IV
Appropriate Remedies where the Alleged Contemptuous Statement is also Claimed
to be Libelous
Under the American doctrine, to repeat, the great weight of
authority is that in so far as proceedings to punish for contempt are
concerned, critical comment upon the behavior of the court in cases fully
determined by it is unrestricted, under the constitutional guaranties of the
liberty of the press and freedom of speech. Thus, comments, however
stringent, which have relation to judicial proceedings which are past and
ended, are not contemptuous of the authority of the court to which reference
is made. Such comments may constitute a libel against the judge, but it
cannot be treated as in contempt of the court's authority. cdll
On this score, it is said that prosecution for libel is usually the most
appropriate and effective remedy. 67 The force of American public opinion
has greatly restrained the courts in the exercise of the power to punish one
as in contempt for making disrespectful or injurious remarks, and it has
been said that the remedy of a judge is the same as that given to a private
citizen. 68 In such a case, therefore, the remedy of a criminal action for libel
is available to a judge who has been derogated in a newspaper publication
made after the termination of a case tried by him, since such publication can
no longer be made subject of contempt proceedings.
The rule, however, is different in instances under the Philippine
doctrine earlier discussed wherein there may still be a contempt of court
even after a case has been decided and terminated. In such case, the offender
may be cited for contempt for uttering libelous remarks against the court or
the judge. The availability, however, of the power to punish for contempt
does not and will not prevent a prosecution for libel, either before, during,
or after the institution of contempt proceedings. In other words, the fact that
certain contemptuous conduct likewise constitutes an indictable libel against
the judge of the court contemned does not necessarily require him to bring a
libel action, rather than relying on contempt proceedings. 69
The fact that an act constituting a contempt is also criminal and
punishable by indictment or other method of criminal prosecution does not
prevent the outraged court from punishing the contempt. 70 This principle
stems from the fundamental doctrine that an act may be punished as a
contempt even though it has been punished as a criminal offense. 71 The
defense of having once been in jeopardy, based on a conviction for the
criminal offense, would not lie in bar of the contempt proceedings, on the
proposition that a contempt may be an offense, against the dignity of a court
and, at the same time, an offense against the peace and dignity of the people
of the State. 72 But more importantly, adherence to the American doctrine
by insisting that a judge should instead file an action for libel will definitely
give rise to an absurd situation and may even cause more harm than good.
Drawing also from American jurisprudence, to compel the judge to
descend from the plane of his judicial office to the level of the contemnor,
pass over the matter of contempt, and instead attack him by a civil action to
satisfy the judge in damages for a libel, would be a still greater humiliation
of a court. That conduct would be personal; the court is impersonal. In our
jurisdiction, the judicial status is fixed to such a point that our courts and the
judges thereof should be protected from the improper consequences of their
discharge of duties so much so that judicial officers have always been
shielded, on the highest considerations of the public good, from being called
for questioning in civil actions for things done in their judicial capacity.
Whenever we subject the established courts of the land to the
degradation of private prosecution, we subdue their independence, and
destroy their authority. Instead of being venerable before the public, they
become contemptible; and we thereby embolden the licentious to trample
upon everything sacred in society, and to overturn those institutions which
have hitherto been deemed the best guardians of civil liberty. 73
Hence, the suggestion that judges who are unjustly attacked have a
remedy in an action for libel, has been assailed as being without rational
basis in principle. In the first place, the outrage is not directed to the judge as
a private individual but to the judge as such or to the court as an organ of
the administration of justice. In the second place, public interests will
gravely suffer where the judge, as such, will, from time to time, be pulled
down and disrobed of his judicial authority to face his assailant on equal
grounds and prosecute cases in his behalf as a private individual. The same
reasons of public policy which exempt a judge from civil liability in the
exercise of his judicial functions, most fundamental of which is the policy to
confine his time exclusively to the discharge of his public duties, applies
here with equal, if not superior, force. 74
V
Whether or not the Same Contemptuous Conduct of a Member of the Bar can be
the Subject of both a Contempt Proceeding and an Administrative Disciplinary
Action
With the foregoing discussion of the appropriate remedies
available to a judge, we feel that this issue with respect to proper remedies
against an erring member of the Bar should consequentially be addressed,
by way of reiteration, since conflicting and erroneous remedies are
sometimes resorted to by aggrieved tribunals or parties.
The basic rule here is that the power to punish for contempt and
the power to disbar are separate and distinct, and that the exercise of one
does not exclude the exercise of the other. 75 A contempt proceeding for
misbehavior in court is designed to vindicate the authority of the court; on
the other hand, the object of a disciplinary proceeding is to deal with the
fitness of the court's officer to continue in that office, to preserve and protect
the court and the public from the official ministrations or persons unfit or
unworthy to hold such office. 76 The principal purpose of the exercise of the
power to cite for contempt is to safeguard the functions of the court and
should thus be used sparingly on a preservative and not on the vindictive
principle. 77 The principal purpose of the exercise of disciplinary authority
by the Supreme Court is to assure respect for orders of such court by
attorneys who, as much as judges, are responsible for the orderly
administration of justice. 78
Moreover, it has been held that the imposition of a fine as a penalty
in a contempt proceeding is not considered res judicata to a subsequent
charge for unprofessional conduct. 79 In the same manner, an attorney's
conviction for contempt was not collaterally estopped by reason of a
subsequent disbarment proceeding in which the court found in his favor on
essentially the same facts leading to conviction. 80 It has likewise been the
rule that a notice to a lawyer to show cause why he should not be punished
for contempt cannot be considered as a notice to show cause why he should
not be suspended from the practice of law, considering that they have
distinct objects and for each of them a different procedure is established.
Contempt of court is governed by the procedures laid down under Rule 71
of the Rules of Court, whereas disciplinary actions in the practice of law are
governed by Rules 138 and 139 thereof. 81
Although apparently different in legal bases, the authority to

punish for contempt and to discipline lawyers are both inherent in the
Supreme Court and are equally incidents of the court's basic power to
oversee the proper administration of justice and the orderly discharge of
judicial functions. As was succinctly expounded in Zaldivar vs.
Sandiganbayan, et al.: 82
There are, in other words, two (2) related powers which
come into play in cases like that before us here: the Court's
inherent power to discipline attorneys and the contempt
power. The disciplinary authority of the Court over
members of the Bar is broader than the power to punish for
contempt. Contempt of court may be committed both by
lawyers and non-lawyers, both in and out of court.
Frequently, where the contemnor is a lawyer, the
contumacious conduct also constitutes professional
misconduct which calls into play the disciplinary authority
of the Supreme Court. Where the respondent is a lawyer,
however, the Supreme Court's disciplinary authority over
lawyers may come into play whether or not the misconduct
with which the respondent is charged also constitutes
contempt of court. The power to punish for contempt of
court does not exhaust the scope of disciplinary authority of
the Court over lawyers. The disciplinary authority of the
Court over members of the Bar is but corollary to the Court's
exclusive power of admission to the Bar. A lawyer is not
merely a professional but also an officer of the court and as
such, he is called upon to share in the task and responsibility
of dispensing justice and resolving disputes in society. Any
act on his part which visibly tends to obstruct, pervert, or
impede and degrade the administration of justice constitutes
both professional misconduct calling for the exercise of
disciplinary action against him, and contumacious conduct
warranting application of the contempt power.
With this rounding out of the subordinate and principal issue in

resolving this incident, we feel that the guidelines we have laid down will
provide assistive references for the lower courts in disciplinary matters
arising before them. Coming back to the incident for resolution, arising as a
spin-off from the criminal cases at bar, we reiterate what we have declared
at the outset, absolving respondents from the charges proferred by
complainant judge for the reasons therein stated. Cdpr
WHEREFORE, on the foregoing premises, the complaint for
indirect contempt against herein respondents Mauricio Reynoso, Jr. and Eva
P. Ponce de Leon is hereby DISMISSED.
SO ORDERED.
||| (People v. Godoy, G.R. Nos. 115908, 115909, March 29, 1995)
SECOND DIVISION
[G.R. No. 190171. March 14, 2011.]

ALEN ROSS RODRIGUEZ and REGIDOR TULALI,
petitioners, vs. THE HON. BIENVENIDO BLANCAFLOR,
in his capacity as the Acting Presiding Judge of the
Regional Trial Court of Palawan, Branch 52, and PEOPLE
OF THE PHILIPPINES, respondents.
DECISION
MENDOZA, J p:
This is a petition for certiorari and prohibition under Rule 65 of the Revised Rules
of Court filed by Alen Ross Rodriguez (Rodriguez), the Provincial Prosecutor of
Palawan; and Regidor Tulali (Tulali), Prosecutor I of the Office of the Provincial
Prosecutor of Palawan, seeking to annul and set aside the October 13, 2009
Decision 1 of respondent Judge Bienvenido Blancaflor (Judge Blancaflor), Acting
Presiding Judge of Branch 52, Regional Trial Court, Palawan (RTC). The petition
likewise seeks to prohibit Judge Blancaflor from implementing the said decision.
In his October 13, 2009 Decision, Judge Blancaflor found petitioners Rodriguez
and Tulali guilty of direct contempt and ordered them to issue a public apology
to the court. In the same decision, Judge Blancaflor suspended them indefinitely
from the practice of law. The dispositive portion of the decision reads:

rendered finding respondents PROVINCIAL
PROSECUTORS OF PALAWAN ALEN ROSS B.
RODRIGUEZ and PROSECUTOR REGIDOR TULALI as
both guilty of direct contempt and for violation of their oath
of office as member of the bar and as officer of the Court,
and hereby sentence them to suffer the penalty of
INDEFINITE SUSPENSION from practice of law and for
each to pay a fine of P100,000.00.
Respondents are further directed to issue a public apology to

the Court for the above grave offenses and should they fail
to do so after the finality of this Sentence, a warrant for their
arrest will be issued, and they will not be released unless
they comply with the order of this Court.
Let a copy of this Order be furnished the Secretary of Justice

for appropriate action. TIaEDC
IT IS SO ORDERED. 2
The Facts
Previously pending before Judge Blancaflor was Criminal Case No. 22240 for
arson (arson case), entitled People of the Philippines v. Teksan Ami, in which Tulali
was the trial prosecutor.
During the pendency of the case, Tulali was implicated in a controversy

involving an alleged bribery initiated by Randy Awayan (Awayan), the driver
assigned to Judge Blancaflor under the payroll of the Office of the Governor of
Palawan, and one Ernesto Fernandez (Fernandez), to assure the acquittal of the
accused, Rolly Ami (Ami), and the dismissal of the arson case.
On June 29, 2009, a day before the scheduled promulgation of the decision in the
arson case, Tulali filed an Ex-Parte Manifestation withdrawing his appearance in
the said case to prevent any suspicion of misdemeanor and collusion. He
attached to the said manifestation a copy of the administrative complaint against
Awayan filed (but eventually withdrawn) by his superior, Rodriguez, before the
Office of the Governor of Palawan.
On June 30, 2009, Judge Blancaflor rendered his decision acquitting Ami of the
crime of arson.
Purportedly on the basis of the administrative complaint filed against Awayan

and Rodriguez, Judge Blancaflor summoned several witnesses including Tulali
and heard their testimonies. On July 30, 2009, he issued an order summoning
Rodriguez to appear before him for the purpose of holding an inquiry on matters
pertaining to his possible involvement in Tulali's filing of the ex-parte
manifestation and the administrative complaint against Awayan, among others.
On August 7, 2009, Rodriguez filed his Motion for Clarification as to the purpose
of Judge Blancaflor's continued inquiries considering that the decision in the
arson case had already been promulgated.
In an order dated August 13, 2009, Judge Blancaflor informed the petitioners that
he was proceeding against them for direct contempt and violation of their oath of
office on the basis of Tulali's Ex-Parte Manifestation.
As earlier recited, after the submission of petitioners' respective position papers,

Judge Blancaflor issued the assailed October 13, 2009 Decision finding petitioners
guilty of direct contempt. The penalty of indefinite suspension from the practice
of law and a fine of P100,000.00 each were imposed upon them.
The petitioners filed a motion for reconsideration of the decision but it was
denied in the assailed November 6, 2009 Order. 3 DISEaC
Hence, the petitioners interpose the present special civil action before this Court
anchored on the following:
GROUNDS
(A)
RESPONDENT COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN ISSUING THE ASSAILED
DECISION AND ORDER CONSIDERING THAT
PETITIONERS WERE DENIED THEIR RIGHT TO DUE
PROCESS.
(B)
RESPONDENT COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN ISSUING THE ASSAILED
DECISION AND ORDER CONSIDERING THAT HE
GROSSLY VIOLATED THE RULES ON CONTEMPT.
(C)
SINCE THE ASSAILED DECISION AND ORDER ARE

VOID, A WRIT OF PROHIBITION MUST BE ISSUED
AGAINST RESPONDENT. 4
Petitioners argue that the contempt proceedings are null and void for
contravening their rights to due process of law. They claim that they were denied
their rights to be informed of the nature and cause of the accusation against
them, to confront the witnesses and present their own evidence. According to
petitioners, Judge Blancaflor's disregard of due process constituted grave abuse
of discretion which was further aggravated by the unlawful manner of
simultaneously conducting suspension and contempt proceedings against them.
Petitioners further argue that the penalty imposed upon them in the "direct
contempt" proceeding is clearly oppressive and without basis.
In its Manifestation in Lieu of Comment, 5 the Office of the Solicitor General

(OSG) stated that Judge Blancaflor committed grave abuse of discretion
amounting to lack or excess of jurisdiction in holding petitioners guilty of direct
contempt as the judgment was not based on law and evidence.
The petition is impressed with merit.
The power to punish a person in contempt of court is inherent in all courts to

preserve order in judicial proceedings and to uphold the orderly administration
of justice. However, judges are enjoined to exercise the power judiciously and
sparingly, with utmost restraint, and with the end in view of utilizing the same
for correction and preservation of the dignity of the court, and not for retaliation
or vindictiveness. It bears stressing that the power to declare a person in
contempt of court must be exercised on the preservative, not the vindictive
principle; and on the corrective, not the retaliatory, idea of punishment. 6 Such
power, being drastic and extraordinary in its nature, should not be resorted to
unless necessary in the interest of justice. 7 HDAaIS
In this case, the Court cannot sustain Judge Blancaflor's order penalizing
petitioners for direct contempt on the basis of Tulali's Ex-Parte Manifestation.
Direct contempt is any misbehavior in the presence of or so near a court as to

obstruct or interrupt the proceedings before the same, including disrespect
toward the court, offensive personalities toward others, or refusal to be sworn or
to answer as a witness, or to subscribe an affidavit or deposition when lawfully
required to do so. 8
Based on the foregoing definition, the act of Tulali in filing the Ex-Parte
Manifestation cannot be construed as contumacious within the purview of direct
contempt. It must be recalled that the subject manifestation bore Tulali's
voluntary withdrawal from the arson case to dispel any suspicion of collusion
between him and the accused. Its filing on the day before the promulgation of the
decision in the pending criminal case, did not in any way disrupt the
proceedings before the court. Accordingly, he should not be held accountable for
his act which was done in good faith and without malice.
Neither should Rodriguez be liable for direct contempt as he had no knowledge

of, or participation in, the preparation and filing of the subject manifestation. It
was signed and filed by Tulali alone in his capacity as the trial prosecutor in the
arson case. The attached complaint against Awayan was filed with the Office of
the Palawan Governor, and not with the RTC.
Apparently, Judge Blancaflor's conclusion, that the subject manifestation

containing derogatory matters was purposely filed to discredit the
administration of justice in court, is unfounded and without basis. There being
no factual or legal basis for the charge of direct contempt, it is clear that Judge
Blancaflor gravely abused his discretion in finding petitioners guilty as charged.
Such grave abuse of authority is likewise manifested from the penalty imposed
on the petitioners. Under Section 1, Rule 71 of the Revised Rules of Court, direct
contempt before the RTC or a court of equivalent or higher rank is punishable by
a fine not exceeding P2,000.00 or imprisonment not exceeding ten (10) days, or
both.
The penalty of indefinite suspension from the practice of law and to pay a fine of
P100,000.00 each with the additional order to issue a public apology to the Court
under pain of arrest, is evidently unreasonable, excessive and outside the bounds
of the law.
Petitioners also fault Judge Blancaflor for non-observance of due process in

conducting the contempt proceedings. It must be emphasized that direct
contempt is adjudged and punished summarily pursuant to Section 1, Rule 71 of
the Rules. Hence, hearings and opportunity to confront witnesses are absolutely
unnecessary. AaIDCS
In the same vein, the petitioners' alleged "vilification campaign" against Judge
Blancaflor cannot be regarded as direct contempt. At most, it may constitute
indirect contempt, as correctly concluded by the OSG. For indirect contempt
citation to prosper, however, the requirements under Sections 3 and 4, Rule 71 of
the Rules must be satisfied, to wit:
Sec. 3.Indirect contempt to be punished after charge and hearing.

After a charge in writing has been filed, and an
opportunity given to the respondent to comment thereon
within such period as may be fixed by the court and to be
heard by himself or counsel, a person guilty of any of the
following acts may be punished for indirect contempt:
xxx xxx xxx
(d)any improper conduct tending, directly or indirectly, to

impede, obstruct, or degrade the administration of justice;
xxx xxx xxx.
Sec. 4.How proceedings commenced. Proceedings for indirect

contempt may be initiated motu proprio by the court against
which the contempt was committed by an order or any other
formal charge requiring the respondent to show cause why
he should not be punished for contempt.
In all other cases, charges for indirect contempt shall be

commenced by a verified petition with supporting
particulars and certified true copies of documents or papers
involved therein, and upon full compliance with the
requirements for filing initiatory pleadings for civil actions
in the court concerned. If the contempt charges arose out of
or are related to a principal action pending in the court, the
petition for contempt shall allege that fact but said petition
shall be docketed, heard and decided separately, unless the
court in its discretion orders the consolidation of the
contempt charge and the principal action for joint hearing
and decision.
In the present case, Judge Blancaflor failed to observe the elementary procedure
which requires written charge and due hearing. There was no order issued to
petitioners. Neither was there any written or formal charge filed against them. In
fact, Rodriguez only learned of the contempt proceedings upon his receipt of the
July 30, 2009 Order, requiring him to appear before the Court in order to clarify
certain matters contained in the said order. Tulali, on the other hand, only
learned of the proceedings when he was ordered to submit his compliance to
explain how he came in possession of the administrative complaint against
Awayan.
The fact that petitioners were afforded the opportunity to file their appropriate
pleadings is not sufficient as the proceedings ex-parte to hear the witnesses'
testimonies had already been completed. EaSCAH
In the course of his investigation, Judge Blancaflor showed that he no longer had
the cold impartiality expected of a magistrate. He had clearly prejudged
petitioners as manifested in the questions propounded in his July 30, 2009 Order,
as follows:
a.Your [petitioner Rodriguez's] participation, if any, in the

filing of the ex-parte manifestation by Prosecutor
Tulali together with the attachment of your letter to
Gov. Joel T. Reyes dated May 8, 2009 filed on June
29, 2009 with the Clerk of Court, Branch 52,
Regional Trial Court, Palawan;
b.Whether or not the letter was received and read by Gov.

Joel T. Reyes, if you know, and if so what was the
official action thereon;
c.Before Randy Awayan was terminated on June 30, 2009

was he allowed to answer the charges against him,
i.e., calling him bag man and facilitator and Ernesto
Fernandez, calling him "extortionist."
Aside from the allegations of Salam Ami, any other

evidentiary basis for your conclusion that Ernesto Fernandez
was an extortionist and that Awayan was a bag man and
facilitator;
What was your role in obtaining the release of accused Rolly

Ami from the City Jail without permission from the Court on
June 29, 2009 at 2:00 o'clock in the afternoon and having
been interviewed in the Office of the Provincial Prosecutor
(c/o Prosecutor Tulali) and how long was Rolly Ami
interviewed?
d.Rolly Ami is publicly known as illiterate (cannot read or

write) but he was made to sign affidavits in the
absence of his lawyer on June 29, 2009 at 2:00
o'clock in the afternoon, why?
e.Rolly Ami was fetched upon his release by SPO4 Efren

Guinto, a close associate of yours, and directly went
to the Palawan Pawnshop to pawn expensive
jewelry (watch and ring), why?
What is your participation in the media coverage Re:

VILIFICATION CAMPAIGN of the Judge of Branch 52 RTC-
Palawan from July 1 to 10, 2009. Do you recognize that as a
member of the Bar and as an officer of the Court, pursuant to
the rules of judicial ethics and your oath of office as a
lawyer, your loyalty and fidelity is primarily to the Court?
Do you still recognize this duty and obligation? 9
Indeed, Judge Blancaflor failed to conform to the standard of honesty and

impartiality required of judges as mandated under Canon 3 of the Code of
Judicial Conduct. CIAacS
As a public servant, a judge should perform his duties in accordance with the
dictates of his conscience and the light that God has given him. A judge should
never allow himself to be moved by pride, prejudice, passion, or pettiness in the
performance of his duties. He should always bear in mind that the power of the
court to punish for contempt should be exercised for purposes that are
impersonal, because that power is intended as a safeguard not for the judges as
persons but for the functions that they exercise. 10
Contempt and suspension proceedings are supposed to be separate and distinct.

They have different objects and purposes for which different procedures have
been established. Judge Blancaflor should have conducted separate proceedings.
As held in the case of People v. Godoy, 11 thus:
A contempt proceeding for misbehavior in court is designed

to vindicate the authority of the court; on the other hand, the
object of a disciplinary proceeding is to deal with the fitness
of the court's officer to continue in that office, to preserve
and protect the court and the public from the official
ministrations of persons unfit or unworthy to hold such
office. The principal purpose of the exercise of the power to
cite for contempt is to safeguard the functions of the court
and should thus be used sparingly on a preservative and
not, on the vindictive principle. The principal purpose of the
exercise of disciplinary authority by the Supreme Court is to
assure respect for orders of such court by attorneys who, as
much as judges, are responsible for the orderly
administration of justice.
. . . . It has likewise been the rule that a notice to a lawyer to

show cause why he should not be punished for contempt
cannot be considered as a notice to show cause why he
should not be suspended from the practice of law,
considering that they have distinct objects and for each of
them a different procedure is established. Contempt of court
is governed by the procedures laid down under Rule 71 of
the Rules of Court, whereas disciplinary actions in the
practice of law are governed by file 138 and 139 thereof.
Thus, it was grossly improper for Judge Blancaflor to consider his July 30, 2009
Order on the contempt charge as the notice required in the disciplinary
proceedings suspending petitioners from the practice of law.
Granting that the simultaneous conduct of contempt and suspension proceedings

is permitted, the suspension of petitioners must still fail.
This Court is not unmindful of a judge's power to suspend an attorney from

practice for just cause pursuant to Section 28, Rule 138 of the Revised Rules of
Court. Judge Blancaflor, however, must be reminded that the requirements of
due process must be complied with, as mandated under Section 30, Rule 138 of
the same Rules which specifically provides, viz.:
Sec. 30.Attorney to be heard before removal or suspension. No

attorney shall be removed or suspended from the practice of
his profession, until he has had full opportunity upon
reasonable notice to answer the charges against him, to
produce witnesses in his own behalf, and to be heard by
himself or counsel. But if upon reasonable notice he fails to
appear and answer the accusation, the court may proceed to
determine the matter ex parte. CSaITD
Indeed, a lawyer may be disbarred or suspended for any misconduct showing

any fault or deficiency in his moral character, honesty, probity or good
demeanor. His guilt, however, cannot be presumed. It must indicate the dubious
character of the acts done, as well as the motivation thereof. Furthermore, a
disbarred lawyer must have been given full opportunity upon reasonable notice
to answer the charges against him, produce witnesses in his own behalf, and to
be heard by himself and counsel. 12
In the case at bench, there was no prior and separate notice issued to petitioners
setting forth the facts constituting the misconduct and requiring them, within a
specified period from receipt thereof, to show cause why they should not be
suspended from the practice of their profession. Neither were they given full
opportunity to defend themselves, to produce evidence on their behalf and to be
heard by themselves and counsel. Undoubtedly, the suspension proceedings
against petitioners are null and void, having violated their right to due process.
Likewise, Judge Blancaflor's suspension order is also void as the basis for
suspension is not one of the causes that will warrant disciplinary action. Section
27, Rule 138 of the Rules enumerates the grounds for disbarment or suspension
of a member of the Bar from his office as attorney, to wit: (1) deceit, (2)
malpractice, (3) gross misconduct in office, (4) grossly immoral conduct, (5)
conviction of a crime involving moral turpitude, (6) violation of the lawyer's
oath, (7) willful disobedience of any lawful order of a superior court, and for (8)
willfully appearing as an attorney for a party without authority to do so. Judge
Blancaflor failed to show that the suspension was for any of the foregoing
grounds.
In fine, having established that Judge Blancaflor committed grave abuse of

discretion amounting to lack or excess of jurisdiction, petitioners are entitled to
the remedy of prohibition under Section 2, Rule 71 of the Rules on Contempt
which provides:
SEC. 2.Remedy therefrom. The person adjudged in direct

contempt by any court may not appeal therefrom, but may
avail himself of the remedies of certiorari or prohibition. The
resolution of such petition, provided such person files a
bond fixed by the court which rendered the judgment and
should the petition be decided against him.
Accordingly, an order of direct contempt is not immediately executory or

enforceable. The contemnor must be afforded a reasonable remedy to extricate or
purge himself of the contempt. Where the person adjudged in direct contempt by
any court avails of the remedy of certiorari or prohibition, the execution of the
judgment shall be suspended pending resolution of such petition provided the
contemnor files a bond fixed by the court which rendered the judgment and
conditioned that he will abide by and perform the judgment should the petition
be decided against him. 13 ASIDTa
WHEREFORE, the petition is GRANTED. The October 13, 2009 Decision and
November 6, 2009 Order are hereby annulled and set aside. Judge Bienvenido
Blancaflor is hereby permanently enjoined from implementing the said decision
and order. This injunctive order is immediately executory
||| (Rodriguez v. Blancaflor, G.R. No. 190171, March 14, 2011)
THIRD DIVISION
[G.R. No. 205504. February 3, 2014.]

CATALINO TANCHANCO, JR., petitioner, vs. MELISSA T.
GOZUM, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution dated February 3,
"G.R. No. 205504 (Catalino Tanchanco, Jr. v. Melissa T. Gozum). This resolves
the petition 1 for review on certiorari of the Court of Appeals' decision 2 and
resolution 3 finding Catalino Tanchanco, Jr., Ronaldo G Tanchanco, and Carmela
Tanchanco-Fales guilty of indirect contempt. 4
Melissa T. Gozum petitioned the Regional Trial Court of Makati City to settle the
estate of her deceased uncle, Ricardo Tanchanco. She alleged that the property
located at 128 Jupiter Street, Bel-Air Village, Makati City belonged to Ricardo's
estate. She prayed that the trial court appoint her as special administratrix. 5
The case 6 was raffled to Branch 139, Makati City.
Catalino, Ricardo's brother, opposed the petition. 7 He alleged that Ricardo sold
the Bel-Air property to him and to his two siblings, Ronaldo and Carmela. He
prayed that the Bel-Air property be excluded from Ricardo's estate. He also
prayed that he be appointed as administrator. 8 HECaTD
Melissa filed the motion 9 to deposit rent. She alleged that the Bel-Air property
earns P200,000.00 monthly rent. She prayed that the monthly rent be deposited in
court and be awarded after the estate court decides who owns the Bel-Air
property. 10
Catalino opposed the motion to deposit rent. He reiterated that he, Ronaldo, and
Carmela owned the Bel-Air property. Thus, only they are entitled to the monthly
rent. 11
In its order 12 dated October 31, 2007, the estate court granted the motion to
deposit rent "to preserve [the rent] for the best interest . . . of [those] legally
entitled to it." 13
Catalino moved for reconsideration. In its order 14 dated February 12, 2008, the
estate court denied Catalino's motion for reconsideration. 15
On April 14, 2008, Catalino filed a petition 16 for certiorari with the Court of
Appeals to set aside the orders granting the motion to deposit rent. He prayed
that the Court of Appeals issue a temporary restraining order against the October
31, 2007 and February 12, 2008 orders. 17
On October 14, 2008, Melissa filed a petition 18 for indirect contempt against
Catalino, Ronaldo, and Carmela. She alleged that Catalino, Ronaldo, and
Carmela did not deposit the rent as the estate court ordered. 19
The contempt petition 20 was raffled to Branch 65, Makati City.
In its decision 21 dated August 26, 2009, the contempt court denied the petition
for indirect contempt for lack of merit. The court refused to direct Catalino,
Ronaldo, and Carmela to deposit the rent pending the petition for certiorari of the
orders granting the motion to deposit rent with the Court of Appeals. 22 TAIEcS
Melissa moved for reconsideration. 23
In its resolution 24 dated January 5, 2010, the contempt court reconsidered its
decision dated August 26, 2009. The contempt court ruled that a petition for
certiorari does not interrupt the course of the principal case unless a temporary
restraining order or a writ of preliminary injunction is issued against the lower
court. Since the Court of Appeals issued no temporary restraining order or writ
of preliminary injunction upon filing of the petition for certiorari, the order to
deposit rent stands. Catalino, Ronaldo, and Carmela must obey the order to
deposit rent. 25
For failing to comply with the order to deposit rent, Catalino, Ronaldo, and
Carmela were found guilty of indirect contempt by the contempt court. The
contempt court fined Catalino, Ronaldo, and Carmela P10,000.00 each and
sternly warned them that failure to deposit the rent in court "will merit a more
severe penalty." 26 The dispositive portion of the resolution dated January 5,
2010 reads:
WHEREFORE, in view of the foregoing, the questioned

decision is hereby reconsidered and the court fords the
respondents, RONALD [sic] G TANCHANCO,
CARMELITA [sic] TANCHA[N]CO-FALES and CATALINO
TANCHANCO, JR., GUILTY of indirect contempt and are
ordered to pay a fine of TEN THOUSAND PESOS each, with
a stern warning that continued non-compliance with or
disobedience of the directive of the court will merit a more
severe penalty. cDHAaT
SO ORDERED. 27
Catalino moved for reconsideration, which the contempt court denied in its joint
resolution 28 dated May 6, 2010. 29
Catalino appealed the resolution dated January 5, 2010 and joint resolution dated
May 6, 2010 to the Court of Appeals. 30
In its decision 31 dated May 30, 2012, the Court of Appeals affirmed the
resolution dated January 5, 2010 and the joint resolution dated May 6, 2010. The
Court of Appeals reiterated that a pending petition for certiorari "does not . . .
justify [the] refusal to abide [by the order to deposit rent], more so if . . . no
restraining order and/or injunction has been issued to stay its implementation."
32 The dispositive portion of the decision dated May 30, 2012 reads:
WHEREFORE, the appeal is DENIED. The assailed

Resolution of the Regional Trial Court of Makati City,
Branch 65 dated 5 January 2010, as well as the Joint
Resolution dated 6 May 2010 denying the reconsideration
thereof, is AFFIRMED. No pronouncement as to costs.
SO ORDERED. 33
Catalino moved for reconsideration. 34
In its resolution 35 dated January 21, 2013, the Court of Appeals denied the
motion for reconsideration for lack of merit. CDHaET
Catalino filed this petition 36 for review on certiorari. He argues that he cannot be
enjoined to deposit rent. The estate court's order to deposit rent is not yet final.
37 He also argues that he is not guilty of indirect contempt. His failure to deposit
rent does not tend to bring the estate court's authority into disrepute. 38
Melissa commented 39 on Catalino's petition for review on certiorari. She argues

that Catalino's filing of a petition 40 for certiorari to set aside the order to deposit
rent did not interrupt the estate court's proceedings. 41 The order to deposit rent
is an interlocutory order which "demand[s] immediate compliance." 42 For
disobeying a lawful order of the court, Catalino is guilty of indirect contempt.
The issue is whether Catalino is guilty of indirect contempt.
This court finds Catalino guilty of indirect contempt. He disobeyed and resisted
a lawful court order.
Contempt of court is "disobedience to [a] court [by opposing] its authority,

justice, and dignity." 43 It includes "willful disregard or disobedience of . . . court
orders" 44 or any "conduct [tending to] bring the authority of the court and the
administration of law into disrepute." 45
All courts have the "inherent power to punish for contempt." 46 This power is
"essential to the preservation of order in judicial proceedings, and to the
enforcement of judgments, orders, and mandates of the court, and consequently,
to the due administration of justice." 47 ACcaET
Under Rule 71 of the 1997 Rules of Civil Procedure, contempt of court may be
direct or indirect. Direct contempt is committed "in the presence of or so near a
court as to obstruct or interrupt [its] proceedings . . . ." 48 Direct contempt
includes "disrespect toward the court, offensive personalities toward others, or
refusal to be sworn or to answer as a witness, or to subscribe an affidavit or
deposition when lawfully required to do so . . . ." 49
As opposed to direct contempt, indirect contempt "is not committed in the

presence of the court." 50 It includes disobeying or resisting lawful court orders.
Rule 71, Section 3 of the 1997 Rules of Civil Procedure provides:
Sec. 3. Indirect contempt to be punished after charge and hearing.

After a charge in writing has been filed, and an opportunity

given to the respondent to comment thereon within such
period as may be fixed by the court and to be heard by
himself or counsel, a person guilty of any of the following
acts may be punished for indirect contempt:
xxx xxx xxx
(b) Disobedience of or resistance to a lawful writ, process,

order, or judgment of a court, including the act of a person
who, after being dispossessed or ejected from any real
property by the judgment or process of any court of
competent jurisdiction, enters or attempts or induces another
to enter into or upon such real property, for the purpose of
executing acts of ownership or possession, or in any manner
disturbs the possession given to the person adjudged to be
entitled thereto; . . . .
Catalino admits that he has not deposited in court the monthly rent the Bel-Air
property earned. 51 Catalino admits that he has not followed a lawful court
order. This is indirect contempt under Rule 71, Section 3, paragraph (b) of the
1997 Rules of Civil Procedure. CSTHca
A petition for certiorari of the order to deposit rent pending with the Court of
Appeals is immaterial. Rule 65, Section 7 of the 1997 Rules of Civil Procedure
explicitly states that a petition for certiorari does not interrupt the course of the
principal case unless a temporary restraining order or a writ of preliminary
injunction is issued against the court hearing the principal case:
Sec. 7. Expediting proceedings; injunctive relief. The court in

which the petition is filed may issue orders expediting the
proceedings, and it may also grant a temporary restraining
order or a writ of preliminary injunction for the preservation
of the rights of the potties pending such proceedings. The
petition shall not interrupt the coarse of the principal case,
unless a temporary restraining order or a writ of preliminary
injunction has been issued, enjoining the public respondent
from further proceeding with the case.
The public respondent shall proceed with the principal case

within ten (10) days from the filing of a petition for certiorari
with a higher court or tribunal, absent a temporary
restraining order or a preliminary injunction, or upon its
expiration. Failure of the public respondent to proceed with
the principal case may be a ground for an administrative
charge.
The Court of Appeals did not issue any temporary restraining order or writ of
preliminary injunction against the order to deposit rent. Thus, the order to
deposit rent stands. Catalino should have deposited in court the monthly rent as
the estate court ordered. AacDHE
As the contempt court said in its resolution 52 dated January 5, 2010, Catalino,
Ronaldo, and Carmela could have easily obeyed the order to deposit rent. Should
the Court of Appeals affirm the order to deposit rent, Catalino, Ronaldo, and
Carmela "merely have to continue depositing the succeeding monthly [rent]." 53
Should the Court of Appeals reverse the order to deposit rent, the amounts
deposited "need only be returned to whoever is entitled to it." 54
Also, Catalino, Ronaldo, and Carmela claimed that they deposited in a Bank of
the Philippine Islands bank account some of the estate's earnings. 55 As the
contempt court said, Catalino, Ronaldo, and Carmela could have easily
deposited the monthly rent with the court. 56 Instead, Catalino, Ronaldo, and
Carmela chose to disobey the order to deposit rent in opposition to the estate
court's authority. Thus, Catalino, Ronaldo, and Carmela are guilty of indirect
contempt.
Catalino argues that he did not deposit the rent in court because the order to
deposit "[has] not yet attained finality." 57 The Court of Appeals affirmed the
order to deposit rent, 58 and Catalino filed a petition for review on certiorari with
this court. Since this court has yet to resolve his petition for review on certiorari,
Catalino argues that he cannot be enjoined to deposit rent in court.
Catalino uses "finality" in the sense of a final order appealed to a higher court.
This "finality" concept does not apply to interlocutory orders. Interlocutory
orders never attain finality 59 and do not "finally dispose of the [main] case." 60
Thus, interlocutory orders cannot be appealed. 61 Interlocutory orders stand
unless set aside by a writ of certiorari 62 or enjoined by a temporary restraining
order or a writ of preliminary injunction issued against them. 63 aTEADI
The order to deposit rent is interlocutory. It does not finally dispose of the main
case, that is, the petition for settlement of Ricardo Tanchanco's estate. Since the
order to deposit rent is interlocutory, it cannot be appealed. Catalino correctly
filed a petition for certiorari against the order to deposit rent.
When Catalino filed the petition for certiorari against the order to deposit rent,
the Court of Appeals did not issue a temporary restraining order or writ of
preliminary injunction against the order. The Court of Appeals also denied
Catalino's petition for certiorari and affirmed the order to deposit rent.
Thus, the order to deposit rent stands and should be complied with. This is
regardless of the petition for review on certiorari of the dismissal of the petition
for certiorari. The petition for review on certiorari merely continues 64 the petition
for certiorari which, as discussed, does not interrupt the proceedings in the
principal case.
Catalino alleges that the estate court itself refused to implement the order to
deposit rent. After the estate court granted Melissa's motion to deposit rent,
Melissa filed an ex parte motion to direct Catalino, Ronaldo, and Carmela to
deposit the rent over the Bel-Air property. In its order dated February 21, 2011,
the estate court refused to resolve the ex parte motion. The estate court found it
"premature" to resolve the ex parte motion pending Catalino's petition for
certiorari with the Court of Appeals. Since the estate court itself found it
"premature" for Catalino to comply with the order to deposit rent, Catalino
argues that he cannot be compelled to comply with the order to deposit rent.
There is no "contumacious conduct" 65 to speak of. SIaHTD
In its order dated February 21, 2011, the estate court said:
Considering that the Order sought to be implemented by

[Melissa] is already the subject of a Petition for Certiorari.
(CA-G.R. SP No. 103130) now pending before the Court of
Appeals, which was filed by herein oppositor Catalino G.
Tanchanco, the Court finds it premature to resolve at this
point in time the instant Ex-Parte Motion. Hence, the
resolution of the said motion is hereby held in abeyance to
await the final resolution of the said certiorari case
questioning the Order of this Court dated October 31, 2007.
66
As Melissa argued in her comment on the petition for review on certiorari, the
estate court only refused to resolve the ex parte motion. 67 However, the order to
deposit rent stands: Catalino disobeyed the order to deposit rent even before the
estate court issued the order dated February 21, 2011. Catalino remains guilty of
indirect contempt.
The estate court only exhibited judicial courtesy to the Court of Appeals. The
estate court, however, is reminded of its duty to enforce its order despite a
petition for certiorari. 68
The power to punish for contempt is exercised "on the preservative and not on
the vindictive principle." 69 Courts should not exercise this power "unless
necessary in the interest of justice." 70 Nevertheless, courts should not hesitate to
exercise this power if acts "patently and clearly derogatory to [their authority]"
71 are committed against them.
||| (Tanchanco, Jr. v. Gozum, G.R. No. 205504 (Notice), February 03, 2014)
THIRD DIVISION
[G.R. No. 167988. February 6, 2007.]
MA. CONCEPCION L. REGALADO, petitioner, vs.

ANTONIO S. GO, respondent.
DECISION
CHICO-NAZARIO, J p:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, of
the Resolution 1 dated 30 August 2004 of the Court of Appeals, finding petitioner
Ma. Concepcion L. Regalado (Atty. Regalado) guilty of indirect contempt.
Likewise assailed in this petition is the Resolution 2 denying her Motion for
Reconsideration. The dispositive portion of the Resolution reads:
WHEREFORE, Atty. Ma. Concepcion Regalado of De Borja

Medialdea Bello Guevarra and Gerodias Law Offices is
declared GUILTY of INDIRECT CONTEMPT and is ordered
to pay a fine of Five Thousand Pesos (P5,000), with a STERN
WARNING that a repetition of the same or similar acts in
the future will be dealt with more severely. The imposed
fine should be paid to this Court upon finality hereof.
Let a copy of this resolution be furnished the Bar Confidant

(sic), the Integrated Bar of the Philippines and the Court
Administrator for investigation and possible administrative
sanction. 3
The present controversy stemmed from the complaint of illegal dismissal filed
before the Labor Arbiter by herein respondent Antonio S. Go against Eurotech
Hair Systems, Inc. (EHSI), and its President Lutz Kunack and General Manager
Jose E. Barin.
In a Decision 4 dated 29 December 2000, the Labor Arbiter ruled that respondent
Go was illegally dismissed from employment, the decretal portion of which
reads:

rendered as follows:
1. Declaring [EHSI, Kunack and Barin] guilty of illegal

dismissal;
2. Considering that reinstatement would not be feasible

because of strained relations, [EHSI, Kunack and Barin] are
ordered to pay [herein respondent Go] backwages in the
amount of Php900,000.00 (Php60,000 x 15 months),
separation pay of Php180,000.00 (one month pay for every
year of service = Php60,000 x 3 years);
3. Ordering [EHSI, Kunack and Barin] to pay [respondent

Go] Php500,000.00 as moral damages;
4. Ordering [EHSI, Kunack and Barin] to pay [respondent
Go] Php300,000 as exemplary damages;
5. Ordering the payment of ten percent (10%) of the total

monetary award as attorney's fees in the sum of
Php188,000.00.
All other claims are hereby dismissed for lack of merit.
On appeal to the National Labor Relations Commission (NLRC), EHSI, Kunack

and Barin employed the legal services of De Borja Medialdea Bello Guevarra and
Gerodias Law Offices where herein petitioner Atty. Regalado worked as an
associate. 5
On 11 June 2001, the NLRC rendered a Decision 6 reversing the Labor Arbiter's
decision and declaring that respondent Go's separation from employment was
legal for it was attended by a just cause and was validly effected by EHSI,
Kunack and Barin. The dispositive part of the decision reads:
WHEREFORE, the appealed decision is set aside. The

complaint below is dismissed for being without merit.
For lack of patent or palpable error, the Motion for Reconsideration interposed
by respondent Go was denied by the NLRC in an Order 7 dated 20 December
2001.
Aggrieved, respondent Go elevated the adverse decision to the Court of Appeals

which was docketed as CA-G.R. SP No. 69909 entitled, Antonio S. Go v. National
Labor Relations Commission, Eurotech Hair Systems, Inc., Lutz Kunack and Jose Barin.
CIDTcH
On 9 July 2003, the Court of Appeals promulgated a Decision 8 setting aside the
ruling of the NLRC and reinstating the decision of the Labor Arbiter adjudging
EHSI, Kunack and Barin guilty of illegal dismissal. The appellate court thus
ordered EHSI, Kunack and Barin to pay respondent Go full backwages,
separation pay, moral and exemplary damages. The fallo of the decision reads:
WHEREFORE, the petition for certiorari is GRANTED. The

assailed decision of the NLRC promulgated on July 30, 2001
and its Order dated December 20, 2001 are SET ASIDE while
the decision of Labor Arbiter Waldo Emerson R. Gan dated
December 29, 2000 declaring the dismissal of [herein
respondent Go] as illegal is hereby REINSTATED with the
modification that [EHSI] is hereby Ordered to pay
[respondent Go]:
1. His full backwages from the time of his illegal dismissal
until the finality of this decision;
2. Separation pay equal to one month pay for every year of

service;
3. Moral damages in the amount of P50,000.00; and
4. Exemplary damages in the amount of P20,000.00
The award of attorney's fees is DELETED.
EHSI, Kunack and Barin were able to receive a copy of the decision through
registered mail on 17 July 2003 while respondent Go received his copy on 21 July
2003. 9
On 16 July 2003, after the promulgation of the Court of Appeals decision but
prior to the receipt of the parties of their respective copies, the parties decided to
settle the case and signed a Release Waiver and Quitclaim 10 with the approval
of the Labor Arbiter. In view of the amicable settlement, the Labor Arbiter, on the
same day, issued an Order 11 dismissing the illegal dismissal case with
prejudice. The order thus reads:
In view of the Release, Waiver and Quitclaim voluntarily

executed by the [herein respondent] Antonio S. Go, let the
instant case be as it is hereby DISMISSED WITH
PREJUDICE.
The execution of the compromise agreement was attended by the counsel for
EHSI, Kunack and Barin, petitioner Atty. Regalado, and respondent Go, but in
the absence and without the knowledge of respondent Go's lawyer. 12
After the receipt of a copy of the Court of Appeals decision, respondent Go,
through counsel, filed, on 29 July 2003, a Manifestation with Omnibus Motion 13
seeking to nullify the Release Waiver and Quitclaim dated 16 July 2003 on the
ground of fraud, mistake or undue influence. In the same motion, respondent
Go, through counsel, moved that petitioner Atty. Regalado be made to explain
her unethical conduct for directly negotiating with respondent Go without the
knowledge of his counsel. The motion thus prays:
WHEREFORE, premises considered, it is most respectfully

prayed for the Honorable Court to declare Null and Void the
dismissal of the instant (sic), with prejudice, by Labor (sic)
Waldo Emerson Gan, as well as the Release Waiver and
Quitclaim dated July 16, 2003 signed by [herein respondent
Go] for having been obtained through mistake, fraud or
undue influence committed by [EHSI, Kunack and Barin]
and their counsels (sic).
It is likewise prayed for [EHSI, Kunack and Barin's] counsel,

particularly Atty. Ma. Concepcion Regalado, to be required
to explain why no disciplinary action should be taken
against them (sic) for their (sic), unethical conduct of directly
negotiating with [respondent Go] without the presence of
undersigned counsel, and for submitting the Release, Waiver
and Quitclaim before Labor Arbiter Waldo Emerson Gan
knowing fully well that the controversy between
[respondent Go] and [EHSI] is still pending before this
Honorable Court.
[Respondent Go] likewise prays for such other relief [as may
be] just and equitable under the premises. 14
For their part, EHSI, Kunack and Barin submitted a Manifestation and Motion
with Leave of Court 15 praying that CA-G.R. SP No. 69909 be considered settled
with finality in view of the amicable settlement among the parties which resulted
in the dismissal of respondent Go's complaint with prejudice in the Labor
Arbiter's Order dated 16 July 2003.
In addition, EHSI, Kunack and Barin also filed a Motion for Reconsideration 16
with an ad cautelam that in case of unfavorable action on their foregoing
Manifestation and Motion, the appellate court should reconsider its decision
dated 9 July 2003.
Acting on the motions, the appellate court issued a Resolution 17 on 19

November 2003 annulling the Order of the Labor Arbiter dated 16 July 2003 for
lack of jurisdiction. It also denied for lack of merit EHSI, Kunack and Barin's
Motion for Reconsideration Ad Cautelam. In the same resolution, petitioner Atty.
Regalado was ordered to explain why she should not be cited for contempt of
court for violating Canon 9 of the Canons of Professional Ethics. The decretal
portion of the Resolution reads:
WHEREFORE, premises considered, the Manifestation with

Omnibus Motion is PARTIALLY GRANTED. The order of
Labor Arbiter Gan dismissing the case with prejudice is
hereby declared NULL and VOID for lack of jurisdiction.
[EHSI, Kunack and Barin's] counsel, [herein petitioner] Atty.
Ma. Concepcion Regalado is ordered to SHOW CAUSE
within five (5) days from receipt of this Resolution why she
should not be cited for contempt of court for directly
negotiating with [herein respondent Go] in violation of
Canon 9 of the Canons of Professional Ethics. On the other
hand, the Motion for Reconsideration Ad Cautelam is hereby
denied for lack of merit.
EHSI, Kunack and Barin thus filed a Petition for Review on Certiorari before this
Court, assailing the Court of Appeals decision promulgated on 9 July 2003 and
its Resolution dated 19 November 2003, denying their Motion for
Reconsideration. The case is cognized by another division of this Court.
For her part, petitioner Atty. Regalado submitted a Compliance 18 and explained
that she never took part in the negotiation for the amicable settlement of the
illegal dismissal case with respondent Go which led to the execution of a
compromise agreement by the parties on 16 July 2003. EHSI, Kunack and Barin,
through a Mr. Ragay, a former EHSI employee and a close ally of respondent Go,
were the ones who negotiated the settlement.
Further, petitioner Atty. Regalado maintained that she never met personally
respondent Go, not until 16 July 2003, when the latter appeared before the Labor
Arbiter for the execution of the Release Waiver and Quitclaim. Petitioner Atty.
Regalado claimed that she was in fact apprehensive to release the money to
respondent Go because the latter cannot present any valid identification card to
prove his identity. It was only upon the assurance of Labor Arbiter Gan that
Antonio S. Go and the person representing himself as such were one and the
same, that the execution of the agreement was consummated.
Considering the circumstances, petitioner Atty. Regalado firmly stood that there
was no way that she had directly dealt with respondent Go, to the latter's
damage and prejudice, and misled him to enter into an amicable settlement with
her client.
On 30 August 2004, the Court of Appeals issued a Resolution 19 disregarding

petitioner Atty. Regalado's defenses and adjudging her guilty of indirect
contempt under Rule 71 of the Revised Rules of Court. As declared by the
appellate court, even granting arguendo that petitioner Atty. Regalado did not
participate in the negotiation process, she was nonetheless under the obligation
to restrain her clients from doing acts that she herself was prohibited to perform
as mandated by Canon 16 of the Canons of Professional Ethics. However, instead
of preventing her clients from negotiating with respondent Go who was
unassisted by his counsel, Atty. Regalado actively participated in the
consummation of the compromise agreement by dealing directly with
respondent Go and allowing him to sign the Release Waiver and Quitclaim
without his lawyer.
Undaunted, petitioner Atty. Regalado filed a Motion for Reconsideration which
was also denied by the appellate court for lack of merit. 20
Hence, this instant Petition for Review on Certiorari, 21 raising the following
issues:
I.
WHETHER OR NOT THE COURT OF APPEALS

COMPLETELY VIOLATED PETITIONER'S
CONSTITUTIONAL RIGHTS.
II.
WHETHER OR NOT THE COURT OF APPEALS TOTALLY

DISREGARDED THE MANDATORY PROVISION OF
RULE 71 OF THE 1997 RULES OF CIVIL PROCEDURE.
III.
WHETHER OR NOT THE COURT OF APPEALS

COMMITTED A MANIFEST ERROR OF LAW IN RULING
THAT PETITIONER IS ESTOPPED FROM CHALLENGING
ITS AUTHORITY TO ENTERTAIN THE CONTEMPT
CHARGES AGAINST HER.
IV.
WHETHER OR NOT THE COURT OF APPEALS ACTED

WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN DISREGARDING
THE OVERWHELMING EVIDENCE ON RECORD TO
EFFECT THAT PETITIONER DID NOT COMMIT ANY
CONTUMACIOUS CONDUCT.
V.
WHETHER OR NOT THE COURT OF APPEALS ACTED

WITH GRAVE ABUSE OF DISCRETION AND
COMMITTED A GROSS MISAPPRECIATION OF FACTS
IN FINDING THE PETITIONER GUILTY OF INDIRECT
CONTEMPT ON THE BASIS OF THE CONFLICTING,
UNCORROBORATED, AND UNVERIFIED ASSERTIONS
OF THE RESPONDENT.
Considering that the issues raised herein are both questions of law and fact, and
consistent with our policy that this Court is not a trier of facts, we shall address
only the pure questions of law and leave the factual issues, which are supported
by evidence, as found by the appellate court. It is an oft-repeated principle that in
the exercise of the Supreme Court's power of review, the Court is not a trier of
facts and does not normally undertake the re-examination of the evidence
presented by the contending parties during the trial of the case considering that
the findings of facts of the Court of Appeals, if supported by evidence, are
conclusive and binding upon this Court. 22
Contempt of court is a defiance of the authority, justice or dignity of the court;

such conduct as tends to bring the authority and administration of the law into
disrespect or to interfere with or prejudice parties litigant or their witnesses
during litigation. 23 It is defined as disobedience to the Court by acting in
opposition to its authority, justice, and dignity. It signifies not only a willful
disregard or disobedience of the court's orders, but such conduct as tends to
bring the authority of the court and the administration of law into disrepute or in
some manner to impede the due administration of justice. 24
The power to punish for contempt is inherent in all courts and is essential to the
preservation of order in judicial proceedings and to the enforcement of
judgments, orders, and mandates of the court, and consequently, to the due
administration of justice. 25
Thus, contempt proceedings has a dual function: (1) vindication of public interest
by punishment of contemptuous conduct; and (2) coercion to compel the
contemnor to do what the law requires him to uphold the power of the Court,
and also to secure the rights of the parties to a suit awarded by the Court. 26
In our jurisdiction, the Rules of Court penalizes two types of contempt, namely
direct contempt and indirect contempt. 27
Direct contempt is committed in the presence of or so near a court as to obstruct

or interrupt the proceedings before the same, and includes disrespect toward the
court, offensive personalities toward others, or refusal to be sworn or answer as a
witness, or to subscribe an affidavit or deposition when lawfully required to do
so. 28
On the other hand, Section 3, Rule 71 of the Rules of Court enumerates particular
acts which constitute indirect contempt, thus:
(a) Misbehavior of an officer of a court in the performance of

his official duties or in his official transactions;
(b) Disobedience of or resistance to a lawful writ, process,

order, or judgment of a court, including the act of a person
who, after being dispossessed or ejected from any real
property by the judgment or process of any court of
competent jurisdiction, enters or attempts or induces another
to enter into or upon such real property, for the purpose of
executing acts of ownership or possession, or in any manner
disturbs the possession given to the person adjudged to be
entitled thereto;
(c) Any abuse of or any unlawful interference with the

processes or proceedings of a court not constituting direct
contempt under Section 1 of this Rule;
(d) Any improper conduct tending, directly or indirectly, to

impede, obstruct, or degrade the administration of justice;
(e) Assuming to be an attorney or an officer of a court, and

acting as such without authority;
(f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or property

in the custody of an officer by virtue of an order or process
of a court held by him.
But nothing in this section shall be so construed as to

prevent the court from issuing process to bring the
respondent into court, or from holding him in custody
pending such proceedings. (Emphasis supplied.) 29
Section 4, Rule 71 of the same Rules provides how proceedings for indirect
contempt should be commenced, thus:
SEC. 4. How Proceedings Commenced. Proceedings for

indirect contempt may be initiated motu proprio by the court
against which the contempt was committed by an order or
any other formal charge requiring the respondent to show
cause why he should not be punished for contempt.
In all other cases, charges for indirect contempt shall be

commenced by a verified petition with supporting
particulars and certified true copies of documents or
papers involved therein, and upon full compliance with
the requirements for filing initiatory pleadings for civil
actions in the court concerned. If the contempt charges
arose out of or are related to a principal action pending in
the court, the petition for contempt shall allege that fact but
said petition shall be docketed, heard and decided
separately, unless the court in its discretion orders the
consolidation of the contempt charge and the principal
action for joint hearing and decision. (Emphases supplied.)
As can be gleaned above, the provisions of the Rules are unequivocal. Indirect
contempt proceedings may be initiated only in two ways: (1) motu proprio by the
court; or (2) through a verified petition and upon compliance with the
requirements for initiatory pleadings. Procedural requirements as outlined must
be complied with.
There is no doubt that the complained acts of Atty. Regalado would fall under
paragraphs (a) and (d) of Section 3, Rule 71, as in fact, she was adjudged guilty of
indirect contempt. But were the proceedings conducted in convicting petitioner
done in accordance with law?
In the instant case, the indirect contempt proceedings was initiated by

respondent Go through a Manifestation with Omnibus Motion. 30 It was based
on the aforesaid Motion that the appellate court issued a Resolution 31 dated 19
November 2003, requiring petitioner Atty. Regalado to show cause why she
should not be cited for contempt.
Clearly, respondent Go's Manifestation with Omnibus Motion was the catalyst
which set everything in motion and led to the eventual conviction of Atty.
Regalado. It was respondent Go who brought to the attention of the appellate
court the alleged misbehavior committed by petitioner Atty. Regalado. Without
such positive act on the part of respondent Go, no indirect contempt charge
could have been initiated at all.
Indeed, the appellate court itself, in its Resolution dated 30 August 2004, made
categorical findings as to how the contempt charge was initiated, to wit:
In the present case, [respondent's Go] Manifestation With

Omnibus Motion which led to our 19 November 2003
Resolution requiring Atty. Regalado to explain why she
should not be cited for contempt, . . . . 32
We cannot, therefore, argue that the Court of Appeals on its own initiated the
indirect contempt charge without contradicting the factual findings made by the
very same court which rendered the questioned resolution.
It is true in Leonidas v. Judge Supnet, 33 this Court ruled that the contempt
proceedings was considered commenced by the court motu proprio even if the
show cause order came after the filing of the motions to cite for contempt filed by
the adverse party. The Decision thus reads:
Thus, independently of the motions filed by the Tamondong

Spouses, it was the Pasay MTC which commenced the
contempt proceedings motu proprio. No verified petition is
required if proceedings for indirect contempt are initiated in
this manner, and the absence of a verified petition does not
affect the procedure adopted.
It is true that the Tamondong Spouses did file a Motion To

Cite Plaintiff For Contempt Of Court, dated May 17, 2000. In
this pleading they prayed that Union Bank be declared in
indirect contempt of court for its disobedience to the Pasay
MTC's Order dated May 9, 2000. This Order dated May 9,
2000 specifically directed Union Bank to "return immediately
to the defendants the replevied motor vehicle." However, the
Tamondong Spouses' unverified motion dated May 17, 2000
cannot invalidate the contempt proceedings because these
proceedings were initiated by respondent judge motu proprio
in accordance with Section 4, Rule 71 of the 1997 Rules of
Civil Procedure. caIACE
This above-cited case, however, has no application in the case at bar for the
factual milieu of the cases are different from each other. In Leonidas, there was an
order of the court that was utterly violated by Union Bank. Thus, even in the
absence of the motion of spouses Tamondong to cite Union Bank in contempt,
the court a quo on its own can verily initiate the action. In the present case, the
appellate court could not have acquired knowledge of petitioner Atty. Regalado's
misbehavior without respondent Go's Manifestation with Omnibus Motion
reiterating the alleged deceitful conduct committed by the former.
Having painstakingly laid down that the instant case was not initiated by the
court motu proprio necessitates us to look into the second mode of filing indirect
contempt proceedings.
In cases where the court did not initiate the contempt charge, the Rules prescribe
that a verified petition which has complied with the requirements of initiatory
pleadings as outlined in the heretofore quoted provision of second paragraph,
Section 4, Rule 71 of the Rules of Court, must be filed.
The manner upon which the case at bar was commenced is clearly in
contravention with the categorical mandate of the Rules. Respondent Go filed a
Manifestation with Omnibus Motion, which was unverified and without any
supporting particulars and documents. Such procedural flaw notwithstanding,
the appellate court granted the motion and directed petitioner Atty. Regalado to
show cause why she should not be cited for contempt. Upon petitioner Atty.
Regalado's compliance with the appellate court's directive, the tribunal
proceeded in adjudging her guilty of indirect contempt and imposing a penalty
of fine, completely ignoring the procedural infirmities in the commencement of
the indirect contempt action.
It bears to stress that the power to punish for contempt is not limitless. It must be
used sparingly with caution, restraint, judiciousness, deliberation, and due
regard to the provisions of the law and the constitutional rights of the individual.
34
The limitations in the exercise of the power to punish for indirect contempt are
delineated by the procedural guidelines specified under Section 4, Rule 71 of the
Rules of Court. Strict compliance with such procedural guidelines is mandatory
considering that proceedings against person alleged to be guilty of contempt are
commonly treated as criminal in nature. 35
As explained by Justice Florenz Regalado, 36 the filing of a verified petition that

has complied with the requirements for the filing of initiatory pleading, is
mandatory, and thus states:
1. This new provision clarifies with a regularity norm the

proper procedure for commencing contempt proceedings.
While such proceeding has been classified as special civil
action under the former Rules, the heterogenous practice
tolerated by the courts, has been for any party to file a
motion without paying any docket or lawful fees therefore
and without complying with the requirements for initiatory
pleadings, which is now required in the second paragraph
of this amended section.
xxx xxx xxx
Henceforth, except for indirect contempt proceedings

initiated motu propio by order of or a formal charge by the
offended court, all charges shall be commenced by a
verified petition with full compliance with the requirements
therefore and shall be disposed in accordance with the
second paragraph of this section.
Time and again we rule that the use of the word "shall" underscores the
mandatory character of the Rule. The term "shall" is a word of command, and
one which has always or which must be given a compulsory meaning, and it is
generally imperative or mandatory. 37
In Enriquez v. Enriquez, 38 this Court applied the word "shall" by giving it

mandatory and imperative import and ruled that non-compliance with the
mandatory requirements of the Rules goes into the very authority of the court to
acquire jurisdiction over the subject matter of the case, thus:
"However, the 1997 Rules of Civil Procedure, as amended,

which took effect on July 1, 1997, now require that appellate
docket and other lawful fees must be paid within the same
period for taking an appeal. This is clear from the opening
sentence of Section 4, Rule 41 of the same rules that,
"(W)ithin the period for taking an appeal, the appellant shall
pay to the clerk of court which rendered the judgment or
final order appealed from, the full amount of the appellate
court docket and other lawful fees."
xxx xxx xxx
Time and again, this Court has consistently held that

payment of docket fee within the prescribed period is
mandatory for the perfection of an appeal. Without such
payment, the appellate court does not acquire jurisdiction
over the subject matter of the action and the decision
sought to be appealed from becomes final and executory. 39
(Emphases supplied.)
In United States v. de la Santa, 40 which bears parallelism in the instant case, we

held:
The objection in this case is not, strictly speaking, to the

sufficiency of the complaint, but goes directly to the
jurisdiction of the court over the crime with which the
accused was charged. . . . . (Emphasis supplied.)
Even if the contempt proceedings stemmed from the main case over which the
court already acquired jurisdiction, the Rules direct that the petition for contempt
be treated independently of the principal action. Consequently, the necessary
prerequisites for the filing of initiatory pleadings, such as the filing of a verified
petition, attachment of a certification on non-forum shopping, and the payment
of the necessary docket fees, must be faithfully observed. 41
We now proceed to the issue of estoppel raised by the Court of Appeals. When
petitioner Atty. Regalado brought to the attention of the appellate court through
a Motion for Reconsideration the remedial defect attendant to her conviction, the
Court of Appeals, instead of rectifying the palpable and patent procedural error
it earlier committed, altogether disregarded the glaring mistake by interposing
the doctrine of estoppel. The appellate court ruled that having actively
participated in the contempt proceedings, petitioner Atty. Regalado is now
barred from impugning the Court of Appeals jurisdiction over her contempt case
citing the case of People v. Regalario. 42
We do not agree.
Laches is defined as the "failure or neglect for an unreasonable and unexplained

length of time, to do that which, by exercising due diligence, could or should
have been done earlier, it is negligence or omission to assert a right within a
reasonable length of time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it." 43
The ruling in People v. Regalario 44 that was based on the landmark doctrine
enunciated in Tijam v. Sibonghanoy 45 on the matter of jurisdiction by estoppel is
the exception rather than the rule. Estoppel by laches may be invoked to bar the issue
of lack of jurisdiction only in cases in which the factual milieu is analogous to that in the
cited case. In such controversies, laches should have been clearly present; that is,
lack of jurisdiction must have been raised so belatedly as to warrant the
presumption that the party entitled to assert it had abandoned or declined to
assert it. 46
In Sibonghanoy, 47 the defense of lack of jurisdiction was raised for the first time
in a motion to dismiss filed by the Surety 48 almost 15 years after the questioned
ruling had been rendered. 49 At several stages of the proceedings, in the court a
quo as well as in the Court of Appeals, the Surety invoked the jurisdiction of the
said courts to obtain affirmative relief and submitted its case for final
adjudication on the merits. It was only when the adverse decision was rendered
by the Court of Appeals that it finally woke up to raise the question of
jurisdiction. 50
Clearly, the factual settings attendant in Sibonghanoy are not present in the case at
bar. Petitioner Atty. Regalado, after the receipt of the Court of Appeals resolution
finding her guilty of contempt, promptly filed a Motion for Reconsideration
assailing the said court's jurisdiction based on procedural infirmity in initiating
the action. Her compliance with the appellate court's directive to show cause
why she should not be cited for contempt and filing a single piece of pleading to
that effect could not be considered as an active participation in the judicial
proceedings so as to take the case within the milieu of Sibonghanoy. Rather, it is
the natural fear to disobey the mandate of the court that could lead to dire
consequences that impelled her to comply.
The provisions of the Rules are worded in very clear and categorical language. In
case where the indirect contempt charge is not initiated by the courts, the filing
of a verified petition which fulfills the requirements on initiatory pleadings is a
prerequisite. Beyond question now is the mandatory requirement of a verified
petition in initiating an indirect contempt proceeding. Truly, prior to the
amendment of the 1997 Rules of Civil Procedure, mere motion without
complying with the requirements for initiatory pleadings was tolerated by the
courts. 51 At the onset of the 1997 Revised Rules of Civil Procedure, however,
such practice can no longer be countenanced.
Evidently, the proceedings attendant to the conviction of petitioner Atty.

Regalado for indirect contempt suffered a serious procedural defect to which this
Court cannot close its eyes without offending the fundamental principles
enunciated in the Rules that we, ourselves, had promulgated.
The other issues raised on the merits of the contempt case have become moot and
academic.
WHEREFORE, premises considered, the instant Petition is GRANTED. The

indirect contempt proceedings before the Court of Appeals is DECLARED null
and void.
||| (Regalado v. Go, G.R. No. 167988, February 06, 2007)
THIRD DIVISION
[G.R. No. 182738. February 24, 2014.]
CAPITOL HILLS GOLF & COUNTRY CLUB, INC. and

PABLO B. ROMAN, JR., petitioners, vs. MANUEL O.
SANCHEZ, respondent.
DECISION
PERALTA, J p:
Before Us is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the March 13, 2008 Decision 1 and April 28, 2008 Resolution 2 of the
Court of Appeals (CA) in CA-G.R. SP No. 100911, which affirmed the September
3, 2007 Resolution 3 of the Quezon City Regional Trial Court (RTC), Branch 226.
The relevant facts are as follows:
On July 1, 2002, respondent Manuel O. Sanchez (respondent), a stockholder of

petitioner Capitol Hills Golf & Country Club, Inc. (Corporation) filed a petition for
the nullification of the annual meeting of stockholders of May 21, 2002 and the
special meeting of stockholders of April 23, 2002. 4 Petitioners, along with their
co-defendants, filed an Answer with Counterclaims 5 and, thereafter, a Motion
for Preliminary Hearing of Defendants' Affirmative Defenses, 6 which was
denied on August 9, 2002 7 by Hon. Apolinario D. Bruselas, Jr., then Presiding
Judge of the RTC of Quezon City, Branch 93, now a member of the Court of
Appeals.
On August 12, 2002, respondent filed a Motion for Production and Inspection of
Documents, which the court granted in an Order dated September 10, 2002
directing, thus: IcaHCS
On motion of the plaintiff, without objection from the

defendants, and pursuant to Rule 3 of the Interim Rules of
Procedure Governing Intra-Corporate Controversies, in
relation to Rule 27 of the 1997 Rules of Civil Procedure, the
defendants are ordered to produce and make available for
inspection and photocopying by the plaintiff the following
documents:
1.The list of stockholders of record as of March

2002;
2.All proxies, whether validated or not, which have

been received by the defendants;
3.The specimen signatures of all stockholders as

contained in the Stock and Transfer Book or on the
stub of the stock certificate; and
4.The tape recording of the stockholders' meeting

on April 23, 2002 and May 21, 2002.
The production, inspection and photocopying must be

undertaken in the office premises of defendant corporation
within reasonable business hours of a business day before
the pre-trial with costs to be shouldered by the plaintiff.
SO ORDERED. 8
Petitioners filed a motion for reconsideration 9 (MR) of the August 9, 2002 Order,
which denied their motion for preliminary hearing. Subsequently, they filed a
Supplement to Defendants' Motion for Reconsideration, 10 attaching therewith
an alleged certification issued by the National Printing Office to support their
contention of lack of cause of action on the grounds, among others, that the
Securities and Exchange Commission (SEC) Memorandum Circular No. 5, Series
of 1996, as amended, has not been duly published in accordance with law and
jurisprudence. Pending resolution of the MR, petitioners filed on January 21,
2003 a Motion for Deferment of Implementation of the September 10, 2002 Order.
11
For his part, respondent, on October 7, 2002, filed an Omnibus Motion to

immediately allow him to inspect and photocopy the documents and to compel
petitioners to deposit with the court the documents subject of the September 10,
2002 Order.
On December 9, 2002, then Presiding Judge Bruselas issued an Order 12 denying

petitioners' MR of the Order dated August 9, 2002 and considered respondent's
omnibus motion as a reiteration of his earlier motion for inspection and
production of documents; thus, the immediate implementation of the September
10, 2002 Order was simultaneously ordered.
Petitioners elevated the case to the CA via a petition for certiorari assailing the
Orders dated August 9, 2002 and December 9, 2002. However, the CA denied the
same in its Decision dated June 29, 2004. Petitioners' MR was likewise denied on
November 3, 2004. A petition for review was filed before this Court, but We
denied it per Resolution dated January 10, 2005. aSHAIC
In the meantime, respondent sought to enforce the September 10, 2002 Order.
The supposed inspection on September 30, 2002 was not held per the trial court's
Order dated September 27, 2002. 13 The January 22, 2003 inspection also did not
push through after petitioners and their co-defendants again moved for its
deferment. 14 When the court eventually denied their motion on June 16, 2003,
respondent set the inspection to August 1, 2003. 15 On said date, however, Atty.
Matias V. Defensor, then Corporate Secretary of the Corporation, was alleged to
be out of town and petitioner Pablo B. Roman, Jr. (Roman) purported to have
shown no willingness to comply with the directive. 16 The matter was reported
to the trial court, which merely noted respondent's Report and Manifestation. 17
On November 3, 2003, respondent moved for the issuance of an order for
immediate implementation of the September 10, 2002 Order, as reiterated in the
Order dated June 16, 2003, but the court denied the same in its May 24, 2004
Order. 18 Respondent's motion for issuance of writ of execution suffered the
same fate when the trial court denied it on February 10, 2005. 19
When this Court settled petitioners' challenge to the Orders dated August 9, 2002
and December 9, 2002, respondent filed a Manifestation with Omnibus Motion
for Clarification and to Resolve Plaintiff's Pending Motion for the Issuance of a
Writ of Execution and to Set the Case for Pre-Trial Conference. 20 Acting
thereon, Judge Ramon Paul L. Hernando, likewise now a member of the Court of
Appeals, who took over Branch 93 after the appointment of Judge Bruselas to the
CA, issued the July 10, 2006 Order, 21 which directed the immediate execution of
the September 10, 2002 Order, and set the case for pre-trial.
On February 9, 2007, Judge Hernando issued an Order 22 inhibiting himself from
handling the case in view of his "close friendship relation" with petitioners'
counsel and ordering the transmittal of the records of the case to the Office of the
Clerk of Court for re-raffle to another sala. The case was subsequently re-raffled
to RTC Branch 90 presided by Judge Reynaldo B. Daway, who likewise
voluntarily recused himself from the case per Order 23 dated July 13, 2007.
Finally, on July 30, 2007, the case was re-raffled to RTC Branch 226 presided by
Judge Leah S. Domingo Regala. 24 cTDaEH
On November 28, 2006, the parties agreed to defer the pre-trial conference until
the actual conduct of the inspection of records/documents on December 12, 2006.
25 Before said date, however, petitioners and their co-defendants moved to hold
the inspection to January 11, 2007, which the court granted. 26
During the January 11, 2007 inspection, the only document produced by the
Acting Corporate Secretary, Atty. Antonio V. Meriz, and one of the staff, Malou
Santos, was the Stock and Transfer Book of the Corporation. They alleged that
they could not find from the corporate records the copies of the proxies
submitted by the stockholders, including the tape recordings taken during the
stockholders' meetings, and that they needed more time to locate and find the list
of stockholders as of March 2002, which was in the bodega of the Corporation. 27
This prompted respondent to file a Manifestation with Omnibus Motion praying
that an order be issued in accordance with Section 3, Paragraphs (a) to (d) of Rule
29 of the Rules of Court (Rules), in relation to Section 4, Rule 3 of the Interim
Rules of Procedure Governing Intra-Corporate Controversies under Republic Act
No. 8799 (Interim Rules).
On September 3, 2007, the trial court issued a Resolution, the concluding portion
of which ordered:
In order to give both the plaintiff and defendants one last

chance to comply with the order dated September 10, 2002,
this Court reiterates the said order:
"On motion of the plaintiff, without objection from the

defendants, and pursuant to Rule 3 of the Interim Rules of
Procedure Governing Intra-Corporate Controversies[,] in
relation to Rule 27 of the 1997 Rule[s] of Civil Procedure, the
defendants are ordered to produce and make available for
inspection and photocopying by the plaintiff the following
documents:
1.The list of stockholders of record as of March

2002; TICAcD
2.All proxies, whether validated or not, which have
been received by the defendants;
3.The specimen signatures of all stockholders as

contained in the Stock and Transfer Book or on the
stub of the stock certificate; and
4.The tape recording of the stockholders' meeting

on April 23, 2002 and May 21, 2002.
The production, inspection and photocopying must

be undertaken in the office premises of defendant
corporation within reasonable business hours of a
business day before the pre-trial with costs to be
shouldered by the plaintiff.
SO ORDERED."
This Court orders the defendants to strictly comply with this

order. Failure of the defendants to comply with all the
requirements of the order dated September 10, 2002 will
result in this court citing all the defendants in contempt of
court. This Court shall order defendants solidarily to pay a
fine of P10,000.00 for every day of delay to comply with the
order of September 10, 2002 until the defendants shall have
fully and completely complied with the said order.
Further sanctions shall be meted upon defendants should

the Court find that defendants have been in bad faith in
complying with the order of September 10, 2002 despite the
order of this Court.
Both plaintiff and counsel, as well as defendants and

counsel, are therefore ordered to meet on November 13, 2007
at the corporate offices of defendant firm between 9:00 a.m.
to 4:00 p.m. so that faithful compliance with the order of
September 10, 2002 may be done, otherwise, this Court shall
allow the plaintiff to present evidence to prove their prayer
in their Manifestation with Omnibus Motion filed on
January 31, 2007 and issue a resolution based on the same
accordingly.
SO ORDERED. 28
Petitioners questioned the aforesaid Resolution via Petition for Certiorari (With
Application for Temporary Restraining Order and/or Writ of Preliminary
Injunction). 29 In resolving the petition, the CA ruled that there is no indication
that the RTC committed grave abuse of discretion amounting to lack or excess of
jurisdiction. According to the appellate court, the September 3, 2007 Resolution
was issued pursuant to Section 3, 30 Rule 3 of the Interim Rules, with the
suppletory application of Section 1, 31 Rule 27 of the Rules. It noted that, except
for the sanctions contained therein, the assailed Resolution merely reiterated the
September 10, 2002 Order of Judge Bruselas, which petitioners did not dispute in
accordance with Section 2, 32 Rule 3 of the Interim Rules or via petition for
certiorari. The CA further held that petitioners were not denied due process as
they were able to move for a reconsideration of the September 10, 2002 Order,
but not opted to file the same with respect to the September 3, 2007 Resolution.
TCDHIc
Anent the argument against the threatened imposition of sanction for contempt
of court and the possible payment of a hefty fine, the CA opined that the case of
Dee v. Securities and Exchange Commission 33 cited by petitioners is inapplicable,
since the September 3, 2007 Resolution merely warned petitioners that they
would be cited for contempt and be fined if they fail to comply with the court's
directive. Moreover, it said that the penalty contained in the September 3, 2007
Resolution is in accord with Section 4, 34 Rule 3 of the Interim Rules, in relation
to Section 3, 35 Rule 29 of the Rules.
Petitioners moved to reconsider the CA Decision, but it was denied. 36
Before Us, petitioners contend that the "threatened imminent action" by the RTC
to penalize them sua sponte or without regard to the guideline laid down by the
Court in Engr. Torcende v. Judge Sardido 37 is not proper and calls for the exercise
of Our power of supervision over the lower courts. Likewise, citing Panaligan v.
Judge Ibay, 38 among others, they claim that the threatened citation for contempt
is not in line with the policy that there should be willfullness or that the
contumacious act be done deliberately in disregard of the authority of the court.
We deny.
A person guilty of disobedience of or resistance to a lawful order of a court 39 or

commits any improper conduct tending, directly or indirectly, to impede,
obstruct, or degrade the administration of justice 40 may be punished for indirect
contempt. In particular, Section 4, Rule 3 of the Interim Rules states that, in
addition to a possible treatment of a party as non-suited or as in default, the
sanctions prescribed in the Rules for failure to avail of, or refusal to comply with,
the modes of discovery shall apply. Under Section 3, Rule 29 of the Rules, if a
party or an officer or managing agent of a party refuses to obey an order to
produce any document or other things for inspection, copying, or photographing
or to permit it to be done, the court may make such orders as are just. The
enumeration of options given to the court under Section 3, Rule 29 of the Rules is
not exclusive, as shown by the phrase "among others." Thus, in Republic v.
Sandiganbayan, 41 We said:
To ensure that availment of the modes of discovery is

otherwise untrammeled and efficacious, the law imposes
serious sanctions on the party who refuses to make
discovery, such as dismissing the action or proceeding or
part thereof, or rendering judgment by default against the
disobedient party; contempt of court, or arrest of the party or
agent of the party; payment of the amount of reasonable
expenses incurred in obtaining a court order to compel
discovery; taking the matters inquired into as established in
accordance with the claim of the party seeking discovery;
refusal to allow the disobedient party support or oppose
designated claims or defenses; striking out pleadings or
parts thereof; staying further proceedings. 42
If adjudged guilty of indirect contempt, the respondent who committed it against

a Regional Trial Court or a court of equivalent or higher rank may be punished
with a fine not exceeding thirty thousand pesos, or imprisonment not exceeding
six (6) months, or both. 43 In this case, the threatened sanction of possibly
ordering petitioners to solidarily pay a fine of P10,000.00 for every day of delay
in complying with the September 10, 2002 Order is well within the allowable
range of penalty.
As far as the proceedings for indirect contempt is concerned, the case of Baculi v.
Judge Belen 44 is instructive:
. . . Under the Rules of Court, there are two ways of initiating

indirect contempt proceedings: (1) motu proprio by the court;
or (2) by a verified petition.
In the Matter of the Contempt Orders against Lt. Gen. Jose M.

Calimlim and Atty. Domingo A. Doctor, Jr. (Calimlim) clarified
the procedure prescribed for indirect contempt proceedings.
We held in that case: EIaDHS
In contempt proceedings, the prescribed procedure

must be followed. Sections 3 and 4, Rule 71 of the
Rules of Court provide the procedure to be
followed in case of indirect contempt. First, there
must be an order requiring the respondent to show
cause why he should not be cited for contempt.
Second, the respondent must be given the
opportunity to comment on the charge against him.
Third, there must be a hearing and the court must
investigate the charge and consider respondent's
answer. Finally, only if found guilty will respondent
be punished accordingly. (Citations omitted.)
As to the second mode of initiating indirect contempt

proceedings, that is, through a verified petition, the rule is
already settled in Regalado v. Go:
In cases where the court did not initiate the

contempt charge, the Rules prescribe that a verified
petition which has complied with the requirements
of initiatory pleadings as outlined in the heretofore
quoted provision of second paragraph, Section 4,
Rule 71 of the Rules of Court, must be filed.
The Rules itself is explicit on this point:
In all other cases, charges for indirect contempt

shall be commenced by a verified petition with
supporting particulars and certified true copies of
documents or papers involved therein, and upon
full compliance with the requirements for filing
initiatory pleadings for civil actions in the court
concerned. If the contempt charges arose out of or
are related to a principal action pending in the
court, the petition for contempt shall allege that fact
but said petition shall be docketed, heard and
decided separately, unless the court in its
discretion orders the consolidation of the contempt
charge and the principal action for joint hearing
and decision. (Emphasis added.)
Thus, where there is a verified petition to cite someone in

contempt of court, courts have the duty to ensure that all the
requirements for filing initiatory pleadings have been
complied with. It behooves them too to docket the petition,
and to hear and decide it separately from the main case,
unless the presiding judge orders the consolidation of the
contempt proceedings and the main action.
But in indirect contempt proceedings initiated motu proprio

by the court, the above rules, as clarified in Regalado, do not
necessarily apply. First, since the court itself motu proprio
initiates the proceedings, there can be no verified petition to
speak of. Instead, the court has the duty to inform the
respondent in writing, in accordance with his or her right to
due process. This formal charge is done by the court in the
form of an Order requiring the respondent to explain why
he or she should not be cited in contempt of court.
In Calimlim, the Judge issued an Order requiring the

petitioners to explain their failure to bring the accused
before the RTC for his scheduled arraignment. We held in
that case that such Order was not yet sufficient to initiate the
contempt proceedings because it did not yet amount to a
show-cause order directing the petitioners to explain why
they should not be cited in contempt. The formal charge has
to be specific enough to inform the person, against whom
contempt proceedings are being conducted, that he or she
must explain to the court; otherwise, he or she will be cited
in contempt. The Order must express this in clear and
unambiguous language.
xxx xxx xxx
Second, when the court issues motu proprio a show-cause

order, the duty of the court (1) to docket and (2) to hear and
decide the case separately from the main case does not arise,
much less to exercise the discretion to order the
consolidation of the cases. There is no petition from any
party to be docketed, heard and decided separately from the
main case precisely because it is the show-cause order that
initiated the proceedings.
What remains in any case, whether the proceedings are

initiated by a verified petition or by the court motu proprio, is
the duty of the court to ensure that the proceedings are
conducted respecting the right to due process of the party
being cited in contempt. In both modes of initiating indirect
contempt proceedings, if the court deems that the answer to
the contempt charge is satisfactory, the proceedings end. The
court must conduct a hearing, and the court must consider
the respondent's answer. Only if found guilty will the
respondent be punished accordingly.
xxx xxx xxx
In contempt proceedings, the respondent must be given the

right to defend himself or herself and have a day in court
a basic requirement of due process. This is especially so in
indirect contempt proceedings, as the court cannot decide
them summarily pursuant to the Rules of Court. As We have
stated in Calimlim, in indirect contempt proceedings, the
respondent must be given the opportunity to comment on
the charge against him or her, and there must be a hearing,
and the court must investigate the charge and consider the
respondent's answer. 45
In this case, the proceedings for indirect contempt have not been initiated. To the
Court's mind, the September 3, 2007 Resolution could be treated as a mere
reiteration of the September 10, 2002 Order. It is not yet a "judgment or final
order of a court in a case of indirect contempt" as contemplated under the Rules.
The penalty mentioned therein only serves as a reminder to caution petitioners of
the consequence of possible non-observance of the long-overdue order to
produce and make available for inspection and photocopying of the requested
records/documents. In case of another failure or refusal to comply with the
directive, the court or respondent could formally initiate the indirect contempt
proceedings pursuant to the mandatory requirements of the Rules and existing
jurisprudence. CaSAcH
Even if We are to treat the September 3, 2007 Resolution as a "judgment or final

order of a court in a case of indirect contempt," this would still not work to
petitioners' advantage. Section 11, Rule 71 of the Rules of Court lays down the
proper remedy from a judgment in indirect contempt proceedings. It states:
Sec. 11.Review of judgment or final order; bond for stay. The

judgment or final order of a court in a case of indirect
contempt may be appealed to the proper court as in criminal
cases. But execution of the judgment or final order shall not
be suspended until a bond is filed by the person adjudged in
contempt, in an amount fixed by the court from which the
appeal is taken, conditioned that if the appeal be decided
against him he will abide by and perform the judgment or
final order.
The recourse provided for in the above-mentioned provision is clear enough: the
person adjudged in indirect contempt must file an appeal under Rule 41 (Appeal
from the Regional Trial Courts) and post a bond for its suspension pendente lite.
46 Obviously, these were not done in this case. Instead, petitioners filed a
petition for certiorari under Rule 65 of the Rules and did not post the required
bond, effectively making the September 3, 2007 Resolution final and executory.
WHEREFORE, premises considered, the instant Petition is DENIED. The March

13, 2008 Decision and April 28, 2008 Resolution of the Court of Appeals in CA-
G.R. SP No. 100911, which affirmed the September 3, 2007 Resolution of the
Quezon City Regional Trial Court, Branch 226, are AFFIRMED.
||| (Capitol Hills Golf & Country Club, Inc. v. Sanchez, G.R. No. 182738, February
24, 2014)
SECOND DIVISION
[G.R. No. 186589. July 18, 2014.]
RICARDO C. SILVERIO, SR. and LORNA CILLAN-

SILVERIO, petitioners, vs. RICARDO S. SILVERIO, JR.,
respondent.
DECISION
DEL CASTILLO, J p:
A hearing is required in order to resolve a charge of indirect contempt; the

respondent to the charge may not be convicted on the basis of written pleadings
alone.
This Petition for Review on Certiorari 1 seeks to set aside the February 25, 2009
Decision 2 of the Court of Appeals (CA) in CA-G.R. SP No. 104060, entitled
"Ricardo C. Silverio, Sr. and Lorna Cillan-Silverio, Petitioners, versus Ricardo S.
Silverio, Jr., Respondent."
Factual Antecedents
In an October 31, 2006 Omnibus Order 3 issued by Branch 57 of the Regional
Trial Court of Makati in Spec. Proc. M-2629 entitled "In re: Intestate Estate of the
Late Beatriz S. Silverio, Ricardo C. Silverio, Sr., Petitioner, versus Ricardo S. Silverio,
Jr., Heir-Administrator Designate, Edmundo S. Silverio, Heir-Movant, and Ligaya S.
Silverio, represented by her Legal Guardian Nestor Dela Merced II, Heir-Intervenor," it
was decreed as follows:
WHEREFORE, above premises considered, this Court for the

foregoing reasons resolves to grant the following:
(1) Partially reconsidering Nos. 1 and 5 of its Order dated

December 12, 2005, thus upholding the granting of Letters of
Administration to Ricardo S. Silverio, Jr. anent the Estate of
Beatriz S. Silverio in lieu of Ricardo C. Silverio, Sr., who is
removed as Administrator for gross violation of his duties
and functions under Section 1, Rule 81 of the Rules of Court;
(2) Allowing Ricardo S. Silverio, Jr. to immediately take his

oath as Administrator and exercise his duties and functions
under his Administrator's Bond Utassco No. JCL(1)-001-
1001, if still valid, or upon posting a new Administrator's
Bond of PHP1,000,000.00;
(3) Allowing the sale of the properties located at (1) No. 82

Cambridge Circle, Forbes Park, Makati City, covered by
T.C.T. No. 137155 issued by Register of Deeds of Makati
City; (2) No. 3 Intsia Road, Forbes Park, Makati City covered
by T.C.T. No. 137154 issued by the Register of Deeds of
Makati City; and (3) No. 19 Taurus St., Bel-Air Subd., Makati
City covered by TCT No. 137156 issued by the Register of
Deeds of Makati City to partially settle the intestate estate of
the late Beatriz S. Silverio, and authorizing the
Administrator to undertake the proper procedure of
transferring the titles involved to the name of the estate; and
IaSCTE
(4) To apply the proceeds of the sale mentioned in Number 3

above to the payment of the taxes, interests, penalties and
other charges, if any, and to distribute the residue among the
heirs Ricardo [C.] Silverio, Sr., Ricardo S. Silverio, Jr., Ligaya
S. Silverio represented by Legal Guardian Nestor S. Dela
Merced II, Edmundo S. Silverio and Nelia S. Silverio-Dee in
accordance with the law on intestacy.
SO ORDERED. 4
Petitioner Ricardo C. Silverio, Sr. (Ricardo Sr.) is the surviving spouse of the
decedent Beatriz S. Silverio, with whom he has children: herein respondent
Ricardo Jr. (Ricardo Jr.); Edmundo; Ligaya; and Nelia Silverio-Dee (Nelia). Lorna
Cillan-Silverio (Lorna) is Ricardo Sr.'s second wife. The subject matter of Spec.
Proc. M-2629 is the decedent's intestate estate (the estate), which includes, among
others, shares of stock in Pilipinas Development Corporation (PDC) and a
residential house in Urdaneta Village (house at Urdaneta Village).
Nelia filed a Petition for Certiorari with the CA docketed as CA-G.R. SP No.
97196 5 questioning the trial court's October 31, 2006 Omnibus Order,
particularly Ricardo Jr.'s appointment as the new administrator. The CA later
issued two Resolutions, which granted Nelia's application for a writ of
preliminary injunction, to wit:
1. A July 4, 2007 Resolution, 6 with the following decretal portion:
WHEREFORE, premises considered, the Private

Respondents' motion(s) for the reconsideration of Our
February 5, 2007 Resolution are DENIED. The Petitioner's
application for a writ of injunction is hereby GRANTED.
Accordingly, let a Writ of Preliminary Injunction issue upon

posting of the bond in the amount of two million pesos
(PhP2,000,000.00) enjoining the Respondents from enforcing
the October 31, 2006 Omnibus Order issued in Sp. Proc. M-
2629; and, allowing Ricardo [C.] Silverio, Sr. to continue as
administrator, pending resolution of the instant petition.
aEcHCD
It appearing that the required pleadings have already been

filed and no other pleading may be forthcoming per the
Judicial Records Division's verification report of June 19,
2007, the main petition may be considered submitted for
resolution.
SO ORDERED. 7
2. A February 29, 2008 Resolution, 8 which decreed:
WHEREFORE, the ten million[-]peso (PhP10,000,000.00)

bond posted by the Petitioner under PSIC Bond No. JCL (8)
00207102119 is APPROVED. Accordingly, by this WRIT OF
PRELIMINARY INJUNCTION, the Respondents, their
agents or anybody acting in their behalf, are ENJOINED
from executing, enforcing or implementing any writ of
execution, order, or resolution for the enforcement of the
October 31, 2006 Omnibus Order issued by the Respondent
Court in Sp. Proc. M-2629 thereby allowing Ricardo [C.]
Silverio, Sr. to continue as administrator during the
pendency of this case.
The Petitioner's motion seeking the reconsideration of Our

January 3, 2008 Resolution increasing the amount of the
bond from two (2) million to ten (10) million pesos, having
been rendered moot and academic by her subsequent
submission of a bond in the increased amount, is DENIED.
SO ORDERED. 9
On September 3, 2007, Ricardo Jr. filed with this Court an "Appeal under Rule 45
and/or Certiorari under Sec. 1, Rule 65" with a prayer for the issuance of a
temporary restraining order and/or writ of preliminary injunction, docketed as
G.R. No. 178676, 10 seeking among others a reversal of the CA's July 4, 2007
Resolution and the issuance of injunctive relief. Respondent contended therein
that the CA acted with grave abuse of discretion in issuing the July 4, 2007
Resolution and in granting injunctive relief against him. TADIHE
On June 13, 2008, Ricardo Jr. wrote and sent two letters, one each to petitioners.
Ricardo Jr. demanded in the first letter that Ricardo Sr. cease and desist from 1)
exercising the rights of a stockholder in PDC; 2) managing PDC's affairs and
business; and 3) transacting with third persons for and in behalf of PDC and to
turn over all of its books and records. In the second letter, Ricardo Jr. demanded
that Lorna immediately vacate the house at Urdaneta Village. 11

On June 25, 2008, petitioners filed with the CA a Petition for Indirect Contempt,
12 docketed as CA-G.R. SP No. 104060, seeking that herein respondent Ricardo
Jr. be declared in indirect contempt of court and punished accordingly. They
charged that respondent's June 13, 2008 demand letters violate and defy the CA's
July 4, 2007 and February 29, 2008 Resolutions in CA-G.R. SP No. 97196, which
enjoined respondent's appointment as administrator pursuant to the October 31,
2006 Omnibus Order; allowed petitioner Ricardo Sr. to continue as administrator
of the estate; and enjoined Ricardo Jr. and his co-respondents in Spec. Proc. M-
2629 from executing, enforcing or implementing any writ of execution, order, or
resolution for the enforcement of the Omnibus Order. Petitioners likewise
charged that AEIcSa
14. [Last] June 20, 2008 at about 2:00 in the afternoon,

respondent Silverio Jr., accompanied by his two lawyers:
Attys. Efren Vincent M. Dizon and Charlie Mendoza and
some John Does, without the benefit of a final court order or
writ of execution and without the assistance of a sheriff,
attempted to enforce the Decision of the Regional Trial Court
of Makati City, Branch 145 which was appealed to the Court
of Appeals by way of Notice of Appeal, by trying to forcibly
evict against their will, the occupants of one of the
residence(s) of his petitioner father Silverio Sr. at #21
Cruzada, Urdaneta Village, Makati City, covered by the
Testate Intestate Case appealed to this Honorable Court
which issued the aforementioned injunction. In the process,
respondent Silverio Jr. created quite a commotion and public
disturbance inside the subdivision. Only [with] the timely
intervention of the officers of the homeowners association,
barangay officials, some policemen and this representation
was respondent Silverio Jr. prevailed upon to peacefully
leave the place. ETDAaC
15. Such acts of respondent Ricardo S. Silverio, Jr. in trying

to eject his father from his residence without the benefit of a
final court order/writ of execution, [are] not only . . . illegal
and show disrespect for elders, but also smack a lot of bad
taste in contravention [of] our established customs and
tradition[s]. 13
Petitioners argued further that PDC and the house at Urdaneta Village are assets
of the estate placed under Ricardo Sr.'s charge as administrator through the July
4, 2007 and February 29, 2008 Resolutions, which characterize respondent's acts
as undue interference with Ricardo Sr.'s administratorship; moreover,
respondent's acts contravene Philippine customs and traditions. Thus,
respondent's acts constitute indirect contempt as defined and punished under
Rule 71, Section 3 of the 1997 Rules of Civil Procedure 14 (1997 Rules).
On February 25, 2009, the CA issued the assailed Decision, which held thus
cCaDSA
After a careful evaluation of the evidentiary records, this

Court finds it inappropriate to make a ruling on whether or
not the Respondent has committed certain acts, supra,
violative of Revised Rule 71 of the Rules.
Records show that on 3 September 2007, the Respondent has

interposed an appeal from the CA Resolution dated 4 July
2007, supra, before the Supreme Court questioning in essence
said resolution as having been granted to the Petitioners
with grave abuse of discretion amounting to lack or in excess
of jurisdiction, hence, allegedly null and void.
Accordingly, in the light of the foregoing development, this

Court is compelled to restrain itself from resolving the issues
in the instant petition. Otherwise put, it is imperative that
We instantly pull the plug and let the High Tribunal settle
the controversy surrounding the propriety in the issuance of
CA Resolution dated 4 July 2007, supra, from which order
the Respondent has allegedly committed acts in defiance
thereof.
As laid down by the High Tribunal in Manila Electric

Company v. Phil. Consumers Foundation, Inc., et al., thus:
. . . it is the duty of the lower courts to obey the
Decisions of this Court and render obeisance to its
status as the apex of the hierarchy of courts. "A
becoming modesty of inferior courts demands
conscious realization of the position that they
occupy in the interrelation and operation of the
integrated judicial system of the nation." "There is
only one Supreme Court from whose decisions all
other courts should take their bearings". . .
WHEREFORE, premises considered, the instant Petition is

hereby DISMISSED.
SO ORDERED. 15
On this account, petitioners filed the present Petition.
Issue
In the Petition, it is submitted that
THE PENDENCY OF AN APPEAL BEFORE THE

[SUPREME COURT] ON THE VALIDITY OF AN
INJUNCTION ISSUED BY THE COURT OF APPEALS
DOES NOT PRECLUDE THE [LATTER] FROM
ADJUDICATING THE QUESTION OF WHETHER . . .
SUPERVENING ACTS COMMITTED BY ONE OF THE
PARTIES IN THE COURT OF APPEALS CASE
CONSTITUTE INDIRECT CONTEMPT BASED ON THE
PRINCIPLE OF RESPECT FOR HIERARCHY OF
COURTS. THUS, THE COURT OF APPEALS ERRED
WHEN IT INVOKED THE PRINCIPLE OF RESPECT FOR
HIERARCHY OF COURTS IN DISMISSING THE
PETITION FOR INDIRECT CONTEMPT. 16
Petitioners' Arguments acHDTE

Petitioners, in praying that the assailed Decision be set aside and that the Court
declare respondent guilty of indirect contempt, maintain that the July 4, 2007 and
February 29, 2008 CA Resolutions in CA-G.R. SP No. 97196 are valid and
standing orders that must be obeyed unless and until they are reversed or set
aside, and despite the pendency of the petition in G.R. No. 178676; respondent is
bound by what is decreed in the July 4, 2007 Resolution, and without injunctive
relief from this Court, any act performed in contravention thereof constitutes
indirect contempt. Petitioners thus conclude that in refusing to take cognizance
of their petition for indirect contempt, the CA in CA-G.R. SP No. 104060
committed error.
Finally, petitioners urge this Court to take the initiative in finding respondent
guilty of indirect contempt for issuing the June 13, 2008 letters and for attempting
to evict them from their Urdaneta Village home on June 20, 2008, which acts they
believe amount to a defiance and disobedience of the CA's dispositions in CA-
G.R. SP No. 97196. EacHCD
Respondent's Arguments
Arguing for the denial of the Petition, respondent in his Comment 17 submits
that the mere act of writing and sending the June 13, 2008 letters to petitioners
does not make him liable for indirect contempt of court, as they "do not deal
directly or indirectly with any of the enjoined acts enumerated in the 31 October
2006" Omnibus Order. Respondent adds that petitioners have not shown that
petitioner Ricardo Sr. has filed an administrator's bond and has taken his
administrator's oath; because if he has not, then it may not be said that
respondent acted in defiance of the appellate court's Resolutions since he
continued to act as the administrator on the strength of the October 31, 2006
Omnibus Order in Spec. Proc. M-2629. Finally, respondent submits that he may
not be found guilty of indirect contempt in the absence of proof that he
physically carried out the demands contained in his June 13, 2008 letters; though
he admits that he wrote the letters, he nonetheless claims that he did nothing
more beyond sending them.
Our Ruling
The Petition is granted in part.
The pendency of a special civil action for certiorari instituted in relation to a

pending case does not stay the proceedings therein in the absence of a writ of
preliminary injunction or temporary restraining order. Rule 65, Section 7 of the
1997 Rules makes this clear:
The court in which the petition is filed may issue orders

expediting the proceedings, and it may also grant a
temporary restraining order or a writ of preliminary
injunction for the preservation of the rights of the parties
pending such proceedings. The 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 the public respondent from further
proceeding in the case.
The public respondent shall proceed with the principal case

within ten (10) days from the filing of a petition for certiorari
with a higher court or tribunal, absent a temporary
restraining order or a preliminary injunction, or upon its
expiration. Failure of the public respondent to proceed with
the principal case may be a ground for an administrative
charge. (Emphasis supplied)
Petitioners are thus correct in arguing that the pendency of G.R. No. 178676 did
not interrupt the course of CA-G.R. SP No. 97196, in the absence of a temporary
restraining order or writ of preliminary injunction issued in the former case. This
is because "an original action for certiorari is an independent action and is neither
a continuation nor a part of the trial resulting in the judgment complained of." 18
The CA therefore committed error in dismissing CA-G.R. SP No. 104060, or
petitioners' indirect contempt petition, on the ground of pendency of G.R. No.
178676. It need not wait for this Court to resolve G.R. No. 178676 before the
petitioners' contempt charge may be heard.
However, at this point, this Court cannot grant petitioners' plea to resolve the
merits of their petition for indirect contempt; it is the CA that should properly try
the same. Aside from the fact that the CA is the court against which the alleged
contempt was committed, a hearing is required in resolving a charge for indirect
contempt. The respondent in an indirect contempt charge may not be convicted
on the basis of written pleadings alone. 19
Sections 3 and 4, Rule 71 of the Rules of Court, specifically

[outline] the procedural requisites before the accused may
be punished for indirect contempt. First, there must be an
order requiring the respondent to show cause why he
should not be cited for contempt. Second, the respondent
must be given the opportunity to comment on the charge
against him. Third, there must be a hearing and the court
must investigate the charge and consider respondent's
answer. Finally, only if found guilty will respondent be
punished accordingly. The law requires that there be a
charge in writing, duly filed in court, and an opportunity
given to the person charged to be heard by himself or
counsel. What is most essential is that the alleged
contemner be granted an opportunity to meet the charges
against him and to be heard in his defenses. This is due
process, which must be observed at all times.
xxx xxx xxx
In contempt proceedings, the prescribed procedure must

be followed. To be sure, since an indirect contempt charge
partakes the nature of a criminal charge, conviction cannot
be had merely on the basis of written pleadings. A
respondent in a contempt charge must be served with a copy
of the motion/petition. Unlike in civil actions, the Court
does not issue summons on the respondent. While the
respondent is not required to file a formal answer similar to
that in ordinary civil actions, the court must set the
contempt charge for hearing on a fixed date and time on
which the respondent must make his appearance to answer
the charge. . . . 20 (Emphasis supplied)
To be sure, there are more pressing matters that require the attention of this
Court; petitioners' complaint for indirect contempt could very well be resolved
by the appellate court.
WHEREFORE, the Petition is GRANTED IN PART. The February 25, 2009

Decision of the Court of Appeals in CA-G.R. SP No. 104060 is SET ASIDE. The
Court of Appeals is ORDERED to take cognizance of petitioners' June 25, 2008
Petition for Indirect Contempt.
SO
||| (Silverio, Sr. v. Silverio, Jr., G.R. No. 186589, July 18, 2014)
EN BANC
[A.M. No. 10-10-4-SC. June 7, 2011.]
RE: Letter of the UP Law Faculty entitled Restoring

Integrity: A Statement by the Faculty of the University of
the Philippines College of Law on the Allegations of
Plagiarism and Misrepresentation in the Supreme Court
RESOLUTION
For disposition of the Court are the following:
(a)the Motion for Reconsideration 1 dated April 1, 2011 filed

by respondent University of the Philippines (UP)
law professors Tristan A. Catindig and Carina C.
Laforteza; and
(b)the Manifestation 2 dated April 1, 2011 filed by
respondents Dean Marvic M.V.F. Leonen and Prof.
Theodore O. Te.
In support of their Motion for Reconsideration, Professors Catindig and

Laforteza relied on the following grounds:
GROUNDS
A.THIS PROCEEDING, WHILE OSTENSIBLY DOCKETED

AS AN ADMINISTRATIVE MATTER, IS PREMISED ON A
FINDING OF INDIRECT CONTEMPT. ACCORDINGLY,
WITH ALL DUE RESPECT, THE HONORABLE COURT
ERRED IN FINDING THAT THE RESPONDENTS
BREACHED THEIR ETHICAL OBLIGATIONS WITHOUT
OBSERVANCE OF THE DUE PROCESS SAFEGUARDS
GUARANTEED IN AN INDIRECT CONTEMPT
PROCEEDING.
B.WITH DUE RESPECT, THE HONORABLE COURT

ERRED IN RULING THAT (1) THE PLAGIARISM AND
MISREPRESENTATION ISSUES IN THE VINUYA CASE
AND IN A.M. NO. 10-7-17-SC HAVE NO RELATION TO
THE RESTORING INTEGRITY STATEMENT AND THE
SHOW CAUSE RESOLUTION, AND THEREFORE (2) THE
RESPONDENTS ARE NOT ENTITLED TO ACCESS AND
ADDRESS THE EVIDENCE PRESENTED IN A.M. NO. 10-7-
17-SC, TO PRESENT THEIR OWN EVIDENCE IN RESPECT
OF THE PLAGIARISM AND MISREPRESENTATION
ISSUES, AND TO SUPPORT THEIR RESPONSE TO THE
SHOW CAUSE RESOLUTION WITH SUCH EVIDENCE.
C.WITH DUE RESPECT, THE HONORABLE COURT

ERRED IN FINDING THAT THE RESPONDENTS ARE IN
BREACH OF THEIR ETHICAL OBLIGATIONS FOR
HAVING ISSUED THE RESTORING INTEGRITY
STATEMENT. 3
In their Motion for Reconsideration, respondents pray that (a) the Court's
Decision dated March 8, 2011 be reconsidered and set aside and the respondents'
Compliance dated November 18, 2010 be deemed satisfactory, and (b) the Court
expunge the reference in A.M. No. 10-7-17-SC to the respondents (i.e., "joined by
some faculty members of the University of the Philippines school of law")
effectively finding them guilty of making false charges against Associate Justice
Mariano C. del Castillo (Justice Del Castillo). In the alternative, they pray that
they be afforded their full rights to due process and provided the full
opportunity to present evidence on the matters subject of the Show Cause
Resolution dated October 19, 2010. 4 IHAcCS
Anent the first ground, Professors Catindig and Laforteza insist that,
notwithstanding the docketing of this matter as an administrative case, there was
purportedly a finding that respondents were guilty of indirect contempt in view
of (1) the mention made in the Show Cause Resolution dated October 19, 2010 of
In re Kelly, 5 a case involving a contempt charge; and (2) the references to
respondents' "contumacious language" or "contumacious speech and conduct"
and to several authorities which dealt with contempt proceedings in the Decision
dated March 8, 2011.
The shallowness of such argument is all too easily revealed. It is true that
contumacious speech and conduct directed against the courts done by any
person, whether or not a member of the Bar, may be considered as indirect
contempt under Rule 71, Section 3 of the Rules of Court, to wit:
Sec. 3.Indirect contempt to be punished after charge and hearing.

After a charge in writing has been filed, and an
opportunity given to the respondent to comment thereon
within such period as may be fixed by the court and to be
heard by himself or counsel, a person guilty of any of the
following acts may be punished for indirect contempt:
xxx xxx xxx
(d)Any improper conduct tending,

directly or indirectly, to impede,
obstruct, or degrade the administration
of justice.
A charge of indirect contempt, if proven in due proceedings, carry with it

penal sanctions such as imprisonment or a fine or both. 6
The very same contumacious speech or conduct directed against a court or
judicial officer, if committed by a member of the Bar, may likewise subject the
offender to disciplinary proceedings under the Code of Professional
Responsibility, which prescribes that lawyers observe and promote due respect
for the courts. 7 In such disciplinary cases, the sanctions are not penal but
administrative such as, disbarment, suspension, reprimand or admonition.
Contrary to Professors Catindig and Laforteza's theory, what established

jurisprudence tells us is that the same incident of contumacious speech and/or
behavior directed against the Court on the part of a lawyer may be punishable
either as contempt or an ethical violation, or both in the discretion of the Court.
In Salcedo v. Hernandez, 8 for the same act of filing in court a pleading with
intemperate and offensive statements, the concerned lawyer was found guilty of
contempt and liable administratively. For this reason, two separate penalties
were imposed upon him, a fine (for the contempt charge) and reprimand (for his
failure to observe his lawyerly duty to give due respect to the Court).
The full case title 9 of In re: Atty. Vicente Raul Almacen 10 and the sanction
imposed indubitably show that the proceeding involved therein was
disciplinary. Notwithstanding the fact that the Court in Almacen adverted to a
few principles and authorities involving contempt proceedings aside from
jurisprudence on ethical responsibilities of lawyers, Atty. Almacen was only
meted out an administrative sanction (indefinite suspension from the practice of
law) and no penal sanction was imposed upon him. Indeed, in Almacen, the
Court explicitly stated that whether or not respondent lawyer could be held
liable for contempt for his utterances and actuations was immaterial as the sole
issue in his disciplinary case concerns his professional identity, his sworn duty as
a lawyer and his fitness as an officer of the Court. 11 HTDCAS
Conversely, In re Vicente Sotto 12 was purely a contempt proceeding.

Nonetheless, the Court in that case saw fit to remind Atty. Sotto that:
As a member of the bar and an officer of the courts Atty.

Vicente Sotto, like any other, is in duty bound to uphold the
dignity and authority of this Court, to which he owes fidelity
according to the oath he has taken as such attorney, and not
to promote distrust in the administration of justice. Respect
to the courts guarantees the stability of other institutions,
which without such guaranty would be resting on a very
shaky foundation. 13
Atty. Sotto was expressly found liable only for contempt and accordingly
fined the amount of P1,000.00 payable within 15 days from promulgation of
judgment. The unmistakable reference to Atty. Sotto's failure to observe his
ethical duties as a lawyer did not convert the action against him into a
disciplinary proceeding. In fact, part of the disposition of the case was to
require Atty. Sotto to show cause, within the same period given for the
payment of the fine, why he should not be disbarred for his contemptuous
statements against the Court published in a newspaper.
Similar to Salcedo, Zaldivar v. Sandiganbayan 14 involved both contempt and
disciplinary proceedings for the lawyer's act of making public statements to the
media that were offensive and disrespectful of the Court and its members
relating to matters that were sub judice. This was evident in the May 2, 1988
Resolution of the Court which required respondent lawyer to "explain in writing
within ten (10) days from notice hereof, why he should not be punished for
contempt of court and/or subjected to administrative sanctions." 15 In Zaldivar,
however, although the Court found that respondent's act constituted both
contempt and gross misconduct as a member of the Bar, he was only
administratively sanctioned with an indefinite suspension from the practice of
law.
The lesson imparted by the foregoing authorities is that, when the Court initiates
contempt proceedings and/or disciplinary proceedings against lawyers for
intemperate and discourteous language and behavior directed at the courts, the
evil sought to be prevented is the same the degradation of the courts and the
loss of trust in the administration of justice. For this reason, it is not unusual for
the Court to cite authorities on bar discipline (involving the duty to give due
respect to the courts) in contempt cases against lawyers and vice versa.
Thus, when the Court chooses to institute an administrative case against a

respondent lawyer, the mere citation or discussion in the orders or decision in
the administrative case of jurisprudence involving contempt proceedings does
not transform the action from a disciplinary proceeding to one for contempt.
Respondents' contrary position in their motion for reconsideration is bereft of
any rational merit. Had this Court opted to cite respondents for contempt of
court, which is punishable by imprisonment or fine, this Court would have
initiated contempt proceedings in accordance with the Rules of Court. Clearly,
the Court did not opt to do so. We cannot see why respondents would
stubbornly cling to the notion that they were being cited for indirect contempt
under the Show Cause Resolution when there is no basis for such belief other
than their own apparent misreading of the same. HTCSDE
With respect to the second ground offered for reconsideration of the Decision
dated March 8, 2011, respondents continue to insist on their theory, previously
expounded in their Compliance, that the evidence and proceedings in A.M. No.
10-7-17-SC was relevant to their own administrative case and thus; it was
necessary for them to be granted access to the evidence and records of that case
in order to prove their own defenses in the present case. The Decision already
debunked at length the theory that if respondents are able to prove the bases for
their "well founded" concerns regarding the plagiarism charge against Justice Del
Castillo, then they would be exonerated of the administrative charges against
them. It bears repeating here that what respondents have been required to
explain was their contumacious, intemperate and irresponsible language and/or
conduct in the issuance of the Restoring Integrity Statement, which most certainly
cannot be justified by a belief, well-founded or not, that Justice Del Castillo
and/or his legal researcher committed plagiarism.
To dispel respondents' misconception once and for all, it should be stressed that
this Court did not call the attention of respondents for having an opinion
contrary to that of the Court in the plagiarism case against Justice Del Castillo.
Notably, even their co-respondent Prof. Raul T. Vasquez stood fast on his
opinion regarding the plagiarism issue. Still, he was able to simply relate to this
Court how he came to sign the Restoring Integrity Statement and candidly
conceded that he may have failed to assess the effect of the language of the
Statement. This straightforward and honest explanation was found satisfactory
despite the lack of reference to the evidence in A.M. No. 10-7-17-SC or the
holding of any formal trial-type evidentiary hearing, which respondents know
fully well was not mandatory in administrative proceedings. This circumstance
belied respondents' justification for seeking access to the evidence and records of
A.M. No. 10-7-17-SC and their assertion that they have in any way been denied
their due process rights. For the same reason that A.M. 10-7-17-SC and the
present case are independent of each other, a passing mention of respondent law
professors in the Resolution dated February 8, 2011 in A.M. 10-7-17-SC is not
proof that this Court has found respondents guilty of falsely accusing Justice Del
Castillo of plagiarism nor is it any prejudgment of the present case. For if so, no
one would be exonerated or none of the compliances would be found satisfactory
in this administrative case. Again, the case of Prof. Vasquez confirms that this
Court duly considered respondents' submissions in this case before coming to a
decision.
To buttress their third ground for reconsideration, respondents mainly contend

that the Court erred in taking the "emphatic language" in the Statement in
isolation from the other statements evidencing the good intentions of
respondents and calling for constructive action. Again, these arguments have
been substantially addressed in the Decision dated March 8, 2011 and there is no
need to belabor these points here. Suffice it to say that respondents' avowed
noble motives have been given due weight and factored in the determination of
the action taken with respect to submissions of respondents.
In all, the Court finds that respondent Professors Catindig and Laforteza have
offered no substantial arguments to warrant a reconsideration of the Decision
dated March 8, 2011 nor to justify the grant of the reliefs prayed for in their
motion.
As for the Manifestation dated April 1, 2011, Dean Leonen and Professor Te
alleged that "they support the Motion for Reconsideration which was filed by
Respondents Professors Tristan Catindig and Caren Laforteza on April 1, 2011."
The rest of the assertions therein are mere restatements of arguments previously
proffered in respondents' compliances and have been extensively taken up in the
Decision dated March 8, 2011. aIAHcE
Since the Manifestation, apart from being an expression of support for Professors
Catindig and Laforteza's motion for reconsideration, did not raise any new
matter nor pray for any affirmative relief, the Court resolves to merely note the
same.
WHEREFORE, premises considered, the Court hereby RESOLVES to (a) DENY

the Motion for Reconsideration dated April 1, 2011 filed by respondent
Professors Tristan A. Catindig and Carina C. Laforteza; and (b) NOTE the
Manifestation dated April 1, 2011 filed by Dean Marvic M.V.F. Leonen and
Professor Theodore O. Te.
SO ORDERED.
||| (In re: Letter of the UP Law Faculty on Allegations of Plagiarism and
Misrepresentation in the Supreme Court, A.M. No. 10-10-4-SC, June 07, 2011)
EN BANC
[A.M. No. 10-10-4-SC. October 19, 2010.]
RE: LETTER OF THE UP LAW FACULTY ENTITLED

"RESTORING INTEGRITY: A STATEMENT BY THE
FACULTY OF THE UNIVERSITY OF THE PHILIPPINES
COLLEGE OF LAW ON THE ALLEGATIONS OF
PLAGIARISM AND MISREPRESENTATION IN THE
SUPREME COURT"
RESOLUTION
VILLARAMA, JR., J p:
Plagiarism is the act of appropriating the literary composition of another, or parts

or passages of his writings, or the ideas or language of the same, and passing
them off as the product of one's own mind. 1
Allegations of this intellectual offense were hurled by Atty. Harry L. Roque, Jr.
and Atty. Romel R. Bagares against Justice Mariano C. Del Castillo for his
ponencia in the case of Vinuya v. Executive Secretary, G.R. No. 162230, April 28,
2010. In said case, the Court denied the petition for certiorari filed by Filipino
comfort women to compel certain officers of the executive department 2 to
espouse their claims for reparation and demand apology from the Japanese
government for the abuses committed against them by the Japanese soldiers
during World War II. Attys. Roque and Bagares represent the comfort women in
Vinuya v. Executive Secretary, which is presently the subject of a motion for
reconsideration.
The authors and their purportedly plagiarized articles are: (1) Evan J. Criddle
and Evan Fox-Decent from their article, "A Fiduciary Theory of Jus Cogens"
published in 2009 in the Yale Journal of International Law; (2) Christian J. Tams
from his book, "Enforcing Erga Omnes Obligations in International Law"
published by the Cambridge University Press in 2005; and (3) Mark Ellis from his
article, "Breaking the Silence: On Rape as an International Crime" published in
the Case Western Reserve Journal of International Law in 2006. The allegations of
plagiarism centered on Justice Del Castillo's discussion of the principles of jus
cogens and erga omnes.
On August 9, 2010, Attys. Marvic M.V.F. Leonen, Froilan M. Bacungan, Pacifico

A. Agabin, Merlin M. Magallona, Salvador T. Carlota, Carmelo V. Sison, Patricia
R.P. Salvador Daway, Dante B. Gatmaytan, Theodore O. Te, Florin T. Hilbay, Jay
L. Batongbacal, Evelyn (Leo) D. Battad, Gwen G. De Vera, Solomon F. Lumba,
Rommel J. Casis, Jose Gerardo A. Alampay, Miguel R. Armovit, Arthur P. Autea,
Rosa Maria J. Bautista, Mark R. Bocobo, Dan P. Calica, Tristan A. Catindig,
Sandra Marie O. Coronel, Rosario O. Gallo, Concepcion L. Jardeleza, Antonio
G.M. La Via, Carina C. Laforteza, Jose C. Laureta, Owen J. Lynch, Rodolfo Noel
S. Quimbo, Antonio M. Santos, Gmeleen Faye B. Tomboc, Nicholas Felix L. Ty,
Evalyn G. Ursua, Raul V. Vasquez, Susan D. Villanueva, and Dina D. Lucenario,
members of the faculty of the University of the Philippines College of Law
published a statement on the allegations of plagiarism and misrepresentation
relative to the Court's decision in Vinuya v. Executive Secretary. Essentially, the
faculty of the UP College of Law, headed by its dean, Atty. Marvic M.V.F.
Leonen, calls for the resignation of Justice Mariano C. Del Castillo in the face of
allegations of plagiarism in his work. HEISca
Notably, while the statement was meant to reflect the educators' opinion on the
allegations of plagiarism against Justice Del Castillo, they treated such allegation
not only as an established fact, but a truth. In particular, they expressed
dissatisfaction over Justice Del Castillo's explanation on how he cited the
primary sources of the quoted portions and yet arrived at a contrary conclusion
to those of the authors of the articles supposedly plagiarized.
Beyond this, however, the statement bore certain remarks which raise concern
for the Court. The opening sentence alone is a grim preamble to the institutional
attack that lay ahead. It reads:
An extraordinary act of injustice has again been committed

against the brave Filipinas who had suffered abuse during a
time of war.
The first paragraph concludes with a reference to the decision in Vinuya v.
Executive Secretary as a reprehensible act of dishonesty and misrepresentation by
the Highest Court of the land. The authors also not only assumed that Justice Del
Castillo committed plagiarism, they went further by directly accusing the Court
of perpetrating extraordinary injustice by dismissing the petition of the comfort
women in Vinuya v. Executive Secretary. They further attempt to educate this
Court on how to go about the review of the case.
The insult to the members of the Court was aggravated by imputations of

deliberately delaying the resolution of the said case, its dismissal on the basis of
"polluted sources," the Court's alleged indifference to the cause of petitioners, as
well as the supposed alarming lack of concern of the members of the Court for
even the most basic values of decency and respect. Paragraph 9 of their
published statement reads,
But instead of acting with urgency on this case, the Court

delayed its resolution for almost seven years, oblivious to
the deaths of many of the petitioners seeking justice from the
Court. When it dismissed the Vinuya petition based on
misrepresented and plagiarized materials, the Court
decided this case based on polluted sources. By doing so,
the Supreme Court added insult to injury by failing to
actually exercise its "power to urge and exhort the Executive
Department to take up the claims of the Vinuya petitioners.
Its callous disposition, coupled with false sympathy and
nonchalance, belies (sic) [betrays] a more alarming lack of
concern for even the most basic values of decency and
respect. (Emphasis supplied).
The publication of a statement by the faculty of the UP College of Law regarding

the allegations of plagiarism and misrepresentation in the Supreme Court was
totally unnecessary, uncalled for and a rash act of misplaced vigilance. Of public
knowledge is the ongoing investigation precisely to determine the truth of such
allegations. More importantly, the motion for reconsideration of the decision
alleged to contain plagiarized materials is still pending before the Court. We
made it clear in the case of In re Kelly 3 that any publication, pending a suit,
reflecting upon the court, the jury, the parties, the officers of the court, the
counsel with reference to the suit, or tending to influence the decision of the
controversy, is contempt of court and is punishable. TDSICH
While most agree that the right to criticize the judiciary is critical to maintaining
a free and democratic society, there is also a general consensus that healthy
criticism only goes so far. Many types of criticism leveled at the judiciary cross
the line to become harmful and irresponsible attacks. These potentially
devastating attacks and unjust criticism can threaten the independence of the
judiciary. 4 The court must "insist on being permitted to proceed to the
disposition of its business in an orderly manner, free from outside interference
obstructive of its functions and tending to embarrass the administration of
justice." 5
The Court could hardly perceive any reasonable purpose for the faculty's less
than objective comments except to discredit the April 28, 2010 Decision in the
Vinuya case and undermine the Court's honesty, integrity and competence in
addressing the motion for its reconsideration. As if the case on the comfort
women's claims is not controversial enough, the UP Law faculty would fan the
flames and invite resentment against a resolution that would not reverse the said
decision. This runs contrary to their obligation as law professors and officers of
the Court to be the first to uphold the dignity and authority of this Court, to
which they owe fidelity according to the oath they have taken as attorneys, and
not to promote distrust in the administration of justice. 6 Their actions likewise
constitute violations of Canons 10, 11, and 13 7 and Rules 1.02 and 11.05 8 of the
Code of Professional Responsibility. 9
WHEREFORE, in light of the foregoing, Attys. Marvic M.V.F. Leonen, Froilan M.

Bacungan, Pacifico A. Agabin, Merlin M. Magallona, Salvador T. Carlota,
Carmelo V. Sison, Patricia R.P. Salvador Daway, Dante B. Gatmaytan, Theodore
O. Te, Florin T. Hilbay, Jay L. Batongbacal, Evelyn (Leo) D. Battad, Gwen G. De
Vera, Solomon F. Lumba, Rommel J. Casis, Jose Gerardo A. Alampay, Miguel R.
Armovit, Arthur P. Autea, Rosa Maria J. Bautista, Mark R. Bocobo, Dan P. Calica,
Tristan A. Catindig, Sandra Marie O. Coronel, Rosario O. Gallo, Concepcion L.
Jardeleza, Antonio G.M. La Via, Carina C. Laforteza, Jose C. Laureta, Owen J.
Lynch, Rodolfo Noel S. Quimbo, Antonio M. Santos, Gmeleen Faye B. Tomboc,
Nicholas Felix L. Ty, Evalyn G. Ursua, Raul V. Vasquez, Susan D. Villanueva,
and Dina D. Lucenario, members of the faculty of the University of the
Philippines College of Law, are directed to SHOW CAUSE, within ten (10) days
from receipt of a copy of this Resolution, why they should not be disciplined as
members of the Bar for violation of Canons 10, 11, and 13 and Rules 1.02 and
11.05 of the Code of Professional Responsibility.
Further, Dean Marvic M.V.F. Leonen is directed to SHOW CAUSE, within ten
(10) days from receipt of this Resolution, why he should not be disciplinarily
dealt with for violation of Canon 10, Rules 10.01, 10.02 and 10.03 for submitting,
through his letter dated August 10, 2010, during the pendency of G.R. No.
162230, Vinuya v. Executive Secretary and of the investigation before the
Committee on Ethics and Ethical Standards, for the consideration of the Court En
Banc, a dummy which is not a true and faithful reproduction of the purported
statement, entitled "Restoring Integrity: A Statement by the Faculty of the
University of the Philippines College of Law on the Allegations of Plagiarism
and Misrepresentation in the Supreme Court." Enclosed are copies of the said
dummy and signed statement, respectively, attached to the said letter dated
August 10, 2010 and to the Compliance dated August 31, 2010 filed by Roque &
Butuyan Law Offices with the Committee on Ethics and Ethical Standards.
cDTIAC
Let this matter be DOCKETED as a regular administrative matter.
Let service of this Resolution upon the above-named UP College of Law faculty
members be effected by personal delivery.
SO ORDERED.
Corona, C.J., Velasco, Jr., Nachura, Leonardo-de Castro, Brion, Peralta, Bersamin, Perez,
and Mendoza, JJ., concur.
Carpio, J.,I join the Dissenting Opinions of Justice Morales and Justice Sereno.
Carpio Morales, JJ., I certify that Justice Carpio Morales wrote a dissenting
opinion. - CJ Renato C. Corona.
Del Castillo, J., took no part.
Abad, J., is on leave.
Sereno, J.,See dissenting opinion.
Separate
||| (Re: Letter of the UP Law Faculty on Allegations of Plagiarism and

Misrepresentation in the Supreme Court, A.M. No. 10-10-4-SC, October 19, 2010)
EN BANC
[A.M. No. 10-10-4-SC. March 8, 2011.]
RE: LETTER OF THE UP LAW FACULTY ENTITLED

"RESTORING INTEGRITY: A STATEMENT BY THE
SUPREME COURT"
DECISION
For disposition of the Court are the various submissions of the 37 respondent law
professors 1 in response to the Resolution dated October 19, 2010 (the Show
Cause Resolution), directing them to show cause why they should not be
disciplined as members of the Bar for violation of specific provisions of the Code
of Professional Responsibility enumerated therein.
At the outset, it must be stressed that the Show Cause Resolution clearly dockets
this as an administrative matter, not a special civil action for indirect contempt
under Rule 71 of the Rules of Court, contrary to the dissenting opinion of
Associate Justice Maria Lourdes P. A. Sereno (Justice Sereno) to the said October
19, 2010 Show Cause Resolution. Neither is this a disciplinary proceeding
grounded on an allegedly irregularly concluded finding of indirect contempt as
intimated by Associate Justice Conchita Carpio Morales (Justice Morales) in her
dissenting opinions to both the October 19, 2010 Show Cause Resolution and the
present decision.
With the nature of this case as purely a bar disciplinary proceeding firmly in
mind, the Court finds that with the exception of one respondent whose
compliance was adequate and another who manifested he was not a member
of the Philippine Bar, the submitted explanations, being mere denials and/or
tangential to the issues at hand, are decidedly unsatisfactory. The proffered
defenses even more urgently behoove this Court to call the attention of
respondent law professors, who are members of the Bar, to the relationship of
their duties as such under the Code of Professional Responsibility to their civil
rights as citizens and academics in our free and democratic republic.
The provisions of the Code of Professional Responsibility involved in this case

are as follows: EDSHcT
CANON 1 A lawyer shall uphold the constitution, obey

the laws of the land and promote respect for law and legal
processes.
RULE 1.02 A lawyer shall not counsel or abet

activities aimed at defiance of the law or at
lessening confidence in the legal system.
CANON 10 A lawyer owes candor, fairness and good

faith to the court.
Rule 10.01 A lawyer shall not do any falsehood,

nor consent to the doing of any in court; nor shall
he mislead, or allow the Court to be misled by any
artifice.
Rule 10.02 A lawyer shall not knowingly

misquote or misrepresent the contents of paper, the
language or the argument of opposing counsel, or
the text of a decision or authority, or knowingly cite
as law a provision already rendered inoperative by
repeal or amendment, or assert as a fact that which
has not been proved.
Rule 10.03 A lawyer shall observe the rules of

procedure and shall not misuse them to defeat the
ends of justice.
CANON 11 A lawyer shall observe and maintain the

respect due to the courts and to judicial officers and should
insist on similar conduct by others.
RULE 11.05 A lawyer shall submit grievances

against a Judge to the proper authorities only.
CANON 13 A lawyer shall rely upon the merits of his

cause and refrain from any impropriety which tends to
influence, or gives the appearance of influencing the court.
Established jurisprudence will undeniably support our view that when lawyers
speak their minds, they must ever be mindful of their sworn oath to observe
ethical standards of their profession, and in particular, avoid foul and abusive
language to condemn the Supreme Court, or any court for that matter, for a
decision it has rendered, especially during the pendency of a motion for such
decision's reconsideration. The accusation of plagiarism against a member of
this Court is not the real issue here but rather this plagiarism issue has been used
to deflect everyone's attention from the actual concern of this Court to determine
by respondents' explanations whether or not respondent members of the Bar
have crossed the line of decency and acceptable professional conduct and speech
and violated the Rules of Court through improper intervention or interference as
third parties to a pending case. Preliminarily, it should be stressed that it was
respondents themselves who called upon the Supreme Court to act on their
Statement, 2 which they formally submitted, through Dean Marvic M.V.F.
Leonen (Dean Leonen), for the Court's proper disposition. Considering the
defenses of freedom of speech and academic freedom invoked by the
respondents, it is worth discussing here that the legal reasoning used in the past
by this Court to rule that freedom of expression is not a defense in administrative
cases against lawyers for using intemperate speech in open court or in court
submissions can similarly be applied to respondents' invocation of academic
freedom. Indeed, it is precisely because respondents are not merely lawyers but
lawyers who teach law and mould the minds of young aspiring attorneys that
respondents' own non-observance of the Code of Professional Responsibility,
even if purportedly motivated by the purest of intentions, cannot be ignored nor
glossed over by this Court. acHTIC
To fully appreciate the grave repercussions of respondents' actuations, it is

apropos to revisit the factual antecedents of this case.
BACKGROUND OF THE CASE

Antecedent Facts and Proceedings
On April 28, 2010, the ponencia of Associate Justice Mariano del Castillo (Justice
Del Castillo) in Vinuya, et al. v. Executive Secretary (G.R. No. 162230) was
promulgated. On May 31, 2010, the counsel 3 for Vinuya, et al. (the "Malaya
Lolas"), filed a Motion for Reconsideration of the Vinuya decision, raising solely
the following grounds:
I. OUR OWN CONSTITUTIONAL AND

JURISPRUDENTIAL HISTORIES REJECT THIS
HONORABLE COURTS' (SIC) ASSERTION THAT THE
EXECUTIVE'S FOREIGN POLICY PREROGATIVES ARE
VIRTUALLY UNLIMITED; PRECISELY, UNDER THE
RELEVANT JURISPRUDENCE AND CONSTITUTIONAL
PROVISIONS, SUCH PREROGATIVES ARE PROSCRIBED
BY INTERNATIONAL HUMAN RIGHTS AND
HUMANITARIAN STANDARDS, INCLUDING THOSE
PROVIDED FOR IN THE RELEVANT INTERNATIONAL
CONVENTIONS OF WHICH THE PHILIPPINES IS A
PARTY. 4
II. THIS HONORABLE COURT HAS CONFUSED

DIPLOMATIC PROTECTION WITH THE BROADER, IF
FUNDAMENTAL, RESPONSIBILITY OF STATES TO
PROTECT THE HUMAN RIGHTS OF ITS CITIZENS
ESPECIALLY WHERE THE RIGHTS ASSERTED ARE
SUBJECT OF ERGA OMNES OBLIGATIONS AND
PERTAIN TO JUS COGENS NORMS. 5
On July 19, 2010, 6 counsel for the Malaya Lolas, Attys. H. Harry L. Roque, Jr.
(Atty. Roque) and Romel Regalado Bagares (Atty. Bagares), filed a Supplemental
Motion for Reconsideration in G.R. No. 162230, where they posited for the first
time their charge of plagiarism as one of the grounds for reconsideration of the
Vinuya decision. Among other arguments, Attys. Roque and Bagares asserted
that:
I.
IN THE FIRST PLACE, IT IS HIGHLY IMPROPER FOR

THIS HONORABLE COURT'S JUDGMENT OF APRIL 28,
2010 TO PLAGIARIZE AT LEAST THREE SOURCES AN
ARTICLE PUBLISHED IN 2009 IN THE YALE LAW
JOURNAL OF INTERNATIONAL LAW, A BOOK
PUBLISHED BY THE CAMBRIDGE UNIVERSITY PRESS IN
2005 AND AN ARTICLE PUBLISHED IN 2006 IN THE
CASE WESTERN RESERVE JOURNAL OF
INTERNATIONAL LAW AND MAKE IT APPEAR
THAT THESE SOURCES SUPPORT THE JUDGMENT'S
ARGUMENTS FOR DISMISSING THE INSTANT PETITION
WHEN IN TRUTH, THE PLAGIARIZED SOURCES EVEN
MAKE A STRONG CASE FOR THE PETITION'S CLAIMS. 7
They also claimed that "[i]n this controversy, the evidence bears out the fact
not only of extensive plagiarism but of (sic) also of twisting the true intents
of the plagiarized sources by the ponencia to suit the arguments of the
assailed Judgment for denying the Petition." 8 HEDCAS
According to Attys. Roque and Bagares, the works allegedly plagiarized in the
Vinuya decision were namely: (1) Evan J. Criddle and Evan Fox-Decent's article
"A Fiduciary Theory of Jus Cogens;" 9 (2) Christian J. Tams' book Enforcing Erga
Omnes Obligations in International Law; 10 and (3) Mark Ellis' article "Breaking the
Silence: On Rape as an International Crime." 11
On the same day as the filing of the Supplemental Motion for Reconsideration on
July 19, 2010, journalists Aries C. Rufo and Purple S. Romero posted an article,
entitled "SC justice plagiarized parts of ruling on comfort women," on the
Newsbreak website. 12 The same article appeared on the GMA News TV website
also on July 19, 2010. 13
On July 22, 2010, Atty. Roque's column, entitled "Plagiarized and Twisted,"
appeared in the Manila Standard Today. 14 In the said column, Atty. Roque
claimed that Prof. Evan Criddle, one of the authors purportedly not properly
acknowledged in the Vinuya decision, confirmed that his work, co-authored with
Prof. Evan Fox-Decent, had been plagiarized. Atty. Roque quoted Prof. Criddle's
response to the post by Julian Ku regarding the news report 15 on the alleged
plagiarism in the international law blog, Opinio Juris. Prof. Criddle responded to
Ku's blog entry in this wise:
The newspaper's 16 [plagiarism] claims are based on a

motion for reconsideration filed yesterday with the
Philippine Supreme Court yesterday. The motion is
available here:
http://harryroque.com/2010/07/18/supplemental-motion-
alleging-plagiarism-in-the-supreme-court/
The motion suggests that the Court's decision contains

thirty-four sentences and citations that are identical to
sentences and citations in my 2009 YJIL article (co-authored
with Evan Fox-Decent). Professor Fox-Decent and I were
unaware of the petitioners' [plagiarism] allegations until
after the motion was filed today.
Speaking for myself, the most troubling aspect of the court's

jus cogens discussion is that it implies that the prohibitions
against crimes against humanity, sexual slavery, and torture
are not jus cogens norms. Our article emphatically asserts
the opposite. The Supreme Court's decision is available here:
http://sc.judiciary.gov.ph/jurisprudence/2010/april2010/1
62230.htm 17
On even date, July 22, 2010, Justice Del Castillo wrote to his colleagues on the
Court in reply to the charge of plagiarism contained in the Supplemental Motion
for Reconsideration. 18
In a letter dated July 23, 2010, another purportedly plagiarized author in the
Vinuya decision, Dr. Mark Ellis, wrote the Court, to wit:
Your Honours: SEcTHA
I write concerning a most delicate issue that has come to my

attention in the last few days.
Much as I regret to raise this matter before your esteemed

Court, I am compelled, as a question of the integrity of my
work as an academic and as an advocate of human rights
and humanitarian law, to take exception to the possible
unauthorized use of my law review article on rape as an
international crime in your esteemed Court's Judgment in
the case of Vinuya, et al. v. Executive Secretary, et al. (G.R. No.
162230, Judgment of 28 April 2010).
My attention was called to the Judgment and the issue of

possible plagiarism by the Philippine chapter of the
Southeast Asia Media Legal Defence Initiative (SEAMLDI),
19 an affiliate of the London-based Media Legal Defence
Initiative (MLDI), where I sit as trustee.
In particular, I am concerned about a large part of the
extensive discussion in footnote 65, pp. 27-28, of the said
Judgment of your esteemed Court. I am also concerned that
your esteemed Court may have misread the arguments I
made in the article and employed them for cross purposes.
This would be ironic since the article was written precisely
to argue for the appropriate legal remedy for victims of war
crimes, genocide, and crimes against humanity.
I believe a full copy of my article as published in the Case

Western Reserve Journal of International Law in 2006 has been
made available to your esteemed Court. I trust that your
esteemed Court will take the time to carefully study the
arguments I made in the article.
I would appreciate receiving a response from your esteemed

Court as to the issues raised by this letter.
With respect,
(Sgd.) Dr. Mark Ellis 20
In Memorandum Order No. 35-2010 issued on July 27, 2010, the Court formed
the Committee on Ethics and Ethical Standards (the Ethics Committee) pursuant
to Section 13, Rule 2 of the Internal Rules of the Supreme Court. In an En Banc
Resolution also dated July 27, 2010, the Court referred the July 22, 2010 letter of
Justice Del Castillo to the Ethics Committee. The matter was subsequently
docketed as A.M. No. 10-7-17-SC.
On August 2, 2010, the Ethics Committee required Attys. Roque and Bagares to
comment on the letter of Justice Del Castillo. 21
On August 9, 2010, a statement dated July 27, 2010, entitled "Restoring Integrity:
A Statement by the Faculty of the University of the Philippines College of Law
on the Allegations of Plagiarism and Misrepresentation in the Supreme Court"
(the Statement), was posted in Newsbreak's website 22 and on Atty. Roque's
blog. 23 A report regarding the statement also appeared on various on-line news
sites, such as the GMA News TV 24 and the Sun Star 25 sites, on the same date.
The statement was likewise posted at the University of the Philippines College of
Law's bulletin board allegedly on August 10, 2010 26 and at said college's
website. 27 DHACES
On August 11, 2010, Dean Leonen submitted a copy of the Statement of the
University of the Philippines College of Law Faculty (UP Law faculty) to the
Court, through Chief Justice Renato C. Corona (Chief Justice Corona). The cover
letter dated August 10, 2010 of Dean Leonen read:
The Honorable
Supreme Court of the Republic of the Philippines
Through: Hon. Renato C. Corona Chief Justice
Subject: Statement of faculty from the UP College

of Law on the Plagiarism in the case
of Vinuya v. Executive Secretary
Your Honors:
We attach for your information and proper disposition a

statement signed by thirty[-]eight (38) 28 members of the
faculty of the UP College of Law. We hope that its points
could be considered by the Supreme Court en banc.
Respectfully,
(Sgd.)
Marvic M.V.F.
Leonen
Dean and
Professor of Law
(Emphases
supplied.)
The copy of the Statement attached to the above-quoted letter did not contain the
actual signatures of the alleged signatories but only stated the names of 37 UP
Law professors with the notation (SGD.) appearing beside each name. For
convenient reference, the text of the UP Law faculty Statement is reproduced
here:
RESTORING INTEGRITY A STATEMENT BY THE

SUPREME COURT
An extraordinary act of injustice has again been committed

against the brave Filipinas who had suffered abuse during a
time of war. After they courageously came out with their
very personal stories of abuse and suffering as "comfort
women", waited for almost two decades for any meaningful
relief from their own government as well as from the
government of Japan, got their hopes up for a semblance of
judicial recourse in the case of Vinuya v. Executive Secretary,
G.R. No. 162230 (28 April 2010), they only had these hopes
crushed by a singularly reprehensible act of dishonesty and
misrepresentation by the Highest Court of the land. TacESD
It is within this frame that the Faculty of the University of

the Philippines College of Law views the charge that an
Associate Justice of the Supreme Court committed
plagiarism and misrepresentation in Vinuya v. Executive
Secretary. The plagiarism and misrepresentation are not only
affronts to the individual scholars whose work have been
appropriated without correct attribution, but also a serious
threat to the integrity and credibility of the Philippine
Judicial System.
In common parlance, 'plagiarism' is the appropriation and

misrepresentation of another person's work as one's own. In
the field of writing, it is cheating at best, and stealing at
worst. It constitutes a taking of someone else's ideas and
expressions, including all the effort and creativity that went
into committing such ideas and expressions into writing,
and then making it appear that such ideas and expressions
were originally created by the taker. It is dishonesty, pure
and simple. A judicial system that allows plagiarism in any
form is one that allows dishonesty. Since all judicial
decisions form part of the law of the land, to allow
plagiarism in the Supreme Court is to allow the production
of laws by dishonest means. Evidently, this is a complete
perversion and falsification of the ends of justice.
A comparison of the Vinuya decision and the original source

material shows that the ponente merely copied select portions
of other legal writers' works and interspersed them into the
decision as if they were his own, original work. Under the
circumstances, however, because the Decision has been
promulgated by the Court, the Decision now becomes the
Court's and no longer just the ponente's. Thus the Court also
bears the responsibility for the Decision. In the absence of
any mention of the original writers' names and the
publications from which they came, the thing speaks for
itself.
So far there have been unsatisfactory responses from the
ponente of this case and the spokesman of the Court.
It is argued, for example, that the inclusion of the footnotes

from the original articles is a reference to the 'primary'
sources relied upon. This cursory explanation is not
acceptable, because the original authors' writings and the
effort they put into finding and summarizing those primary
sources are precisely the subject of plagiarism. The inclusion
of the footnotes together with portions of their writings in
fact aggravates, instead of mitigates, the plagiarism since it
provides additional evidence of a deliberate intention to
appropriate the original authors' work of organizing and
analyzing those primary sources.
It is also argued that the Members of the Court cannot be

expected to be familiar with all legal and scholarly journals.
This is also not acceptable, because personal unfamiliarity
with sources all the more demands correct and careful
attribution and citation of the material relied upon. It is a
matter of diligence and competence expected of all
Magistrates of the Highest Court of the Land.
But a far more serious matter is the objection of the original

writers, Professors Evan Criddle and Evan Fox-Descent, that
the High Court actually misrepresents the conclusions of
their work entitled "A Fiduciary Theory of Jus Cogens," the
main source of the plagiarized text. In this article they argue
that the classification of the crimes of rape, torture, and
sexual slavery as crimes against humanity have attained the
status of jus cogens, making it obligatory upon the State to
seek remedies on behalf of its aggrieved citizens. Yet, the
Vinuya decision uses parts of the same article to arrive at the
contrary conclusion. This exacerbates the intellectual
dishonesty of copying works without attribution by
transforming it into an act of intellectual fraud by copying
works in order to mislead and deceive. DHSEcI
The case is a potential landmark decision in International

Law, because it deals with State liability and responsibility
for personal injury and damage suffered in a time of war,
and the role of the injured parties' home States in the pursuit
of remedies against such injury or damage. National courts
rarely have such opportunities to make an international
impact. That the petitioners were Filipino "comfort women"
who suffered from horrific abuse during the Second World
War made it incumbent on the Court of last resort to afford
them every solicitude. But instead of acting with urgency on
this case, the Court delayed its resolution for almost seven
years, oblivious to the deaths of many of the petitioners
seeking justice from the Court. When it dismissed the Vinuya
petition based on misrepresented and plagiarized materials,
the Court decided this case based on polluted sources. By so
doing, the Supreme Court added insult to injury by failing to
actually exercise its "power to urge and exhort the Executive
Department to take up the claims of the Vinuya petitioners.
Its callous disposition, coupled with false sympathy and
nonchalance, belies a more alarming lack of concern for even
the most basic values of decency and respect. The reputation
of the Philippine Supreme Court and the standing of the
Philippine legal profession before other Judiciaries and legal
systems are truly at stake.
The High Court cannot accommodate less than absolute

honesty in its decisions and cannot accept excuses for failure
to attain the highest standards of conduct imposed upon all
members of the Bench and Bar because these undermine the
very foundation of its authority and power in a democratic
society. Given the Court's recent history and the controversy
that surrounded it, it cannot allow the charges of such clear
and obvious plagiarism to pass without sanction as this
would only further erode faith and confidence in the judicial
system. And in light of the significance of this decision to the
quest for justice not only of Filipino women, but of women
elsewhere in the world who have suffered the horrors of
sexual abuse and exploitation in times of war, the Court
cannot coldly deny relief and justice to the petitioners on the
basis of pilfered and misinterpreted texts.
The Court cannot regain its credibility and maintain its

moral authority without ensuring that its own conduct,
whether collectively or through its Members, is beyond
reproach. This necessarily includes ensuring that not only
the content, but also the processes of preparing and writing
its own decisions, are credible and beyond question. The
Vinuya Decision must be conscientiously reviewed and not
casually cast aside, if not for the purpose of sanction, then at
least for the purpose of reflection and guidance. It is an
absolutely essential step toward the establishment of a
higher standard of professional care and practical
scholarship in the Bench and Bar, which are critical to
improving the system of administration of justice in the
Philippines. It is also a very crucial step in ensuring the
position of the Supreme Court as the Final Arbiter of all
controversies: a position that requires competence and
integrity completely above any and all reproach, in
accordance with the exacting demands of judicial and
professional ethics. aICHEc
With these considerations, and bearing in mind the solemn

duties and trust reposed upon them as teachers in the
profession of Law, it is the opinion of the Faculty of the
University of the Philippine College of Law that:
(1) The plagiarism committed in the case of Vinuya v.

Executive Secretary is unacceptable, unethical and in
breach of the high standards of moral conduct and
judicial and professional competence expected of
the Supreme Court;
(2) Such a fundamental breach endangers the integrity and

credibility of the entire Supreme Court and
undermines the foundations of the Philippine
judicial system by allowing implicitly the decision
of cases and the establishment of legal precedents
through dubious means;
(3) The same breach and consequent disposition of the

Vinuya case does violence to the primordial
function of the Supreme Court as the ultimate
dispenser of justice to all those who have been left
without legal or equitable recourse, such as the
petitioners therein;
(4) In light of the extremely serious and far-reaching nature

of the dishonesty and to save the honor and dignity
of the Supreme Court as an institution, it is
necessary for the ponente of Vinuya v. Executive
Secretary to resign his position, without prejudice to
any other sanctions that the Court may consider
appropriate;
(5) The Supreme Court must take this opportunity to review

the manner by which it conducts research, prepares
drafts, reaches and finalizes decisions in order to
prevent a recurrence of similar acts, and to provide
clear and concise guidance to the Bench and Bar to
ensure only the highest quality of legal research
and writing in pleadings, practice, and
adjudication.
Malcolm Hall, University of the Philippines College of Law,

Quezon City, 27 July 2010.
(SGD.) MARVIC M.V.F. LEONEN
Dean and Professor of Law

(SGD.) FROILAN M. BACUNGAN (SGD.) PACIFICO A.
AGABIN
Dean (1978-1983) Dean (1989-1995)

(SGD.) MERLIN M. MAGALLONA (SGD.) SALVADOR T.
CARLOTA
Dean (1995-1999) Dean (2005-2008)
and Professor of Law

REGULAR FACULTY
(SGD.) CARMELO V. SISON (SGD.) JAY L. BATONGBACAL
Professor Assistant Professor

(SGD.) PATRICIA R.P. SALVADOR (SGD.) EVELYN (LEO) D.
BATTAD DAWAY Assistant Professor
Associate Dean and Associate Professor

(SGD.) DANTE B. GATMAYTAN (SGD.) GWEN G. DE VERA
Associate Professor Assistant Professor

(SGD.) THEODORE O. TE (SGD.) SOLOMON F. LUMBA
Assistant Professor Assistant Professor

(SGD.) FLORIN T. HILBAY (SGD.) ROMMEL J. CASIS
Assistant Professor Assistant Professor

LECTURERS
(SGD.) JOSE GERARDO A. ALAMPAY (SGD.) JOSE C. LAURETA
(SGD.) ARTHUR P. AUTEA (SGD.) DINA D. LUCENARIO
(SGD.) ROSA MARIA J. BAUTISTA (SGD.) OWEN J. LYNCH
(SGD.) MARK R. BOCOBO (SGD.) ANTONIO M. SANTOS
(SGD.) DAN P. CALICA (SGD.) VICENTE V. MENDOZA
(SGD.) TRISTAN A. CATINDIG (SGD.) RODOLFO NOEL S.
QUIMBO
(SGD.) SANDRA MARIE O. CORONEL (SGD.) GMELEEN FAYE
B. TOMBOC
(SGD.) ROSARIO O. GALLO (SGD.) NICHOLAS FELIX L. TY
(SGD.) CONCEPCION L. JARDELEZA (SGD.) EVALYN G.
URSUA
(SGD.) ANTONIO G.M. LA VIA (SGD.) RAUL T. VASQUEZ
(SGD.) CARINA C. LAFORTEZA (SGD.) SUSAN D.
VILLANUEVA 29
(Underscoring supplied.)
Meanwhile, in a letter dated August 18, 2010, Prof. Christian J. Tams made
known his sentiments on the alleged plagiarism issue to the Court. 30 We quote
Prof. Tams' letter here: ACcISa
Glasgow, 18 August 2010
Vinuya, et al. v. Executive Secretary, et al. (G.R. No. 162230)
Hon. Renato C. Corona, Chief Justice
Your Excellency,
My name is Christian J. Tams, and I am a professor of

international law at the University of Glasgow. I am writing
to you in relation to the use of one of my publications in the
above-mentioned judgment of your Honourable Court.
The relevant passage of the judgment is to be found on p. 30

of your Court's Judgment, in the section addressing the
concept of obligations erga omnes. As the table annexed to
this letter shows, the relevant sentences were taken almost
word by word from the introductory chapter of my book
Enforcing Obligations Erga Omnes in International Law
(Cambridge University Press 2005). I note that there is a
generic reference to my work in footnote 69 of the Judgment,
but as this is in relation to a citation from another author
(Bruno Simma) rather than with respect to the substantive
passages reproduced in the Judgment, I do not think it can
be considered an appropriate form of referencing.
I am particularly concerned that my work should have been

used to support the Judgment's cautious approach to the
erga omnes concept. In fact, a most cursory reading shows
that my book's central thesis is precisely the opposite:
namely that the erga omnes concept has been widely accepted
and has a firm place in contemporary international law.
Hence the introductory chapter notes that "[t]he present
study attempts to demystify aspects of the 'very mysterious'
concept and thereby to facilitate its implementation" (p. 5).
In the same vein, the concluding section notes that "the
preceding chapters show that the concept is now a part of
the reality of international law, established in the
jurisprudence of courts and the practice of States" (p. 309).
With due respect to your Honourable Court, I am at a loss to

see how my work should have been cited to support as it
seemingly has the opposite approach. More generally, I
am concerned at the way in which your Honourable Court's
Judgment has drawn on scholarly work without properly
acknowledging it.
On both aspects, I would appreciate a prompt response from

your Honourable Court. ICTacD
I remain
Sincerely yours
(Sgd.)
Christian J. Tams
31
In the course of the submission of Atty. Roque and Atty. Bagares' exhibits during
the August 26, 2010 hearing in the ethics case against Justice Del Castillo, the
Ethics Committee noted that Exhibit "J" (a copy of the Restoring Integrity
Statement) was not signed but merely reflected the names of certain faculty
members with the letters (SGD.) beside the names. Thus, the Ethics Committee
directed Atty. Roque to present the signed copy of the said Statement within
three days from the August 26 hearing. 32
It was upon compliance with this directive that the Ethics Committee was given
a copy of the signed UP Law Faculty Statement that showed on the signature
pages the names of the full roster of the UP Law Faculty, 81 faculty members in
all. Indubitable from the actual signed copy of the Statement was that only 37 of
the 81 faculty members appeared to have signed the same. However, the 37
actual signatories to the Statement did not include former Supreme Court
Associate Justice Vicente V. Mendoza (Justice Mendoza) as represented in the
previous copies of the Statement submitted by Dean Leonen and Atty. Roque. It
also appeared that Atty. Miguel R. Armovit (Atty. Armovit) signed the Statement
although his name was not included among the signatories in the previous
copies submitted to the Court. Thus, the total number of ostensible signatories to
the Statement remained at 37.
The Ethics Committee referred this matter to the Court en banc since the same
Statement, having been formally submitted by Dean Leonen on August 11, 2010,
was already under consideration by the Court. 33
In a Resolution dated October 19, 2010, the Court en banc made the following
observations regarding the UP Law Faculty Statement:
Notably, while the statement was meant to reflect the

educators' opinion on the allegations of plagiarism against
Justice Del Castillo, they treated such allegation not only as
an established fact, but a truth. In particular, they expressed
dissatisfaction over Justice Del Castillo's explanation on how
he cited the primary sources of the quoted portions and yet
arrived at a contrary conclusion to those of the authors of the
articles supposedly plagiarized.
Beyond this, however, the statement bore certain remarks

which raise concern for the Court. The opening sentence
alone is a grim preamble to the institutional attack that lay
ahead. It reads:
An extraordinary act of injustice has again been

committed against the brave Filipinas who had
suffered abuse during a time of war. ISaCTE
The first paragraph concludes with a reference to the

decision in Vinuya v. Executive Secretary as a reprehensible
act of dishonesty and misrepresentation by the Highest
Court of the land. . . . .
The insult to the members of the Court was aggravated by

imputations of deliberately delaying the resolution of the
said case, its dismissal on the basis of "polluted sources," the
Court's alleged indifference to the cause of petitioners [in the
Vinuya case], as well as the supposed alarming lack of
concern of the members of the Court for even the most basic
values of decency and respect. 34 . . . . (Underscoring ours.)
In the same Resolution, the Court went on to state that:
While most agree that the right to criticize the judiciary is

critical to maintaining a free and democratic society, there is
also a general consensus that healthy criticism only goes so
far. Many types of criticism leveled at the judiciary cross the
line to become harmful and irresponsible attacks. These
potentially devastating attacks and unjust criticism can
threaten the independence of the judiciary. The court must
"insist on being permitted to proceed to the disposition of its
business in an orderly manner, free from outside
interference obstructive of its functions and tending to
embarrass the administration of justice."
The Court could hardly perceive any reasonable purpose for

the faculty's less than objective comments except to discredit
the April 28, 2010 Decision in the Vinuya case and
undermine the Court's honesty, integrity and competence in
addressing the motion for its reconsideration. As if the case
on the comfort women's claims is not controversial enough,
the UP Law faculty would fan the flames and invite
resentment against a resolution that would not reverse the
said decision. This runs contrary to their obligation as law
professors and officers of the Court to be the first to
uphold the dignity and authority of this Court, to which
they owe fidelity according to the oath they have taken as
attorneys, and not to promote distrust in the
administration of justice. 35 . . . . (Citations omitted;
emphases and underscoring supplied.) ATSIED
Thus, the Court directed Attys. Marvic M.V.F. Leonen, Froilan M. Bacungan,
Pacifico A. Agabin, Merlin M. Magallona, Salvador T. Carlota, Carmelo V. Sison,
Patricia R.P. Salvador Daway, Dante B. Gatmaytan, Theodore O. Te, Florin T.
Hilbay, Jay L. Batongbacal, Evelyn (Leo) D. Battad, Gwen G. De Vera, Solomon F.
Lumba, Rommel J. Casis, Jose Gerardo A. Alampay, Miguel R. Armovit, Arthur
P. Autea, Rosa Maria J. Bautista, Mark R. Bocobo, Dan P. Calica, Tristan A.
Catindig, Sandra Marie O. Coronel, Rosario O. Gallo, Concepcion L. Jardeleza,
Antonio G.M. La Via, Carina C. Laforteza, Jose C. Laureta, Owen J. Lynch,
Rodolfo Noel S. Quimbo, Antonio M. Santos, Gmeleen Faye B. Tomboc, Nicholas
Felix L. Ty, Evalyn G. Ursua, Raul T. Vasquez, Susan D. Villanueva and Dina D.
Lucenario to show cause, within ten (10) days from receipt of the copy of the
Resolution, why they should not be disciplined as members of the Bar for
violation of Canons 1, 36 11 and 13 and Rules 1.02 and 11.05 of the Code of
Professional Responsibility. 37
Dean Leonen was likewise directed to show cause within the same period why
he should not be disciplinarily dealt with for violation of Canon 10, Rules 10.01,
10.02 and 10.03 for submitting through his letter dated August 10, 2010, during
the pendency of G.R. No. 162230 and of the investigation before the Ethics
Committee, for the consideration of the Court en banc, a dummy which is not a
true and faithful reproduction of the UP Law Faculty Statement. 38
In the same Resolution, the present controversy was docketed as a regular

administrative matter.
Summaries of the Pleadings Filed by Respondents in Response to the

October 19, 2010 Show Cause Resolution
On November 19, 2010, within the extension for filing granted by the Court,
respondents filed the following pleadings:
(1) Compliance dated November 18, 2010 by counsels for 35

of the 37 respondents, excluding Prof. Owen Lynch
and Prof. Raul T. Vasquez, in relation to the charge
of violation of Canons 1, 11 and 13 and Rules 1.02
and 11.05 of the Code of Professional
Responsibility;
(2) Compliance and Reservation dated November 18, 2010

by Prof. Rosa Maria T. Juan-Bautista in relation to
the same charge in par. (1);
(3) Compliance dated November 19, 2010 by counsel for

Prof. Raul T. Vasquez in relation to the same charge
in par. (1);
(4) Compliance dated November 19, 2010 by counsels for

Dean Leonen, in relation to the charge of violation
of Canon 10, Rules 10.01, 10.02 and 10.03; and
HSTCcD
(5) Manifestation dated November 19, 2010 by counsel for

Prof. Owen Lynch.
Common Compliance of 35 Respondents (Excluding Prof. Owen Lynch

and Prof. Raul Vasquez)
Thirty-five (35) of the respondent UP Law professors filed on November 19, 2010
a common compliance which was signed by their respective counsels (the
Common Compliance). In the "Preface" of said Common Compliance,
respondents stressed that "[they] issued the Restoring Integrity Statement in the
discharge of the 'solemn duties and trust reposed upon them as teachers in the
profession of law,' and as members of the Bar to speak out on a matter of public
concern and one that is of vital interest to them." 39 They likewise alleged that
"they acted with the purest of intentions" and pointed out that "none of them was
involved either as party or counsel" 40 in the Vinuya case. Further, respondents
"note with concern" that the Show Cause Resolution's findings and conclusions
were "a prejudgment that respondents indeed are in contempt, have
breached their obligations as law professors and officers of the Court, and have
violated 'Canons [1], 11 and 13 and Rules 1.02 and 11.05 of the Code of
Professional Responsibility." 41
By way of explanation, the respondents emphasized the following points:
(a) Respondents' alleged noble intentions
In response to the charges of failure to observe due respect to legal processes 42

and the courts 43 and of tending to influence, or giving the appearance of
influencing the Court 44 in the issuance of their Statement, respondents assert
that their intention was not to malign the Court but rather to defend its integrity
and credibility and to ensure continued confidence in the legal system. Their
noble motive was purportedly evidenced by the portion of their Statement
"focusing on constructive action." 45 Respondents' call in the Statement for the
Court "to provide clear and concise guidance to the Bench and Bar to ensure only
the highest quality of legal research and writing in adjudication," was reputedly
"in keeping with strictures enjoining lawyers to 'participate in the development
of the legal system by initiating or supporting efforts in law reform and in the
improvement of the administration of justice'" (under Canon 4 of the Code of
Professional Responsibility) and to "promote respect for the law and legal
processes" (under Canon 1, id.). 46 Furthermore, as academics, they allegedly
have a "special interest and duty to vigilantly guard against plagiarism and
misrepresentation because these unwelcome occurrences have a profound
impact in the academe, especially in our law schools." 47 acHCSD
Respondents further "[called] on this Court not to misconstrue the Restoring

Integrity Statement as an 'institutional attack' . . . on the basis of its first and ninth
paragraphs." 48 They further clarified that at the time the Statement was
allegedly drafted and agreed upon, it appeared to them the Court "was not going
to take any action on the grave and startling allegations of plagiarism and
misrepresentation." 49 According to respondents, the bases for their belief were
(i) the news article published on July 21, 2010 in the Philippine Daily Inquirer
wherein Court Administrator Jose Midas P. Marquez was reported to have said
that Chief Justice Corona would not order an inquiry into the matter; 50 and (ii)
the July 22, 2010 letter of Justice Del Castillo which they claimed "did nothing but
to downplay the gravity of the plagiarism and misrepresentation charges." 51
Respondents claimed that it was their perception of the Court's indifference to
the dangers posed by the plagiarism allegations against Justice Del Castillo that
impelled them to urgently take a public stand on the issue.
(b) The "correctness" of respondents' position that Justice Del Castillo committed
plagiarism and should be held accountable in accordance with the standards of academic
writing
A significant portion of the Common Compliance is devoted to a discussion of

the merits of respondents' charge of plagiarism against Justice Del Castillo.
Relying on University of the Philippines Board of Regents v. Court of Appeals 52 and
foreign materials and jurisprudence, respondents essentially argue that their
position regarding the plagiarism charge against Justice Del Castillo is the correct
view and that they are therefore justified in issuing their Restoring Integrity
Statement. Attachments to the Common Compliance included, among others: (i)
the letter dated October 28, 2010 of Peter B. Payoyo, LL.M, Ph.D., 53 sent to Chief
Justice Corona through Justice Sereno, alleging that the Vinuya decision likewise
lifted without proper attribution the text from a legal article by Mariana Salazar
Albornoz that appeared in the Anuario Mexicano De Derecho Internacional and
from an International Court of Justice decision; and (ii) a 2008 Human Rights
Law Review Article entitled "Sexual Orientation, Gender Identity and
International Human Rights Law" by Michael O'Flaherty and John Fisher, in
support of their charge that Justice Del Castillo also lifted passages from said
article without proper attribution, but this time, in his ponencia in Ang Ladlad
LGBT Party v. Commission on Elections. 54
(c) Respondents' belief that they are being "singled out" by the Court when others have
likewise spoken on the "plagiarism issue"
In the Common Compliance, respondents likewise asserted that "the plagiarism

and misrepresentation allegations are legitimate public issues." 55 They
identified various published reports and opinions, in agreement with and in
opposition to the stance of respondents, on the issue of plagiarism, specifically:
(i) Newsbreak report on July 19, 2010 by Aries Rufo and

Purple Romero; 56
(ii) Column of Ramon Tulfo which appeared in the

Philippine Daily Inquirer on July 24, 2010; 57
(iii) Editorial of the Philippine Daily Inquirer published on
July 25, 2010; 58
(iv) Letter dated July 22, 2010 of Justice Del Castillo

published in the Philippine Star on July 30, 2010; 59
(v) Column of Former Intellectual Property Office Director

General Adrian Cristobal, Jr. published in the
Business Mirror on August 5, 2010; 60 SIDEaA
(vi) Column of Former Chief Justice Artemio Panganiban

published in the Philippine Daily Inquirer on
August 8, 2010; 61
(vii) News report regarding Senator Francis Pangilinan's call

for the resignation of Justice Del Castillo published
in the Daily Tribune and the Manila Standard
Today on July 31, 2010; 62
(viii) News reports regarding the statement of Dean Cesar

Villanueva of the Ateneo de Manila University
School of Law on the calls for the resignation of
Justice Del Castillo published in The Manila
Bulletin, the Philippine Star and the Business
Mirror on August 11, 2010; 63
(ix) News report on expressions of support for Justice Del

Castillo from a former dean of the Pamantasan ng
Lungsod ng Maynila, the Philippine Constitutional
Association, the Judges Association of Bulacan and
the Integrated Bar of the Philippines Bulacan
Chapter published in the Philippine Star on August
16, 2010; 64 and
(x) Letter of the Dean of the Liceo de Cagayan University

College of Law published in the Philippine Daily
Inquirer on August 10, 2010. 65
In view of the foregoing, respondents alleged that this Court has singled them
out for sanctions and the charge in the Show Cause Resolution dated October 19,
2010 that they may have violated specific canons of the Code of Professional
Responsibility is unfair and without basis.
(d) Freedom of expression
In paragraphs 28 to 30 of the Common Compliance, respondents briefly

discussed their position that in issuing their Statement, "they should be seen as
not only to be performing their duties as members of the Bar, officers of the
court, and teachers of law, but also as citizens of a democracy who are
constitutionally protected in the exercise of free speech." 66 In support of this
contention, they cited United States v. Bustos, 67 In re: Atty. Vicente Raul Almacen,
68 and In the Matter of Petition for Declaratory Relief Re: Constitutionality of Republic
Act 4880, Gonzales v. Commission on Elections. 69 CSAaDE
(e) Academic freedom
In paragraphs 31 to 34 of the Common Compliance, respondents asserted that

their Statement was also issued in the exercise of their academic freedom as
teachers in an institution of higher learning. They relied on Section 5 of the
University of the Philippines Charter of 2008 which provided that "[t]he national
university has the right and responsibility to exercise academic freedom." They
likewise adverted to Garcia v. The Faculty Admission Committee, Loyola School of
Theology 70 which they claimed recognized the extent and breadth of such
freedom as to encourage a free and healthy discussion and communication of a
faculty member's field of study without fear of reprisal. It is respondents' view
that had they remained silent on the plagiarism issue in the Vinuya decision they
would have "compromised [their] integrity and credibility as teachers; [their
silence] would have created a culture and generation of students, professionals,
even lawyers, who would lack the competence and discipline for research and
pleading; or, worse, [that] their silence would have communicated to the public
that plagiarism and misrepresentation are inconsequential matters and that
intellectual integrity has no bearing or relevance to one's conduct." 71
In closing, respondents' Common Compliance exhorted this Court to consider

the following portion of the dissenting opinion of Justice George A. Malcolm in
Salcedo v. Hernandez, 72 to wit:
Respect for the courts can better be obtained by following a

calm and impartial course from the bench than by an
attempt to compel respect for the judiciary by chastising a
lawyer for a too vigorous or injudicious exposition of his
side of a case. The Philippines needs lawyers of independent
thought and courageous bearing, jealous of the interests of
their clients and unafraid of any court, high or low, and the
courts will do well tolerantly to overlook occasional
intemperate language soon to be regretted by the lawyer
which affects in no way the outcome of a case. 73
On the matter of the reliefs to which respondents believe they are entitled, the
Common Compliance stated, thus:
WHEREFORE:
A. Respondents, as citizens of a democracy, professors of

law, members of the Bar and officers of the Court,
respectfully pray that:
1. the foregoing be noted; and
2. the Court reconsider and reverse its adverse

findings in the Show Cause Resolution,
including its conclusions that respondents
have: [a] breached their "obligation as law
professors and officers of the Court to be
the first to uphold the dignity and
authority of this Court, . . . and not to
promote distrust in the administration of
justice;" and [b] committed "violations of
Canons 10, 11, and 13 and Rules 1.02 and
11.05 of the Code of Professional
Responsibility." CcaASE
B. In the event the Honorable Court declines to grant the

foregoing prayer, respondents respectfully pray, in the
alternative, and in assertion of their due process rights,
that before final judgment be rendered:
1. the Show Cause Resolution be set for hearing;
2. respondents be given a fair and full opportunity

to refute and/or address the findings and
conclusions of fact in the Show Cause
Resolution (including especially the
finding and conclusion of a lack of
malicious intent), and in that connection,
that appropriate procedures and schedules
for hearing be adopted and defined that
will allow them the full and fair
opportunity to require the production of
and to present testimonial, documentary,
and object evidence bearing on the
plagiarism and misrepresentation issues in
Vinuya v. Executive Secretary (G.R. No.
162230, April 28, 2010) and In the Matter of
the Charges of Plagiarism, etc. Against
Associate Justice Mariano C. Del Castillo
(A.M. No. 10-7-17-SC); and
3. respondents be given fair and full access to the

transcripts, records, drafts, reports and
submissions in or relating to, and
accorded the opportunity to cross-examine
the witnesses who were or could have
been called in In the Matter of the Charges of
Plagiarism, etc. Against Associate Justice
Mariano C. Del Castillo (A.M. No. 10-7-17-
SC). 74
Compliance and Reservation of Prof. Rosa Maria T. Juan-Bautista

Although already included in the Common Compliance, Prof. Rosa Maria T.
Juan-Bautista (Prof. Juan-Bautista) filed a separate Compliance and Reservation
(the Bautista Compliance), wherein she adopted the allegations in the Common
Compliance with some additional averments.
Prof. Juan-Bautista reiterated that her due process rights allegedly entitled her to
challenge the findings and conclusions in the Show Cause Resolution.
Furthermore, "[i]f the Restoring Integrity Statement can be considered indirect
contempt, under Section 3 of Rule 71 of the Rules of Court, such may be
punished only after charge and hearing." 75
Prof. Juan-Bautista stressed that respondents signed the Statement "in good faith
and with the best intentions to protect the Supreme Court by asking one member
to resign." 76 For her part, Prof. Juan-Bautista intimated that her deep
disappointment and sadness for the plight of the Malaya Lolas were what
motivated her to sign the Statement. SEACTH
On the point of academic freedom, Prof. Juan-Bautista cited jurisprudence 77

which in her view highlighted that academic freedom is constitutionally
guaranteed to institutions of higher learning such that schools have the freedom
to determine for themselves who may teach, what may be taught, how lessons
shall be taught and who may be admitted to study and that courts have no
authority to interfere in the schools' exercise of discretion in these matters in the
absence of grave abuse of discretion. She claims the Court has encroached on the
academic freedom of the University of the Philippines and other universities on
their right to determine how lessons shall be taught.
Lastly, Prof. Juan-Bautista asserted that the Statement was an exercise of

respondents' constitutional right to freedom of expression that can only be
curtailed when there is grave and imminent danger to public safety, public
morale, public health or other legitimate public interest. 78
Compliance of Prof. Raul T. Vasquez
On November 19, 2010, Prof. Raul T. Vasquez (Prof. Vasquez) filed a separate
Compliance by registered mail (the Vasquez Compliance). In said Compliance,
Prof. Vasquez narrated the circumstances surrounding his signing of the
Statement. He alleged that the Vinuya decision was a topic of conversation
among the UP Law faculty early in the first semester (of academic year 2010-11)
because it reportedly contained citations not properly attributed to the sources;
that he was shown a copy of the Statement by a clerk of the Office of the Dean on
his way to his class; and that, agreeing in principle with the main theme
advanced by the Statement, he signed the same in utmost good faith. 79
In response to the directive from this Court to explain why he should not be
disciplined as a member of the Bar under the Show Cause Resolution, Prof.
Vasquez also took the position that a lawyer has the right, like all citizens in a
democratic society, to comment on acts of public officers. He invited the
attention of the Court to the following authorities: (a) In re: Vicente Sotto; 80 (b) In
re: Atty. Vicente Raul Almacen; 81 and (c) a discussion appearing in American
Jurisprudence (AmJur) 2d. 82 He claims that he "never had any intention to
unduly influence, nor entertained any illusion that he could or should influence,
[the Court] in its disposition of the Vinuya case" 83 and that "attacking the
integrity of [the Court] was the farthest thing on respondent's mind when he
signed the Statement." 84 Unlike his colleagues, who wish to impress upon this
Court the purported homogeneity of the views on what constitutes plagiarism,
Prof. Vasquez stated in his Compliance that:
13. Before this Honorable Court rendered its Decision dated

12 October 2010, some espoused the view that willful and
deliberate intent to commit plagiarism is an essential
element of the same. Others, like respondent, were of the
opinion that plagiarism is committed regardless of the
intent of the perpetrator, the way it has always been viewed
in the academe. This uncertainty made the issue a fair topic
for academic discussion in the College. Now, this
Honorable Court has ruled that plagiarism presupposes
deliberate intent to steal another's work and to pass it off as
one's own. 85 (Emphases supplied.) HCaDIS
Also in contrast to his colleagues, Prof. Vasquez was willing to concede that he
"might have been remiss in correctly assessing the effects of such language [in
the Statement] and could have been more careful." 86 He ends his discussion
with a respectful submission that with his explanation, he has faithfully
complied with the Show Cause Resolution and that the Court will rule that he
had not in any manner violated his oath as a lawyer and officer of the Court.
Separate Compliance of Dean Leonen regarding the charge of violation
of Canon 10 in relation to his submission of a "dummy" of the UP Law
Faculty Statement to this Court
In his Compliance, Dean Leonen claimed that there were three drafts/versions of
the UP Law Faculty Statement, which he described as follows:
"Restoring Integrity I" which bears the entire roster of the

faculty of the UP College of Law in its signing
pages, and the actual signatures of the thirty-seven
(37) faculty members subject of the Show Cause
Resolution. A copy was filed with the Honorable
Court by Roque and Butuyan on 31 August 2010 in
A.M. No. 10-7-17-SC.
"Restoring Integrity II" which does not bear any actual

physical signature, but which reflects as signatories
the names of thirty-seven (37) members of the
faculty with the notation "(SGD.)". A copy of
Restoring Integrity II was publicly and physically
posted in the UP College of Law on 10 August 2010.
Another copy of Restoring Integrity II was also
officially received by the Honorable Court from the
Dean of the UP College of Law on 11 August 2010,
almost three weeks before the filing of Restoring
Integrity I.
"Restoring Integrity III" which is a reprinting of Restoring

Integrity II, and which presently serves as the
official file copy of the Dean's Office in the UP
College of Law that may be signed by other faculty
members who still wish to. It bears the actual
signatures of the thirty-seven original signatories to
Restoring Integrity I above their printed names and
the notation "(SGD.") and, in addition, the actual
signatures of eight (8) other members of the faculty
above their handwritten or typewritten names. 87
For purposes of this discussion, only Restoring Integrity I and Restoring

Integrity II are relevant since what Dean Leonen has been directed to explain are
the discrepancies in the signature pages of these two documents. Restoring
Integrity III was never submitted to this Court. IAETDc
On how Restoring Integrity I and Restoring Integrity II were prepared and came
about, Dean Leonen alleged, thus:
2.2. On 27 July 2010, sensing the emergence of a relatively
broad agreement in the faculty on a draft statement, Dean
Leonen instructed his staff to print the draft and circulate it
among the faculty members so that those who wished to
may sign. For this purpose, the staff encoded the law faculty
roster to serve as the printed draft's signing pages. Thus did
the first printed draft of the Restoring Integrity Statement,
Restoring Integrity I, come into being.
2.3. As of 27 July 2010, the date of the Restoring Integrity

Statement, Dean Leonen was unaware that a Motion for
Reconsideration of the Honorable Court's Decision in Vinuya
vs. Executive Secretary (G.R. No. 162230, 28 April 2010) had
already been filed, or that the Honorable Court was in the
process of convening its Committee on Ethics and Ethical
Standards in A.M. No. 10-7-17-SC.
2.4. Dean Leonen's staff then circulated Restoring Integrity I

among the members of the faculty. Some faculty members
visited the Dean's Office to sign the document or had it
brought to their classrooms in the College of Law, or to their
offices or residences. Still other faculty members who, for
one reason or another, were unable to sign Restoring
Integrity I at that time, nevertheless conveyed to Dean
Leonen their assurances that they would sign as soon as they
could manage.
2.5. Sometime in the second week of August, judging that

Restoring Integrity I had been circulated long enough, Dean
Leonen instructed his staff to reproduce the statement in a
style and manner appropriate for posting in the College of
Law. Following his own established practice in relation to
significant public issuances, he directed them to reformat the
signing pages so that only the names of those who signed
the first printed draft would appear, together with the
corresponding "(SGD.)" note following each name. Restoring
Integrity II thus came into being. 88
According to Dean Leonen, the "practice of eliminating blanks opposite or

above the names of non-signatories in the final draft of significant public
issuances, is meant not so much for aesthetic considerations as to secure the
integrity of such documents." 89 He likewise claimed that "[p]osting
statements with blanks would be an open invitation to vandals and
pranksters." 90
With respect to the inclusion of Justice Mendoza's name as among the signatories
in Restoring Integrity II when in fact he did not sign Restoring Integrity I, Dean
Leonen attributed the mistake to a miscommunication involving his
administrative officer. In his Compliance, he narrated that: CHTcSE
2.7. Upon being presented with a draft of Restoring Integrity

II with the reformatted signing pages, Dean Leonen noticed
the inclusion of the name of Justice Mendoza among the
"(SGD.)" signatories. As Justice Mendoza was not among
those who had physically signed Restoring Integrity I when
it was previously circulated, Dean Leonen called the
attention of his staff to the inclusion of the Justice's name
among the "(SGD.)" signatories in Restoring Integrity II.
2.8. Dean Leonen was told by his administrative officer that

she had spoken to Justice Mendoza over the phone on
Friday, 06 August 2010. According to her, Justice Mendoza
had authorized the dean to sign the Restoring Integrity
Statement for him as he agreed fundamentally with its
contents. Also according to her, Justice Mendoza was unable
at that time to sign the Restoring Integrity Statement himself
as he was leaving for the United States the following week. It
would later turn out that this account was not entirely accurate.
91 (Underscoring and italics supplied.)
Dean Leonen claimed that he "had no reason to doubt his administrative officer,
however, and so placed full reliance on her account" 92 as "[t]here were indeed
other faculty members who had also authorized the Dean to indicate that they
were signatories, even though they were at that time unable to affix their
signatures physically to the document." 93
However, after receiving the Show Cause Resolution, Dean Leonen and his staff
reviewed the circumstances surrounding their effort to secure Justice Mendoza's
signature. It would turn out that this was what actually transpired:
2.22.1. On Friday, 06 August 2010, when the dean's staff

talked to Justice Mendoza on the phone, he [Justice
Mendoza] indeed initially agreed to sign the Restoring
Integrity Statement as he fundamentally agreed with its
contents. However, Justice Mendoza did not exactly say that
he authorized the dean to sign the Restoring Integrity
Statement. Rather, he inquired if he could authorize the dean
to sign it for him as he was about to leave for the United
States. The dean's staff informed him that they would, at any
rate, still try to bring the Restoring Integrity Statement to
him.
2.22.2. Due to some administrative difficulties, Justice

Mendoza was unable to sign the Restoring Integrity
Statement before he left for the U.S. the following week.
2.22.3. The staff was able to bring Restoring Integrity III to

Justice Mendoza when he went to the College to teach on 24
September 2010, a day after his arrival from the U.S. This
time, Justice Mendoza declined to sign. 94 SaICcT
According to the Dean:
2.23. It was only at this time that Dean Leonen realized the
true import of the call he received from Justice Mendoza in
late September. Indeed, Justice Mendoza confirmed that by
the time the hard copy of the Restoring Integrity Statement
was brought to him shortly after his arrival from the U.S., he
declined to sign it because it had already become
controversial. At that time, he predicted that the Court
would take some form of action against the faculty. By
then, and under those circumstances, he wanted to show
due deference to the Honorable Court, being a former
Associate Justice and not wishing to unduly aggravate the
situation by signing the Statement. 95 (Emphases supplied.)
With respect to the omission of Atty. Armovit's name in the signature page of
Restoring Integrity II when he was one of the signatories of Restoring Integrity I
and the erroneous description in Dean Leonen's August 10, 2010 letter that the
version of the Statement submitted to the Court was signed by 38 members of the
UP Law Faculty, it was explained in the Compliance that:
Respondent Atty. Miguel Armovit physically signed

Restoring Integrity I when it was circulated to him.
However, his name was inadvertently left out by Dean
Leonen's staff in the reformatting of the signing pages in
Restoring Integrity II. The dean assumed that his name was
still included in the reformatted signing pages, and so
mentioned in his cover note to Chief Justice Corona that 38
members of the law faculty signed (the original 37 plus
Justice Mendoza.) 96
Dean Leonen argues that he should not be deemed to have submitted a dummy
of the Statement that was not a true and faithful reproduction of the same. He
emphasized that the main body of the Statement was unchanged in all its three
versions and only the signature pages were not the same. This purportedly is
merely "reflective of [the Statement's] essential nature as a 'live' public manifesto
meant to continuously draw adherents to its message, its signatory portion is
necessarily evolving and dynamic . . . many other printings of [the Statement]
may be made in the future, each one reflecting the same text but with more and
more signatories." 97 Adverting to criminal law by analogy, Dean Leonen claims
that "this is not an instance where it has been made to appear in a document that
a person has participated in an act when the latter did not in fact so participate"
98 for he "did not misrepresent which members of the faculty of the UP College
of Law had agreed with the Restoring Integrity Statement proper and/or had
expressed their desire to be signatories thereto." 99
In this regard, Dean Leonen believes that he had not committed any violation of
Canon 10 or Rules 10.01 and 10.02 for he did not mislead nor misrepresent to the
Court the contents of the Statement or the identities of the UP Law faculty
members who agreed with, or expressed their desire to be signatories to, the
Statement. He also asserts that he did not commit any violation of Rule 10.03 as
he "coursed [the Statement] through the appropriate channels by transmitting the
same to Honorable Chief Justice Corona for the latter's information and proper
disposition with the hope that its points would be duly considered by the
Honorable Court en banc." 100 Citing Rudecon Management Corporation v. Camacho,
101 Dean Leonen posits that the required quantum of proof has not been met in
this case and that no dubious character or motivation for the act complained of
existed to warrant an administrative sanction for violation of the standard of
honesty provided for by the Code of Professional Responsibility. 102 cCSHET
Dean Leonen ends his Compliance with an enumeration of nearly identical

reliefs as the Common Compliance, including the prayers for a hearing and for
access to the records, evidence and witnesses allegedly relevant not only in this
case but also in A.M. No. 10-7-17-SC, the ethical investigation involving Justice
Del Castillo.
Manifestation of Prof. Owen Lynch (Lynch Manifestation)

For his part, Prof. Owen Lynch (Prof. Lynch) manifests to this Court that he is
not a member of the Philippine bar; but he is a member of the bar of the State of
Minnesota. He alleges that he first taught as a visiting professor at the UP
College of Law in 1981 to 1988 and returned in the same capacity in 2010. He
further alleges that "[h]e subscribes to the principle, espoused by this Court and
the Supreme Court of the United States, that '. . .[d]ebate on public issues should
be uninhibited, robust and wide open and that it may well include vehement,
caustic, and sometimes unpleasantly sharp attacks on government and public
officials." 103 In signing the Statement, he believes that "the right to speak means
the right to speak effectively." 104 Citing the dissenting opinions in Manila Public
School Teachers Association v. Laguio, Jr., 105 Prof. Lynch argued that "[f]or speech
to be effective, it must be forceful enough to make the intended recipients listen"
106 and "[t]he quality of education would deteriorate in an atmosphere of
repression, when the very teachers who are supposed to provide an example of
courage and self-assertiveness to their pupils can speak only in timorous
whispers." 107 Relying on the doctrine in In the Matter of Petition for Declaratory
Relief Re: Constitutionality of Republic Act 4880, Gonzales v. Commission on Elections,
108 Prof. Lynch believed that the Statement did not pose any danger, clear or
present, of any substantive evil so as to remove it from the protective mantle of
the Bill of Rights (i.e., referring to the constitutional guarantee on free speech).
109 He also stated that he "has read the Compliance of the other respondents to
the Show Cause Resolution" and that "he signed the Restoring Integrity
Statement for the same reasons they did." 110
ISSUES
Based on the Show Cause Resolution and a perusal of the submissions of
respondents, the material issues to be resolved in this case are as follows:
1.) Does the Show Cause Resolution deny respondents their freedom of
expression?
2.) Does the Show Cause Resolution violate respondents' academic freedom as
law professors?
3.) Do the submissions of respondents satisfactorily explain why they should not
be disciplined as Members of the Bar under Canons 1, 11, and 13 and Rules 1.02
and 11.05 of the Code of Professional Responsibility?
4.) Does the separate Compliance of Dean Leonen satisfactorily explain why he
should not be disciplined as a Member of the Bar under Canon 10, Rules 10.01,
10.02 and 10.03?
5.) Are respondents entitled to have the Show Cause Resolution set for hearing
and in relation to such hearing, are respondents entitled to require the
production or presentation of evidence bearing on the plagiarism and
misrepresentation issues in the Vinuya case (G.R. No. 162230) and the ethics case
against Justice Del Castillo (A.M. No. 10-7-17-SC) and to have access to the
records and transcripts of, and the witnesses and evidence presented, or could
have been presented, in the ethics case against Justice Del Castillo (A.M. No. 10-
7-17-SC)? HCSAIa
DISCUSSION
The Show Cause Resolution does not deny respondents their freedom of
expression.
It is respondents' collective claim that the Court, with the issuance of the Show
Cause Resolution, has interfered with respondents' constitutionally mandated
right to free speech and expression. It appears that the underlying assumption
behind respondents' assertion is the misconception that this Court is denying
them the right to criticize the Court's decisions and actions, and that this Court
seeks to "silence" respondent law professors' dissenting view on what they
characterize as a "legitimate public issue."
This is far from the truth. A reading of the Show Cause Resolution will plainly
show that it was neither the fact that respondents had criticized a decision of the
Court nor that they had charged one of its members of plagiarism that motivated
the said Resolution. It was the manner of the criticism and the contumacious
language by which respondents, who are not parties nor counsels in the Vinuya
case, have expressed their opinion in favor of the petitioners in the said pending
case for the "proper disposition" and consideration of the Court that gave rise to
said Resolution. The Show Cause Resolution painstakingly enumerated the
statements that the Court considered excessive and uncalled for under the
circumstances surrounding the issuance, publication, and later submission to this
Court of the UP Law faculty's Restoring Integrity Statement.
To reiterate, it was not the circumstance that respondents expressed a belief that
Justice Del Castillo was guilty of plagiarism but rather their expression of that
belief as "not only as an established fact, but a truth" 111 when it was "[o]f public
knowledge [that there was] an ongoing investigation precisely to determine the
truth of such allegations." 112 It was also pointed out in the Show Cause
Resolution that there was a pending motion for reconsideration of the Vinuya
decision. 113 The Show Cause Resolution made no objections to the portions of
the Restoring Integrity Statement that respondents claimed to be "constructive"
but only asked respondents to explain those portions of the said Statement that
by no stretch of the imagination could be considered as fair or constructive, to
wit:
Beyond this, however, the statement bore certain remarks

which raise concern for the Court. The opening sentence
alone is a grim preamble to the institutional attack that lay
ahead. It reads:
An extraordinary act of injustice has again been

committed against the brave Filipinas who had
suffered abuse during a time of war.
The first paragraph concludes with a reference to the

decision in Vinuya v. Executive Secretary as a reprehensible
act of dishonesty and misrepresentation by the Highest
Court of the land. . . . .
The insult to the members of the Court was aggravated by
imputations of deliberately delaying the resolution of the
said case, its dismissal on the basis of "polluted sources," the
Court's alleged indifference to the cause of petitioners [in the
Vinuya case], as well as the supposed alarming lack of
concern of the members of the Court for even the most basic
values of decency and respect. 114 . . . . (Underscoring ours.)
SHaIDE
To be sure, the Show Cause Resolution itself recognized respondents' freedom of

expression when it stated that:
While most agree that the right to criticize the judiciary is

critical to maintaining a free and democratic society, there is
also a general consensus that healthy criticism only goes so
far. Many types of criticism leveled at the judiciary cross the
line to become harmful and irresponsible attacks. These
potentially devastating attacks and unjust criticism can
threaten the independence of the judiciary. The court must
"insist on being permitted to proceed to the disposition of its
business in an orderly manner, free from outside
interference obstructive of its functions and tending to
embarrass the administration of justice."
The Court could hardly perceive any reasonable purpose for

the faculty's less than objective comments except to discredit
the April 28, 2010 Decision in the Vinuya case and
undermine the Court's honesty, integrity and competence in
addressing the motion for its reconsideration. As if the case
on the comfort women's claims is not controversial enough,
the UP Law faculty would fan the flames and invite
resentment against a resolution that would not reverse the
said decision. This runs contrary to their obligation as law
professors and officers of the Court to be the first to
uphold the dignity and authority of this Court, to which
they owe fidelity according to the oath they have taken as
attorneys, and not to promote distrust in the
administration of justice. 115 . . . . (Citations omitted;
emphases and underscoring supplied.)
Indeed, in a long line of cases, including those cited in respondents' submissions,

this Court has held that the right to criticize the courts and judicial officers must
be balanced against the equally primordial concern that the independence of the
Judiciary be protected from due influence or interference. In cases where the
critics are not only citizens but members of the Bar, jurisprudence has repeatedly
affirmed the authority of this Court to discipline lawyers whose statements
regarding the courts and fellow lawyers, whether judicial or extrajudicial, have
exceeded the limits of fair comment and common decency.
As early as the 1935 case of Salcedo v. Hernandez, 116 the Court found Atty.
Vicente J. Francisco both guilty of contempt and liable administratively for the
following paragraph in his second motion for reconsideration:
We should like frankly and respectfully to make it of record

that the resolution of this court, denying our motion for
reconsideration, is absolutely erroneous and constitutes an
outrage to the rights of the petitioner Felipe Salcedo and a
mockery of the popular will expressed at the polls in the
municipality of Tiaong, Tayabas. We wish to exhaust all the
means within our power in order that this error may be
corrected by the very court which has committed it, because
we should not want that some citizen, particularly some
voter of the municipality of Tiaong, Tayabas, resort to the
press publicly to denounce, as he has a right to do, the
judicial outrage of which the herein petitioner has been the
victim, and because it is our utmost desire to safeguard the
prestige of this honorable court and of each and every
member thereof in the eyes of the public. But, at the same
time we wish to state sincerely that erroneous decisions
like these, which the affected party and his thousands of
voters will necessarily consider unjust, increase the
proselytes of 'sakdalism' and make the public lose
confidence in the administration of justice. 117 (Emphases
supplied.) SaHIEA
The highlighted phrases were considered by the Court as neither justified

nor necessary and further held that:
[I]n order to call the attention of the court in a special way to
the essential points relied upon in his argument and to
emphasize the force thereof, the many reasons stated in his
said motion were sufficient and the phrases in question were
superfluous. In order to appeal to reason and justice, it is
highly improper and amiss to make trouble and resort to
threats, as Attorney Vicente J. Francisco has done, because
both means are annoying and good practice can never
sanction them by reason of their natural tendency to
disturb and hinder the free exercise of a serene and
impartial judgment, particularly in judicial matters, in the
consideration of questions submitted for resolution.
There is no question that said paragraph of Attorney Vicente

J. Francisco's motion contains a more or less veiled threat to
the court because it is insinuated therein, after the author
shows the course which the voters of Tiaong should follow
in case he fails in his attempt, that they will resort to the
press for the purpose of denouncing, what he claims to be
a judicial outrage of which his client has been the victim;
and because he states in a threatening manner with the
intention of predisposing the mind of the reader against
the court, thus creating an atmosphere of prejudices
against it in order to make it odious in the public eye, that
decisions of the nature of that referred to in his motion
promote distrust in the administration of justice and increase
the proselytes of sakdalism, a movement with seditious and
revolutionary tendencies the activities of which, as is of
public knowledge, occurred in this country a few days ago.
This cannot mean otherwise than contempt of the dignity
of the court and disrespect of the authority thereof on the
part of Attorney Vicente J. Francisco, because he presumes
that the court is so devoid of the sense of justice that, if he
did not resort to intimidation, it would maintain its error
notwithstanding the fact that it may be proven, with good
reasons, that it has acted erroneously. 118 (Emphases
supplied.)
Significantly, Salcedo is the decision from which respondents culled their quote
from the minority view of Justice Malcolm. Moreover, Salcedo concerned
statements made in a pleading filed by a counsel in a case, unlike the
respondents here, who are neither parties nor counsels in the Vinuya case and
therefore, do not have any standing at all to interfere in the Vinuya case. Instead
of supporting respondents' theory, Salcedo is authority for the following
principle:
As a member of the bar and an officer of this court,

Attorney Vicente J. Francisco, as any attorney, is in duty
bound to uphold its dignity and authority and to defend
its integrity, not only because it has conferred upon him
the high privilege, not a right (Malcolm, Legal Ethics, 158
and 160), of being what he now is: a priest of justice (In re
Thatcher, 80 Ohio St. Rep., 492, 669), but also because in so
doing, he neither creates nor promotes distrust in the
administration of justice, and prevents anybody from
harboring and encouraging discontent which, in many
cases, is the source of disorder, thus undermining the
foundation upon which rests that bulwark called judicial
power to which those who are aggrieved turn for protection
and relief. 119 (Emphases supplied.)
Thus, the lawyer in Salcedo was fined and reprimanded for his injudicious
statements in his pleading, by accusing the Court of "erroneous ruling." Here, the
respondents' Statement goes way beyond merely ascribing error to the Court.
cASIED
Other cases cited by respondents likewise espouse rulings contrary to their

position. In re: Atty. Vicente Raul Almacen, 120 cited in the Common Compliance
and the Vasquez Compliance, was an instance where the Court indefinitely
suspended a member of the Bar for filing and releasing to the press a "Petition to
Surrender Lawyer's Certificate of Title" in protest of what he claimed was a great
injustice to his client committed by the Supreme Court. In the decision, the
petition was described, thus:
He indicts this Court, in his own phrase, as a tribunal

"peopled by men who are calloused to our pleas for justice,
who ignore without reasons their own applicable decisions
and commit culpable violations of the Constitution with
impunity." His client's he continues, who was deeply
aggrieved by this Court's "unjust judgment," has become
"one of the sacrificial victims before the altar of hypocrisy."
In the same breath that he alludes to the classic symbol of
justice, he ridicules the members of this Court, saying "that
justice as administered by the present members of the
Supreme Court is not only blind, but also deaf and dumb."
He then vows to argue the cause of his client "in the
people's forum," so that "the people may know of the
silent injustices committed by this Court," and that
"whatever mistakes, wrongs and injustices that were
committed must never be repeated." He ends his petition
with a prayer that:
". . . a resolution issue ordering the Clerk of Court

to receive the certificate of the undersigned
attorney and counsellor-at-law IN TRUST with
reservation that at any time in the future and in the
event we regain our faith and confidence, we may
retrieve our title to assume the practice of the
noblest profession." 121
It is true that in Almacen the Court extensively discussed foreign jurisprudence
on the principle that a lawyer, just like any citizen, has the right to criticize and
comment upon actuations of public officers, including judicial authority.
However, the real doctrine in Almacen is that such criticism of the courts,
whether done in court or outside of it, must conform to standards of fairness and
propriety. This case engaged in an even more extensive discussion of the legal
authorities sustaining this view. To quote from that decision:
But it is the cardinal condition of all such criticism that it

shall be bona fide, and shall not spill over the walls of
decency and propriety. A wide chasm exists between fair
criticism, on the one hand, and abuse and slander of courts
and the judges thereof, on the other. Intemperate and unfair
criticism is a gross violation of the duty of respect to
courts. It is such a misconduct that subjects a lawyer to
disciplinary action. HcDSaT
For, membership in the Bar imposes upon a person

obligations and duties which are not mere flux and
ferment. His investiture into the legal profession places
upon his shoulders no burden more basic, more exacting
and more imperative than that of respectful behavior toward
the courts. He vows solemnly to conduct himself "with all
good fidelity . . . to the courts;" and the Rules of Court
constantly remind him "to observe and maintain the respect
due to courts of justice and judicial officers." The first canon
of legal ethics enjoins him "to maintain towards the courts
a respectful attitude, not for the sake of the temporary
incumbent of the judicial office, but for the maintenance
of its supreme importance."
As Mr. Justice Field puts it:
". . . the obligation which attorneys impliedly

assume, if they do not by express declaration take
upon themselves, when they are admitted to the
Bar, is not merely to be obedient to the Constitution
and laws, but to maintain at all times the respect
due to courts of justice and judicial officers. This
obligation is not discharged by merely observing
the rules of courteous demeanor in open court,
but includes abstaining out of court from all
insulting language and offensive conduct toward
judges personally for their judicial acts." (Bradley
v. Fisher, 20 Law. 4d. 647, 652)
The lawyer's duty to render respectful subordination to the
courts is essential to the orderly administration of justice.
Hence, in the assertion of their clients' rights, lawyers
even those gifted with superior intellect are enjoined to
rein up their tempers.
"The counsel in any case may or may not be an

abler or more learned lawyer than the judge, and it
may tax his patience and temper to submit to
rulings which he regards as incorrect, but
discipline and self-respect are as necessary to the
orderly administration of justice as they are to the
effectiveness of an army. The decisions of the
judge must be obeyed, because he is the tribunal
appointed to decide, and the bar should at all times
be the foremost in rendering respectful
submission." (In Re Scouten, 40 Atl. 481)
xxx xxx xxx
In his relations with the courts, a lawyer may not divide

his personality so as to be an attorney at one time and a
mere citizen at another. Thus, statements made by an
attorney in private conversations or communications or in
the course of a political campaign, if couched in insulting
language as to bring into scorn and disrepute the
administration of justice, may subject the attorney to
disciplinary action. 122 (Emphases and underscoring
supplied.) CacTSI
In a similar vein, In re: Vicente Sotto, 123 cited in the Vasquez Compliance,
observed that:
[T]his Court, in In re Kelly, held the following:
The publication of a criticism of a party or of the

court to a pending cause, respecting the same, has
always been considered as misbehavior, tending
to obstruct the administration of justice, and
subjects such persons to contempt proceedings.
Parties have a constitutional right to have their
causes tried fairly in court, by an impartial
tribunal, uninfluenced by publications or public
clamor. Every citizen has a profound personal
interest in the enforcement of the fundamental right
to have justice administered by the courts, under
the protection and forms of law, free from outside
coercion or interference. . . . .
Mere criticism or comment on the correctness or wrongness,

soundness or unsoundness of the decision of the court in a
pending case made in good faith may be tolerated; because if
well founded it may enlighten the court and contribute to
the correction of an error if committed; but if it is not well
taken and obviously erroneous, it should, in no way,
influence the court in reversing or modifying its decision. . . .
.
xxx xxx xxx
To hurl the false charge that this Court has been for the
last years committing deliberately "so many blunders and
injustices," that is to say, that it has been deciding in favor of
one party knowing that the law and justice is on the part of
the adverse party and not on the one in whose favor the
decision was rendered, in many cases decided during the
last years, would tend necessarily to undermine the
confidence of the people in the honesty and integrity of
the members of this Court, and consequently to lower or
degrade the administration of justice by this Court. The
Supreme Court of the Philippines is, under the Constitution,
the last bulwark to which the Filipino people may repair to
obtain relief for their grievances or protection of their rights
when these are trampled upon, and if the people lose their
confidence in the honesty and integrity of the members of
this Court and believe that they cannot expect justice
therefrom, they might be driven to take the law into their
own hands, and disorder and perhaps chaos might be the
result. As a member of the bar and an officer of the courts
Atty. Vicente Sotto, like any other, is in duty bound to
uphold the dignity and authority of this Court, to which he
owes fidelity according to the oath he has taken as such
attorney, and not to promote distrust in the administration
of justice. Respect to the courts guarantees the stability of
other institutions, which without such guaranty would be
resting on a very shaky foundation. 124 (Emphases and
underscoring supplied.)
That the doctrinal pronouncements in these early cases are still good law can be
easily gleaned even from more recent jurisprudence.
In Choa v. Chiongson, 125 the Court administratively disciplined a lawyer,

through the imposition of a fine, for making malicious and unfounded criticisms
of a judge in the guise of an administrative complaint and held, thus: cCSTHA
As an officer of the court and its indispensable partner in the

sacred task of administering justice, graver responsibility is
imposed upon a lawyer than any other to uphold the
integrity of the courts and to show respect to its officers. This
does not mean, however, that a lawyer cannot criticize a
judge. As we stated in Tiongco vs. Hon. Aguilar:
It does not, however, follow that just because a lawyer is an

officer of the court, he cannot criticize the courts. That is his
right as a citizen, and it is even his duty as an officer of the
court to avail of such right. Thus, in In Re: Almacen (31 SCRA
562, 579-580 [1970]), this Court explicitly declared:
Hence, as a citizen and as officer of the court, a

lawyer is expected not only to exercise the right,
but also to consider it his duty to avail of such right.
No law may abridge this right. Nor is he
"professionally answerable to a scrutiny into the
official conduct of the judges, which would not
expose him to legal animadversion as a citizen."
(Case of Austin, 28 Am Dec. 657, 665).
xxx xxx xxx
Nevertheless, such a right is not without limit. For, as this

Court warned in Almacen:
But it is a cardinal condition of all such criticism

that it shall be bona fide, and shall not spill over the
walls of decency and propriety. A wide chasm
exists between fair criticism, on the one hand, and
abuse and slander of courts and the judges
thereof, on the other. Intemperate and unfair
criticism is a gross violation of the duty of respect
to courts. It is such a misconduct, that subjects a
lawyer to disciplinary action.
xxx xxx xxx
Elsewise stated, the right to criticize, which is guaranteed

by the freedom of speech and of expression in the Bill of
Rights of the Constitution, must be exercised responsibly,
for every right carries with it a corresponding obligation.
Freedom is not freedom from responsibility, but freedom
with responsibility. . . . .
xxx xxx xxx
Proscribed then are, inter alia, the use of unnecessary

language which jeopardizes high esteem in courts, creates
or promotes distrust in judicial administration (Rheem,
supra), or tends necessarily to undermine the confidence of
people in the integrity of the members of this Court and to
degrade the administration of justice by this Court (In re:
Sotto, 82 Phil. 595 [1949]); or of offensive and abusive
language (In re: Rafael Climaco, 55 SCRA 107 [1974]); or
abrasive and offensive language (Yangson vs. Salandanan, 68
SCRA 42 [1975]; or of disrespectful, offensive, manifestly
baseless, and malicious statements in pleadings or in a
letter addressed to the judge (Baja vs. Macandog, 158 SCRA
[1988], citing the resolution of 19 January 1988 in Phil. Public
Schools Teachers Association vs. Quisumbing, G.R. No. 76180,
and Ceniza vs. Sebastian, 130 SCRA 295 [1984]); or of
disparaging, intemperate, and uncalled-for remarks
(Sangalang vs. Intermediate Appellate Court, 177 SCRA 87
[1989]). IcEACH
Any criticism against a judge made in the guise of an

administrative complaint which is clearly unfounded and
impelled by ulterior motive will not excuse the lawyer
responsible therefor under his duty of fidelity to his client. . .
. . 126 (Emphases and underscoring supplied.)
In Saberon v. Larong, 127 where this Court found respondent lawyer guilty of
simple misconduct for using intemperate language in his pleadings and imposed
a fine upon him, we had the occasion to state:
The Code of Professional Responsibility mandates:
CANON 8 A lawyer shall conduct himself with

courtesy, fairness and candor toward his
professional colleagues, and shall avoid harassing
tactics against opposing counsel.
Rule 8.01 A lawyer shall not, in his professional

dealings, use language which is abusive, offensive
or otherwise improper.
CANON 11 A lawyer shall observe and

maintain the respect due to the courts and to
judicial officers and should insist on similar
conduct by others.
Rule 11.03 A lawyer shall abstain from

scandalous, offensive or menacing language or
behavior before the Courts.
To be sure, the adversarial nature of our legal system has

tempted members of the bar to use strong language in
pursuit of their duty to advance the interests of their clients.
However, while a lawyer is entitled to present his case

with vigor and courage, such enthusiasm does not justify
the use of offensive and abusive language. Language
abounds with countless possibilities for one to be
emphatic but respectful, convincing but not derogatory,
illuminating but not offensive.
On many occasions, the Court has reminded members of

the Bar to abstain from all offensive personality and to
advance no fact prejudicial to the honor or reputation of a
party or witness, unless required by the justice of the cause
with which he is charged. In keeping with the dignity of the
legal profession, a lawyer's language even in his pleadings
must be dignified. 128
Verily, the accusatory and vilifying nature of certain portions of the Statement
exceeded the limits of fair comment and cannot be deemed as protected free
speech. Even In the Matter of Petition for Declaratory Relief Re: Constitutionality of
Republic Act 4880, Gonzales v. Commission on Elections, 129 relied upon by
respondents in the Common Compliance, held that:
From the language of the specific constitutional provision, it

would appear that the right is not susceptible of any
limitation. No law may be passed abridging the freedom of
speech and of the press. The realities of life in a complex
society preclude however a literal interpretation. Freedom of
expression is not an absolute. It would be too much to
insist that at all times and under all circumstances it
should remain unfettered and unrestrained. There are
other societal values that press for recognition. . . . . 130
One such societal value that presses for recognition in the case at bar is the threat
to judicial independence and the orderly administration of justice that
immoderate, reckless and unfair attacks on judicial decisions and institutions
pose. This Court held as much in Zaldivar v. Sandiganbayan and Gonzales, 131
where we indefinitely suspended a lawyer from the practice of law for issuing
to the media statements grossly disrespectful towards the Court in relation to a
pending case, to wit:
Respondent Gonzales is entitled to the constitutional

guarantee of free speech. No one seeks to deny him that
right, least of all this Court. What respondent seems
unaware of is that freedom of speech and of expression,
like all constitutional freedoms, is not absolute and that
freedom of expression needs on occasion to be adjusted to
and accommodated with the requirements of equally
important public interest. One of these fundamental
public interests is the maintenance of the integrity and
orderly functioning of the administration of justice. There
is no antinomy between free expression and the integrity of
the system of administering justice. For the protection and
maintenance of freedom of expression itself can be secured
only within the context of a functioning and orderly
system of dispensing justice, within the context, in other
words, of viable independent institutions for delivery of
justice which are accepted by the general community. . . . .
132 (Emphases supplied.)
For this reason, the Court cannot uphold the view of some respondents 133 that
the Statement presents no grave or imminent danger to a legitimate public
interest. ETIcHa
The Show Cause Resolution does not interfere with respondents'

academic freedom.
It is not contested that respondents herein are, by law and jurisprudence,
guaranteed academic freedom and undisputably, they are free to determine what
they will teach their students and how they will teach. We must point out that
there is nothing in the Show Cause Resolution that dictates upon respondents the
subject matter they can teach and the manner of their instruction. Moreover, it is
not inconsistent with the principle of academic freedom for this Court to subject
lawyers who teach law to disciplinary action for contumacious conduct and
speech, coupled with undue intervention in favor of a party in a pending case,
without observing proper procedure, even if purportedly done in their capacity
as teachers.
A novel issue involved in the present controversy, for it has not been passed
upon in any previous case before this Court, is the question of whether lawyers
who are also law professors can invoke academic freedom as a defense in an
administrative proceeding for intemperate statements tending to pressure the
Court or influence the outcome of a case or degrade the courts.
Applying by analogy the Court's past treatment of the "free speech" defense in
other bar discipline cases, academic freedom cannot be successfully invoked by
respondents in this case. The implicit ruling in the jurisprudence discussed above
is that the constitutional right to freedom of expression of members of the Bar
may be circumscribed by their ethical duties as lawyers to give due respect to the
courts and to uphold the public's faith in the legal profession and the justice
system. To our mind, the reason that freedom of expression may be so delimited
in the case of lawyers applies with greater force to the academic freedom of law
professors.
It would do well for the Court to remind respondents that, in view of the broad
definition in Cayetano v. Monsod, 134 lawyers when they teach law are considered
engaged in the practice of law. Unlike professors in other disciplines and more
than lawyers who do not teach law, respondents are bound by their oath to
uphold the ethical standards of the legal profession. Thus, their actions as law
professors must be measured against the same canons of professional
responsibility applicable to acts of members of the Bar as the fact of their being
law professors is inextricably entwined with the fact that they are lawyers.
Even if the Court was willing to accept respondents' proposition in the Common
Compliance that their issuance of the Statement was in keeping with their duty
to "participate in the development of the legal system by initiating or supporting
efforts in law reform and in the improvement of the administration of justice"
under Canon 4 of the Code of Professional Responsibility, we cannot agree that
they have fulfilled that same duty in keeping with the demands of Canons 1, 11
and 13 to give due respect to legal processes and the courts, and to avoid conduct
that tends to influence the courts. Members of the Bar cannot be selective
regarding which canons to abide by given particular situations. With more
reason that law professors are not allowed this indulgence, since they are
expected to provide their students exemplars of the Code of Professional
Responsibility as a whole and not just their preferred portions thereof.
The Court's rulings on the submissions regarding the charge of violation

of Canons 1, 11 and 13.
Having disposed of respondents' main arguments of freedom of expression and
academic freedom, the Court considers here the other averments in their
submissions.
With respect to good faith, respondents' allegations presented two main ideas:
(a) the validity of their position regarding the plagiarism charge against Justice
Del Castillo, and (b) their pure motive to spur this Court to take the correct
action on said issue.
The Court has already clarified that it is not the expression of respondents'
staunch belief that Justice Del Castillo has committed a misconduct that the
majority of this Court has found so unbecoming in the Show Cause Resolution.
No matter how firm a lawyer's conviction in the righteousness of his cause there
is simply no excuse for denigrating the courts and engaging in public behavior
that tends to put the courts and the legal profession into disrepute. This doctrine,
which we have repeatedly upheld in such cases as Salcedo, In re Almacen and
Saberong, should be applied in this case with more reason, as the respondents,
not parties to the Vinuya case, denounced the Court and urged it to change its
decision therein, in a public statement using contumacious language, which with
temerity they subsequently submitted to the Court for "proper disposition."
That humiliating the Court into reconsidering the Vinuya Decision in favor of the
Malaya Lolas was one of the objectives of the Statement could be seen in the
following paragraphs from the same:
And in light of the significance of this decision to the quest

for justice not only of Filipino women, but of women
elsewhere in the world who have suffered the horrors of
sexual abuse and exploitation in times of war, the Court
cannot coldly deny relief and justice to the petitioners on
the basis of pilfered and misinterpreted texts.
xxx xxx xxx
(3) The same breach and consequent disposition of the

Vinuya case does violence to the primordial function of the
Supreme Court as the ultimate dispenser of justice to all
those who have been left without legal or equitable recourse,
such as the petitioners therein. 135 (Emphases and
underscoring supplied.) HcTEaA
Whether or not respondents' views regarding the plagiarism issue in the Vinuya
case had valid basis was wholly immaterial to their liability for contumacious
speech and conduct. These are two separate matters to be properly threshed out
in separate proceedings. The Court considers it highly inappropriate, if not
tantamount to dissembling, the discussion devoted in one of the compliances
arguing the guilt of Justice Del Castillo. In the Common Compliance,
respondents even go so far as to attach documentary evidence to support the
plagiarism charges against Justice Del Castillo in the present controversy. The
ethics case of Justice Del Castillo (A.M. No. 10-7-17-SC), with the filing of a
motion for reconsideration, was still pending at the time of the filing of
respondents' submissions in this administrative case. As respondents themselves
admit, they are neither parties nor counsels in the ethics case against Justice Del
Castillo. Notwithstanding their professed overriding interest in said ethics case,
it is not proper procedure for respondents to bring up their plagiarism
arguments here especially when it has no bearing on their own administrative
case.
Still on motive, it is also proposed that the choice of language in the Statement
was intended for effective speech; that speech must be "forceful enough to make
the intended recipients listen." 136 One wonders what sort of effect respondents
were hoping for in branding this Court as, among others, callous, dishonest and
lacking in concern for the basic values of decency and respect. The Court fails to
see how it can ennoble the profession if we allow respondents to send a signal to
their students that the only way to effectively plead their cases and persuade
others to their point of view is to be offensive.
This brings to our mind the letters of Dr. Ellis and Prof. Tams which were
deliberately quoted in full in the narration of background facts to illustrate the
sharp contrast between the civil tenor of these letters and the antagonistic
irreverence of the Statement. In truth, these foreign authors are the ones who
would expectedly be affected by any perception of misuse of their works.
Notwithstanding that they are beyond the disciplinary reach of this Court, they
still obviously took pains to convey their objections in a deferential and scholarly
manner. It is unfathomable to the Court why respondents could not do the same.
These foreign authors' letters underscore the universality of the tenet that legal
professionals must deal with each other in good faith and due respect. The mark
of the true intellectual is one who can express his opinions logically and soberly
without resort to exaggerated rhetoric and unproductive recriminations.
As for the claim that the respondents' noble intention is to spur the Court to take
"constructive action" on the plagiarism issue, the Court has some doubts as to its
veracity. For if the Statement was primarily meant for this Court's consideration,
why was the same published and reported in the media first before it was
submitted to this Court? It is more plausible that the Statement was prepared for
consumption by the general public and designed to capture media attention as
part of the effort to generate interest in the most controversial ground in the
Supplemental Motion for Reconsideration filed in the Vinuya case by Atty.
Roque, who is respondents' colleague on the UP Law faculty.
In this regard, the Court finds that there was indeed a lack of observance of
fidelity and due respect to the Court, particularly when respondents knew fully
well that the matter of plagiarism in the Vinuya decision and the merits of the
Vinuya decision itself, at the time of the Statement's issuance, were still both sub
judice or pending final disposition of the Court. These facts have been widely
publicized. On this point, respondents allege that at the time the Statement was
first drafted on July 27, 2010, they did not know of the constitution of the Ethics
Committee and they had issued the Statement under the belief that this Court
intended to take no action on the ethics charge against Justice Del Castillo. Still,
there was a significant lapse of time from the drafting and printing of the
Statement on July 27, 2010 and its publication and submission to this Court in
early August when the Ethics Committee had already been convened. If it is true
that the respondents' outrage was fueled by their perception of indifference on
the part of the Court then, when it became known that the Court did intend to
take action, there was nothing to prevent respondents from recalibrating the
Statement to take this supervening event into account in the interest of fairness.
Speaking of the publicity this case has generated, we likewise find no merit in the
respondents' reliance on various news reports and commentaries in the print
media and the internet as proof that they are being unfairly "singled out." On the
contrary, these same annexes to the Common Compliance show that it is not
enough for one to criticize the Court to warrant the institution of disciplinary 137
or contempt 138 action. This Court takes into account the nature of the criticism
and weighs the possible repercussions of the same on the Judiciary. When the
criticism comes from persons outside the profession who may not have a full
grasp of legal issues or from individuals whose personal or other interests in
making the criticism are obvious, the Court may perhaps tolerate or ignore them.
However, when law professors are the ones who appear to have lost sight of the
boundaries of fair commentary and worse, would justify the same as an exercise
of civil liberties, this Court cannot remain silent for such silence would have a
grave implication on legal education in our country.
With respect to the 35 respondents named in the Common Compliance,

considering that this appears to be the first time these respondents have been
involved in disciplinary proceedings of this sort, the Court is willing to give
them the benefit of the doubt that they were for the most part well-intentioned in
the issuance of the Statement. However, it is established in jurisprudence that
where the excessive and contumacious language used is plain and undeniable,
then good intent can only be mitigating. As this Court expounded in Salcedo:
HcDSaT
In his defense, Attorney Vicente J. Francisco states that it

was not his intention to offend the court or to be recreant
to the respect thereto but, unfortunately, there are his
phrases which need no further comment. Furthermore, it is
a well settled rule in all places where the same conditions
and practice as those in this jurisdiction obtain, that want of
intention is no excuse from liability (13 C. J., 45). Neither is
the fact that the phrases employed are justified by the facts
a valid defense:
"Where the matter is abusive or insulting,

evidence that the language used was justified by
the facts is not admissible as a defense. Respect
for the judicial office should always be observed
and enforced." (In re Stewart, 118 La., 827; 43 S.,
455.) Said lack or want of intention constitutes at
most an extenuation of liability in this case, taking
into consideration Attorney Vicente J. Francisco's
state of mind, according to him when he prepared
said motion. This court is disposed to make such
concession. However, in order to avoid a
recurrence thereof and to prevent others, by
following the bad example, from taking the same
course, this court considers it imperative to treat
the case of said attorney with the justice it
deserves. 139 (Emphases supplied.)
Thus, the 35 respondents named in the Common Compliance should,

notwithstanding their claim of good faith, be reminded of their lawyerly duty,
under Canons 1, 11 and 13, to give due respect to the courts and to refrain from
intemperate and offensive language tending to influence the Court on pending
matters or to denigrate the courts and the administration of justice.
With respect to Prof. Vasquez, the Court favorably notes the differences in his
Compliance compared to his colleagues. In our view, he was the only one among
the respondents who showed true candor and sincere deference to the Court. He
was able to give a straightforward account of how he came to sign the Statement.
He was candid enough to state that his agreement to the Statement was in
principle and that the reason plagiarism was a "fair topic of discussion" among
the UP Law faculty prior to the promulgation of the October 12, 2010 Decision in
A.M. No. 10-7-17-SC was the uncertainty brought about by a division of opinion
on whether or not willful or deliberate intent was an element of plagiarism. He
was likewise willing to acknowledge that he may have been remiss in failing to
assess the effect of the language of the Statement and could have used more care.
He did all this without having to retract his position on the plagiarism issue,
without demands for undeserved reliefs (as will be discussed below) and
without baseless insinuations of deprivation of due process or of prejudgment.
This is all that this Court expected from respondents, not for them to sacrifice
their principles but only that they recognize that they themselves may have
committed some ethical lapse in this affair. We commend Prof. Vaquez for
showing that at least one of the respondents can grasp the true import of the
Show Cause Resolution involving them. For these reasons, the Court finds Prof.
Vasquez's Compliance satisfactory.
As for Prof. Lynch, in view of his Manifestation that he is a member of the Bar of
the State of Minnesota and, therefore, not under the disciplinary authority of this
Court, he should be excused from these proceedings. However, he should be
reminded that while he is engaged as a professor in a Philippine law school he
should strive to be a model of responsible and professional conduct to his
students even without the threat of sanction from this Court. For even if one is
not bound by the Code of Professional Responsibility for members of the
Philippine Bar, civility and respect among legal professionals of any nationality
should be aspired for under universal standards of decency and fairness.
The Court's ruling on Dean Leonen's Compliance regarding the charge

of violation of Canon 10.
To recall, the Show Cause Resolution directed Dean Leonen to show cause why
he should not be disciplinary dealt with for violation of Canon 10, Rules 10.01,
10.02 and 10.03 and for submitting a "dummy" that was not a true and faithful
reproduction of the signed Statement.
In his Compliance, Dean Leonen essentially denies that Restoring Integrity II

was not a true and faithful reproduction of the actual signed copy, Restoring
Integrity I, because looking at the text or the body, there were no differences
between the two. He attempts to downplay the discrepancies in the signature
pages of the two versions of the Statement (i.e., Restoring Integrity I and
Restoring Integrity II) by claiming that it is but expected in "live" public
manifestos with dynamic and evolving pages as more and more signatories add
their imprimatur thereto. He likewise stresses that he is not administratively
liable because he did not misrepresent the members of the UP Law faculty who
"had agreed with the Restoring Integrity Statement proper and/or who had
expressed their desire to be signatories thereto." 140
To begin with, the Court cannot subscribe to Dean Leonen's implied view that
the signatures in the Statement are not as significant as its contents. Live public
manifesto or not, the Statement was formally submitted to this Court at a specific
point in time and it should reflect accurately its signatories at that point. The
value of the Statement as a UP Law Faculty Statement lies precisely in the
identities of the persons who have signed it, since the Statement's persuasive
authority mainly depends on the reputation and stature of the persons who have
endorsed the same. Indeed, it is apparent from respondents' explanations that
their own belief in the "importance" of their positions as UP law professors
prompted them to publicly speak out on the matter of the plagiarism issue in the
Vinuya case. IEcaHS
Further, in our assessment, the true cause of Dean Leonen's predicament is the
fact that he did not from the beginning submit the signed copy, Restoring
Integrity I, to this Court on August 11, 2010 and, instead, submitted Restoring
Integrity II with its retyped or "reformatted" signature pages. It would turn out,
according to Dean Leonen's account, that there were errors in the retyping of the
signature pages due to lapses of his unnamed staff. First, an unnamed
administrative officer in the dean's office gave the dean inaccurate information
that led him to allow the inclusion of Justice Mendoza as among the signatories
of Restoring Integrity II. Second, an unnamed staff also failed to type the name
of Atty. Armovit when encoding the signature pages of Restoring Integrity II
when in fact he had signed Restoring Integrity I.
The Court can understand why for purposes of posting on a bulletin board or a
website a signed document may have to be reformatted and signatures may be
indicated by the notation (SGD). This is not unusual. We are willing to accept
that the reformatting of documents meant for posting to eliminate blanks is
necessitated by vandalism concerns.
However, what is unusual is the submission to a court, especially this Court, of a

signed document for the Court's consideration that did not contain the actual
signatures of its authors. In most cases, it is the original signed document that is
transmitted to the Court or at the very least a photocopy of the actual signed
document. Dean Leonen has not offered any explanation why he deviated from
this practice with his submission to the Court of Restoring Integrity II on August
11, 2010. There was nothing to prevent the dean from submitting Restoring
Integrity I to this Court even with its blanks and unsigned portions. Dean
Leonen cannot claim fears of vandalism with respect to court submissions for
court employees are accountable for the care of documents and records that may
come into their custody. Yet, Dean Leonen deliberately chose to submit to this
Court the facsimile that did not contain the actual signatures and his silence on
the reason therefor is in itself a display of lack of candor.
Still, a careful reading of Dean Leonen's explanations yield the answer. In the
course of his explanation of his willingness to accept his administrative officer's
claim that Justice Mendoza agreed to be indicated as a signatory, Dean Leonen
admits in a footnote that other professors had likewise only authorized him to
indicate them as signatories and had not in fact signed the Statement. Thus, at
around the time Restoring Integrity II was printed, posted and submitted to this
Court, at least one purported signatory thereto had not actually signed the same.
Contrary to Dean Leonen's proposition, that is precisely tantamount to making it
appear to this Court that a person or persons participated in an act when such
person or persons did not.
We are surprised that someone like Dean Leonen, with his reputation for
perfection and stringent standards of intellectual honesty, could proffer the
explanation that there was no misrepresentation when he allowed at least one
person to be indicated as having actually signed the Statement when all he had
was a verbal communication of an intent to sign. In the case of Justice Mendoza,
what he had was only hearsay information that the former intended to sign the
Statement. If Dean Leonen was truly determined to observe candor and
truthfulness in his dealings with the Court, we see no reason why he could not
have waited until all the professors who indicated their desire to sign the
Statement had in fact signed before transmitting the Statement to the Court as a
duly signed document. If it was truly impossible to secure some signatures, such
as that of Justice Mendoza who had to leave for abroad, then Dean Leonen
should have just resigned himself to the signatures that he was able to secure.
We cannot imagine what urgent concern there was that he could not wait for
actual signatures before submission of the Statement to this Court. As
respondents all asserted, they were neither parties to nor counsels in the Vinuya
case and the ethics case against Justice Del Castillo. The Statement was neither a
pleading with a deadline nor a required submission to the Court; rather, it was a
voluntary submission that Dean Leonen could do at any time.
In sum, the Court likewise finds Dean Leonen's Compliance unsatisfactory.

However, the Court is willing to ascribe these isolated lapses in judgment of
Dean Leonen to his misplaced zeal in pursuit of his objectives. In due
consideration of Dean Leonen's professed good intentions, the Court deems it
sufficient to admonish Dean Leonen for failing to observe full candor and
honesty in his dealings with the Court as required under Canon 10.
Respondents' requests for a hearing, for production/presentation of

evidence bearing on the plagiarism and misrepresentation issues in G.R.
No. 162230 and A.M. No. 10-7-17-SC, and for access to the records of A.M.
No. 10-7-17- SC are unmeritorious.
In the Common Compliance, respondents named therein asked for alternative
reliefs should the Court find their Compliance unsatisfactory, that is, that the
Show Cause Resolution be set for hearing and for that purpose, they be allowed
to require the production or presentation of witnesses and evidence bearing on
the plagiarism and misrepresentation issues in the Vinuya case (G.R. No. 162230)
and the plagiarism case against Justice Del Castillo (A.M. No. 10-7-17-SC) and to
have access to the records of, and evidence that were presented or may be
presented in the ethics case against Justice Del Castillo. The prayer for a hearing
and for access to the records of A.M. No. 10-7-17-SC was substantially echoed in
Dean Leonen's separate Compliance. In Prof. Juan-Bautista's Compliance, she
similarly expressed the sentiment that "[i]f the Restoring Integrity Statement can
be considered indirect contempt, under Section 3 of Rule 71 of the Rules of Court,
such may be punished only after charge and hearing." 141 It is this group of
respondents' premise that these reliefs are necessary for them to be accorded full
due process. EATCcI
The Court finds this contention unmeritorious.
Firstly, it would appear that the confusion as to the necessity of a hearing in this
case springs largely from its characterization as a special civil action for indirect
contempt in the Dissenting Opinion of Justice Sereno (to the October 19, 2010
Show Cause Resolution) and her reliance therein on the majority's purported
failure to follow the procedure in Rule 71 of the Rules of Court as her main
ground for opposition to the Show Cause Resolution.
However, once and for all, it should be clarified that this is not an indirect
contempt proceeding and Rule 71 (which requires a hearing) has no application
to this case. As explicitly ordered in the Show Cause Resolution this case was
docketed as an administrative matter.
The rule that is relevant to this controversy is Rule 139-B, Section 13, on
disciplinary proceedings initiated motu proprio by the Supreme Court, to wit:
SEC. 13. Supreme Court Investigators. In proceedings

initiated motu proprio by the Supreme Court or in other
proceedings when the interest of justice so requires, the
Supreme Court may refer the case for investigation to the
Solicitor General or to any officer of the Supreme Court or
judge of a lower court, in which case the investigation shall
proceed in the same manner provided in sections 6 to 11
hereof, save that the review of the report of investigation
shall be conducted directly by the Supreme Court.
From the foregoing provision, it cannot be denied that a formal

investigation, through a referral to the specified officers, is merely
discretionary, not mandatory on the Court. Furthermore, it is only if the
Court deems such an investigation necessary that the procedure in Sections
6 to 11 of Rule 139-A will be followed.
As respondents are fully aware, in general, administrative proceedings do not
require a trial type hearing. We have held that:
The essence of due process is simply an opportunity to be

heard or, as applied to administrative proceedings, an
opportunity to explain one's side or an opportunity to seek
a reconsideration of the action or ruling complained of.
What the law prohibits is absolute absence of the opportunity
to be heard, hence, a party cannot feign denial of due
process where he had been afforded the opportunity to
present his side. A formal or trial type hearing is not at all
times and in all instances essential to due process, the
requirements of which are satisfied where the parties are
afforded fair and reasonable opportunity to explain their
side of the controversy. 142 (Emphases supplied.)
In relation to bar discipline cases, we have had the occasion to rule in Pena v.
Aparicio 143 that:
Disciplinary proceedings against lawyers are sui generis.

Neither purely civil nor purely criminal, they do not
involve a trial of an action or a suit, but is rather an
investigation by the Court into the conduct of one of its
officers. Not being intended to inflict punishment, it is in
no sense a criminal prosecution. Accordingly, there is
neither a plaintiff nor a prosecutor therein. It may be
initiated by the Court motu proprio. Public interest is its
primary objective, and the real question for determination
is whether or not the attorney is still a fit person to be
allowed the privileges as such. Hence, in the exercise of its
disciplinary powers, the Court merely calls upon a
member of the Bar to account for his actuations as an
officer of the Court with the end in view of preserving the
purity of the legal profession and the proper and honest
administration of justice by purging the profession of
members who by their misconduct have proved themselves
no longer worthy to be entrusted with the duties and
responsibilities pertaining to the office of an attorney. In
such posture, there can thus be no occasion to speak of a
complainant or a prosecutor. 144 (Emphases supplied.)
In Query of Atty. Karen M. Silverio-Buffe, Former Clerk of Court Br. 81, Romblon
On the Prohibition from Engaging in the Private Practice of Law, 145 we further
observed that:
[I]n several cases, the Court has disciplined lawyers without

further inquiry or resort to any formal investigation where
the facts on record sufficiently provided the basis for the
determination of their administrative liability.
In Prudential Bank v. Castro, the Court disbarred a lawyer

without need of any further investigation after considering
his actions based on records showing his unethical
misconduct; the misconduct not only cast dishonor on the
image of both the Bench and the Bar, but was also inimical to
public interest and welfare. In this regard, the Court took
judicial notice of several cases handled by the errant lawyer
and his cohorts that revealed their modus operandi in
circumventing the payment of the proper judicial fees for the
astronomical sums they claimed in their cases. The Court
held that those cases sufficiently provided the basis for the
determination of respondents' administrative liability,
without need for further inquiry into the matter under the
principle of res ipsa loquitur. HADTEC
Also on the basis of this principle, we ruled in Richards v.

Asoy, that no evidentiary hearing is required before the
respondent may be disciplined for professional
misconduct already established by the facts on record.
xxx xxx xxx
These cases clearly show that the absence of any formal

charge against and/or formal investigation of an errant
lawyer do not preclude the Court from immediately
exercising its disciplining authority, as long as the errant
lawyer or judge has been given the opportunity to be
heard. As we stated earlier, Atty. Buffe has been afforded
the opportunity to be heard on the present matter through
her letter-query and Manifestation filed before this Court.
146 (Emphases supplied.)
Under the rules and jurisprudence, respondents clearly had no right to a hearing
and their reservation of a right they do not have has no effect on these
proceedings. Neither have they shown in their pleadings any justification for this
Court to call for a hearing in this instance. They have not specifically stated what
relevant evidence, documentary or testimonial, they intend to present in their
defense that will necessitate a formal hearing.
Instead, it would appear that they intend to present records, evidence, and
witnesses bearing on the plagiarism and misrepresentation issues in the Vinuya
case and in A.M. No. 10-7-17-SC on the assumption that the findings of this
Court which were the bases of the Show Cause Resolution were made in A.M.
No. 10-7-17-SC, or were related to the conclusions of the Court in the Decision in
that case. This is the primary reason for their request for access to the records and
evidence presented in A.M. No. 10-7-17-SC.
This assumption on the part of respondents is erroneous. To illustrate, the only

incident in A.M. No. 10-7-17-SC that is relevant to the case at bar is the fact that
the submission of the actual signed copy of the Statement (or Restoring Integrity I,
as Dean Leonen referred to it) happened there. Apart from that fact, it bears
repeating that the proceedings in A.M. No. 10-7-17-SC, the ethics case against
Justice Del Castillo, is a separate and independent matter from this case.
To find the bases of the statements of the Court in the Show Cause Resolution
that the respondents issued a Statement with language that the Court deems
objectionable during the pendency of the Vinuya case and the ethics case against
Justice Del Castillo, respondents need to go no further than the four corners of
the Statement itself, its various versions, news reports/columns (many of which
respondents themselves supplied to this Court in their Common Compliance)
and internet sources that are already of public knowledge.
Considering that what respondents are chiefly required to explain are the
language of the Statement and the circumstances surrounding the drafting,
printing, signing, dissemination, etc., of its various versions, the Court does not
see how any witness or evidence in the ethics case of Justice Del Castillo could
possibly shed light on these facts. To be sure, these facts are within the
knowledge of respondents and if there is any evidence on these matters the same
would be in their possession.
We find it significant that in Dean Leonen's Compliance he narrated how as early

as September 2010, i.e., before the Decision of this Court in the ethics case of
Justice Del Castillo on October 12, 2010 and before the October 19, 2010 Show
Cause Resolution, retired Supreme Court Justice Vicente V. Mendoza, after being
shown a copy of the Statement upon his return from abroad, predicted that the
Court would take some form of action on the Statement. By simply reading a
hard copy of the Statement, a reasonable person, even one who "fundamentally
agreed" with the Statement's principles, could foresee the possibility of court
action on the same on an implicit recognition that the Statement, as worded, is
not a matter this Court should simply let pass. This belies respondents' claim that
it is necessary for them to refer to any record or evidence in A.M. No. 10-7-17-SC
in order to divine the bases for the Show Cause Resolution.
If respondents have chosen not to include certain pieces of evidence in their

respective compliances or chosen not to make a full defense at this time, because
they were counting on being granted a hearing, that is respondents' own look-
out. Indeed, law professors of their stature are supposed to be aware of the above
jurisprudential doctrines regarding the non-necessity of a hearing in disciplinary
cases. They should bear the consequence of the risk they have taken.
Thus, respondents' requests for a hearing and for access to the records of, and
evidence presented in, A.M. No. 10-7-17-SC should be denied for lack of merit.
A final word
In a democracy, members of the legal community are hardly expected to have
monolithic views on any subject, be it a legal, political or social issue. Even as
lawyers passionately and vigorously propound their points of view they are
bound by certain rules of conduct for the legal profession. This Court is certainly
not claiming that it should be shielded from criticism. All the Court demands is
the same respect and courtesy that one lawyer owes to another under established
ethical standards. All lawyers, whether they are judges, court employees,
professors or private practitioners, are officers of the Court and have voluntarily
taken an oath, as an indispensable qualification for admission to the Bar, to
conduct themselves with good fidelity towards the courts. There is no exemption
from this sworn duty for law professors, regardless of their status in the
academic community or the law school to which they belong. aSATHE
WHEREFORE, this administrative matter is decided as follows:
(1) With respect to Prof. Vasquez, after favorably noting his submission, the
Court finds his Compliance to be SATISFACTORY.
(2) The Common Compliance of 35 respondents, namely, Attys. Marvic M.V.F.

Leonen, Froilan M. Bacungan, Pacifico A. Agabin, Merlin M. Magallona,
Salvador T. Carlota, Carmelo V. Sison, Patricia R.P. Salvador Daway, Dante B.
Gatmaytan, Theodore O. Te, Florin T. Hilbay, Jay L. Batongbacal, Evelyn (Leo)
D. Battad, Gwen G. De Vera, Solomon F. Lumba, Rommel J. Casis, Jose
Gerardo A. Alampay, Miguel R. Armovit, Arthur P. Autea, Rosa Maria J.
Bautista, Mark R. Bocobo, Dan P. Calica, Tristan A. Catindig, Sandra Marie O.
Coronel, Rosario O. Gallo, Concepcion L. Jardeleza, Antonio G.M. La Via,
Carina C. Laforteza, Jose C. Laureta, Rodolfo Noel S. Quimbo, Antonio M.
Santos, Gmeleen Faye B. Tomboc, Nicholas Felix L. Ty, Evalyn G. Ursua,
Susan D. Villanueva and Dina D. Lucenario, is found UNSATISFACTORY.
These 35 respondent law professors are REMINDED of their lawyerly duty,
under Canons 1, 11 and 13 of the Code of Professional Responsibility, to give due
respect to the Court and to refrain from intemperate and offensive language
tending to influence the Court on pending matters or to denigrate the Court and
the administration of justice and warned that the same or similar act in the future
shall be dealt with more severely.
(3) The separate Compliance of Dean Marvic M.V.F. Leonen regarding the
charge of violation of Canon 10 is found UNSATISFACTORY. He is further
ADMONISHED to be more mindful of his duty, as a member of the Bar, an
officer of the Court, and a Dean and professor of law, to observe full candor and
honesty in his dealings with the Court and warned that the same or similar act in
the future shall be dealt with more severely.
(4) Prof. Lynch, who is not a member of the Philippine bar, is EXCUSED from
these proceedings. However, he is reminded that while he is engaged as a
professor in a Philippine law school he should strive to be a model of responsible
and professional conduct to his students even without the threat of sanction from
this Court.
(5) Finally, respondents' requests for a hearing and for access to the records of
A.M. No. 10-7-17-SC are DENIED for lack of merit.
SO ORDERED.
||| (Re: Letter of the UP Law Faculty on Allegations of Plagiarism and

Misrepresentation in the Supreme Court, A.M. No. 10-10-4-SC, March 08, 2011)
EN BANC
[G.R. No. L-18338. October 31, 1962.]
KAISAHAN NG MGA MANGGAGAWA SA LA

CAMPANA, petitioner, vs. RICARDO TANTONGCO and
THE COURT OF INDUSTRIAL RELATIONS, respondents.
Carlos E. Santiago for petitioner.
Fornier & Alvarez Law Office for respondent Ricardo Tantongco.
Court of Industrial Relations Legal Division for respondent Court of Industrial

Relations.
SYLLABUS
1. COURT OF INDUSTRIAL RELATIONS; FINDINGS OF FACT; WHEN

CONCLUSIVE UPON THE SUPREME COURT. The findings of fact by the
Court of Industrial Relations are final and conclusive and are binding upon the
Supreme Court when (1) the parties are given the opportunity to present
evidence; (2) the tribunal considered the evidence presented (3) there is
something to support the findings; and (4) the evidence supporting the findings
is substantial (Ormoc Sugar Co., Inc. vs. Osco Workers Fraternity Labor, et al.,
G.R. L-15826, Jan. 23, 1961).
2. CONTEMPT; INDIRECT CONTEMPT; NO CONVICTION WHERE

ACCUSED DID NOT RECEIVE THE ORDER. One accused of indirect
contempt for alleged failure to obey the court's orders cannot be convicted
thereof if it does not appear beyond doubt that he received said orders.
DECISION
PAREDES, J p:
On January 18, 1957, the respondent Court of Industrial Relations promulgated

an Order in Cases Nos. 584 [V], (1), (2), (3), (5) and (6), all entitled "Kaisahan Ng
Mga Manggagawa sa La Campana (KKM) vs. La Campana Starch and Coffee
Factory, and the Administrator of the Estate of Ramon Tantongco", ordering the
reinstatement and payment of back wages of twelve (12) employees involved in
said cases. The respondents therein, after their motion for reconsideration had
been denied by the Court (CIR), presented a petition for Certiorari with this
Court, docketed as case G. R. No. L-12355, entitled "La Campana Starch & Coffee
Factory & Ricardo Tantongco, as administrator of the Estate of Ramon
Tantongco, Petitioners, vs. Kaisahan Ng Mga Manggagawa sa La Campana
(KKM) and the CIR, Respondents". The above petition was dismissed by this
Court in a Resolution dated June 12, 1957, for "lack of merit"
On February 18, 1957, the order of the CIR having become final and executory, the
Kaisahan filed a motion of Execution on August 13, 1957. The employees who
were ordered to be reinstated and whose back wages should be paid, presented
themselves for work on August 28, 1957. Upon refusal of the La Campana
and/or Ricardo Tantongco to comply with the final order, the Kaisahan on
August 30, 1957, presented a petition to cite Ricardo Tantongco for Contempt.
Under date of September 6, 1957, Tantongco presented a "Manifestation"

averring therein that he was not anymore the administrator of the Estate of
Ramon Tantongco, such estate having been distributed and proceedings closed
and his bond as administrator has already been cancelled by the probate court
and, therefore, he should not be cited for contempt.
On September 30, 1957, the CIR entered an Order whereby it required the La
Campana or its Manager or the person who has charge of the management, and
the Administrator of the Estate of Ramon Tantongco, to comply with the Order
of February 18, 1957 within five (5) days from receipt, specially to (a) reinstate
the persons named in said Order of February 18, 1957; and (b) to deposit the
amount of P65,534.01 with the Court. Upon the alleged refusal of the La
Campana, more specifically Ricardo Tantongco, to comply with the above order,
the Kaisahan filed a manifestation informing the CIR of said refusal. A
preliminary investigation was subsequently conducted by the Acting Prosecutor
and Attorney of the respondent Court, wherein Ricardo Tantongco appeared
with counsel. On November 18, 1957, after the preliminary investigation, a
complaint for Indirect Contempt was filed against Ricardo Tantongco, "People of
the Philippines vs. Ricardo Tantongco", Case No. V-24. Upon the filing of the
contempt case, Ricardo Tantongco presented a petition for Certiorari with
Preliminary Injunction, G.R. No. L-13119, entitled "Ricardo Tantongco vs.
Kaisahan and the Court of Industrial Relations, praying that the CIR be enjoined
from proceeding with the trial of the contempt case and from enforcing the
Order of September 30, 1957, requiring him to reinstate the 12 employees and to
deposit P65,534.01. This Court issued the writ of preliminary injunction, and
after hearing, rendered a decision on September 22, 1959, holding among others,
that the respondent Ricardo Tantongco was "the proper person and official to
which the orders of the CIR are addressed and who is in duty bound to comply
with the same". The writ earlier issued was accordingly dissolved. The contempt
case was subsequently heard and on March 3, 1960, the prosecution rested its
case. Tantongco manifested his desire to file a Motion to Dismiss, as in fact he
filed same on March 4, 1960. At the subsequent hearings, Tantongco insisted on
the resolution of his Motion to Dismiss. The Presiding Judge, however, in open
court, deferred resolution of said Motion until after the reception of evidence and
re-set the hearing for March 8, 1960, with the warning that should Tantongco fail
to appear, the case would be considered submitted for decision. A written Order
to this effect was handed down on March 5, 1960. On the scheduled hearing,
Tantongco failed to appear and on April 30, 1960, Judge Jose S. Bautista rendered
judgment, the pertinent portions of which read:
"From the evidence thus presented, which is unrebutted, it is

clear that the accused refused to follow the order of this
Court dated February 18, 1957 and September 30, 1957, such
action constitutes indirect contempt of Court.
WHEREFORE, the accused is sentenced to be imprisoned

until he complies with the orders of this Court dated
February 18, 1957 and September 30, 1957."
Tantongco moved for a reconsideration of the above decision to the Court en

banc, contending that (1) the order is arbitrary and contrary to law; (2) the order
is illegal, because the Court has no power to issue such order; and (3) the order is
not supported by the evidence. After hearing, the Court en banc, on March 2,
1961, rendered judgment, the pertinent portions (majority opinion) of which,
read:
". . . The accused insisted that the evidence of the

prosecution is not sufficient beyond reasonable doubt to
convict the accused of the charge in the complaint. This
condition can be seen from the evidence of the prosecution
thus presented. It appears from the evidence of the
prosecution that the Order dated September 30, 1957,
wherein the accused was charged of refusing to comply was
never served on the said accused. The testimonies of the
different witnesses are mere hearsay and are not therefore of
probative value in a criminal complaint where the accused is
charged of indirect contempt for alleged refusal to comply
with the terms and conditions of a valid order. The
witnesses merely said that the accused refused to accept the
Order of the Court dated September 30, 1957, without
actually proving that such Order was really and actually
served upon the accused Ricardo Tantongco. The only direct
evidence to show that the copy of such Order was supposed
to have been served on the accused was the testimony of the
bailiff of the Court, Mr. Penilla; and his testimony in answer
to questions therein propounded brings to light the
following:
"Q I call your attention, Mr. Witness to exhibit "H-1" wherein

you have reported the following and I quote: 'I
have this day served copy of ORDER in case No.
584-V (1). 1, 2, 3, 5, and (6) to the Manager, or his
management incharge, and Mr. Ricardo Tantongco,
Luscot Str., Galas, Quezon City, thru Mr.
Fernandez, on October 5, 1957', do you know
personally Mr. Fernandez whom you have cited in
the officers return of service marked as Exhibit "H-
1"?
A I do not know, sir.
Q If you do not know Mr. Fernandez, why did you entrust

and deliver the corresponding notice of order of
decision which is supposed to be delivered to Mr.
Ricardo Tantongco?
A Because Mr. Ricardo Tantongco was absent at that time".

(T. S. N. Page 61, November 21, 1957)."
It is clear that when the Order of September 30, 1957 was

allegedly served on the accused Ricardo Tantongco, he was
absent. Consequently, such service of the Order sought to be
served, was not actually served on the accused. It is claimed
that one Mr. Fernandez received from the bailiff of the court,
Mr. Penilla, the copy of the Order of the Court on October 5,
1957, but the said bailiff had no knowledge that the said Mr.
Fernandez is a personnel or employee empowered or
authorized by the accused to receive documents or
communications for and in his behalf. The evidence did not
also disclose that the said Mr. Fernandez who claimed to
have received the alleged order, copy of the Order in Cases
Nos. 585-V (1), (2), (3), (5) and (6) was never presented in
court to testify as to what connection he had with the
accused, and why he allegedly received such Order. There is
no showing that this person is an employee of the accused
and if he is not responsible employee or in any way
connected in the employ of the accused Ricardo Tantongco,
then the service of such order to such person could not be
considered in evidence sufficient to serve the purpose of the
rules of court that an order has been duly served on the
accused.
"Indirect contempt partakes the nature of a criminal action

and under the law a person so accused of indirect contempt
has the same rights before any court of justice to present
evidence in defense of his rights. One of these rights of an
accused is to move for the dismissal of a complaint if it is
shown that the evidence therein submitted are not sufficient
beyond reasonable doubt that the person therein accused
has committed the alleged contempt. It is incumbent upon
the Trial Court to decide first such motion to dismiss . . .
Under the present situation, there is no direct evidence to
show that the Orders of the Trial Court involved were
sufficiently and properly served upon the accused Ricardo
Tantongco. Now, why shall we put him in prison until he
complies with the said Order when he did not receive such
Order in the ordinary course of business under the laws of
this country?
". . . Accused, however, refused to submit evidence until

after the Trial Court has ruled on his motion to dismiss.
Under the situation, the Trial Court considered the case
submitted for decision without giving the accused the
opportunity to submit his evidence in defense of his rights.
"We believe that the action taken by the Trial Court is way
out of beat. The right of an accused to move for the dismissal
of a case after prosecution has rested its case is a right
recognized in this jurisdiction. . . (People vs. Moro Nanacol,
G.R. No. L-1748, Sept. 29, 1948).
xxx xxx xxx

It must be remembered that proceedings in indirect
contempt is penal in nature (Villanueva vs. Lim, 69 Phil.,
650), and as such the accused is entitled to be heard in
evidence . . ..
It is our view that the Order of the Trial Court dated April
30, 1960, deprived the accused of his day in court and denied
him due process of law and the equal protection of the laws.
It is our honest belief that even in indirect contempt case, the
accused should be given ample opportunity to properly
defend himself by availing all rights, stages, means and
remedies allowed under our democratic processes in a
regime where the rule of law is supreme.
Considering that the evidence in this case thus presented as

basis of the decision and/or order of April 30, 1960 is not the
evidence beyond reasonable doubt called for under the law
and proceedings criminal in nature, we are constrained to vote
for the dismissal of this case."
The trial judge, Hon. Jose S. Bautista dissented, while Judge Baltazar M.
Villanueva gave the following vote:
"FOR ALL THE FOREGOING CONSIDERATIONS, without

advancing any opinion on the question of sufficiency of the
evidence, I hereby hold that the Motion to Dismiss by the
accused is a prejudicial question which must be first
resolved by the Trial Court before it could force the accused
to present his defense should the said motion be dismissed
and, therefore, I vote for the reconsideration and setting
aside of the order of the Trial Court dated April 30, 1960 and
for the remand of the case for further trial in conformity with
the foregoing opinion."
The majority opinion is now the subject of the present Petition for Review, the
Kaisahan, as petitioner, alleging that the respondent CIR committed a grave error
of law in dismissing the case. The basis of the allegation is the decision of this
Court in G. R. No. L-13119, supra holding that the respondent Ricardo Tantongco
was the "proper person and official to whom the orders of the CIR are addressed
and who is in duty bound to comply with the same."
Respondent CIR filed a separate Answer, and after the customary admission and
denials, advanced, in argument the propriety of the majority decision dismissing
the contempt case. It was opined that respondent Tantongco, who was charged
with indirect contempt, which partakes of a criminal prosecution, had the right
to present a Motion to Dismiss on insufficiency of evidence, after the prosecution
has rested and is entitled to a resolution of said motion before he can be
compelled to present his evidence in defense; that the trial judge in considering
the case submitted, even before evidence in defense was adduced virtually
deprived Tantongco of his day in court and denied him of his liberty without
due process of law. The answer of respondent Court also invokes the principle
that this Court has no authority or jurisdiction to Review the instant case, it
appearing that the question involved is dominantly factual. In support of this
contention, the respondent Court said:
"In the Resolution En Banc (Annex "J"), findings of fact were

made as to whether the accused - respondent herein had
in fact received copies of the orders which he was charged of
having refused to comply. In the said resolution, a finding
was made that respondent herein did not receive copies of
said orders. This is a clear finding of fact and jurisprudence
in this jurisdiction is that the issue is not within the
corrective jurisdiction of this Honorable Tribunal (Section 6,
Republic Act No. 875; and Teodoro Donato case, G.R. No. L-
12506). As a matter of fact, in the said Resolution it was there
found that ". . . the evidence in this case thus presented as
basis of the decision and/or order of April 30, 1960 is not the
evidence beyond reasonable doubt called for under the law
and proceedings criminal in nature, . . ." From the analysis of
the evidence as shown in the Resolution, this is a factual
finding."
Respondent Tantongco, in his Answer, after admitting and denying some of the
allegations in the petition, and after invoking the same grounds sponsored by the
CIR claimed that the petition at bar places him in double jeopardy since the
dismissal of the case of indirect contempt against him, admittedly a criminal
prosecution, amounted to an acquittal which became final immediately.
There are two issues which we are called upon to determine in the present
proceeding, i. e., whether under the facts recited in the petition, this Court can
review the case and whether double jeopardy attaches.
There is no doubt that the CIR had the jurisdiction to hear the indirect contempt
case (Section 6, Com. Act No. 103). The presiding Judge, who tried the case and
sentenced the respondent, had authority to take cognizance of the case and the
Court En Banc had also the authority to review his findings, both of facts and of
law. The Court En Banc reversed the findings of the trial Judge, both on the
issues of fact and law, when the majority opinion found that the record does not
show that respondent Tantongco actually received the Orders which he was
called upon to comply with, a pivotal point in the matter of evidence, and when
it further held that the trial judge should not have considered the case submitted
for decision, without first resolving the motion to dismiss and permitting
respondent Tantongco to adduce evidence in his defense, in the event of an
adverse resolution.
We share the view expressed by respondent CIR that the case under
consideration involves factual findings, which under consistent rulings of this
Court, we are not authorized to review, or alter, unless such findings are
completely devoid of basis, and there is grave abuse of discretion (Cristobal
Olaivar vs. Manila Elec. Company & CIR, 71 Phil., 503, and cases cited therein).
The findings of fact by the CIR are final and conclusive and are binding upon
this Court when (1) the parties were given the opportunity to present evidence
(2) the tribunal considered the evidence presented; (3) there is something to
support the findings; and (4) the evidence supporting the findings is substantial
(Ormoc Sugar Co., Inc. vs. Osco Workers Fraternity Labor, et al. 110 Phil., 627).
The record of the case at bar and the well considered opinion of the majority of
the respondent Court, clearly reveal that all the above requirements concur.
Much emphasis is placed by petitioner on the decision of this Court in case G. R.

No. L-13119, supra, where we held that respondent Tantongco was the proper
person to whom the orders sought to be complied with should be directed. The
majority decision of the respondent Court did not, in any way, contradict this
finding. It dismissed the contempt case, on the ground that there was no
evidence on record, to show beyond doubt, that the orders which respondent
Tantongco supposedly refused to obey, were actually received by him. Certainly,
the trial judge could not convict an accused of indirect contempt, when he did
not receive said orders.
On this score alone, the petition for Certiorari to Review the Order of respondent
Court, should be dismissed, thereby rendering unnecessary the further
discussion of the other issue of double jeopardy.
CONFORMABLY WITH ALL THE FOREGOING, the petition is hereby

dismissed and the decision sought to be reviewed is affirmed, with costs against
the Petitioner Kaisahan Ng Mga Manggagawa sa La Campana.
||| (Kaisahan ng mga Manggagawa sa La Campana v. Tantongco, G.R. No. L-18338,

October 31, 1962)
SECOND DIVISION
[G.R. No. 78413. November 8, 1989.]
CAGAYAN VALLEY ENTERPRISES, INC., Represented

by its President, Rogelio Q. Lim, petitioner, vs. THE HON.
COURT OF APPEALS and LA TONDEA, INC.,
respondents.
Efren M. Cacatian for petitioners.
San Jose, Enrique, Lacas, Santos and Borje for private respondent.
SYLLABUS
1. ADMINISTRATIVE LAW; PHILIPPINE PATENT OFFICE; REGISTRATION

OF BOTTLES AND OTHER CONTAINERS UNDER Republic Act 623, AS
AMENDED BY Republic Act 5700. The provisions of Sections 1, 2 and 3 of
R.A. 623, as amended by R.A. 5700 grant protection to a qualified manufacturer
who successfully registered with the Philippine Patent Office its duly stamped or
marked bottles, boxes, casks and other similar containers.
2. ID.; ID.; ID.; MERE UNAUTHORIZED USE OF REGISTERED BOTTLES,

PROHIBITED; EXCEPTIONS. The mere use of registered bottles or containers
without the written consent of the manufacturer is prohibited, the only
exceptions being when they are used as containers for "sisi," "bagoong," "patis"
and similar native products.
3. ID.; ID.; ID.; REQUISITES FOR REGISTRATION. Republic Act No. 623
merely requires that the bottles, in order to be eligible for registration, must be
stamped or marked with the names of the manufacturers or the names of their
principals or products, or other marks of ownership. No drawings or labels are
required but, instead, two photographs of the container, duly signed by the
applicant, showing clearly and legibly the names and other marks of ownership
sought to be registered and a bottle showing the name or other mark or
ownership, irremovably stamped or marked, shall be submitted.
4. ID.; ID.; ID.; ID.; TERM "NAME OR OTHER MARK OF OWNERSHIP",

CONSTRUED. The term "Name or Other Mark of Ownership" means the
name of the applicant or the name of his principal, or of the product, or other
mark of ownership.
5. ID.; ID.; ID.; ID.; ID.; OMISSION OF THE WORDS "PROPERTY OF" WILL
NOT REMOVE THE BOTTLES FROM THE PROTECTION OF THE LAW; CASE
AT BAR. The omitted words "property of" are not of such vital
indispensability such that the omission thereof will remove the bottles from the
protection of the law. The owner of a trade-mark or trade-name, and in this case
the marked containers, does not abandon it by making minor modifications in
the mark or name itself. With much more reason will this be true where what is
involved is the mere omission of the words "property of" since even without said
words the ownership of the bottles is easily identifiable. The words "La Tondea.
Inc." and "Ginebra San Miguel" stamped on the bottles, even without the words
"property of," are sufficient notice to the public that those bottles so marked are
owned by LTI.
6. ID.; ID.; ID.; OTHER LAWFUL BEVERAGES; COVERAGE. The words

"other lawful beverages" provided in Section 1 of Republic Act No. 623, as
amended by Republic Act No. 5700, is used in its general sense, referring to all
beverages not prohibited by law. Beverage is defined as a liquor or liquid for
drinking. Hard liquor, although regulated, is not prohibited by law, hence it is
within the purview and coverage of Republic Act No, 623, as amended.
7. ID.; ID.; ID.; PURPOSE OF THE LAW. Republic Act No. 623, as amended,
has for its purpose the protection of the health of the general public and the
prevention of the spread of contagious diseases. It further seeks to safeguard the
property rights of an important sector of Philippine industry.
8. STATUTORY CONSTRUCTION; RULE OF EJUSDEM GENERIS; RESORTED

TO ONLY TO DETERMINE LEGISLATIVE INTENT. The rule of ejusdem
generis is to be resorted to only for the purpose of determining what the intent of
the legislature was in enacting the law. If that intent clearly appears from other
parts of the law, and such intent thus clearly manifested is contrary to the result
which would be reached by the appreciation of the rule of ejusdem generis, the
latter must give way.
9. REMEDIAL LAW; EVIDENCE; EXECUTIVE CONSTRUCTION ENTITLED

TO GREAT WEIGHT AND CONSIDERATION. While executive construction
is not necessarily binding upon the courts, it is entitled to great weight and
consideration. The reason for this is that such construction comes from the
particular branch of government called upon to implement the particular law
involved.
10. ADMINISTRATIVE LAW; PHILIPPINE PATENT OFFICE; REGISTRATION

OF BOTTLES AND OTHER CONTAINERS UNDER Republic Act No. 623 AS
AMENDED BY Republic Act No. 5700; CRIMINAL AND CIVIL SANCTIONS
FOR VIOLATION THEREOF. While Republic Act No. 623, as amended,
provides for a criminal action in case of violation, a civil action for damages is
proper under Article 20 of the Civil Code. Moreover, under Section 23 of
Republic Act No. 166, as amended, a person entitled to the exclusive use of a
registered mark or trade-name may recover damages in a civil action from any
person who infringes his rights.
11. ID.; ID.; ID.; FAILURE TO GIVE NOTICE OF REGISTRATION, EFFECT.
The failure to give notice of registration under Section 21, Republic Act No. 166
will not deprive the aggrieved party of a cause of action against the infringer but,
at the most, such failure may bar recovery of damages but only under the
provisions of Republic Act No. 166.
12. MERCANTILE LAW; CORPORATIONS; PIERCING THE VEIL OF

CORPORATE ENTITY; INSTANCES WHERE DOCTRINE IS APPLIED.
While a corporation is an entity separate and distinct from its stockholders and
from other corporations with which it may be connected, where the discreteness
of its personality is used to defeat public convenience, justify wrong, protect
fraud, or defend crime, the law will regard the corporation as an association of
persons, or in the case of two corporations, merge them into one. When the
corporation is the mere alter ego or business conduit of a person, it may be
disregarded.
13. REMEDIAL LAW; SPECIAL CIVIL ACTION; CONTEMPT; CLASSES.

Generally, contempt proceedings are characterized as criminal in nature, but the
more accurate juridical concept is that contempt proceedings may actually be
either civil or criminal. It is criminal when the purpose is to vindicate the
authority of the court and protect its outraged dignity. It is civil when there is
failure to do something ordered by a court to be done for the benefit of a party.
(Converse Rubber Corporation vs. Jacinto Rubber & Plastic Co., Inc., 98 SCRA
158 [1980])
14. CONSTITUTIONAL LAW; DOUBLE JEOPARDY; APPEAL FROM

ACQUITTAL IN A CIVIL CONTEMPT PROCEEDING, DOES NOT
CONSTITUTES A VIOLATION OF THE SAFEGUARD; CASE AT BAR. An
appeal from a verdict of acquittal in a contempt proceeding constitutes double
jeopardy. The contempt involved in this case is civil and constructive in nature, it
having arisen from the act of Cagayan in violating the writ of preliminary
injunction of the lower court which clearly defined the forbidden act.
15. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTION;

COMPLIANCE THEREWITH, MANDATORY. An injunction duly issued
must be obeyed, however erroneous the action of the court may be, until its
decision is overruled by itself or by a higher court.
16. ID.; SPECIAL CIVIL ACTION; CONTEMPT; POWER NOT ABSOLUTE.

The American rule that the power to judge a contempt rests exclusively with the
court contemned does not apply in this jurisdiction. The provision of the present
Section 4, Rule 71 of the Rules of Court as to where the charge may be filed is
permissive in nature and is merely declaratory of the inherent power of courts to
punish contumacious conduct. Said rules do not extend to the determination of
the jurisdiction of Philippine courts. In appropriate cases, therefore, this Court
may, in the interest of expedient justice, impose sanctions on contemners of the
lower courts.
17. ID.; PROVISIONAL REMEDIES; INJUNCTION; ISSUANCE CAN NOT BE

MERELY DISREGARDED; CASE AT BAR. Section 3 of Republic Act No. 623,
as amended, creates a prima facie presumption against Cagayan for its unlawful
use of the bottles registered in the name of LTI. Corollarily, the writ of injunction
directing petitioner to desist from using the subject bottles was properly issued
by the trial court. Hence, said writ could not be simply disregarded by Cagayan
without adducing proof sufficient to overcome the aforesaid presumption.
18. ID.; SUPREME COURT; WILL FINALLY RESOLVE ISSUES INSTEAD OF

REMANDING THE CASE TO THE LOWER COURT; PRINCIPLE BEHIND.
Based on the findings of respondent court, and the records before us being
sufficient for arbitrament, without remanding the incident to the court a quo
petitioner can be adjudged guilty of contempt and imposed a sanction in this
appeal since it is a cherished rule of procedure for this Court to always strive to
settle the entire controversy in a single proceeding. We so impose such penalty
concordant with the preservative principle and as demanded by the respect due
the orders, writs and processes of the courts of justice.
DECISION
REGALADO, J p:
This petition for review on certiorari seeks the nullification of the decision of the
Court of Appeals of December 5, 1986 in CA-G.R. CV No. 06685 which reversed
the decision of the trial court, and its resolution dated May 5, 1987 denying
petitioner's motion for reconsideration.
The following antecedent facts generative of the present controversy are not in
dispute.
Sometime in 1953, La Tondea, Inc. (hereafter, LTI for short) registered with the
Philippine Patent Office pursuant to Republic Act No. 623 1 the 350 c.c. white
flint bottles it has been using for its gin popularly known as "Ginebra San
Miguel". This registration was subsequently renewed on December 4, 1974. 2
On November 10, 1981, LTI filed Civil Case No 2668 for injunction and damages
in the then Branch I, Court of First Instance of Isabela against Cagayan Valley
Enterprises, Inc. (Cagayan, for brevity) for using the 350 c.c., white flint bottles
with the mark "La Tondea, Inc." and "Ginebra San Miguel" stamped or blown-in
therein by filling the same with Cagayan's liquor product bearing the label
"Sonny Boy" for commercial sale and distribution, without LTI's written consent
and in violation of Section 2 of Republic Act No. 623, as amended by Republic
Act No. 5700. On the same date, LTI further filed an ex parte petition for the
issuance of a writ of preliminary injunction against the defendant therein. 3 On
November 16, 1981, the court a quo issued a temporary restraining order against
Cagayan and its officers and employees from using the 350 c.c. bottles with the
marks "La Tondea" and "Ginebra San Miguel." 4
Cagayan, in its answer, 5 alleged the following defenses: LibLex
1. LTI has no cause of action due to its failure to comply with Section 21 of
Republic Act No. 166 which requires the giving of notice that its aforesaid marks
are registered by displaying and printing the words "Registered in the Phil.
Patent Office" or "Reg. Phil. Pat. Off.," hence no suit, civil or criminal, can be filed
against Cagayan;
2. LTI is not entitled to any protection under Republic Act No. 623, as amended
by Republic Act No. 5700, because its products, consisting of hard liquor, are not
among those contemplated therein. What is protected under said law are
beverages like Coca-cola, Royal Tru-Orange, Lem-O-Lime and similar beverages
the bottles whereof bear the words "Reg. Phil. Pat. Off.;"
3. No reservation of ownership on its bottles was made by LTI in its sales

invoices nor does it require any deposit for the retention of said bottles; and
4. There was no infringement of the goods or products of LTI since Cagayan uses
its own labels and trade-mark on its product.
In its subsequent pleadings, Cagayan contended that the bottles they are using
are not the registered bottles of LTI since the former was using the bottles
marked with "La Tondea, Inc." and "Ginebra San Miguel" but without the
words "property of" indicated in said bottles as stated in the sworn statement
attached to the certificate of registration of LTI for said bottles.
On December 18, 1981, the lower court issued a writ of preliminary injunction,
upon the filing of a bond by LTI in the sum of P50,000.00, enjoining Cagayan, its
officers and agents from using the aforesaid registered bottles of LTI. 6
After a protracted trial, which entailed five (5) motions for contempt filed by LTI
against Cagayan, the trial court rendered judgment 7 in favor of Cagayan, ruling
that the complaint does not state a cause of action and that Cagayan was not
guilty of contempt. Furthermore, it awarded damages in favor of Cagayan.
LLphil
LTI appealed to the Court of Appeals which, on December 5, 1986 rendered a
decision in favor of said appellant, the dispositive portion whereof reads:
"WHEREFORE, the decision appealed from is hereby SET

ASIDE and judgment is rendered permanently enjoining the
defendant, its officers and agents from using the 350 c.c.
white flint bottles with the marks of ownership 'La Tondea,
Inc.' and 'Ginebra San Miguel', blown-in or stamped on said
bottles as containers for defendant's products.
"The writ of preliminary injunction issued by the trial court

is therefore made permanent.
"Defendant is ordered to pay the amounts of:
(1) P15,000.00 as nominal or temperate damages;
(2) P50,000.00 as exemplary damages;
(3) P10,000.00 as attorney's fees; and
(4) Costs of suit." 8
On December 23, 1986, Cagayan filed a motion for reconsideration which was
denied by the respondent court in its resolution dated May 5, 1987, hence the
present petition, with the following assignment of errors:
"I. The Court of Appeals gravely erred in the decision

granting that 'there is, therefore, no need for plaintiff to
display the words "Reg. Phil. Pat. Off." in order for it to
succeed in bringing any injunction suit against defendant for
the illegal use of its bottles. Rep. Act No. 623, as amended by
Rep. Act No. 5700 simply provides and requires that the
marks or names shall be stamped or marked on the
containers.'
"II. The Court of Appeals gravely erred in deciding that

'neither is there a reason to distinguish between the two (2)
sets of marked bottles those which contain the marks
'Property of La Tondea, Inc., Ginebra San Miguel,' and
those simply marked 'La Tondea, Inc., Ginebra San Miguel'.
By omitting the words "property of", plaintiff did not open
itself to violation of Republic Act No. 623, as amended, as
having registered its marks or names it is protected under
the law.'
"III. The Honorable Court of Appeals gravely erred in

deciding that the words 'La Tondea, Inc. and Ginebra San
Miguel' are sufficient notice to the defendant which should
have inquired from the plaintiff or the Philippine Patent
Office, if it was lawful for it to re-use the empty bottles of the
plaintiff.
"IV. The Honorable Court of Appeals gravely erred in

deciding that defendant-appellee cannot claim good faith
from using the bottles of plaintiff with marks 'La Tondea,
Inc.' alone, short for the description contained in the sworn
statement of Mr. Carlos Palanca, Jr., which was a requisite of
its original and renewal registrations.
"V. The Honorable Court of Appeals gravely erred in

accommodating the appeal on the dismissals of the five (5)
contempt charges.
"VI. The Honorable Court of Appeals gravely erred in

deciding that the award of damages in favor of the
defendant-appellee, petitioner herein, is not in order. Instead
it awarded nominal or temperate exemplary damages and
attorney's fees without proof of bad faith. 9
The pertinent provisions of Republic Act No. 623, as amended by Republic Act
No. 5700, provides:
"SECTION 1. Persons engaged or licensed to engage in the

manufacture, bottling, or selling of soda water, mineral or
aerated waters, cider, milk, cream or other lawful beverages
in bottles, boxes, casks, kegs, or barrels, and other similar
containers, or in the manufacturing, compressing or selling
of gases such as oxygen, acytelene, nitrogen, carbon dioxide
ammonia, hydrogen, chloride, helium, sulphur, dioxide,
butane, propane, freon, melthyl chloride or similar gases
contained in steel cylinders, tanks, flasks, accumulators or
similar containers, with the name or the names of their
principals or products, or other marks of ownership
stamped or marked thereon, may register with the
Philippine Patent Office a description of the names or marks,
and the purpose for which the containers so marked and
used by them, under the same conditions, rules, and
regulations, made applicable by law or regulation to the
issuance of trademarks.
"SEC. 2. It shall be unlawful for any person, without the

written consent of the manufacturer, bottler, or seller, who
has successfully registered the marks of ownership in
accordance with the provisions of the next preceding section,
to fill such bottles, boxes, kegs, barrels, steel cylinders, tanks,
flasks, accumulators or other similar containers so marked or
stamped, for the purpose of sale, or to sell, disposed of, buy
or traffic in, or wantonly destroy the same, whether filled or
not, to use the same, for drinking vessels or glasses or drain
pipes, foundation pipes, for any other purposes than that
registered by the manufacturer, bottler or seller. Any
violation of this section shall be punished by a fine of not
more than one thousand pesos or imprisonment of not more
than one year or both.
"SEC. 3. The use by any person other than the registered

manufacturer, bottler or seller, without written permission
of the latter of any such bottle, cask, barrel, keg, box, steel
cylinders, tanks, flask, accumulators, or other similar
containers, or the possession thereof without written
permission of the manufacturer, by any junk dealer or dealer
in casks, barrels, kegs, boxes, steel cylinders, tanks, flasks,
accumulators or other similar containers, the same being
duly marked or stamped and registered as herein provided,
shall give rise to a prima facie presumption that such use or
possession is unlawful."
The above-quoted provisions grant protection to a qualified manufacturer who

successfully registered with the Philippine Patent Office its duly stamped or
marked bottles, boxes, casks and other similar containers. The mere use of
registered bottles or containers without the written consent of the manufacturer
is prohibited, the only exceptions being when they are used as containers for
"sisi," "bagoong," "patis" and similar native products. 10
It is an admitted fact that herein petitioner Cagayan buys from junk dealers and
retailers bottles which bear the marks or names "La Tondea, Inc." and "Ginebra
San Miguel" and uses them as containers for its own liquor products. The
contention of Cagayan that the aforementioned bottles without the words
"property of" indicated thereon are not the registered bottles of LTI, since they do
not conform with the statement or description in the supporting affidavits
attached to the original registration certificate and renewal, is untenable. cdll
Republic Act No. 623 which governs the registration of marked bottles and
containers merely requires that the bottles, in order to be eligible for registration,
must be stamped or marked with the names of the manufacturers or the names
of their principals or products, or other marks of ownership. No drawings or
labels are required but, instead, two photographs of the container, duly signed
by the applicant, showing clearly and legibly the names and other marks of
ownership sought to be registered and a bottle showing the name or other mark
or ownership, irremovably stamped or marked, shall be submitted. 11
The term "Name or Other Mark of Ownership" 12 means the name of the
applicant or the name of his principal, or of the product, or other mark of
ownership. The second set of bottles of LTI without the words "property of"
substantially complied with the requirements of Republic Act No. 623, as
amended, since they bear the name of the principal, La Tondea, Inc., and of its
product, Ginebra San Miguel. The omitted words "property of" are not of such
vital indispensability such that the omission thereof will remove the bottles from
the protection of the law. The owner of a trade-mark or trade-name, and in this
case the marked containers, does not abandon it by making minor modifications
in the mark or name itself. 13 With much more reason will this be true where
what is involved is the mere omission of the words "property of" since even
without said words the ownership of the bottles is easily identifiable. The words
"La Tondea. Inc." and "Ginebra San Miguel" stamped on the bottles, even
without the words "property of," are sufficient notice to the public that those
bottles so marked are owned by LTI.
The claim of petitioner that hard liquor is not included under the term "other
lawful beverages" as provided in Section 1 of Republic Act No. 623, as amended
by Republic Act No. 5700, is without merit. The title of the law itself, which reads
"An Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks,
Kegs, Barrels and Other Similar Containers" clearly shows the legislative intent
to give protection to all marked bottles and containers of all lawful beverages
regardless of the nature of their contents. The words "other lawful beverages" is
used in its general sense, referring to all beverages not prohibited by law.
Beverage is defined as a liquor or liquid for drinking. 14 Hard liquor, although
regulated, is not prohibited by law, hence it is within the purview and coverage
of Republic Act No, 623, as amended.
Republic Act No. 623, as amended, has for its purpose the protection of the
health of the general public and the prevention of the spread of contagious
diseases. It further seeks to safeguard the property rights of an important sector
of Philippine industry. 15 As held by this Court in Destileria Ayala, Inc. vs. Tan
Tay & Co., 16 the purpose of then Act 3070, was to afford a person a means of
identifying the containers he uses in the manufacture, preservation, packing or
sale of his products so that he may secure their registration with the Bureau of
Commerce and Industry and thus prevent other persons from using them. Said
Act 3070 was substantially reenacted as Republic Act No. 623. 17
The proposition that Republic Act No. 623, as amended, protects only the
containers of the soft drinks enumerated by petitioner and those similar thereto,
is unwarranted and specious. The rule of ejusdem generis cannot be applied in this
case. To limit the coverage of the law only to those enumerated or of the same
kind or class as those specifically mentioned will defeat the very purpose of the
law. Such rule of ejusdem generis is to be resorted to only for the purpose of
determining what the intent of the legislature was in enacting the law. If that
intent clearly appears from other parts of the law, and such intent thus clearly
manifested is contrary to the result which would be reached by the appreciation
of the rule of ejusdem generis, the latter must give way. 18
Moreover, the above conclusions are supported by the fact that the Philippine
Patent Office, which is the proper and competent government agency vested
with the authority to enforce and implement Republic Act No. 623, registered the
bottles of respondent LTI as containers for gin and issued in its name a certificate
of registration with the following findings:
"It appearing, upon due examination that the applicant is

entitled to have the said MARKS OR NAMES registered
under R.A. No. 623, the said marks or names have been duly
registered this day in the PATENT OFFICE under the said
Act, for gin, Ginebra San Miguel. 19
While executive construction is not necessarily binding upon the courts, it is

entitled to great weight and consideration. The reason for this is that such
construction comes from the particular branch of government called upon to
implement the particular law involved. 20
Just as impuissant is petitioner's contention that respondent court erred in

holding that there is no need for LTI to display the words "Reg. Phil. Pat. Off." in
order to succeed in its injunction suit against Cagayan for the illegal use of the
bottles. To repeat, Republic Act No. 623 governs the registration of marked
bottles and containers and merely requires that the bottles and or containers be
marked or stamped by the names of the manufacturer or the names of their
principals or products or other marks of ownership. The owner, upon
registration of its marked bottles, is vested by law with an exclusive right to use
the same to the exclusion of others, except as a container for native products. A
violation of said light gives rise to a cause of action against the violator or
infringer. LexLib
While Republic Act No. 623, as amended, provides for a criminal action in case of
violation, a civil action for damages is proper under Article 20 of the Civil Code
which provides that every person who, contrary to law, wilfully or negligently
causes damage to another, shall indemnify the latter for the same. This particular
provision of the Civil Case was clearly meant to complement all legal provisions
which may have inadvertently failed to provide for indemnification or
reparation of damages when proper or called for. In the language of the Code
Commission "(t)he foregoing rule pervades the entire legal system, and renders it
impossible that a person who suffers damage because another has violated some
legal provisions, should find himself without relief." 21 Moreover, under Section
23 of Republic Act No. 166, as amended, a person entitled to the exclusive use of
a registered mark or trade-name may recover damages in a civil action from any
person who infringes his rights. He may also, upon proper showing, be granted
injunction.
It is true that the aforesaid law on trade-marks provides:
"SEC. 21. Requirements of notice of registration of trademark.

The registrant of a trade-mark, heretofore registered or
registered under the provisions of this Act, shall give notice
that his mark is registered by displaying with the same as
used the words 'Registered in the Philippines Patent Office'
or 'Reg. Phil. Pat. Off.'; and in any suit for infringement
under this Act by a registrant failing so to mark the goods
bearing the registered trade-mark, no damages shall be
recovered under the provisions of this Act, unless the
defendant has actual notice of the registration."
Even assuming that said provision is applicable in this case, the failure of LTI to
make said marking will not bar civil action against petitioner Cagayan. The
aforesaid requirement is not a condition sine qua non for filing of a civil action
against the infringer for other reliefs to which the plaintiff may be entitled. The
failure to give notice of registration will not deprive the aggrieved party of a
cause of action against the infringer but, at the most, such failure may bar
recovery of damages but only under the provisions of Republic Act No. 166.
However, in this case an award of damages to LTI is ineluctably called for.

Petitioner cannot claim good faith. The record shows that it had actual
knowledge that the bottles with the blown-in marks "La Tondea, Inc." and
"Ginebra San Miguel" are duly registered. In Civil Case No. 102859 of the Court
of First Instance of Manila, entitled "La Tondea, Inc. versus Diego Lim, doing
business under the name and style 'Cagayan Valley Distillery,'" a decision was
rendered in favor of plaintiff therein on the basis of the admission and or
acknowledgment made by the defendant that the bottles marked only with the
words "La Tondea, Inc." and "Ginebra San Miguel" are registered bottles of LTI.
22
Petitioner cannot avoid the effect of the admission and/or acknowledgment

made by Diego Lim in the said case. While a corporation is an entity separate
and distinct from its stockholders and from other corporations with which it may
be connected, where the discreteness of its personality is used to defeat public
convenience, justify wrong, protect fraud, or defend crime, the law will regard
the corporation as an association of persons, or in the case of two corporations,
merge them into one. When the corporation is the mere alter ego or business
conduit of a person, it may be disregarded. 23
Petitioner's claim that it is separate and distinct from the former Cagayan Valley
Distillery is belied by the evidence on record. The following facts warrant the
conclusion that petitioner, as a corporate entity, and Cagayan Valley Distillery
are one and the same, to wit: (1) petitioner is being managed by Rogelio Lim, the
son of Diego Lim, the owner and manager of Cagayan Valley Distillery; (2) it is a
family corporation; 24 (3) it :s an admitted fact that before petitioner was
incorporated it was under a single proprietorship; 25 (4) petitioner is engaged in
the same business as Cagayan Valley Distillery, the manufacture of wines and
liquors; and (5) the factory of petitioner is located in the same place as the factory
of the former Cagayan Valley Distillery.
It is thus clear that herein petitioner is a mere continuation and successor of

Cagayan Valley Distillery. It is likewise indubitable that the admission made in
the former case, as earlier explained, is binding on it as cogent proof that even
before the filing of this case it had actual knowledge that the bottles in dispute
were registered containers of LTI. As held in La Campana Coffee Factory, Inc., et al.
vs. Kaisahan Ng Mga Manggagawa sa La Campana (KKM), et al., 26 where the main
purpose in forming the corporation was to evade one's subsidiary liability for
damages in a criminal case, the corporation may not be heard to say that it has a
personality separate and distinct from its members, because to allow it to do so
would be to sanction the use of the fiction of corporate entity as a shield to
further an end subversive of justice.
Anent the several motions of private respondent LTI to have petitioner cited for
contempt, we reject the argument of petitioner that an appeal from a verdict of
acquittal in a contempt proceeding constitutes double jeopardy. A failure to do
something ordered by the court for the benefit of a party constitutes civil
contempt. 27 As we held in Converse Rubber Corporation vs. Jacinto Rubber &
Plastics Co., Inc.: LLjur
". . . True it is that generally, contempt proceedings are

characterized as criminal in nature, but the more accurate
juridical concept is that contempt proceedings may actually
be either civil or criminal, even if the distinction between
one and the other may be so thin as to be almost
imperceptible. But it does exist in law. It is criminal when
the purpose is to vindicate the authority of the court and
protect its outraged dignity. It is civil when there is failure to
do something ordered by a court to be done for the benefit of
a party. (3 Moran Rules of Court, pp. 343-344, 1970 ed.; see
also Perkins vs. Director of Prisons, 58 Phil. 272; Harden vs.
Director of Prisons, 81 Phil. 741.) And with this distinction in
mind, the fact that the injunction in the instant case is
manifestly for the benefit of plaintiffs makes of the contempt
herein involved civil, not criminal. Accordingly, the
conclusion is inevitable that appellees have been virtually
found by the trial court guilty of civil contempt, not criminal
contempt, hence, the rule on double jeopardy may not be
invoked." 28
The contempt involved in this case is civil and constructive in nature, it having
arisen from the act of Cagayan in violating the writ of preliminary injunction of
the lower court which clearly defined the forbidden act, to wit:
"NOW THEREFORE, pending the resolution of this case by

the court, you are enjoined from using the 350 c.c. white flint
bottles with the marks 'La Tondea Inc.,' and 'Ginebra San
Miguel' blown-in or stamped into the bottles as containers
for the defendant's products." 29
On this incident, two considerations must be borne in mind. Firstly, an injunction

duly issued must be obeyed, however erroneous the action of the court may be,
until its decision is overruled by itself or by a higher court. 30 Secondly, the
American rule that the power to judge a contempt rests exclusively with the
court contemned does not apply in this jurisdiction. The provision of the present
Section 4, Rule 71 of the Rules of Court as to where the charge may be filed is
permissive in nature and is merely declaratory of the inherent power of courts to
punish contumacious conduct. Said rules do not extend to the determination of
the jurisdiction of Philippine courts. 31 In appropriate cases, therefore, this Court
may, in the interest of expedient justice, impose sanctions on contemners of the
lower courts.
Section 3 of Republic Act No. 623, as amended, creates a prima facie presumption
against Cagayan for its unlawful use of the bottles registered in the name of LTI.
Corollarily, the writ of injunction directing petitioner to desist from using the
subject bottles was properly issued by the trial court. Hence, said writ could not
be simply disregarded by Cagayan without adducing proof sufficient to
overcome the aforesaid presumption. Also, based on the findings of respondent
court, and the records before us being sufficient for arbitrament, without
remanding the incident to the court a quo petitioner can be adjudged guilty of
contempt and imposed a sanction in this appeal since it is a cherished rule of
procedure for this Court to always strive to settle the entire controversy in a
single proceeding. 32 We so impose such penalty concordant with the
preservative principle and as demanded by the respect due the orders, writs and
processes of the courts of justice. LLpr
WHEREFORE, judgment is hereby rendered DENYING the petition in this case

and AFFIRMING the decision of respondent Court of Appeals. Petitioner is
hereby declared in contempt of court and ORDERED to pay a fine of One
Thousand Pesos (P1,000.00). with costs.
SO ORDERED.
||| (Cagayan Valley Enterprises, Inc. v. Court of Appeals, G.R. No. 78413, November
08, 1989)

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G.R. No. 127913. September 13, 2001.

RIZAL COMMERCIAL BANKING CORPORATION,

Angara Abello Concepcion Regala & Cruz for petitioner.

Noel Mingoa for Ley Construction & Development Corp.

Mondragon & Montoya Law Offices for private respondent.

For failure of Ley Construction Corporation (LEYCON) to settle its

1. REMEDIAL LAW; SPECIAL CIVIL ACTION; UNLAWFUL DETAINER;

2. ID.; ID.; INTERPLEADER; PURPOSE. It should be remembered that an

3. ID; ID.; INTERPLEADER FOR PAYMENT OF RENTALS; CEASED TO EXIST

4. ID.; ID.; ID.; ID.; CLAIM OF OWNERSHIP BY ONE OF THE DEFENDANTS

The facts of the case are as follows:

On 26 September 1990, Ley Construction Corporation (LEYCON) contracted a

LEYCON promptly filed an action for Nullification of Extrajudicial Foreclosure

On 26 May 1994, LEYCON filed an action for Unlawful Detainer, docketed as

On 27 May 1994, METROCAN filed a complaint for Interpleader, docketed as

In its Decision, promulgated on 18 October 1996, the Court of Appeals granted

RCBC alleged, that:

(1) THE DECISION OF THE METROPOLITAN TRIAL

(2) WHILE A PARTY WHO INITIATES AN

We sustain the Court of Appeals.

Section 1, Rule 63 of the Revised Rules of Court 2 provides:

SECTION 1. Interpleader when proper. Whenever

It is also undisputed that LEYCON, as lessor of the subject property filed an

It should be remembered that an action of interpleader is afforded to protect a

[G.R. No. 120060. March 9, 2000.]

CEBU WOMAN'S CLUB, petitioner, vs. HON. LORETO D.

Fernan Mercado & Cordero for petitioner.

Juan B. Astete, Jr. for CAMSAC International, Inc.

Rufino L. Remoreras, Jr., for Phanuel Seoron.

Petitioner entered into a construction contract with private respondent CAMSAC

1. REMEDIAL LAW; ACTIONS; APPEAL BY CERTIORARI; DIRECT APPEAL

3. ID.; SPECIAL CIVIL ACTION; CERTIORARI; CANNOT BE AVAILED OF TO

4. ID.; ID.; ID.; ID.; FAILURE TO OBSERVE PROCEDURE FOR

5. ID.; ID.; ID.; PARTY SHOULD OBSERVE HIERARCHY OF COURTS IN

On February 4, 1994, respondent CAMSAC entered into a "Sub-Contract

In the meantime, petitioner allegedly received demand-letters from the

"As herein before-stated, there is already a pending case by

WHEREFORE, the complaint for interpleader is hereby

1. Respondent court acted with grave abuse of discretion, as

2. Respondent court erred when it correlated the "allegation

3. Although no hearing has as yet been conducted and in

Petitioner's imputation of grave abuse of discretion to respondent court as

ACCORDINGLY, the petition is denied for lack of merit.

[G.R. No. 193494. March 12, 2014.]

LUI ENTERPRISES, INC., petitioner, vs. ZUELLIG

Zuellig Pharma promptly informed Lui Enterprises of the Philippine Bank of

The Philippine Bank of Communications filed its answer 12 to the complaint. On

According to Lui Enterprises, an earlier filed nullification of deed of dation in

To support its argument, Lui Enterprises cited a writ of preliminary injunction 19

WHEREAS, on June 30, 2003, the Court issued an Order, a

WHEREFORE, PREMISES CONSIDERED, let a

WHEREAS, that plaintiff posted a bond of P1,000,000.00

IT IS HEREBY ORDERED by the undersigned Judge that,

Nevertheless, Zuellig Pharma filed in court the secretary's certificate dated

With respect to the nullification of deed of dation in payment case, Zuellig

As to the writ of preliminary injunction issued by the Regional Trial Court of

In its compliance 32 dated September 15, 2003, the Philippine Bank

Posed for Resolution is the Motion for Amendment of Order

xxx xxx xxx

As elsewhere stated, [the Philippine Bank of

There being no objection from [the Philippine Bank of

Accordingly, consistent with the order of this Court dated

Plaintiffs move for execution or implementation of the Order